Thai petrochem majors remain unperturbed despite protests, FDI flows in jeopardy

16-Mar-10

About 60 projects in the Rayong province, where Mab Ta Phut is located, are under court injunction on environmental grounds since September 2009. With respect to the environmental issues at Mab Ta Phut, members of the United Front for Democracy against Dictatorship (UDD) took to the streets, giving the government an ultimatum to dissolve the parliament at noon on Sunday or face massive demonstrations. Despite continuing political protests in Bangkok, the petrochemical industry in Thailand continues to function as usual. However, Thailand will need to deal with its long-standing political instability to attract and maintain more foreign direct investments (FDI) as per ICIS news. The protests have largely been peaceful and do not appear to have any immediate impact on foreign investments coming into the country as long as there is no violence, as the frequency of protests in Thailand over the past years have desensitized the markets to some extent. While most have come to expect Thailand’s shaky politics to continue, this may have serious repercussions on FDI flows. Foreign investors are now adopting a “wait-and-see” attitude on how the political situation in Thailand develops. Investor confidence in Thailand could go down if the suspension lasts for more than a year.