BANGKOK (Reuters) ? Thailand reported progress in diverting floodwater round its capital into the sea on Friday but the threat of water swamping Bangkok lingered with canals full to the brim and heavy rain forecast for next week.
After trying to hold the line for a week, the government opened some canals on Thursday to allow water to run through the inner city, carrying the risk of inundating some districts but relieving pressure on dikes.
Thailand's worst floods in five decades, which have killed at least 342 people since July and devastated industrialized areas to the north of Bangkok, are the first real test for politically inexperienced Prime Minister Yingluck Shinawatra, whose government has had to form uneasy alliances with the military and political rivals to coordinate the relief effort.
Bangkok's metropolitan authority is controlled by the opposition Democrat Party, while the military has a frosty relationship with the ruling Puea Thai Party because of its de facto leader and Yingluck's brother, Thaksin Shinawatra, the self-exiled former premier overthrown by the army in 2006.
The flood problem was building even before she took office in early August and looks set to cost industry more than $3 billion, slashing economic growth this year.
The 44-year-old businesswoman is resisting calls to declare a state of emergency, saying authorities are able to manage.
"It would ruin investors' confidence, which is quite weak already," Yingluck told reporters at the crisis center.
"At this moment we can see that we (the government and the people) are cooperating very well to help us get through the problem. If I declare a state of emergency, I would be telling the world that we can't help each other."
Thousands of people in northern parts of Bangkok were moving valuables and electrical equipment to higher floors while evacuees pitched tents in the city's Don Muang airport.
In the fringe provinces of Ayutthaya, Pathum Thani and Nonthaburi, residents packed into boats, some carrying the elderly on their shoulders. Elevated tollways had been turned into giant car parks, with moving traffic reduced to a single lane on some highways.
Many convenience stores in downtown Bangkok were sold out of water and instant noodles and appeals were made for supplies from medicine and food to diapers and slippers.
Some workers stayed home to fortify their houses and banks and shops in Bangkok's business districts were piling up sandbags in case canals burst.
DAMAGE, DISRUPTION
"If the floodwater reaches Bangkok, we're looking at five to ten times the damage we've already seen," Bangkok Bank's executive vice-president, Bhakorn Vanuptikul, told Reuters outside his bank's fortified headquarters.
"The damage would be immeasurable because of the disruption to people's lives."
Water now covers a third of Thailand's provinces, some four million acres (1.6 million hectares) in the north, northeast and center of the country, and a seventh big industrial estate was overwhelmed late on Thursday when flood barriers at the Bang Kadi park in Pathum Thani were breached.
The government's effort to steer the water around the east and west of the capital has had some success, its crisis center said, but people in the northern Don Muang and Lak Si districts were told to be on the alert and ready to move.
Viphavadi-Rangsit, a main road from the north into the heart of the city, is the biggest concern, with fears that canals could overflow and swamp it, said Bangkok Governor Sukhumbhand Paribatra.
The start of the new term for 116 schools, scheduled for November 1, would be delayed indefinitely, Sukhumbhand added.
The weather was expected to clear Friday and similar conditions forecast for on Saturday, but light rain was expected Sunday and thunderstorms in the days after, according to the Meteorological Department.
The central bank has put the damage to industry at more than 100 billion baht ($3.3 billion) on Thursday and its governor, Prasarn Trairatvorakul, said 2011 economic growth could be closer to 3 percent than the 4.1 percent it forecast. Finance Minister Thirachai Phuvanatnaranubala said growth might be barely 2 percent.
The Commerce Ministry said exports might fall 13 percent in the fourth quarter compared with 2010.
Thailand is a big regional hub for the world's car makers and most are suffering disruption, either because their plants are flooded or, more often, because parts makers have had to close and the supply chain has been disrupted.
The output of Japanese car makers has fallen by about 6,000 units a day because of the flooding. Germany's Daimler AG said late on Thursday it had halted car production because of the threat of flooding.
Thailand is the world's top rice exporter. Traders and analysts said it was too early to assess the damage, but estimated about 2 million tonnes of milled rice may have been ruined, with delays to the loading of 100,000 tonnes of rice.
(Additional reporting by Apornrath Phoonphongphiphat; Angie Teo and Sinthana Kosolpradit; Writing by Alan Raybould and Martin Petty; Editing by Nick Macfie)
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