Sharp drop in Singapore investments in Thailand

The Straits Times, February 26, 2007


SINGAPORE investments in Thailand fell sharply by 88 per cent last month compared to the same period last year, according to Thailand's Board of Investment (BOI).

Investment from Singapore-registered firms dropped from 5.26 billion baht (S$234.4 million) in January last year, to just 619 million Baht.

Singapore is one of Thailand's top five foreign investors and the leading investor from Asean.

While some are quick to link the sharp drop to the rough patch that the two countries are going through, others say it may be premature to read too much into the figures.

BOI figures showed that investments from Taiwan and Britain also fell for the same period.

Taiwanese companies invested 1.2 billion baht last month compared with 3.7 billion baht a year ago, while British firms pumped in 362 million baht, down from 1.5 billion baht in January last year.

Overall, the BOI said total foreign investments in January amounted to 14.8 billion baht - up 19 per cent from the same month last year.

The Bangkok Post newspaper on Wednesday quoted a source in the BOI as saying that the drop from Singapore reflected strained bilateral relations.

Anti-Singapore sentiment has simmered in Thailand since Singapore's investment company Temasek Holdings bought a controlling stake in telecommunications giant Shin Corp from the family of then-prime minister Thaksin Shinawatra last year.

The deal catalysed an anti-Thaksin movement in Bangkok which culminated in Mr Thaksin's ouster in a military coup last September.

The military-appointed government which replaced him has opened investigations into the Shin-Temasek deal, and said it would like to regain control of Shin Corp subsidiary ShinSat's satellites.

Bilateral ties were further strained over a visit to Singapore by Mr Thaksin last month.

A BOI official who spoke to The Straits Times, however, cautioned against reading too much into the latest figures.

'The figure from a single month does not tell the whole story. We have to see the trend over at least a quarter, we can't say if it is higher or lower,'' she said.

Independent analysts also said it was too early to conclude that recent events have led to a loss of confidence in Thailand among Singapore investors.