Santi Vilassakdanont, president of the Federation of Thai Industries (FTI), said the government should implement immediate measures to prevent businesses relocating elsewhere out of security concerns.

The committee consisted of the country's three most influential business groups - the Board of Trade (BOT), the Thai Bankers' Association and the FTI.

Meanwhile, commercial banks in Yala were open for business yesterday, except for the Islamic Bank of Thailand branch, which is still closed for repairs following last week's bombings of more than 20 bank branches.

Customers have returned to use banking services as usual, albeit under tightened security.

Santi said the first key point is that the government should ensure the safety of the public and assets by creating unity in the operation and that surveillance cameras be installed in all business areas.

Secondly, the special economic zone should contain incentives such as corporate tax exemptions for businesses locating there for at least three years.

Moreover, business borrowers should receive a one-year extension on their debt repayments and they should be exempt from social security payments for three years.

Santi said the government might have to introduce a special act to accommodate these incentives.

Pramon Suthivong, chief of the BOT, admitted that what had been happening in the southern provinces was not normal, so the government should not let the

private sector handle the situation by itself.

"The caretaker government should be able to execute immediate measures to support businesses in the region. Otherwise, they will move somewhere else because the situation in the three southern provinces has become more violent," he said.

Pongsak Yingchoncharoen, the mayor of Yala and adviser to the Yala Chamber of Commerce, said trade and investment activities in Yala had become very quiet lately.

He said the chances were high that investors would move to other provinces because the banks would not approve loans to them, citing the security risk.

Moreover, the banks should set up higher risk reserves due to the escalating violence in the South, he said.

Meanwhile, consumer product sellers refused to offer credit to agents while product prices increased.

"We have to use cash, which is not that convenient for business," he said.

As for the proposed special economic zone, he said: "We want to see a special fund set up for this purpose to solve the problems of the business sector.

"Two years ago, the government provided Bt20 billion in low-interest loans. But no new initiatives have come up since.

"If the banks don't approve new loans, the business sector faces liquidity problems, and investors will be forced to go elsewhere."

Pakorn Preechavuthidej, the deputy president of the Narathiwat Chamber of Commerce, said business operators in the province were suffering from high-risk, low-return trade because they have no credit and cannot receive loans.

Prices of goods have risen while people's purchasing power was declining, he said.

Besides, the overall business atmosphere is not supportive because people tend to stay at home in the late afternoon because they don't feel safe going out.

"If the government allows the situation to continue, no investor will survive," he said.

Watcharapong Thongrung

The Nation