International implications of Thailand’s internal squabbleBy Asia Sentinel Jan 03, 2014 11:47AM UTC
Other nations and multinational corporations watch with unease, writes Asia Sentinel’s David Fullbrook
As the world watches the unfolding events in Thailand with unease as pro and anti-Thaksin forces take their protests to the streets of Bangkok, unsettled and unsettling questions are arising over the international implications of the struggle.
Questions of the contest for primacy between the two opposing camps have simmered for the best part of a decade, costing dozens, perhaps hundreds of lives, giving reason to expect more lives will be lost.
Tension will continue to rise in the coming weeks as forces favoring autocracy take steps to stop the election called by Prime Minister Yingluck Shinawatra and set for Feb. 2.Thousands of protesters as the New Year got underway were expected to attempt to block roads in as many as 20 commercial zones, in an echo of the Yellow Shirt protests of 2008 through 2010 to increase the heat on the government to cancel the election. The matter is unlikely to be settled either way whether or not the election goes ahead, not least because there is some popular support, albeit a minority, for autocracy.
All of this matters internationally because of trade and geography. Despite Yingluck’s call for elections, the royalist opposition is showing no intention of allowing the polls to go forward.
Thailand threw its doors open to foreign investment in 1990 in the wake of the Asian Financial Crisis, streamlining its banking and investment laws, cutting corporate taxes and providing one of Asia’s most attractive investment climates. Accordingly, from 2000 to 2010, accumulated FDI grew from US$118 billion to US$159 billion, by far the biggest FDI inflows in Southeast Asia and making the country the center of foreign manufacturing.
Thailand is a major exporter of disk drives, car parts and cars, rice, rubber and tourism, among other things. Heavy floods during 2011 knocked out production and transportation causing ripples through global supply chains and markets. The floods revealed Thailand’s critical position in the global division of labour. Similar shocks can be expected should the conflict widen, increasing costs, hitting labor and interrupting exports.
Political and environmental threats to business should give investors pause to consider building factories and placing orders elsewhere in Southeast Asia. Trouble in Thailand perversely may be positive for neighbours hungry for investors and tourists.
Trouble may also create new cross-border interests. The territorial basis to the two main sides in the dispute in Thailand overlaps with understated cultural and ethnic identities. The languages of Lanna and Isarn, both spoken in northeastern Thailand, are closer to each other than they are the Khmeru-Thai imposed nationally by Bangkok as standard Thai.
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