THAI FLOODS: Government determined to take action
Thailand is determined to remain the manufacturing hub of Southeast Asia by overcoming the flooding that caused crippling damage to foreign businesses operating in the country, Thai deputy prime minister Kittiratt Na-Ranong said in an interview.
Kittiratt, who doubles as commerce minister, acknowledged to Dow Jones Newswires that he was "concerned" about the risk of foreign companies, the main driving engine of the country's economic growth, leaving Thailand because of fears of being struck by another flooding disaster.
Japanese manufacturers, the largest foreign investors in Thailand, are suffering prolonged production stoppages after their component suppliers were crippled by floods, the country's worst in half a century which some consider to be a man-made disaster brought about by the mismanagement of water systems such as dams, rivers and canals, and the neglect of infrastructure investments.
Among the worst affected is Toyota Motor which was forced to stop production of 20 vehicle models in Japan due to component shortages, while Honda Motor has reduced output in Japan, North America and Brazil.
Kittiratt countered criticisms of the Thai government. "There is no evidence to believe there was mismanagement or malpractice or ignorance," he said. "This has to be a result of climate change and global warming."
He also argued that businesses themselves are responsible for losses caused by the interruptions to their factory operations, saying the businesses have pursued efficiency over better risk management.
Thailand is nonetheless scrambling to implement both short-term fixes as well as major upgrades to the country's water management systems, such as construction of large canals and more efficient use of dams and reservoirs, Kittiratt said.
"We have high confidence that this will not repeat," he said.
The Thai government has recently unveiled a rescue package for flooding victims and affected businesses. Kittiratt emphasized that both foreign and local companies are to be treated equally in receiving assistance, in an effort to allay concerns that Japanese companies may be left out of taxpayer-funded assistance measures, such as emergency loan provision.
Some Japanese companies believe that political instability in recent years has prevented the government from focusing on dealing with long-term challenges such as flood prevention.
Upgrading the water management systems requires huge government spending, which Thai policy makers may find difficult to agree on.
Kittiratt, in an effort to reassure foreign investors, said: "The problem this time is so severe that it should give consensus among Thai people, even different factions, whether they are on the same side or on the other side, that we need to do something. We have no choice."