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Bangkok's Central World mall, gutted by fire
Bangkok's Central World mall, gutted by fire
Vichai Assarasakorn, president Thai Gem and Jewellery Traders Association
Vichai Assarasakorn, president Thai Gem and Jewellery Traders Association


Riots shut down jewellers

The local jewellery industry has paid particular attention to the recent Bangkok riots because Australia is in the top five countries trading with Thailand’s jewellery industry.
The Thai gem and jewellery industry was well on the road to recovery after the global financial crisis - and then came the red shirt riots. 

While the civil unrest has certainly had an effect on tourism, with the streets eerily empty during the nights of the curfew, mass destruction and looting has created the most problems for the industry.

Fortunately, Australian jewellers look set to avoid the economic consequences of the riots, with the Thai manufacturing and export industry largely unaffected.

Thailand’s jewellery retailers have been less fortunate, with mass destruction and looting forcing many to shut down during the protests. 

Statistics confirm that Thai jewellery manufacturers have weathered the storm. Thailand’s jewellery export figures show a healthy increase over the 2009 figures.  

According to Vichai Assarasakorn, president Thai Gem and Jewellery Traders Association (TGJTA), government statistics showed a 20 per cent increase for the first four months of the year. But he has issued a word of caution to the industry and the government, reminding them that it is an increase over 2009, a year affected greatly by the global financial crisis.

“A 20 per cent increase only shows that we are on the road to recovery (after the GFC). My analogy to the government was that we may be out of the intensive care unit but we are still in the hospital,” Assarasakorn said. 

The Thai gem and jewellery market exceeds $5 billion and employed well over one million people before the GFC. 

Assarasakorn said, “If we didn’t have the recent circumstances (Red Shirt demonstrations and riots) then we’d be doing quite OK. America is coming back. Actually, we do not believe the US economy is coming back (just yet) but the financial system is coming back so we are still cautious about the US economy.”

So with a cautious optimism the Thai manufacturing sector has been growing from the recent lows, and the current turmoil in Greece will most likely not affect Thailand because is trade in gems and jewellery with Greece is small. 

However, the local jewellery market has been hard hit by the riots, with tourists staying away in droves. Assarasakorn said that jewellery sales to tourists are big business in Thailand. “The Tourism Authority of Thailand’s research shows that jewellery sales accounts for 10 per cent of a tourist’s total expenditure in Thailand. That’s 10 per cent of all spending including hotels, food and other tourist activities,” he explained. 

Already reeling from lost tourism revenue during the GFC, Thailand’s retailers suffered a further blow when the escalating conflict between “red shirt” protesters and the country’s armed forces caused mass destruction throughout Bangkok.

Central World mall was the worst affected location, with huge fire damage forcing Southeast Asia’s second-largest mall to close down.

The closure affects more than 30 jewellery retailers, most of which were smaller, independent stores.

Big-name brands were also affected, with Swarovski, Rolex, Tissot and Swatch all forced to close their boutiques.

Central World mall after the riots
Central World mall after the riots

There are at least 500 shops in the mall, with 5,000 jobs affected by the damage.

The company said most of Central World mall would be repaired within six months, however some areas will need longer.

The red shirt demonstration was stationed around the area where three large shopping centres are located, and near Bangkok jewellery manufacturing district. Assarasakorn said that many retailers, especially in Central World mall, began removing valuable stock when the red shirt demonstration first began. 

The Central World mall was a main tourist attraction and, ironically, it still is. Even though it has been destroyed people now congregate near the fence the surround the condemned building to take photographs. 

The damage to Central World mall occurred on Wednesday, May 19, with arson attacks from “red shirt” protesters blamed for the destruction.

The attacks were in retaliation to Thai troops, who broke up a camp set up by anti-government protesters in the area surrounding the mall.

The recent civil unrest in not new to Thailand, nor to Assarasakorn for that matter! As one of the organisers for the Bangkok Gems and Jewellery Fair he has had to deal with similar problems in the past. The September edition of the 2006 Fair had to contend with the coup d'état and in 2008 the Fair was held under a State Of Emergency.

It is for these reasons that Assarasakorn is fully aware of the task ahead to ensure that the 46th Bangkok Gems and Jewellery Fair (7-11 September, 2010) will be a success. He acknowledges that after the GFC, the problems in Europe ad now the civil unrest and riots, there is a lot of work to do. 

But in typical Thai fashion, he is confident everything will sort itself out. In fact, he’s sure the “patient” will soon be out of the hospital!

More Reading:
Thailand still important to local jewellery industry

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