| The economy of Thailand is export-dependent, | | | | The United States is Thailand's largest export |
| with exports accounting for 60% of GDP. The | | | | market and second-largest supplier after Japan. |
| exchange rate has reached 37.00/usd (GDP $7.3 | | | | While Thailand's traditional major markets have |
| trln baht) as of October 26, 2006, for a nominal | | | | been North America, Japan, and Europe, economic |
| GDP at market rates of approximately US$ 200 | | | | recovery among Thailand's regional trading |
| bln. This keeps Thailand as the 2nd largest | | | | partners has helped Thai export growth (5.8% in |
| economy in Southeast Asia, after Indonesia, a | | | | 2002). Recovery from the financial crisis depended |
| position it has held for many years. Thailand's | | | | heavily on increased exports to the rest of Asia |
| recovery from the 1997-98 Asian financial crisis | | | | and the United States. Since 2005, the rapid |
| relied on exports, largely on external demand | | | | ramp-up in export of automobiles of Japanese |
| from the United States and other foreign | | | | makes (esp. Toyota, Nissan, Isuzu) has helped to |
| markets. The Thaksin government took office in | | | | dramatically improve the trade balance, with over |
| February 2001 with the intention of stimulating | | | | 1 million cars produced last year. As such, Thailand |
| domestic demand and reducing Thailand's reliance | | | | has joined the ranks of the world's top ten |
| on foreign trade and investment. Since then, the | | | | automobile exporting nations. |
| Thaksin administration has refined its economic | | | | Machinery and parts, vehicles, electronic integrated |
| message, embracing a "dual track" economic | | | | circuits, chemicals, crude oil and fuels, and iron and |
| policy that combines domestic stimulus with | | | | steel are among Thailand's principal imports. The |
| Thailand's traditional promotion of open markets | | | | recent increase in import levels (4.6% in 2002) |
| and foreign investment. This set of policies are | | | | reflects the need to fuel the production of |
| popularly known as Thaksinomics. Weak export | | | | high-technology items and vehicles. |
| demand held 2001 GDP growth to 1.9%. In | | | | Thailand is a member of the World Trade |
| 2002-3, however, domestic stimulus and export | | | | Organization (WTO) and the Cairns Group of |
| revival fuelled a better performance, with real | | | | agricultural exporters. Thailand is part of the |
| GDP growth at 5.3% and 6.3% respectively. | | | | ASEAN Free Trade Area (AFTA). Thailand has |
| For purchasing power parity comparisons, the US | | | | actively pursued free trade agreements. A |
| Dollar is exchanged at 12.34 Baht only. | | | | China-Thailand Free Trade Agreement (FTA) |
| Before the financial crisis, the Thai economy had | | | | commenced in October 2003. This agreement |
| years of manufacturing-led economic | | | | was limited to agricultural products, with more |
| growth--averaging 9.4% for the decade up to | | | | comprehensive FTA to be agreed by 2010. |
| 1996. Relatively abundant and inexpensive labour | | | | Thailand also has a limited Free Trade Agreement |
| and natural resources, fiscal conservatism, open | | | | with India, which commenced in 2003; and a |
| foreign investment policies, and encouragement of | | | | comprehensive Australia-Thailand Free Trade |
| the private sector underlay the economic success | | | | Agreement which started 1 January 2005. |
| in the years up to 1997. The economy is | | | | Thailand started free trade negotiations with |
| essentially a free enterprise system. Certain | | | | Japan in February 2004, and an in-principle |
| services, such as power generation, | | | | agreement was agreed in September 2005. |
| transportation, and communications, are | | | | Negotiations for a US-Thailand Free Trade |
| state-owned and operated, but the government is | | | | Agreement are underway, with the fifth round of |
| considering privatizing them in the wake of the | | | | meetings held in November 2005. |
| financial crisis. | | | | Tourism contributes significantly to the Thai |
| The Royal Thai Government welcomes foreign | | | | economy, and the industry has benefited from |
| investment, and investors who are willing to meet | | | | the Thai baht's depreciation and Thailand's stability. |
| certain requirements can apply for special | | | | Tourist arrivals in 2002 (10.9 million) reflected a |
| investment privileges through the Board of | | | | 7.3% increase from the previous year (10.1 |
| Investment. To attract additional foreign | | | | million). |
| investment, the government has modified its | | | | Bangkok and its environs are the most |
| investment regulations. | | | | prosperous part of Thailand, and the infertile |
| The organized labour movement remains weak | | | | northeast is the poorest. An overriding concern of |
| and divided in Thailand; only 3% of the work | | | | successive Thai Governments, and a particularly |
| force is unionized. In 2000, the State Enterprise | | | | strong focus of the recently ousted Thaksin |
| Labour Relations Act (SELRA) was passed, giving | | | | government, has been to reduce these regional |
| public sector employees similar rights to those of | | | | income differentials, which have been exacerbated |
| private sector workers, including the right to | | | | by rapid economic growth in and around Bangkok |
| unionize. | | | | and the financial crisis. The government is trying |
| Roughly 60% of Thailand's labour force is | | | | to stimulate provincial economic growth with |
| employed in agriculture.[citation needed] Rice is the | | | | programs such as the Eastern Seaboard project |
| country's most important crop; Thailand is a | | | | and the development of an alternate deep-sea |
| major exporter in the world rice market. Other | | | | port on Thailand's southern peninsula. It also is |
| agricultural commodities produced in significant | | | | conducting discussions with Malaysia to focus on |
| amounts include fish and fishery products, tapioca, | | | | economic development along the Thai-Malaysian |
| rubber, grain, and sugar. Exports of processed | | | | border. |
| foods such as canned tuna, pineapples, and frozen | | | | Although the economy has demonstrated |
| shrimp are on the rise. | | | | moderate positive growth since 1999, future |
| Thailand's increasingly diversified manufacturing | | | | performance depends on continued reform of the |
| sector made the largest contribution to growth | | | | financial sector, corporate debt restructuring, |
| during the economic boom. Industries registering | | | | attracting foreign investment, and increasing |
| rapid increases in production included computers | | | | exports. Telecommunications, roadways, |
| and electronics, garments and footwear, furniture, | | | | electricity generation, and ports showed increasing |
| wood products, canned food, toys, plastic | | | | strain during the period of sustained economic |
| products, gems, and jewelry. High-technology | | | | growth and may pose a future challenge. |
| products such as integrated circuits and parts, | | | | Thailand's growing shortage of engineers and |
| electrical appliances, and vehicles are now leading | | | | skilled technical personnel may limit its future |
| Thailand's strong growth in exports. | | | | technological creativity and productivity. |
| Trade | | | | |