Thai Trade Slumps Alongside Tourism as Protest Violence Takes Toll

By Orathai Sriring & Amy Sawitta Lefevre 26 February 2014

BANGKOK — Thailand announced a slump in trade figures on Tuesday with the biggest drop in imports in more than four years in January, as months of anti-government protests extended their economic toll beyond falling tourism numbers.

The protesters, whose disruption of a general election this month left Thailand in political limbo, aim to topple caretaker Prime Minister Yingluck Shinawatra and erase the influence of her brother, ousted premier Thaksin Shinawatra, seen by many as the power behind the government.

Weeks of unrest, most of it in the capital, Bangkok, have been interrupted by occasional bombs and gunfire, with one blast killing a woman and a young brother and sister in a busy shopping district on Sunday.

Imports fell 15.5 percent in January from a year earlier, the biggest tumble since October 2009. Imports of computers and parts were down 19 percent from a year earlier, auto parts off 31.8 percent and consumer goods 5.3 percent. Exports dropped 2 percent.

Thailand is a regional hub for global car makers and a major producer of hard disk drives.

“Everybody is definitely delaying their imports (of consumer products) as most shopping malls are quiet,” said Nopporn Thepsitthar, chairman of the National Shippers’ Council. “Nobody dares to place big orders.”

Thai Airways International reported a big net loss of 12 billion baht ($369 million) for 2013, including a loss of 5.65 billion in the final three months of the year. Another loss is already expected for 2014.

The political unrest since November and a drop in the number of tourists visiting Thailand have added to the problems of the struggling flag carrier, whose chairman resigned last week, two months after the president said he was stepping down for health reasons.

The Thai Hotel Association said this month that occupancy rates in the capital were hovering at around 50 percent, well below the usual 80 percent at this time of year.

Starwood Hotels & Resorts Worldwide Inc, which ranks fourth among hotel brands in Thailand, has said the protests significantly hurt its business there in January.

Thailand had a record year for tourists in 2013, with more than 26 million visitors, but the picture began to change in the final two months, which is normally the start of the high season. And arrivals in January were barely changed from a year earlier, Tourism Authority of Thailand figures show.

Tourism accounts for about a tenth of Thailand’s gross domestic product.

Farm Payments

In a small bit of good news for Yingluck, the Election Commission approved a 712 million baht ($21.87 million) fund to be drawn from the central budget for rice farmers, many of whom have been waiting months for payment and some of whom have committed suicide in desperation.

But the sum is a small fraction of the estimated 130 billion baht her government needs to pay to nearly a million farmers.

“If we don’t get our money this week, we’ll return to remind the prime minister about it,” said one of the farmers’ leaders after they protested outside an air force base where Yingluck was holding a cabinet meeting.

The rice subsidy scheme is one of several populist policies that swept Yingluck to an election win in 2011 thanks to her rural support base in the north and northeast.

Anti-government protesters accuse former telecoms tycoon Thaksin of corruption and say that, prior to being ousted by the army in 2006, he used taxpayers’ money for such populist policies to buy him the loyalty of millions.

Protest leader Suthep Thaugsuban said protesters would target Shinawatra businesses again on Tuesday, a threat that sent stock prices tumbling last week.

SC Asset Corp, a property developer controlled by the Shinawatra family, lost almost 10 percent in the second half of last week and mobile handset distributor M-Link Asia Corp , also with links to the family, lost 12 percent.

However, SC Asset recovered 0.7 percent on Tuesday and M-Link nearly 5.5 percent.

At least 20 people have been killed and more than 700 wounded since the protests began in November.

It is the worst political violence since 2010, when Thaksin’s supporters paralyzed Bangkok for weeks. More than 90 people were killed and 2,000 wounded during that unrest, which ended when Suthep, then a deputy premier, sent in troops.