Thailand - Economy

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Economy

During the '80s, Thailand maintained a steady GNP growth rate that by 1987 exceeded 10% per annum. Suddenly Thailand has found itself on the threshold of attaining the exclusive rank of NIC or 'newly industrialized country', which experts' forecast will be fulfilled within the next five to ten years. Soon, they say, Thailand will be joining Asia's 'little dragons', also known as the Four Tigers - South Korea, Taiwan, Hong Kong and Singapore - in becoming a leader in the Pacific Rim economic boom.

By 1992, it is expected that more than half of Thailand's labour force will be engaged in the manufacturing and industrial sectors. Currently, about 66% of Thai labour is engaged in agriculture, 10% each in commerce and services, and 8% in manufacturing. Thailand's major exports are rice, tapioca, sugar, rubber, maize, tin, cement, pineapple, tuna, textiles and electronics. Manufactured goods have become an increasingly important source of foreign exchange earnings and now account for 60% of all Thailand's exports.

In 1987, tourism became the leading earner of foreign exchange, out-distancing even Thailand's largest single export: textiles. Nearly five million tourists spent 57 billion Baht (over US$2 billion) in 1988. The government economic strategy remains focused, however, on export-led growth through the development of light industries such as textiles and electronics, backed by rich reserves of natural resources and a large, inexpensive labour force. Observers predict that such a broad-based economy will make Thailand a major economic competitor in Asia in the long term. Thailand also has the lowest foreign debt in South-East Asia, just 20% of the gross domestic product.

Average per capita income by the end of the '80s was US$880 per year. Regional inequities, however, mean that local averages range from US$300 in the northeast to US$2300 in Bangkok. The current inflation rate is about 4% per annum. As in most countries, prices continue to rise.

The northeast of Thailand has the lowest inflation rate and cost of living. This region is poorer than the rest of the country and doesn't get as much tourism; it therefore offers excellent value for the traveller and is in dire need of your travel dollar. Hand-woven textiles and farming remain the primary means of livelihood in this area. In the south, fishing, tin mining and rubber production keep the local economy fairly stable. Central Thailand grows fruit (especially pineapple); sugar cane and rice for export, and supports most of the ever-increasing industry (textiles, food processing and cement). North Thailand produces mountain or dry rice (as opposed to 'water-rice', the bulk of the crop produced in Thailand) for domestic use, maize, tea, various fruits and flowers, and is very dependent on tourism. Teak and other lumber was once a major product of the north, but since early 1989 all logging has been banned in Thailand in order to prevent further deforestation.

Some say that Thailand is growing faster than its infrastructure can handle. Incoming ships have to wait a week before they can get a berth at busy Khlong Toey port. Two new seaports along the eastern seaboard and one on the southern peninsula were completed in the early '90s, but even these may be inadequate to cope with projected demand. Transport and telecommunications systems are in dire need of upgrading.

One of the biggest dilemmas facing the economic planners is whether to acquire a larger foreign debt in order to finance the development of an infrastructure that is capable of handling continued high growth, or whether to allow growth to slow while the infrastructure catches up. Continued rapid growth will probably result in a disproportionate development of the more relatively industrialized central and southern regions, leaving the agricultural north and northeast behind.

Advocates of a slow-growth approach hope for better distribution of wealth around the country through a combination of agribusiness projects and welfare programmes that would bring a higher standard of living to poor rural areas. This makes good sense when one considers the relative differences between Thailand and the Four Tigers (e.g. the proportion of rural to urban dwellers and the high fertility of the land).

Tourism

According to the statistics of the Tourist Authority of Thailand, the country is currently averaging about five million tourist arrivals per year, up from 2.8 million in 1986 and 2.2 million in 1983. Figures are expected to continue to rise for at least the next few years.

In 1987, when total arrivals hit 3.5 million, nearly two-thirds of the visitors came from East Asia and the Pacific, with Malaysians leading the way at around 765,000, followed by the Japanese (341,000), Singaporeans (240,000), and Taiwanese (195,000). Europeans as a whole made up 794,320 of the total, with Britons at the top (184,000), West Germans second (148,000), and the French third (132,000). The Americas, including Canada and all Latin American countries, totalled about 292,000, made up primarily of Yanks (236,000) and Canadians (44,000). South Asians chalked up around 217,000 while Australians totalled 111,000 and the Middle East sent roughly 118,000.

The prize for longest average length of stay goes to Germans and Scandinavians. The average for West Germans was 12 nights, followed by the Swiss (11.1), Austrians (10.5), Swedes (10.26), Danes (10.22), Norwegians (10) and Fins (9.9). In contrast, the average stay for Australians was only 8.2 nights, Britons 7.5 nights, Americans 6.6 and the Japanese 4.2.

Surprisingly, the biggest spenders were the Taiwanese, who averaged a daily per capita expenditure of 3,331 Baht, followed closely by the Japanese at 3,268 Baht. Scandinavians spent an average of 2,916 Baht per day/ person, US visitors 2,744 Baht, Italians 2,251 Baht, Canadians 2,220 Baht, Britons 2,185 Baht, French 2,119 Baht, Australians 2,205 Baht, Swiss 1,903 Baht, and the frugal West Germans 1,511 Baht.


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