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The Thai economy the 1980s continued to function much along the open market lines that had traditionally characterized it. It remained capitalist in orientation, largely operated by the private sector with supportive infrastructure furnished by the government, which had some participation in production and commerce through a limited number of state-owned enterprises. Commitment to the existing economic system appeared general--none of the numerous Thai governments of the post-World War II years had advocated significant changes.
In the 1960s and 1970s, Thailand was among the fastest growing and most successful developing countries in the world. Rapid growth in production, accompanied by progress in alleviating poverty, was impressive, especially in the 1970s. By the early 1980s, however, Thailand's economic performance had slowed, partly as a result of the worldwide recession. Although its annual growth rate remained higher than the average for middle-income countries, earlier expectations had not been met. The targets of the Fifth Economic Development Plan (1982-86) had not been achieved, and serious macroeconomic imbalances persisted.
The government sought balanced economic growth and the closing of the income gap, along with improvement of the inequitable distribution of social services. Social and economic trends included increasing urbanization, expansion of industrial activities at a faster rate than agriculture, and growth of income in the service industries. These trends, often associated with modernization, produced problems with which the government tried to cope. Bangkok continued to face serious housing shortages and severe pressure on such basic services as water, sewerage, energy, and transport facilities. Although agriculture had been the most important economic activity of the country with most of the population living in the rural areas, the area of land under cultivation was unlikely to increase. Rather, it was projected that any increase in income would have to be gained through higher productivity of the labor and land now in use and by the development and diversification of industrial production. Accordingly, the government promoted enterprises that produced agricultural products, chemicals, and mechanical and electronic equipment and those that were labor intensive or export oriented.
Because foreign trade and investment were an important part of the economy, external conditions greatly influenced the country's economic performance. Thailand's harvests exceeded domestic consumption, enabling the country to export large quantities of food each year. The major agricultural exports were rice, cassava products, rubber, maize, and sugar; the major nonagricultural exports were textiles, electronics, and tin. Imports included more than half the country's national petroleum consumption. Although Thailand was a member of the Association of Southeast Asian Nations (ASEAN) with preferential trading arrangements, its principal trading partners were Japan, the United States, countries of the European Economic Community (EEC), and Australia.
Long-term prospects depended greatly on the effects of international economic conditions on the Thai economy. In the late 1970s and early 1980s, rising interest rates, declining demand and prices for Thai exports, and rising petroleum prices had caused a serious economic slump. Further growth of the economy depended, in part, on the success of the Thai government in improving economic efficiency and increasing domestic savings through development planning.
After enjoying the world's highest growth rate from 1985 to 1995 - averaging almost 9% annually - increased pressure on Thailand's currency, the baht, in 1997 led to a crisis that uncovered financial sector weaknesses and forced the government to float the currency. Long pegged at 25 to the US dollar, the baht reached its lowest point of 56 to the US dollar in January 1998 and the economy contracted by 10.2% that same year. The collapse prompted a wider Asian financial crisis.
Thailand entered a recovery stage in 1998, expanding 4.2% and grew 4.4% in 2000, largely due to strong exports - which increased about 20% in 2000. Growth was dampened by a softening of the global economy in 2001, but picked up in the subsequent years due to strong growth in China and the various domestic stimulation programs of Prime Minister Thaksin Shinawatra, popularly known as Thaksinomics. Growth in 2003 and 2004 was over 6% annually.
Thailand exports over $105 billion worth of products annually . Major exports include rice, textiles and footwear, fishery products, rubber, jewelry, automobiles, computers and electrical appliances. Thailand is the world’s no.1 exporter of rice, exporting 6.5 million tons of milled rice annually. Rice is the most important crop in the country. Thailand has the highest percent 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 contributes about 5% of the Thai economy's GDP. Long stay foreign residents also contribute heavily to GDP.
The main natural resources of Thailand are tin, rubber, natural gas, tungsten, tantalum, timber, lead, fish, gypsum, lignite, fluorite, and arable land.
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