Unrest threatens Thailand's tourist industry
04-SEP-2008 Intellasia | AP
Sep 4, 2008 - 7:00:00 AM
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Singapore and South Korea advised their citizens Tuesday against travelling to Thailand, raising concerns that the ongoing political crisis could damage the country's crucial tourist economy.
The advisories follow prime minister Samak Sundaravej's decision to impose a state of emergency overnight after clashes between pro and anti-government protesters left one person dead and dozens injured.
Singapore and South Korea issued advisories urging their citizens to postpone nonessential travel to the country. Australia and New Zealand, on the other hand, advised their citizens to "exercise a high degree of caution" if travelling to the country.
"Travellers should exercise a high degree of vigilance at this time because of the political unrest," Australia's Department of Foreign Affairs said on its Web site. "Further violence cannot be ruled out."
Tourism revenues make up 6.5% of Thailand's GDP --so a blow to the reputation of the country that promotes itself as the "Land of Smiles" could have a ripple effect through the rest of the economy.
On Tuesday, Samak declared a state of emergency, which only added to the uncertainty that has dogged the economy for much of the year.
Thailand's economy --which is heavily dependent on tourist dollars and foreign investment --has struggled to regain its footing since a September 2006 coup ousted prime minister Thaksin Shinawatra.
Investors had cheered the return of democracy last year, when elections ushered in Samak's government. But within months, the same protesters who helped force Thaksin from office returned to the streets to demonstrate against Samak, whom they accuse of being a proxy for the former prime minister.
Protesters stepped up their demonstrations a week ago when they stormed the prime minister's office and took it over. They have occupied it ever since, contending they will remain until Samak resigns --something he has repeatedly refused to do.
Analysts warned things are likely to get worse with prospective investors and tourists being scared off by the most recent instability. The Thai stock market is down 25% since the protests began in May while the dollar has gained 6% against the Thai baht.
On Tuesday, the stock market was down 12 points or about 1.8% midday while the baht has weakened slightly.
"These protests are making Thailand look like unfriendly and a rather volatile place to put your money," said Kobsidthi Silpachai, the head of capital markets research Kasikorn Bank.
"People who are probably potential tourists will say 'Hey, what is going on? There is a state of emergency issued. Maybe it's not the best place to go,"' Kobshidthi said. "It will have a big impact."
Andrew Walker, a fellow at Australian National University who has been following the crisis, said newspapers in his country have been filled with horror stories of tourists whose trips were ruined after protesters forced the closure of three airports in Thailand over the weekend. Strikes also disrupted nationwide rail service.
"Having airports in Phuket and Krabi disrupted and reports in the papers of tourists being confronted by protesters is not good for Thailand's image as a tourist-friendly destination," Walker said.
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