Economy of Thailand
(especially saphires and rubies), salt, lignite, petroleum, natural gas, asphaltic sand, and glass sand are exploited on a smaller scale.
Thailand has substantial hydroelectric potential, which is being developed; projects have been constructed on the Ping, Mekong, Phong, and Songkhram rivers. Industry is growing and is focused chiefly on the processing of agricultural products; rice milling is by far the most important, followed by sugar refining, textile spinning and weaving, and the processing of rubber, tobacco, and forest products. The manufacture of electrical and electronic equipment, including computers and integrated circuits, became important in the late 20th cent., causing a substantial rise in the per capita gross domestic product. Lumbering is concentrated in the north. Other industries include steel production, oil refining, tin smelting, and vehicle and machine assembly. Small factories, many of which are in the Bangkok area, manufacture jewelry, furniture, plastics, glass, and pharmaceuticals. Tourism is the leading source of foreign exchange, and handicraft production has a ready market in the tourist trade. Thailand is also a major transshipment point for illicit heroin and has become a drug-money-laundering center. The main exports are textiles and footwear, fishery products, rice, rubber, jewelry, automobiles, computers, and electrical appliances. The chief imports are capital and consumer goods, raw materials, and fuels. The main trading partners are Japan, the United States, China, Malaysia, and Singapore.Bangkok is a key point on round-the-world air routes. It is the political, commercial, cultural, and transportation center of the country, with the only port that can accommodate oceangoing vessels. Thailand's railroads originate in Bangkok and extend to Chiang Mai, the Korat plateau, and to Cambodia, Laos, and Malaysia; a corresponding network of paved highways has been constructed. Thailand's inland waterways—a complex, interconnected system of rivers, streams, and canals—have been important arteries since ancient times; barges and boats still carry well over half the cargo moved in the central plain.
Thailand is an emerging economy and considered as a Newly Industrialized Country. After enjoying the world's highest growth rate from 1985 to 1996 – averaging 9.4% annually – increased pressure on Thailand's currency, the baht, in 1997, the year in which the economy contracted by 1.9% led to a crisis that uncovered financial sector weaknesses and forced the Chavalit Yongchaiyudh administration to float the currency, however, Prime Minister Chavalit Yongchaiyudh was forced to resign after his cabinet came under fire for its slow response to the crisis. The baht was pegged at 25 to the US dollar from 1978 to 1997, however, the baht reached its lowest point of 56 to the US dollar in January 1998 and the economy contracted by 10.8% that year. This collapse prompted the Asian financial crisis.
Thailand's economy started to recover in 1999, expanding 4.2% and 4.4% in 2000, thanks largely to strong exports. Growth (2.2%) was dampened by the softening of the global economy in 2001, but picked up in the subsequent years owing to strong growth in Asia, a relatively weak baht encouraging exports and increasing domestic spending as a result of several mega projects and incentives of Prime Minister Thaksin Shinawatra, known as Thaksinomics. Growth in 2002, 2003 and 2004 was 5–7% annually. Growth in 2005, 2006 and 2007 hovered around 4–5%. Due both to the weakening of the US dollar and an increasingly strong Thai currency, by March 2008, the dollar was hovering around the 33 baht mark. With a well-developed infrastructure, a free-enterprise economy, and generally pro-investment policies, Thailand was one of East Asia's best performers from 2002-04, averaging more than 6% annual real GDP growth. However, overall economic growth has fallen sharply - averaging 4.9% from 2005 to 2007 - as persistent political crisis stalled infrastructure mega-projects, eroded investor and consumer confidence, and damaged the country's international image. The growth rate fell to 2.6% in 2008. Exports were the key economic driver as foreign investment and consumer demand stalled. Export growth from January 2005 to November 2008 averaged 17.5% annually. Business uncertainty escalated, however, following the September 2006 coup when the military-installed government imposed capital controls and considered far-reaching changes to foreign investment rules and other business legislation. Although controversial capital controls have since been lifted and business rules largely remain unchanged, investor sentiment has not recovered. Moreover, the 2008 global financial crisis further darkened Thailand's economic horizon. Continued political uncertainty will hamper resumption of infrastructure mega-projects.
Thailand exports an increasing value of over $105 billion worth of goods and services annually. Major exports include Thai rice, textiles and footwear, fishery products, rubber, jewelry, automobiles, computers and electrical appliances. Thailand is the world’s no.1 exporter of rice, exporting more than 6.5 million tons of milled rice annually. Rice is the most important crop in the country. Thailand has the highest percentage of arable land, 27.25%, of any nation in the Greater Mekong Subregion. About 55% of the available land area is used for rice production.
Substantial industries include electric appliances, components, computer parts and automobiles, while tourism in Thailand makes up about 6% of the economy. Prostitution in Thailand and sex tourism also form a de facto part of the economy. Cultural milieu combined with poverty and the lure of easy money have caused prostitution and sex tourism in particular to flourish in Thailand. One estimate published in 2003 placed the trade at US$4.3 billion per year or about three percent of the Thai economy. According to research by Chulalongkorn University on the Thai illegal economy, prostitution in Thailand in the period between 1993 and 1995, made up around 2.7% of the GDP. It is believed that at least 10% of tourist dollars are spent on the sex trade.
Thailand uses the metric system but traditional units of measurement and imperial measure (feet, inches) are still much in use, particularly for agriculture and building materials. Years are numbered as B.E. (Buddhist Era) in education, the civil service, government, and on contracts and newspaper datelines; in banking, however, and increasingly in industry and commerce, standard Western year (Christian or Common Era) counting prevails.