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source: Bkk Post
Uncertainties about the shape of the next government are likely to further weigh
on weak consumer and investment sentiment over the next several weeks, according
to local businessmen and economists.
Many had hoped the Dec 23 election would bring a revival in confidence and
economic activity. But the Election Commission has certified only 397 winning
candidates to date, and the remaining 83 are under investigation for possible
election fraud.
Of the 83, 65 are from the People Power Party, filled with allies of former
prime minister Thaksin Shinawatra. PPP won the December poll, taking 233 out of
480 seats in the preliminary results.
Still, concern that the armed forces, which deposed Mr Thaksin in the September
2006 coup, and its appointed government could influence the election results to
avoid a PPP-led coalition is a frightening prospect for many business
executives.
''Nothing has been clear since the election. We are just waiting to see what
will happen,'' said Adisak Rohitasune, a vice-chairman of the Federation of Thai
Industries. ''In the worst-case scenario, the final results of the election
could turn out to be something different from what we expected earlier.''
Pornsil Patcharintanakul, a deputy secretary-general for the Board of Trade,
said any delays in forming the new government would only undermine public
confidence.
''There are concerns by the public that what has happened to the poll results
could upset the establishment of the new government and consequently delay the
implementation of economic policies to boost the economy,'' Mr Pornsil said.
''The economy at this stage needs a real leader who can turn the situation
around,'' he said, adding that he was uncertain about the economic team of the
PPP.
FTI chairman Santi Vilassakdanont agreed that confidence would not improve until
the composition of the new government was clear.
''I think it's still too early to see confidence improving. We are still waiting
to see who would become the new economic ministers and what policies they might
introduce,'' he said.
The decision this week by the Supreme Court to hear complaints filed by the
Democrat Party, which ran second to PPP in the Dec 23 election, was another
potentially alarming development.
PPP could possibly be dissolved if it was found guilty of the charges, which
include an accusation that the party is a proxy for Mr Thaksin's banned Thai Rak
Thai Party. The court will hear the case on Jan 15.
''[The court case] was certainly outside of our expectations, and could delay
the process that we expected to see earlier,'' said Mr Adisak from the FTI.
''We now just have to wait and see how the court will rule. It's better at least
that this is done now, so that the new government could be formed without any
potential problems in the future.''
Charl Kengchon, a senior economist at the Kasikorn Research Center, said the
delay in ratifying the election results could have a psychological impact on
consumer and investor confidence.
''Both investors and consumers have put the stability of the new government as
their top concern. Anything that could make the new government less stable would
certainly have an impact on confidence,'' he said.
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