1. Country Study: Thailand

2. Overview
Thailand was never colonized. A constitutional monarchy was established in 1932
Military Coups are common and play an important role in political environment of the country
Export-dependent, open economy, free enterprise (exports of primary products – rice, rubber, tin, teak)

3. Overview (cont.) GDP per capita - $8,500, growth rate 4-6%
Population – 65 million, working age population 70%
Population growth rate 0.62%, HIV/AIDS 1.4% (more than 600,000 people)
Relatively homogeneous country Thai 75%, Chinese 14%, Buddhism 95%

4. Overview (cont.) Agriculture 14%, Industry 44%, and services 44%
Gini coefficient 0.42%, Inflation rate 5.5%
External debt: $65 billion
Export growth ( ): 17%

5. Development Model
In the First three Five Year Plans ( ) Thailand emphasized economic growth
Economic development policies emphasized in the plans were – infrastructure development, agricultural development (irrigation, crop diversification), land reforms and assistance for IMPORT SUBSTITUTION
Fourth Plan (’77-81) emphasized decentralization of industry and growth from cities to rural areas
It also marked the beginning of export-oriented industrialization

6. Development Model (cont.)
Industrial Estate Authority of Thailand established several estates in rural and semi-rural areas along with export zones
51 companies in these estates produced a range of products: chemicals, automotive equipment, processed food, and electrical equipment
Fifth Plan ( ) emphasized rural poverty and creation of jobs
During Sixth Plan, Thailand privatized its public sectors enterprises
Growth rate doubled (at 10%)
- a streak of double-digit growth for more
than a decade

7. Development Model (cont.)
Sustained growth (moderate yet 8%) redistribution of income and human resource development because the focus of the policy makers in Seventh Plan
Inverted U-Shaped Kuznets curve

8. Development Model (cont.)
The Eighth Plan coincided with financial crisis in Asia
1.5 million people were plunged back in the poverty during
People below poverty line represent 16% of the population (9.8 million)
IMF rescue plan in effect ($17 billion)
Capital inflows declined by 14% initially
Currently, the policy of “sufficiency economy” is emphasized

9. Current Problems and Development
Anti-government demonstrations, riots in Airports, ethnic conflicts in Southern states
Thaksin supported farmers and developed a seven-point policy
In 2006, military coup ousted Prime Minister Thaksin
Political instability, riots and corruption has tarnished the international image of Thailand
Foreign investment and tourism are adversely affected. Tourism contributes 6% to GDP