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An Analysis of Economic Losses from Violence in Narathiwat Province

The objectives of this research were 1) to study the economic situations in Narathiwat province after intensification of insurgency problems in three southern border provinces 2) to analyse the impact of social unrest on the business and service sectors 3) to estimate the economic losses resulting from insurgency problems and to make recommendations on ways to promote commercial and economic development in Narathiwat. The analysis covered the time period between 2004 to 2007 using both secondary and primary data. Secondary data were compiled from the Office of National Economic and Social Development Board and Economics and Security Organization in the southern border provinces of Thailand. For primary data, altogether 260 respondents who were owners of business and services establishments were interviewed. The economic impacts of insurgency problems were analysed using both descriptive statistics and quantitative methods.

The key findings were among the sectors that were clearly affected were trade and tourism where there had been significant reduction in investment and employment. Consumption reduced only marginally. Insurgency problem had negative impacts on income of the private business operators which necessitated adjustments in employment, the nature of business operation and investment in safety, security measures all of which ultimately affected operating costs and marketing strategy. The economic loss during 2004 to 2007 was estimated to be to10,544 million Baht (in 2003 prices) which was equivalent to 7.6% of Narathiwatvs Gross Provincial Product. The total economic losses consisted of 8, 932 millions Baht were losses incurred by the public sector in terms of defense and security expenditures. The remaining 1,612 millions Baht were losses incurred by private business operators in Narathiwat province. Finally, government has to solve an insurgency problem immediately and promoting industry development especially halal food and wood manufacturing.

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