Thailand The Economy
Floating market scene along a bustling khlong (canal)
in the old capital city of Thon Buri across theriver from
Bangkok.
THE THAI ECONOMY of the 1980s continued to function much along
the open market lines that had traditionally characterized it. It
remained capitalist in orientation, largely operated by the
private sector with supportive infrastructure furnished by the
government, which had some participation in production and
commerce through a limited number of state-owned enterprises.
Commitment to the existing economic system appeared general--none
of the numerous Thai governments of the post-World War II years
had advocated significant changes.
In the 1960s and 1970s, Thailand was among the fastest
growing and most successful developing countries in the world.
Rapid growth in production, accompanied by progress in
alleviating poverty, was impressive, especially in the 1970s. By
the early 1980s, however, Thailand's economic performance had
slowed, partly as a result of the worldwide recession. Although
its annual growth rate remained higher than the average for
middle-income countries, earlier expectations had not been met.
The targets of the Fifth Economic Development Plan (1982-86) had
not been achieved, and serious macroeconomic imbalances
persisted.
The government sought balanced economic growth and the
closing of the income gap, along with improvement of the
inequitable distribution of social services. Social and economic
trends included increasing urbanization, expansion of industrial
activities at a faster rate than agriculture, and growth of
income in the service industries. These trends, often associated
with modernization, produced problems with which the government
tried to cope. Bangkok continued to face serious housing
shortages and severe pressure on such basic services as water,
sewerage, energy, and transport facilities. Although agriculture
had been the most important economic activity of the country with
most of the population living in the rural areas, the area of
land under cultivation was unlikely to increase. Rather, it was
projected that any increase in income would have to be gained
through higher productivity of the labor and land now in use and
by the development and diversification of industrial production.
Accordingly, the government promoted enterprises that produced
agricultural products, chemicals, and mechanical and electronic
equipment and those that were labor intensive or export oriented.
Because foreign trade and investment were an important part
of the economy, external conditions greatly influenced the
country's economic performance. Thailand's harvests exceeded
domestic consumption, enabling the country to export large
quantities of food each year. The major agricultural exports were
rice, cassava products, rubber, maize, and sugar; the major
nonagricultural exports were textiles, electronics, and tin.
Imports included more than half the country's national petroleum
consumption. Although Thailand was a member of the Association of
Southeast Asian Nations (ASEAN) with preferential trading
arrangements, its principal trading partners were Japan, the
United States, countries of the European Economic Community
(EEC), and Australia.
Long-term prospects depended greatly on the effects of
international economic conditions on the Thai economy. In the
late 1970s and early 1980s, rising interest rates, declining
demand and prices for Thai exports, and rising petroleum prices
had caused a serious economic slump. Further growth of the
economy depended, in part, on the success of the Thai government
in improving economic efficiency and increasing domestic savings
through development planning.
Data as of September 1987
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