Uncertain Business Climate

SAN FRANCISCO -- Thailand remains a challenging place to do business six months after an Army coup deposed the previous government, and foreign investment faces a possible slowdown, the U.S. ambassador to Thailand, Ralph Boyce, said in San Francisco this week.

Boyce said the military junta that runs the country on an interim basis has backed off from proposals to impose strict capital controls on foreign investors. But the unelected government stirred up controversy by proposing caps on foreign ownership of Thai companies and saying it would strip key drugs of their patent protection and give away generic versions.

Despite its political instability, Thailand -- with a well-regarded workforce, fairly low costs, good infrastructure and a location in the heart of fast-growing Southeast Asia -- remains attractive to multinational businesses.

Boyce, who stopped in San Francisco on Tuesday to address a meeting called by the California-Asia Business Council and San Francisco firm Lombard Investments, said Ford Motor Co. has decided to build a $1 billion manufacturing plant in Thailand.

Boyce's comment seemed to confirm reports published last month that Ford -- despite losing billions of dollars -- was considering opening a major plant somewhere in Southeast Asia. Ford, which has made pickup trucks in Thailand for export since the mid-1990s, is opening contract talks with the United Auto Workers in North America.

"Investors look at potential destinations and judge how well intellectual property is protected when they decide to put capital in those countries," Daniel Christman, senior vice president of the U.S. Chamber of Commerce, said in Bangkok last week. "The vast majority of companies surveyed by us have expressed serious concerns about the future investment climate in Thailand."

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