Analysis

A brave new world in the land of smiles

  • Asia Pacific
  • Thailand
  • Creating a Resilient Organisation
  • Political and Economic Risk Consulting
John Bray

John Bray

A brave new world in the land of smiles

 

Thailand is currently negotiating a phase of profound and unprecedented political uncertainty, following the passing on 13 October of the revered King Bhumibol Adulyadej, the world’s longest-reigning monarch. While heir apparent Crown Prince Vajiralongkorn is still likely to ascend the throne with the backing of the military, his apparent decision to delay accepting the invitation to the throne will create fresh uncertainty amid a tense period in Thai politics. Until this undefined interim passes, destabilising scenarios involving a contested succession, and factional conflict among sections of the military and political elite, will remain plausible.

King Bhumibol’s passing will likely trigger at least two to four weeks of significant business disruption across Thailand. Beyond this initial period, disruption is likely to become less severe. So far, entertainment businesses and venues have already been requested to suspend operations for 30 days, while entertainment events (including sporting tournaments) are likely to be postponed for the same duration. Businesses will need to consider promotional or marketing campaigns (for product roll-outs, branch launches) and roadshows in light of mourning period protocols and the sombre public mood, and communicate respectful messages to staff and condolences to Thai clients and branches of state. 

The government is also likely to extend requests to businesses in the hospitality, leisure and retail sectors to temporarily suspend some of their activities, though the impact is unlikely to be prolonged because the economy depends heavily on tourism. Key economic functions in banking and financial services sectors would face even lower exposure to such risks of disruption. 

Labour-related interruptions are likely in the days ahead, but will gradually lessen after that. The government has declared 14 October a national holiday for government and state enterprise employees to mourn the king’s passing. Further royal and government ceremonies to honour the late king will follow; state officials may be required to take time off to attend them. The corollary is that businesses will experience delays in dealings with state agencies, including securing regulatory approvals. Critical infrastructure such as airports and seaports are unlikely to be formally closed, but staff absences will occur to some degree as employees take extended time off from work. This could result in longer customs and goods clearance times, delays to travel itineraries, and potential service and supply chain issues.

For now, the junta’s tight security measures in Bangkok will deter most anti-junta groups from seeking to undermine the regime, or push any wider political agenda at such an emotional time. Any protests are likely to be poorly attended and swiftly met with a strong security response, and to be detrimental to their organisers since such events would be perceived as disrespectful to the deceased king. However, in the medium term, the succession, even if ultimately smooth, will not eliminate the significant standing risks of a return to broader political conflict and unrest.

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