Thailand Memo
I recommend that we carefully analyse the political unrest observed in Thailand which are categorised below and developing strategies accordingly.
Macroeconomic political risks
As a result of civil unrest Thailand’s economy has experienced slower growth as “the stock market fell almost 10 per cent over the first two days, and car sales and consumer confidence are down” (Snowdon 2014). This will directly affect our revenue.
Civil unrest prompting violent actions also raises doubt in Thailand’s rule of law, as “Thailand has consistently lacked law and order since as police were powerless to enforce order” (Prasirtsuk 2010). This results in the destruction of business assets or disruptions in our distribution and logistics.
High levels of corruption will also affect the business environment as a whole. As shown through transparency international’s corruption index, Thailand has a score of 35 which is considered to be high in corruption. This affect all aspect of business from fair competition to operations, all of which may undermine revenue of the firm.
Micro economic political risks
In the case of Thailand’s recent political unrest, severe setbacks in the tourism industry can be observed below.
Setbacks in tourism directly affects revenue of our firm was tourists make up a large segment of our target market.
Party Specific Risks
Yellow shirt victory: operational risks may occur as part of the yellow shirt’s “nationalistic policies includes rising interest spikes and reductions in FDI” (Ungpakorn 2008), this may affect the business as cost of investment will become higher and foreign investment will be harder to direct ultimately rendering operations more difficult.
Redshirt Victory: the “pro-poor policies where the government will provide more benefits to the lower social class without increasing taxes to wealthier individuals” (Ungpakorn 2008) may result in Ownership – control risks as the state may enforce local ownership in order to retain revenue in
Macroeconomic political risks
As a result of civil unrest Thailand’s economy has experienced slower growth as “the stock market fell almost 10 per cent over the first two days, and car sales and consumer confidence are down” (Snowdon 2014). This will directly affect our revenue.
Civil unrest prompting violent actions also raises doubt in Thailand’s rule of law, as “Thailand has consistently lacked law and order since as police were powerless to enforce order” (Prasirtsuk 2010). This results in the destruction of business assets or disruptions in our distribution and logistics.
High levels of corruption will also affect the business environment as a whole. As shown through transparency international’s corruption index, Thailand has a score of 35 which is considered to be high in corruption. This affect all aspect of business from fair competition to operations, all of which may undermine revenue of the firm.
Micro economic political risks
In the case of Thailand’s recent political unrest, severe setbacks in the tourism industry can be observed below.
Setbacks in tourism directly affects revenue of our firm was tourists make up a large segment of our target market.
Party Specific Risks
Yellow shirt victory: operational risks may occur as part of the yellow shirt’s “nationalistic policies includes rising interest spikes and reductions in FDI” (Ungpakorn 2008), this may affect the business as cost of investment will become higher and foreign investment will be harder to direct ultimately rendering operations more difficult.
Redshirt Victory: the “pro-poor policies where the government will provide more benefits to the lower social class without increasing taxes to wealthier individuals” (Ungpakorn 2008) may result in Ownership – control risks as the state may enforce local ownership in order to retain revenue in
References: Giles Ji Ungpakorn 2008, A briefing on the continuing crisis in Thailand, Prachatai, http://www.prachatai.com/english/node/781 retrieved on 24/03/2014 Karen Snowdon 2014, Political unrest causing serious damage to Thai economy, ABC News, http://www.abc.net.au/news/2014-01-17/political-unrest-causing-serious-damage-to-thai-economy/5205786 retrieved on 24/03/2014 Kitti Prasirtusk 2010, Thailand in 2009: Coloured by turbulence, Asian Survey, Vol. 50 No. 1 California University Press