Wednesday, January 20, 2010

Planned airport rally sparks alarm


Business leaders and analysts offered dire warnings yesterday about the economic impact if airport operations are once again held hostage to Thailand's ongoing political soap opera.


Stocks fall 1.39% on fears of new blockade


Thai stocks fell 1.39% yesterday amid reports that red-shirted supporters of former premier Thaksin Shinawatra could rally at Suvarnabhumi Airport.

Spokesmen for the United Front for Democracy against Dictatorship, a group led by pro-Thaksin supporters, insist that the rally, tentatively planned for next week, would not disrupt airport operations or interfere with passengers.

But concern spread quickly that the rally could turn into a repeat of November and December 2008, when Suvarnabhumi Airport was closed for eight days by the yellow-shirted People's Alliance for Democracy, which forced the resignation of the government led by the People Power Party, the successor to Thaksin's Thai Rak Thai.

Satit Rungkasiri, the director-general of the Finance Ministry's Fiscal Policy Office, warned that an airport closure would be akin to "national suicide".

"If the airport is closed due to political protests, it would be a problem for the economy on par with the Map Ta Phut dispute. No one, no country, could accept a second closure for its main airport," he said.

Serirat Prasutanond, the president of Airports of Thailand, offered a public plea for the red-shirts to drop the protest.

"Any [protest] will be certainly negative for our tourism industry and our country's image. We paid dearly for the airport closure in 2008. Please don't let this happen again," he said.

Thai Hotels Association president Prakit Chinamourphong said Thailand's global image would be "destroyed" if the airport was closed.

"The government must do everything, even if it means drastic measures, to protect the airport," he said.

Analysts said a flareup in political infighting would further hurt market sentiment, already suffering from the court-ordered suspension of dozens of major projects in Map Ta Phut.

Sombat Narawutthichai, secretary-general of the Securities Analysts Association, said political risk was among the greatest worries for the market.

"If airport access is really closed, it will certainly have a direct impact on tourism, which is only just now showing signs of recovery," he said.

Kasikorn Research currently estimates economic growth ranging from 2.5% to 3.5% this year, said assistant managing director Pimonwan Mahujchariyawong. While the forecast includes a degree of political instability, an airport shutdown would definitely hit growth, she said.

"Political risk is the largest domestic risk factor, one that has a major influence on private sector sentiment as well as government spending," she said.

Logistics operators expressed hope that the government and security forces can prevent any serious fallout if a rally occurred. "Even though the protesters say the rally will be peaceful, I think the situation remains fluid," said Alan Miu, country general manager of TNT Express Worldwide.

"The government should learn from what happened last time and come up with measures to prevent airport operations from being disrupted."

Suwit Ratanachinda, president of the International Freight Forwarders Association, said the economic impact of an airport disruption would be massive.

"Things are getting better already, so I am begging [the protesters] not to do anything that will hurt the economy again. The government needs to take decisive steps to manage the situation."

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