The 2011 Board of Investment Fair was supposed to showcase everything great about investing in Thailand. The first such event for 11 years, to be held in purpose-built pavilions on the outskirts of the capital, was supposed to kick off next week. Now, though, with authorities still scrambling to steer floodwaters through makeshift systems of dykes and sandbags in the industrial parks of Bangkok – do we swamp this manufacturer’s facility? Or that one? – the BOI has postponed the fair until January.

The irony will not be lost on anyone. In the short term, consumption and tourism are suffering, food inflation is proving hard to master, and the economy as a whole is slowing. But in the long term, it is Thailand’s foreign direct investment that could be damaged most by the worst floods in half a century. For much of the past five years, regional FDI had headed towards Vietnam or Indonesia, weary of Thailand’s political instability and a declining share of spending on infrastructure, as a percentage of gross domestic product. This year, though, had seen a surge, perhaps lured by pre-election promises to spend more on roads, bridges and drains. Net FDI applications in the first seven months were Bt205bn ($6.7bn), double the tally of a year earlier. About half came from Japan, easily the largest investor by existing FDI stock.

With rainfall about 42 per cent higher than average across Thailand this year, this is certainly force majeure territory. And there is goodwill on both sides to keep supply chains intact. The Thai government says it will grant extra tax credits for companies affected, while the state-owned Japan Bank for International Cooperation stands ready with loans. But the losses are real, as Sony, Panasonic and Honda, among others, have demonstrated . And the BOI should appreciate the sanctity of the “just-in-time” manufacturing mantra. Thailand’s infrastructure deficit has rarely been put in sharper relief.