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Political unrest in Thailand has cast a shadow on Manila where some of the region’s top businessmen and policymakers are meeting this week partly to discuss Southeast Asia’s economic integration that starts next year.
Before dawn on Tuesday, Thailand’s army declared Martial Law after months of government protests that led to the recent ousting of Prime Minister Yingluck Shinawatra, who was found guilty of abusing her power.
Finance Secretary Cesar V. Purisima said Thailand’s political tensions should help break the impasse that has paralyzed policymaking in Bangkok.
“The important thing is businesses work, global supply chains work, and that there are no disruptions,” Purisima told reporters at the sidelines of a meeting of the Association of Southeast Asian Nations’ (Asean) finance ministers in Makati City.
The Asean Finance Ministers Investors Seminar (AFMIS) was held in town this week ahead of the three-day World Economic Forum on East Asia, which takes place in the country’s central business district starting Wednesday.
The 10 Asean members’ commitment to form a single economic bloc similar to the European Union (EU) aims to improve the region’s attractiveness to foreign investors, among other goals. Taken as a whole, the region’s economy will be worth up to $2 trillion.
Asean will also be the third-most populated bloc in the world with more than 600 million people. Policymakers in the region have agreed to bring tariffs on 95 percent of products to zero. Countries have also agreed to open up restricted industries. Professionals such as lawyers and accountants will also be allowed to practice their trades in other countries.
Asked whether the situation in Bangkok posed a threat to the readiness of the region to integrate into a single economic unit next year, Purisima said businesses might simply shrug off the tensions.
“I think this was a necessary development. They’ve had an impasse for quite a period already but my thinking is that this is going to be short term. I think it shows you a march toward maturation,” he said.
“At first it was Myanmar that had challenges but they’ve improved their domestic politics and governance,” he said.
In a note to investors on Tuesday, debt watcher Fitch Ratings said the declaration of Martial Law in Thailand should not affect Bangkok’s fiscal health. This might even help the Thai government, breaking an impasse that has lasted for six months.
“The key factors for the ratings are whether Thailand can avert more serious and bloody political disorder, and whether we see a return to a fully functioning government that is able to make policy and pass a budget for the next fiscal year starting in October,” Fitch said.