I have been travelling around Northern Thailand recently….

Well a lot has happened in THailand since I was home for Xmas so lets take a look at it all and try to make some sense from it.

First, there were the capital controls on foreign investment. This meant that foreigners (also politely referred to as Aliens) must put 30% of their investment in non-interest bearing governments accounts or bonds for a minimum of 12 months. This was meant as a way to control the speculation on the Thai baht which has appreciated over 15% in the last year.

However, the effect of this policy meant that institutional investors did a “runner” from the Thai stock market as controls like this frighten them or are even contrary to their investment prospectus. Meaning that they had little choice but to sell. Although the rules were later changed the following today to give concessions to the stock market and property the damage had already done.

Foreign investors lack confidence in this “interim” government. Zenophobia is now a common word in the vocabulary of the standard Thai expat.

Following this there were also the bombs in Bangkok on New Years eve. Still nobody has claimed responsibility and there is a lot of speculation as to who is behind it all. The “interim” government has hinted at previous leaders who have lost their power. Taksin has denied any involvement and has suggested that Southern insurgents are responsible.

The Prime MInister has stated that Bangkok will not be safe for the next 2 months as they are expecting similar attacks to occur.

Notwithstanding all this turmoil the government has pushed ahead with its plans to amend the Foreign Business Act which further resticts the business operations of foreigners in Thailand. Yesterday they announced approval of the new law which would ban the use of nominees in Thai companies meaning that certain industries could not be controlled by foreigners – and that they must find a Thai partner within a certain period of time.

I fear for the economic future of Thailand. The people who will suffer most will be the lower and middle class Thais. The rich Thais will see this as an opportunity to buy assets at discounted rates and further increase the gap between rich and poor.

Vietnam must be laughing their heads off. In nearly every report there is a reference to Vietnam and ho happy they are to receive foreign investment!

Of course, this is still early days and the rules dont apply to all businesses. THere are different classes of businesses and depending on the class there are different rules. The full details will be interesting. The “interim” Government are stating that they are trying to clear up any misunderstandings of the law and any ambiguity. This, they say, will make it a more attractive prospect for foreign investment. I dont share their optimism.

Up to now, people have always said lets wait and see what happens -TIT – This Is Thailand. But they said that about the visa restrictions and look what happened there. They said it about Taksin and look what happened there. They said it about the Thai baht and look what happened there. They said it about the Southern insurgency and look what happened there. They said it about foreigners owning land through Thai companies and look what happened there!

All in all I think that Thailand is not a place to do business with at the moment. Sure, this could be a temporary blip but its the combination of ALL the above issues that make it such a big turn-off. On their own, none of these problems are insurmountable but combined they are devastating.

Regarding my own personal circumstances I was refused a long term visa by the Thai consulate in Dublin. Again, I didnt meet the criteria. So what they are saying is invest your money here but you cant live here. Great – NOT!

So I will be returning to IReland in February for good. At the moment I am looking at doing some IT contract work when I get home but I am also looking at the prospect of doing some kind of import/export business. Over the next few weeks I am going to invest some time sussing this all out. I will be hopping in my car soon and driving all over Thailand. Should be fun.

If anyone has any knowledge of garden furniture in Thailand I would love to hear from you.

On a lighter note, United are doing quite well recently. They were lucky in the FA Cup to squeeze past Villa. Rooney is not playing well and I think Fergie should drop him. Larsson is a great bit of business – showing that Fergie hasnt lost his touch!