Political conditions reduce Japan investment in Thailand

Japan has always been an important investor and trade contributor for Thailand but recently Thai Chamber of Commerce President Pramon Sutivong said that Japan is slowing down its investment in Thailand because of political issues and differences in conditions proposed by each country. However, he expected that Japanese investor confidence would return soon.

Mr Pramon said progress under the Japan-Thailand Economic Partnership Agreement (JTEPA) is obstructed by the difference in proposed conditions for Thai exports to Japan. Also, political disturbances in Thailand are a major factor in dwindling investor confidence

Japan-Thailand Economic and Trade Committee Chairman Uichiro Niwa believed Thai economic fundamentals remain strong, and said Japan would continue to monitor Thailand’s situation in order to make good investment decisions in the country. Moreover, he also expressed the chances of recession and stagnation in Japan’s economy this year.

However, Deputy Prime Minister for economics Olarn Chaipravat said the economic decline in Japan would not result in declining numbers of workers in Thailand as most Japanese operations in the country are high-tech industries that would be adversely affected by such lay-offs. He believed these operations would instead resort to reducing work hours.

Thai Federation of Industries President Santi Vilassakdanont said Thailand’s major exports to Japan are food and textile products, whose markets are expanding well in accordance with consumption demands in Japan. Mr Santi believed Thai exports to Japan would expand by 21 per cent this year.