A small step back to normal for Bangkok

THAILAND'S lifting of the state of emergency in Bangkok and its surrounding areas two days ago does not signal the end of the political stalemate in the capital but offers a glimmer of hope to businesses and foreign investors that a recovery is on the cards. Tourists have stayed away in droves ever since the emergency decree was imposed two months ago, which dealt a body blow to Thailand's key tourism sector during what would normally be a peak season. The street protests that began last November have eased, although many people remain spooked after the anti-government demonstrations that have claimed at least 23 lives - mostly in shootings and grenade blasts - and injured hundreds more. Scores of foreign companies postponed their plans to travel or do business in the kingdom, while many insurance companies refused to provide travel coverage.

Even with the emergency rule gone, there is still a great deal of uncertainty in Bangkok, which remains one of the most popular tourism destinations in the world, especially among travellers in South-east Asia. The caretaker government's decision to end the state of emergency, while welcome, has been greeted with caution in some key markets because the Internal Security Act will be in force until the end of April to deal with protesters. Hong Kong, for instance, says it will continue to monitor the situation until next week before making any changes to its existing travel advisories for its citizens.

The prolonged political conflict in the Land of Smiles has already cost South-east Asia's second-largest economy more than US$3 billion, and six more months of similar unrest could result in a recession in 2014, the Board of Trade of Thailand and the Thai Chamber of Commerce (TCC) warned this week. Tourism arrivals were down 4.1 per cent in January and February compared to the same two-month period last year.