Thailand investors express fears after army takeover

Thailand investors express fears after army takeover
Thai soldiers patrol at the Army Club in Bangkok on May 20, 2014.

TOKYO - Thailand's biggest investor Japan on Tuesday expressed "grave concerns" after the army imposed martial law, while the United States said it must only be "temporary" as multinational firms monitored events nervously.

After almost seven weeks of anti-government protests, generals ordered forces onto the streets of Bangkok and troops were positioned at television stations as the army said the media would be censored.

But despite the crisis - which saw Southeast Asia's second biggest economy shrink 0.6 per cent in January-March - analysts said the economy could bounce back.

"We have grave concerns about the situation in Thailand," Japan's chief cabinet secretary Yoshihide Suga told reporters in Tokyo. "We once again strongly urge all parties concerned to act in a self-restrained manner without using violence."

The dismissal of prime minister Yingluck Shinawatra this month in a controversial court ruling has sent tensions soaring in the country, which has endured years of political turmoil.

"Red Shirt" supporters of Yingluck and her brother Thaksin Shinawatra, who was deposed as premier in a 2006 coup, have warned of civil war if power is handed to an unelected leader, as the opposition demands.

The army, which has mounted numerous coups in recent decades, insisted Tuesday's declaration was not an attempt to seize power. "This is not a coup," it said. "The public do not need to panic but can still live their lives as normal."

Thailand important to Japan firms

Private-sector think-tank Teikoku Databank said in February nearly 4,000 Japanese firms operate in Thailand, with investments the Bank of Thailand said were worth $6.89 billion in 2013 - half of the total inward investment.

That figure is more than the next three biggest investors combined - the United States, Britain and the Association of Southeast Asian Nations (ASEAN).

Thailand has become increasingly important for Japanese firms as they shift operations from home to counter high wages and an overvalued yen and to mitigate the effects of natural disasters on the supply chain.

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