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