Connect with us
thaieconomy1000x600 thaieconomy1000x600

Thai Country Studies

The Thai Economy in the 1980’s

THE THAI ECONOMY of 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 postWorld 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 non-agricultural 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.

Economic and Financial Development

In the 1960s and 1970s, the country’s abundant natural resources, an enterprising and competitive private sector, and cautious and pragmatic economic management resulted in the emergence of one of the fastest growing and most successful economies among the developing countries. Between 1960 and 1970, the country’s average annual growth rate of gross domestic product (GDP — see Glossary) was 8.4 percent, compared with 5.8 percent for all middle-income, oil-importing countries. Between 1970 and 1980, the GDP rate of growth was 7.2 percent, compared with 5.6 percent for the middleincome oil-importing countries. The world slowdown by the late 1970s was mainly caused by the rise in oil prices. The Thai GDP in 1982 was US$36.7 billion. It rose to US$42 billion in 1985 (see table 5, Appendix). The projected rate of growth for GDP during the early 1980s was around 4.3 percent as a result of falling demand and prices for Thai exports despite a drop in oil price. It was apparent that in the 1980s Thailand had lost its momentum; its Fifth Economic Development Plan targets had not been met because of serious macroeconomic imbalances, such as decreasing savings and investment rates, increasing budget deficits, and increasing debt and debtservicing obligations. Whether Thailand could regain its former momentum depended on the success of its Sixth Economic Development Plan (1987-91).

Between 1970 and 1980, investment represented on the average 25.2 percent of GDP, compared with 24.7 percent by the mid-1980s. This proportion was one of the lowest investment rates in Southeast Asia. The national savings rate had fallen even more, from an average of 22 percent during the 1970s to around 17.8 percent by the mid-1980s. Hence, the average current-account deficit of 7 percent of GDP during the early 1980s had been caused by a declining savings rate rather than by an increase in investment rate. This imbalance was more serious than one caused by rising investment because rising investment could pay for itself with increased output and, possibly, increased savings so that debt could be repaid. With falling savings, foreign borrowing was used not to raise investment but merely to fill the investmentsavings gap, which was mirrored in the external debt ratio of 39 percent of GDP and 146 percent of exports by the mid-1980s. The total debt service ratio went up from 17.3 percent in 1980 to more than 25 percent by the mid-1980s. The increase was an important factor in the decision of the government to sharply reduce authorization for new commitments of public debt.

Public Finance

By the mid-1980s, government revenues averaged around 14 percent of GDP and consumption averaged around 13 percent, leaving a public savings net of interest payments of 1 percent of GDP. This was low compared with an average savings of 7 percent for the lower middle-income countries and 10 percent for the upper middle-income countries.

The financing of public expenditures caused a major imbalance because of high deficit and low public savings. Although not a new problem, increases in public expenditure needed to be matched by increases in revenues. Efforts were made to tackle the problem, and the public capital expenditures annual growth rate had dropped from 64.7 percent in 1980 to 8.5 percent in 1982 and 7.4 percent by the mid-1980s. The problem remained serious, however, because of political unwillingness to raise public revenue to the required level. In fact, the central government managed to finance only its public current expenditures with its revenues. Almost all capital expenditures, which averaged around 3.5 percent of GDP by the mid-1980s, were financed with borrowed funds, and often even some of the current expenditures had been financed with borrowed funds, thus increasing the debt-servicing burden.

How useful was this post?

Click on a star to rate it!

Average rating 4.1 / 5. Vote count: 2319

No votes so far! Be the first to rate this post.

As you found this post useful...

Follow us on social media!

Pages: 1 2

Pages ( 1 of 2 ): 1 2Next »
Advertisement

Thai Country Studies

Industrial Policy of Thailand

industrialpolicyofthailand1000x600

The Thai industrial sector was under the supervision of seven governmental agencies. The Ministry of Finance administered taxes and duties and provided tax refunds on exports. It was involved in large-scale industrial projects in the role of deciding on government equity participation, arranging public foreign borrowing to support the project, and extending protection through tariffs.

(more…)

How useful was this post?

Click on a star to rate it!

Average rating 4.5 / 5. Vote count: 4521

No votes so far! Be the first to rate this post.

As you found this post useful...

Follow us on social media!

Continue Reading

Thai Country Studies

Introduction to Thailand Country Studies

sukhothai1000x600

A STABLE AND PROSPERING NATION located in the heart of mainland Southeast Asia, Thailand faced the 1990s with abundant resources, not the least of which was its people. Thai society was characterized by a rich blend of cultural traits, an openness to new ideas, and a high degree of adaptability to new situations. Despite a certain amount of diversity, Thai society, according to many observers, was bound together by three basic tenets:
(more…)

How useful was this post?

Click on a star to rate it!

Average rating 4.1 / 5. Vote count: 6521

No votes so far! Be the first to rate this post.

As you found this post useful...

Follow us on social media!

Continue Reading

Thai Country Studies

The Social System of Thailand

welfare-in-thailand1000x600

The rural areas, where most Thai live, have been affected by change for many decades, especially since the mid-nineteenth century, when the impact of European economic and political activity was first felt. The full effects of change started to become manifest in the 1930s.

