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Economy
Thailand
has been emerging with difficulty from the Asian
crisis of July 1997 which came about from the crash
of the baht, the national currency, but after two
consecutive years of recession it is starting to
recover due to exports taking off again.
Thailand's economy has a double velocity, with
serious differences in the standard of living. But
the risk of political trouble is fairly low in a
country in which there are no food shortages and
which makes a great display of national unity. The
country is one of the most democratic in the region
and the economic growth potential remains high,
even if production has not yet returned to the
level it enjoyed before the crisis.
The economy is dynamic and turned towards
exportation, policies of diversification have been
successful as manufactured products now represent
80% of the exports. The excellent external trade
performance has permitted the current balance of
payments to remain with a very comfortable surplus
and for the foreign currency reserves to go over 32
billion dollars.
The financial sector needs very in-depth
restructuring which will take a lot of time before
it is totally cleaned up. The banking restructuring
has slowed down after two years of vigorous
macro-economic reforms which were encouraged and
supported by the IMF.
At the end of 2000 bad debts represented about a
third of the total. The stock exchange dropped by
40% over the first nine months of the year and the
value of the baht spiralled down again to reach, at
the end of October, its lowest level for two
years.
The stabilization procedures concerning private
debts have not yet given any spectacular results :
industrial groups are negotiating revised payment
schemes for their debts, in the hope that the
situation will improve and the banks have managed
to reduce their non-paying loans.
Inflation has been kept in check and the
unemployment figures have gone down again. Internal
demand remains low, but mainly due to people being
cautious rather than to a real purchasing problem,
in a period where the return to a lasting growth
situation is not yet ensured.
Thailand has actually plenty of liquidity, but the
financial structures are reluctant to finance
projects which are often not good quality.
Investments are being re-orientated towards more
productive sectors, like transport : the first part
of an elevated railway in Bangkok was opened at the
end of 1999, 4000 kms of highway are being built as
well as new port equipment in the capital.
Direct foreign investments are continuing at a
regular pace. Modernizing and privatizing the
private sector via foreign partnerships is
continuing, with the priority being given to the
sectors of air transport, electricity and
water.
The reforms programmed over the last three years
following the crisis are being progressively
carried out : the econonic laws are being
rewritten, the judicial system is being modernized,
the central Bank has a new status to guarantee its
independence, the banking system is being reformed
progressively...
Division of the GDP by activity sector :
agriculture : 11.2%
industry : 32.1%
mining : 9%
services : 47.7%
Main
economic indicators
|
|
1997
|
1998
|
1999
|
2000
|
|
economic growth
(%)
|
-1.7
|
-10
|
4.0
|
5.0
|
|
inflation
(%)
|
5.6
|
8.1
|
0.3
|
1.8
|
|
budgetary
balance/GDP (%)
|
-2.8
|
-7.3
|
-
6.3
|
-6.8
|
|
unemployment
(%)
|
0.9
|
3.4
|
na
|
na
|
|
exports (billions
$)
|
56.7
|
52.9
|
56.3
|
61.3
|
|
imports (billions
$)
|
55.1
|
36.6
|
42.7
|
50.3
|
|
balance of trade
(billions $)
|
1.6
|
16.3
|
13.6
|
11.0
|
|
current balance
(billions $)
|
-3.1
|
14.3
|
11.5
|
8.6
|
|
external debt
(billions $)
|
96.0
|
90.6
|
80.7
|
74.4
|
Imports
:
Customs
duties remain high on consumer goods. In the latest
recovery plan (10th August 1999) the government
decided to decrease the customs duties on more than
600 products, mainly intermediary goods and
equipment.
The Board of Investment launched a vast reform
programme in 1997 to make the customs system
clearer and faster. Concerning standards other than
tariffs, industrial products have to have a licence
and conform to the standards of the Thai Industrial
Standards Institute (TISI).
Imports come from the United States (12.1%), Japan
(22.8%), the European Union (13.6%), Asia (apart
from Japan) (34.1%).
(sources : MOCI, Le Monde)
Agriculture
Thailand
is a well irrigated country with a strong
agricultural production. Agriculture contributes
20% of the country's exports and has actively
participated in its economic recovery. The sales of
rice, sugar, fruit (pineapples) and sea food
(shrimps) have again progressed during
2000.
Rice, the
country's main crop, covers 42% of the farmed land.
Thailand is the third biggest producer in the world
per capita and the biggest exporter in the
world.
Maize is
grown on 8% of the farmed land.
Thailand is the biggest producer of rubber in the
world and at the end of 1999 it caused the break up
of the association of exporting countries (run on
the same lines as the OPEP) which it judged to be
inefficient, and since then has been leading its
own commercial policy on the world
market.
Fishing is an
important sector for Thailand, 3.49 million tons
were fished in 1997 which represents 59 kg per
capita (for comparison in France 14 kg per capita
are fished). Shrimps are the 5th biggest item
exported.
Agriculture
in ThailAnd (in millions of tons, head, m3
for timber)
|
Production
|
1997
|
1998
|
1999
|
|
wheat
|
0.001
|
0.001
|
0.001
|
|
wood
|
35.962
|
36.302
|
-
|
|
coffee
|
0.084
|
0.078
|
0.08
|
|
sugar
cane
|
56.394
|
45.850
|
52.839
|
|
cotton
|
0.016
|
0.013
|
-
|
|
maize
|
3.832
|
4.986
|
4.630
|
|
oranges
|
0.315
|
0.320
|
0.320
|
|
barley
|
0.002
|
0.002
|
0.002
|
|
potatoes
|
0.007
|
0.007
|
0.007
|
|
rice
|
23.58
|
22.784
|
23.272
|
|
tea
|
0.005
|
0.005
|
0.005
|
|
cattle
|
6.778
|
6.328
|
5.677
|
|
sheep
|
0.042
|
0.041
|
0.041
|
|
pigs
|
6.894
|
7.000
|
7.200
|
|
fishing
|
3.488
|
na
|
na
|
Industry
Thailand is
presently, after Japan and South Korea, the third
biggest Asian exporter of motor vehicles : General
Motors and Ford along with Japanese manufacturers
have installations there.
There is lively competition with Malasia and
Singapore in the electronics field, but Thailand
has managed to attract several assembly factories.
25% of all sales are in this domaine.
Industrial restructuring is advancing : Thai
Petrochemicals were legally rectified in March
2000. It is the first major Thai group to be
treated in this way, a proof that the authorities
really want to go about reforming the sector.
Mining
statistics (mining in millions of tons, gas
in billions of m3)
|
Production
|
1997
|
1998
|
1999
|
|
Tin
|
0.001
|
0.002
|
0.003
|
|
Iron
|
0.080
|
0.124
|
0.213
|
|
Natural
gas
|
15.2
|
16.1
|
17.8
|
|
Lignite
|
23.512
|
20.896
|
19.000
|
|
Petrol
|
5.4
|
5.6
|
5.9
|
|
Phosphates
|
0.009
|
0.010
|
0.008
|
|
Lead
|
0.010
|
na
|
na
|
There is also the
production of precious and semi-precious
stones.
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