BUSINESSES Hurt It's a classic toss-out-the-baby-with-the-bathwater situation. Thailand's investment climate is worsening amid political instability, foreign-ownership probes and capital- control policies, Standard & Poor's said in a REPORT last week. There is a "very strong'' chance the company will lower its outlook on Thailand's credit rating, said S&P's Singapore-based analyst Kim Eng Tan.
Consider, also, the plight of Toyota Motor Corp. New capital controls will crimp the ability of the Japanese carmaker's Thai unit to receive finance from its Tokyo-based parent as it expands. The measures "directly affect us,'' said Mitsuhiro Sonoda, newly appointed president of Toyota's Thai unit. "Our funding costs will be higher and this will curb our competitiveness.''
Misplaced Nostalgia It's hard not to sympathize with the military's hope of unleashing a little "Gross National Happiness,'' or the idea that growth should make everyone happy without destroying cultural identity. It's a laudable goal, though it's too late to reverse course drastically. Doing so risks lowering growth and hurting more Thais than government policies help.
Thailand's new leaders are faring so poorly that they are inspiring nostalgia for the Thaksin days. While I've long been critical of Thaksin's autocratic and unscrupulous ways, the military's shaky leadership is damaging investment, business and consumer confidence.
CIMB's Song said he's "quite sure'' Thailand will rebound "strongly'' in a year or so. "But in the coming months,'' he added, "current and potential investors may take a wait-and-see attitude towards Thailand.''
I hope he's right about Thailand's longer-term outlook. Some may call the military's approach economic nationalism. A more accurate description may be a shot in the foot for Asia's most-promising economy.