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Politics

Political stability essential for economic vitality

BANGKOK -- Speaking to a forum addressing the forthcoming Asean Economic Community, regional business leaders reiterated the mantra that stable politics and successful businesses are inseparable, and that stability remains a central concern for foreign businesses reviewing Southeast Asia as an investment destination.

Kyoichi Tanada, President of Toyota Motor Thailand, speaks in Bangkok on March 31. (Photo by Ken Kobayashi)

     "I have never seen a country where you could separate politics and economics - they go hand in hand," Serge Pun, executive chairman of Yoma Strategic Holdings, told the forum, which was partly organized by the Nikkei Asian Review.

     "Whatever has been achieved in the last four years was a result of the political reform that happened in 2010," said Pun of Myanmar's recent experience. "The absence of that reform would have rendered any kind of economic activity […] useless."

     Yoma has a wide spread of business interests in Myanmar, including real estate, automotives and agriculture, and Pun sees it as a good example of a country where newfound political stability has quickly delivered economic gain.

     After years of political and economic inertia, critical reforms finally got under way with a new administration in 2010. Myanmar still suffers from internal ethnic conflicts, but sufficient reforms have been implemented to fend off foreign economic sanctions and attract investments in telecommunications, real estate and other sectors.

     "I certainly agree with Serge that the economy and politics are closely linked, as shown across ASEAN," said Darren Buckley, the head of Citibank Thailand.

     From a trading outpost, Singapore pulled itself up into an economic powerhouse, thanks in large part to the clean governance imposed by Lee Kuan Yew, its founding prime minister.

     In the Philippines, President Benigno Aquino's anti-corruption drive and a more stable political environment have been rewarded by annual growth rates of more than 6% in the last three years.

     At the same time, stable political environment could help the region keep existing investors at a time when other countries are moving to attract them.      Kyoichi Tanada, president of Toyota Motor Thailand, said his company was banking on the region’s potential as an automobile manufacturing hub, with increasing demand for cars amid improving economy. 

On the other side of the coin, political turmoil in Thailand has dragged down the economy to the point where it barely expanded in 2014.  

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