Thailand to encourage investment in restive south

Thailand's prime minister said Friday his government would try to boost private investment in Muslim provinces hit by a deadly insurgency, hoping to ease the violence by improving the economy.

Premier Samak Sundaravej met the nation's security chiefs Friday to find new ways of tackling the unrest, which has claimed more than 3,000 lives over four years.

After the meeting, Samak said his government would use non-violent means such as encouraging investment to combat the insurgency.

The region is one of the poorest in the country, with economic growth averaging 1.8 percent a year, compared with 4.3 percent for the entire southern region of Thailand, he said.

He said the investment plan would encourage halal food projects, agriculture support schemes, and increased trade with neighboring Malaysia.

However, companies that choose to take part in the investment program will be required to give the military a 51 percent stake in their projects, Samak said.

"We will ask the private sector to commit 100 percent of investment in three southern provinces... but they must allow the military to hold a 51 percent stake," Samak told reporters.

At least 108 factories have shut their doors in the Muslim-majority region along the southern border with Malaysia, while investment has slowed to a trickle. Poverty has grown, with 10.8 per cent of the region's people living in poverty in 2006, compared with 9.7 per cent two years ago.

Thailand has tried for years to pump investment in the Deep South through tax incentives and other measures, but businesses have been willing to put their money into a region where shootings, bombings and arson are a fixture of daily life.