Two suspects are arrested near the clock tower in Betong municipality.

Business in Yala may be brought to its knees after more than 20 banks were bombed in the province yesterday. But most officials and businessmen believe the national economy will avoid the havoc so far still contained in the deep South.

Fourteen bank branches will be closed in Yala today to investigate the bombings and repair damage, but they should reopen on Monday.

All cash-dispensing machines in the province are available for use. Banks will be responsible for security on their premises, while the central bank has already tightened security for its money distribution centre.

The SET index closed up 6.39 points, 0.9 per cent, at 690.90, off an intra-day low of 685.90 following news that least 22 bombs exploded inside commercial banks in the restive south. The SET's muted response to the bombs reflects the limited impact expected on the national economy.

Yet, Pote Paiboonkasemsut, president of Yala's Chamber of Commerce, said the explosions showed flaws in the government's bid to protect lives and assets. "Bombing commercial banks is like disrupting the body's blood vessels and this will sink the trade and investment sentiment in this province," he said.

Jit Siratranont, deputy secretary-general of the Thai Chamber of Commerce, said terrorists had shifted their target from public agencies to commercial ones and this would lessen confidence among Malaysian investors and businessmen.

Malaysian tourists who planned to take a vacation in Yala were already cancelled their room bookings, said Charoen Wangananon, president of the Domestic Travel Association.

The Thai Hotels Association (THA) said tourists were shifting to other tourist sites such as Phuket and Krabi, or would postpone their trips.

However, Deputy Governor Tarisa Watanagase told reporters there would be little impact on the national economy.

"The damages to those banks is minimal," she said.

Her assessment was more optimistic than the central bank's earlier reaction. "It's scary. We can't estimate the damage yet," Governor Pridiyathorn Devakula had said. 

Central bank senior director Suchada Kirakul also said that if the violence could be controlled within the three southern provinces, it would not have much affect on the national economy as the area rarely attracted investment.

Australian Ambassador to Thailand Bill Paterson said that when business people consider investments, they obviously make an assessment of risks - financial risk, political risk and even the bird-flu risk. And law and order was one part of that.

"But as a general proposition, we consider Thailand to be very stable country. It has a problem in of violence in the South. But to be honest, I don't think there would be a great deterrence to Australian companies considering investment here.

"I mean if you consider setting up a factory in Yala, I am sure there would be... But if you are going to put your factory in Rayong province, I think we see that as an area there's good infrastructure, [and] a good location close to the market. And they will be positive about that," he said.

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