Report from Bangkok

This is the assessment from one of our Thai brokers:

" A client remarked last week that people on the street here in Bangkok don’t smile so much anymore. I think that this is a fair comment as ordinary citizen here are finding it tough not only to cope with maintaining their jobs as foreign firms start to scale back investment and a 3 year long political stale-mate that does not seem to show any sign of ending. Thailand will be counting the costs of this year’s unbelievable actions by what is essentially “mob rule” for years to come. If you go to Japanese restaurants in Bangkok today you will find the sushi counters are empty of imported tuna from Japan; there is no FT delivery and DHL and Fed-EX seem to have stopped altogether except some (which had to travel by road from Malaysia). Earlier in the week I had to help charter a private aircraft from a friend to leave from the Vietnam-era U-Tapow airport (where the B-52 bombers were stationed) to fly out 5 clients. This weekend commercial jets were “evacuating” stranded tourists out of the same airbase. Since it is a military base the terminal was far too small and crowded to handle passengers boarding 5 Boeing 747 aircrafts at the same time.

Who is in charge of this country? An elected Prime Minister is prevented from landing in Bangkok when he returned from representing Thailand at an APEC conference; the Head of the Army refuses to do anything; the police made a weak attempt at removing the protesters. The only thing that Thais seem to hope for is an intervention by HM the King on his annual Birthday speech on the 4th December. This is NOT a country that has anyone at the helm of the driving seat. It’s drifting dangerously into a state of anarchy (civil war is now a term used quite regularly in the news paper – when I used it in my note back in August people thought I was being too dramatic).

1. Bangkok middle class are hopeful that there will be a coup, but to me this is ALREADY a coup.

- The head of the army General Anupong is refusing to intervene to remove the protesters and telling the PM to resign on TV.
- The Head of police then did the same and was dismissed last week. The new Head of police is also refusing to storm the airport (except a mere little skirmish on Saturday).
- We Thais now have a government including the PM sitting powerless up in Chiengmai (Thaksin’s support base) afraid of returning to the capital.
- Who is ruling Thailand? A foreign investor will surely wonder this question?
- If this impasse does work out (even with the King’s intervention) people are talking about diving the country into north and south.

2. As much as 2 weeks ago I wrote that risk was rising due to political risk and warned travellers to stay away (although I did not imagine that 2 of our capital’s airports will be shut down completely).

- I mentioned that you can tell about confidence when the Thai Baht starts to depreciate. Today it’s THB 35.6/ US$ (i.e. weakening again).
- Although the Bank of Thailand makes it more difficult for Thais to take money, it is not altogether impossible.

3. It is difficult to see how this impasse can end peacefully (if this country is to be kept undivided by north and south) and now 200,000 Thaksin supporters have entered Bangkok.

- Andrew Stotz went to interview them this weekend and he was told they weren’t paid to protest.
- Thaksin himself is apparently on an island in Cambodia (next to the Thai border) where there is a large investor in a casino project.
- I attended a dinner party of a friend who has at least 3 listed companies and he said that there is a list that is going around to show which business family is Pro-Thaksin and which isn’t. The lines are being drawn up to the very highest in the land.

4. Airlines that have their aircraft stuck here have had to ask the PAD (who have seized the control tower) to let their planes leave whilst THAI airline tries to find a safe airport to park their planes.

- We have been helping friends and families out of Thailand all week.
- So far if you can not afford a private jet, then the only option is a 3 hour trip to U-Tapo airbase and then onto Phuket or Samui and out to HK or Singapore.
- The train and buses still work all the way to the south (the most comfortable being the E&O).
- Thais who are stuck abroad who have to return home urgently have to fly to KL and then take a bus all the way to Bangkok.
- Imagine the lawsuits that will be filed and who will eventually pay the bills? I presume that the airline will sue the AOT (for not securing airport and safety) but I can hardly imagine AOT successfully suing the PAD!.
- As I said before, Thailand will be re-assessed as a more “militant” place (the image of “Land of Smile” is damaged) and this will impact direct investments for years to come. At least the Tsunami was a natural disaster that people were willing to forget, but imagine that your holidays being ruined by a bunch of protesters will surely remain on tour operators’ reassessment of doing business here in a climate when long haul travel is declining fast."