There has been some uncertainty in the past three months as to how the current political crisis in Thailand will play out: from reportage to the vague but uncompromising demands from protesters attempting to clean the country of corruption, albeit with dirty water.
The destruction of the term democracy, the blocking of ballot boxes and others’ right to vote, boycotting the election as well as some toxic and misogynous rhetoric which has emanated from protesters’ stages and deserves no place in any forum.
When a movement cannot grasp the concept of the noun, ‘democracy’, one can be expected to be correctly unsure of their understanding of the verb, ‘reform’. The motive of ridding corruption is a valiant one, but the poor execution has served to alienate more than unity.
There is an awakening occurring, according to the democratic activist, Terence Chulavachana. “We have seen this playbook before from the Yellow shirts, just as we have seen the same counter moves from the government, but I want to stress that the difference between this cycle from the past is that the learning curve of Thai people is up and running, meaning that many now know exactly what is going on.”
“In business too,” continues Terence “the old school view was that Governments came and went, but business policy remained the same. Thaksin changed all of that…” The fact is, that Thaksin Shinawatra introduced many progressive policies, and all – apart from the rice pledging scheme – have gone through. “There is a 80 – 90% likelihood that the rail and infrastructure and other policies integral to the ASEAN initiative will proceed, regardless of whoever ‘wins’ this current struggle.”
The election on February 2 clearly contests the assumed assertions made in protest. At best, the Bangkok protest numbers peaked at around 200k, yet over 20 million turned out to vote. Furthermore, around 920k turned out in Bangkok alone to register for the advanced voting on January 26.
However, it must be stated that while the Democrats boycotted and the official election results are not yet released until remaining by-elections can take place, the majority “vote no” counts that have been reported by much of the Thai media negates confidence in neither the current government nor the protesters, but in democracy as a whole.
Thailand’s ability to recover is well-known, the Kingdom has had many tests of its mettle and it seldom disappoints. The powerful pillars of manufacturing and tourism allow Thailand to build right back up, rapidly, and to new heights.
“For FDI, Thailand has many similarities with America” says Terence, “where the USA is becoming more competitive for manufacturing for many reasons, Thailand shares the same fundamentals – and then there is our geographical position.”
This is a sentiment echoed by Cobby Leathers, head of international marketing for Thailand’s leading property developer, Sansiri: “The manufacturing side is closely tied into overlying global economic conditions, however, Thailand continues to provide valuable export commodities and goods by local players. In parallel to this, Thailand continues to attract FDI via regional and multi-national producers which also creates foreign-branded goods exported from this Thai base.”
Tourism in Thailand needs no fanfare: the Kingdom is blessed with beauty and diversity as well as the support of new and seasoned visitors. Protests, pandemics and natural disasters do little to put off the increasing number of tourists to Thailand, “and there always seems to be a new market,” adds Cobby “from Russians in the recent past to Chinese of the immediate present.”
Regional tourism is strong and it is taking the edge off Thailand’s low-season slumps that were felt before. Once on the ground, it is much easier to have confidence in the current climate.
Bangkok is simply being bypassed right now – once the world’s most visited city, it will be again soon and in terms of property and investment there continue to be many opportunities.
Thai property developers such as Sena and Pruksa recently released revised forecasts for Bangkok and stated that they would focus on provincial expansion where demand remains strong for both domestic and foreign buyers.
Cobby talks of Sansiri’s outlook: “Our provincial expansion is based on demand from local 2nd and 3rd tier cities whose economies are seeing strong growth and consumer buying power. As provincial development makes up approximately 30% of our business, this number is likely to increase as we venture into new locales in the years to come.” With continued interest from regional investors from China to Singapore and beyond, there are still gains to be had. “Undersupplied areas of good value are interesting because they can often achieve better returns solely based on a good property and a lack of surrounding supply.” added Cobby.
Provincial expansion captures many agenda headlines and developers in Thailand have been looking to places from Chiang Mai & Chiang Rai, Udon Thani, Korat and Rayong to Surat, Samui, Nakhon Si Thammarat, Songkhla and Had Yai.
Long-standing locations of high demand and interest remain strong, particularly with the right product and despite areas of well equipped areas, there are more that are underserved.
Sansiri’s aggressive expansion over the past two years brought in 99 projects, including a company record high of 51 projects in 2012 and a current industry-high pre-sales backlog of ฿62.8bn. Meaning that 2014 was always going to be a year to effectively manage the success of the past two years. Nonetheless, they will be moving ahead with 19 projects this year, with a pre-sales target of ฿30.1bn.
The Agency for Real Estate Affairs has forecast that Bangkok and its suburbs will see a drop in launch and development activity, but the prospects for the Kingdom as a whole is very much business as usual. The drop of ฿385bn on last year in Bangkok projects has been countered by forecasted provincial development worth between ฿ 330-340bn for 2014.
In about a decade, the old money model has been challenged and changed: Governments will come and go, but business policy is better for everyone overall. In order to retain 2nd spot in the regional economic rankings, all efforts will be made to ensure that this endures.