By Pooky, this blog economic journalist
Thai Businesses Picks Sides:
The election commission just reported in its latest that the Democrat Party has again received the most amount of donation, doubling its closest rival the For Thai Party, within the last election, saw many key Thai conglomerates, such as CP, donating massively to only the Democrat Party, while BKK Bank has also supported the coup government massively.
Democrats Getting Rich:
Along with announcing the Red School, where the Reds are planning to educate 1 million Thais in the next 3 years, right there with that announcement, was that it will turn to using consumers boycott pressure against key business allies of the Democrat Party of Abhisit.
Laying on the line now is the competition to finance the massive government borrowing, the massive spending on construction, and the Thai agricultural push. All of these industries, have significant Thai conglomerate players looking to be on the friendly end of the Democrat Party, and to a lesser extent, the coalition parties.
That wanting to be on a friendly terms with the government, have seen some such as CP, accused of blocking Red Shirt oriented sites in its internet business and its news site being extremely pro-Abhisit. Rumors also have it with the Reds that BKK Bank, aided the Yellow Shirt significantly and gave it a shoe-in, with the coup government that elevated the current military top brass, Anupong.
Red Shirt Watching Closely:
The Red Shirt, through Thai e-news, have also been running articles exposing the links of Abhisit to all sort of business groups and conglomerates-from the Thai Chamber of Commerce, to PTT to even SCC. Those articles, according to the ranking by Thai e-news, are among the most popular there.
But how far will the Red Shirt go with its boycott? And will it be effective?
The answer to that question is that according to latest reliable data, Taksin and the Red Shirt still commands a great deal of influence in the E-Sarn and the North region.
Blue Ocean Markets:
E-Sarn is Thailand’s poorest with little purchasing power, while the North is better off, but its economy had been hammered by the fall of SMEs which dominates the economy there.
Both region are considered not, currently, the prime market for most Thai conglomerates-with some exception such as CP is a major agricultural region and E-Sarn is moderately important to it. However, on the other side, other markets are considered saturated, especially Bangkok and the Central Plains.
Impact wise therefore, it appears that a Red consumer boycott will not hurt the current bottom line greatly, but could hurt the emergence of the regions into a blue ocean market, where opportunities are smaller, but profit could be highly lucrative from few competitors.
Red Shirt Reluctant:
On the question of effectiveness, the Reds have shown to be not very sophisticated in its boycott attempt, such as with CP on the internet issue, namely just simply writing stories on the internet urging Reds not to use the company’s internet service. While it worked, and CP did lift the blockade, its news station is still as pro-Abhisit as ever, and now and then, will lift the blockade again.
Then with BKK Bank, it simply staged account book tearing up sessions that scared the daylights out of the bank, but then abruptly stopped doing it. Then with the trashing of iPhone, a product CP has exclusive license to in Thailand, the Reds threatened doing it, but then never carried out doing it.
Then while the Red Shirt laugh and ridicule the Nation Group that its print run is being returned from E-Sarn and the North in truck loads, the Nation Group could care less because it has extremely lucrative media contract with the government.
And this can really be why the Reds attempt to use consumers boycott pressure many not work. Simply stated, all the political enemies of the Reds have been or will be benefiting greatly from close relations with the government. Simply stated, the loss of Red Shirt business is too insignificant, especially when considered against the gains to be made on business with the government.
Globally it is different:
However, the cost can be extremely high, and can come from un-expected places. Recently, a foreign reality show decided to run with the global anti-Thailand wave and produced several shows that trashed Thai tourism in a show called “Big Trouble Tourism Thailand.” The government simply freaked out in a major way, and went on a witch hunt of the culprit.
For a variety or reason, Thailand has a very bad global image, namely on the right wing agenda of putting people away for lese majeste. Globally, academia are trashing Thailand in a major way.
While locally, with major Thai conglomerate, the Reds may not be effective. However, the weakness is in the global linkages these Thai conglomerates have. For example, CP sells a great deal of chicken in Europe where human rights is a major concern. All it takes is a mass rally by the Red in Europe against supermarkets that sells CP chicken and one can imagine the fall out.
However, the Reds Shirt, understands its global reach and power but is not exploiting it. The situation is that doing so, can be seen as hurting the Thai economy globally and many of these firms are listed on the stock market, where about 600,000 accounts are in existence.
Taksin does not want permanent enemies:
So the bottom line is that until the situation becomes desperate, the Reds will likely just toy with the idea and use it to threat Abhisit’s business allies. As Taksin, the leader of the Reds, have also shown a great deal of flexibility and have indicated a willingness to negotiate. That obviously means he is leaving open the possibility of changing alliance with business people to his side and does not want to inflict the type of pain that will alienate him from the Thai business world.