S IN THAILAND, 1985-95
Here is a list of the main measurable indicators of
economic growth and structural
change for Thailand to be observed by World Bank staff
members who are visiting there.
To ensure a successful tour of business meeting
between the World Bank
representatives and the Thai government and their business
executives, I feel that a
thorough understanding of the Southeast Asia's (although
the main focus will be Thailand's)
economic growth is necessary. Economic growth is simply a
long-term increase in real
output per capita and measuring it often involves an
unbiased and theoretical assessment of
national performance. The following are the key signs of
economic growth:
1) Agricultural Modernization and Agricultural
Diversification
2) Industrial Transformation
3) Growth of Service Industry
4) Improvement in Quality of Life (including
social, environmental, and economic
variables)
5) Growth of Trade and Foreign Investment
6) Improvement in Technology and Infrastructure
Note that in comparison to other Southeast Asian
countries (except Singapore),
Thailand has a relatively better performance in agriculture
and service industries during
the mid and late 80s. For example, the cultivation,
processing, and export of agricultural
products, especially rice, was traditionally the mainstay
of the Thai economy. Although
Thailand has long been among the most prosperous of the
Asian nations, its dependence on
a single crop made it extremely vulnerable to fluctuations
in the world price of rice and to
variations in the harvest. The government has diminished
this vulnerability by instituting a
number of development programs aimed at diversifying the
economy and by promoting
scientific methods of farming, particularly controlled
flooding of the rice fields, so that the
rice harvest might remain stable even in years of few
rainfalls. In the early 1990s,
Thailand annually produced approximately 18.5 million
metric tons of rice, up from about
11.3 million metric tons per year in the 1960s (Dutt,
1992). Another example of its notable
success was the increase in tourism during the late 1980s
that boosted the economy of
Thailand's service industry.
There are many ways to explain the economic
development of Thailand and other
Southeast Asian countries. Three things come to mind that
is associated with the rise of
their economic success in the 1980s to mid 1990s. The
first is the increase of foreign
direct investment (FDI). In the mid 1980s, there was an
average $676 million dollars in
FDI and by 1995, FDI flowing into Thailand's economy had an
average $2,300 million
dollars. Second, the stock market grew in size between
1980 and 1996; Thailand's market
grew from a mere $1.2 billion dollars to a staggering $99.8
billion dollars (before the
crash in 1997). Third, the people's incomes in many
Southeast Asian countries rose
dramatically between 1980s and early 1990s. In Thailand,
the gross domestic product per
person rose from $444 in 1980 to $6,900 in 1996. Beginning
in the early 1980s, huge
amounts of investments began pouring into Asian countries,
lured by high returns, stable
governments and currencies pegged to the dollar. The
foreign money paid for factories and
skyscrapers, and a booming export economy created a newly
comfortable middle class that
in turn stimulated more consumption.
Other explanations of economic development in
Thailand include:
1) Removal of Regional Economic Disparities
2) Diversification of the Economy
3) Industrialization
4) General Economic Development are conceived as
the goals of the country
Now I will look at the individual sector of
Thailand's economy and try to show the
reasons for each sector's success in its economic
development.
Agriculture accounts for 16% of Thailand's gross
national product. As mentioned
above, rice is the principal crop and the leading export in
Thailand. The second most
important crop in value is rubber, which is produced mainly
on ...