Foreign investors are worried about political instability and have called on the government to solve the problem in order to boost investor confidence.
According to the Foreign Business Confidence Index (FBCI), foreign investors want the government to address five key issues – financial aid for SMEs, help for workers affected by COVID-19, easing investment regulations, reopening the country to investors and tourists, and ensuring political stability.
Investors like rule-based practices as they ensure a level playing field and fair competition, while societies need institutions that enforce the law and create trust.
However, Thailand institutions have always scored average in the annual world competitiveness ranking.
For instance, in 2019 Thailand ranked 40th overall among the 141 economies surveyed by the World Economic Forum. However, that ranking fell to 67 when taking into account only institutions.
The anti-establishment protesters are demanding rule of law and accountability of the monarchy under the Constitution in order to secure people’s rights as well as transparency in tax spending.
The government and the courts have responded by slapping protesters with the harshest of charges – a move that has destroyed trust among a large part of society. It has also reinforced a wide perception that Thailand embraces the rule of authority rather than the rule of law.
The ongoing conflict in Thailand reflects two incompatible political orders. The first regards the Thai king as the country’s legitimate ruler, whereas the democratic outlook contends that sovereignty resides with the Thai people.
Relentless political conflict has deeply split Thai society, undermining social cohesion and fueling tensions even in moments of crisis like the Covid-19 pandemic.
Business community’s worries
In Thailand, anti-establishment protests that kicked off last year are rocking political stability, adding to the business community’s worries.
The economy shrank 6.1 per cent last year under the impact of COVID-19, with no more than 2 per cent growth expected this year.
But that fragile recovery is at further risk from a simmering political conflict that is simmering under the lid of Covid-19 restrictions.
Street protests last year were relatively peaceful apart from a few occasions when police used tear gas and water cannon against protesters. However, violence at protests began to escalate at the end of 2020 as police fired rubber bullets and protesters responded by throwing objects and vandalising police vehicles.
That impact would increase if the government rejects or is slow to respond to the new generation’s demands for a democratic Constitution and monarchy reform, observers warn.
recently a Civil Court has rejected a petition by four core leaders for a court injunction to stop the government from exercising the emergency decree to bar their gathering in protest against the lese majeste law.