By Arno Maierbrugger/Gulf Times Correspondent /Manila

The May 22 coup d’etat in Thailand might have been one of the few feasible strategic steps to end a month-long political impasse, but it comes close to an economic suicide of a formerly prosperous country that used to have excellent trade ties to the Middle East. The likely impact on these trade ties can still not be determined in full by now as it remains totally uncertain in which direction the country is steering, but the first signs of the downward spiral are clearly visible.

One segment suffering from the political situation is the lucrative medical tourism industry in Thailand that caters to a large extent to Middle East patients. Thailand welcomed 2.5mn health and wellness tourists in 2013, of which one third were from the Middle East, mainly the Gulf Co-operation Council region. However, as reported by Gulf Times, patient numbers in hospitals popular with health tourists dropped by up to 40% so far this year, and not only in Bangkok, where most of the political action is taking place, but also at popular tourist destinations such as Phuket.

Losses in revenue in Thailand’s health tourism industry could amount to $1bn if the political situation remains unresolved and many Middle Eastern countries uphold their travel warnings, local experts warn.

Other segments are property and real estate. Bangkok used to be among the more popular investment destinations for the Middle East due to the relatively good quality of premium developments, constant appreciation over the past years but with prices still on levels below regional peers such as Kuala Lumpur. However, while it probably was worthwhile thinking of investing in Thai property during the months of protests when the baht together with condominium prices fell, the situation after a coup d’etat is totally different as there is no more legal certainty at all and no predictability of legal decisions on ownership rights in the future. This will certainly deter Middle Eastern investors who represent a significant number of foreign property investors in Thailand – among the biggest deals in the last year was a Dubai-based business group that invested $27mn in Thailand’s upcoming tallest tower, MahaNakhon, whose completion planned for 2015 is now likely to face another delay, as it happened to many other projects near protest sites in Bangkok.

Problems are also seen in the area of hotel and tourism investment. Though leading hotel investors attending the recent Thailand Hotel Investment Conference in Bangkok expressed their confidence in the country as a tourist destination and released a statement on May 22 that hotel investment in Thailand was “still secure”, their release was seriously challenged by the coup announcement exactly 2 hours later on the same day.

Thailand’s tourism numbers are forecast to drop between 5% and 10% this year – in Bangkok they fell by 15% in the first quarter -, and the total numbers will likely reach a five-year low but it could even be worse as these estimations were made before the coup took place.

The only thing for sure in Thailand is currently uncertainty and any investment under these circumstances is a big bet.

A nurse holds a tray of medicines at Bangkok Hospital in Bangkok. Thailand welcomed 2.5mn health and wellness tourists in 2013, of which one third were from the Middle East, mainly the Gulf Co-operation Council region.