State of emergency declared in Bangkok

The city is under a state of emergency after clashes between pro and anti government protesters claimed the life of one man, and injured dozens more.

Our South East Asia Correspondent Karen Percy reports during a nationally televised press conference, General Anupong Paochinda, told reporters that his soldiers would not use violence to end a week long sit-in at Government House.

Thousands of protesters with the People's Alliance for Democracy remain inside the grounds and have refused to budge, despite an order from the Prime Minister, Samak Sundaravej, for them to leave.

Mr Samak imposed the state of emergency to allow the army to take over from local police.

The protesters want Mr Samak to resign because they say he has mismanaged the country during his 7 months in office.

They also say he has been doing the bidding of former Prime Minister,Thaksin Shinawatra, who is on trial for corruption but fled the country last month.

Business push

Business leaders in Thailand are urging both sides in the nation's political stand-off to show restraint and restore order quickly.

Karon Snowdon reports economic effects are being felt in tourism and investment activity.

The immediate economic fallout from the crisis includes cancelled tourist holidays, a weakening of the currency, falling stock prices and business anxiety over a threatened national strike affecting essential services.

Pacific Asia Travel Association Director, John Koldowski says Bangkok hotels are making contingency plans.

Making sure they have adequate supplies of water, back-up generators are working and so forth.

In the longer term foreign and domestic investment will suffer says Asia Vice President with Moody's Investor Services, Tom Byrne.

The investor sentiment really took a down turn after the Septmeber 2006 coup and it hasn't come back, and if there's a lot of political uncertainty that will dry up straight away.