Tuesday, January 29, 2008

Thailand Elects New Prime Minister: Positive Sign For Investors

Thaksin Shinawatra was ousted as prime minister of Thailand by a military coup in 2006; Thailand subsequently lost a lot of foreign investor confidence. Now that Thailand has elected a new leader, one who desperately wants to revive foreign investment, how will the investment climate change?

The newly elected prime minister is Samak Sundaravej, an ally of Thaksin. If Samak is indeed able to get his new policies through, Thailand’s foreign investment climate should recover nicely--however that is a big "if." It will undoubtedly be hard for Thailand to regain investor confidence after the military coup, especially considering that a close ally of the ousted prime minister was elected. After all, what is to stop the military from doing the same thing over again?

Any time investors choose to invest in foreign countries, they face political risks. While it is likely to take some time for the new prime minister to regain the confidence of investors, this move is undoubtedly a step in the right direction. Any country being led by its military could make investors wary, so the mere fact that Thailand now has a prime minister will be a boost in and of itself.

In time, Thailand will likely regain the confidence and excitement foreign investors previously had for the country, but considering that Thailand is heavily dependent upon exports, and that the U.S. in particular is struggling economically, it could take some additional time for Thailand to see results. Thailand is an attractive country for tourists and investors alike, and the present time--while confidence is low--could prove to be a great time to buy.

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