Sun, Jun 13, 2004 - Page 11 News List

Unrest hits Thailand's tourism industry hard

REUTERS , BANGKOK

Unrest in Thailand's Muslim south has scared off tourists and cut rubber production, hurting the country's economic growth, Prime Minister Thaksin Shinawatra said yesterday.

Shortly after Thaksin vowed to restore peace in a month in the region where more than 200 people have been killed since January, a bomb exploded in front of a judge's house in Narathiwat province. No one was hurt.

"One factor that hurt our growth in the first quarter this year was the unrest in the south," Thaksin said in a weekly radio address.

The country's GDP for the first quarter of the year grew only 6.5 percent from the same period last year, compared with 7.8 percent annual growth in the previous quarter, the national planning agency said recently.

"The unrest has been reported worldwide, which has scared off many potential tourists," Thaksin said.

"Tourism didn't grow as much as we expected," he said. He did not give details.

Authorities have blamed Muslim militants for daily explosions and killings in recent months that have revived memories of a separatist insurgency that plagued the region in the 1970s and 1980s but almost petered out in the 1990s.

Despite sending in thousands of troops and promising millions of dollars in development aid, Thaksin's government has failed to stop the violence in the Malay-speaking region, which borders Muslim Malaysia.

About 2 million tourists visited Thailand in the quarter to March, down from 2.03 million in the same period a year ago, the tourism ministry said in April.

Tourism generates about 6 percent of GDP and had just rebounded from an outbreak of SARS in Asia last year that lopped 10 percent off last year's arrivals.

Australia and the US have advised their citizens against unnecessary travel to the three southernmost provinces -- Pattani, Narathiwat and Yala -- following clashes on April 28 in which security forces killed 108 militants.

The area is about 350km to the south of the resort island of Phuket.

Thaksin said the violence had prevented rubber workers from going out to tap rubber at night, hurting production.

"Despite good prices in the global markets, rubber volume from the three southern provinces is low because people are worried about their safety," Thaksin said.

"I've ordered troops to protect them to resume their normal rubber tapping soonest," he said.

Rubber industry officials say output is bound to be hit in the three provinces, which produce 200,000 tonnes of rubber a year, about a tenth of the country's production. Most is sold to Japan, China and the US.

The latest violence took place in Narathiwat town yesterday when a bomb made of ammonium nitrate was set off by a mobile phone signal near the home of a judge. It caused some minor damage but no injuries.

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