(more…)

How useful was this post?

Click on a star to rate it!

Average rating 4.1 / 5. Vote count: 2126

No votes so far! Be the first to rate this post.

As you found this post useful...

Follow us on social media!

Continue Reading

Advertisement



Thai Covid-19
3,977
Confirmed
11
Confirmed (24h)
60
Deaths
0
Deaths (24h)
1.5%
Deaths (%)
3,800
Recovered
2
Recovered (24h)
95.6%
Recovered (%)
117
Active
2.9%
Active (%)
In Thailand, the health authorities reported 11 new corona infections by the Centre for Covid-19 Situation Administration within 24 hours. Since the beginning of the pandemic, the CFCSA has counted a total of 3,977 infections with Sars-CoV-2 in Thailand. The number of deaths related to the virus rose 0 to a total of 60.

HM King Bhumibol Royal Jazz Composition

HM King Rama IX Royal Composition

Thailand

Central Thailand13 hours ago

Bangkok Expat Travel Guide

Bright lights, big city, where tradition merges effortlessly with the megalopolis that Thailand’s capital has become, be prepared to be...

rangsit1000x600 rangsit1000x600
Central Thailand13 hours ago

Rangsit Expat Travel Guide

Rangsit (รังสิต) is an exurb 40 km north of Bangkok. Understand Memorial Hall, Wat Dhammakaya Effectively a suburb of Bangkok, Rangsit...

udonthani1000x600 udonthani1000x600
Northeast Thailand13 hours ago

Udon Thani Expat & Tourist Guide

Udon Thani (อุดรธานี, also Udorn Thanee) is a city in the Isaan region of Thailand. Often referred to as simply Udon or Udorn (อุดร), the city should not be...

mai-khao-3 mai-khao-3
Thailand2 days ago

2 Hours Nonstop Mega Hits 2020🌱 including Krabi, Phi Phi, Chumphon and many other Travel Destinations

Latest Tracks during the first lockdown covering Belize, Bahamas, Ibiza, Bali, NSW, Rhodes, Phi Phi Islands, etc. How useful was...

huahin1000x600 huahin1000x600
Central Thailand4 days ago

Hua Hin Cha-am Covid-19 Safe Travel Thailand

Hua Hin Travel Guide Hua Hin is a district in the Prachuap Khiri Khan Province of Thailand, 295 kilometers from...

Ko Si Chang1000x600 Ko Si Chang1000x600
Central Thailand4 days ago

Ko Si Chang Covid-19 Safe Travel Thailand

Ko Si Chang (เกาะสีชัง) is a small island, population 4,500, near Si Racha and near Pattaya. Understand In the Gulf of Thailand,...

khaolak1000x600 khaolak1000x600
Southern Thailand4 days ago

Khao Lak Covid-19 Safe Travel to Thailand

Khao Lak (เขาหลัก) is a 20 km long strip of coastal resorts in Phang Nga Province on the Andaman Sea...

Chaiyaphum1000x600 Chaiyaphum1000x600
Northeast Thailand4 days ago

Chaiyaphum Covid-19 Safe Travel Northeast Thailand

Chaiyaphum (ชัยภูมิ) is a town in Isaan, Thailand. Understand Chaiyaphum is a place where many periods of civilization have overlapped...

Nakhon Nayok1000 Nakhon Nayok1000
Central Thailand4 days ago

Nakhon Nayok Covid-19 Safe Travel Central Thailand

Nakhon Nayok (นครนายก) is a city in the Chao Phraya Basin region of Thailand. Understand Nakhon Nayok is a tourism...

chiangmai1000x600 chiangmai1000x600
Thailand4 days ago

Chiang Mai Covid-19 Safe Travel Northern Thailand

Thailand doesn’t only need to be about beaches and nightlife; Chiang Mai, the cultural centre of the north of the...

kochang1000x600 kochang1000x600
Central Thailand4 days ago

Ko Chang Covid-19 Safe Travel Trat Thailand

Ko Chang (เกาะช้าง) is an island in Trat Province, Eastern Thailand. Understand Ko Chang is Thailand’s second largest island, and the biggest in...

ko lanta1000x600 ko lanta1000x600
Southern Thailand4 days ago

Ko Lanta Covid-19 Safe Travel Southern Thailand

Ko Lanta (เกาะลันตา) is an island off the Andaman Coast of Southern Thailand. Like many other destinations in Krabi Province,...

kalasin1000x600 kalasin1000x600
Northeast Thailand4 days ago

Kalasin Covid-19 Safe Travel Northeast Thailand

Kalasin (กาฬสินธุ์) is a town in the Isaan region of Thailand, population ~38,000 (2020). Understand Historical evidence points to the...

nonthaburi1000x600 nonthaburi1000x600
Central Thailand4 days ago

Nonthaburi Coronavirus Covid-19 Outbreak Central Thailand

Nonthaburi (นนทบุรี) is Thailand's second largest city, being a part of the Bangkok Metropolitan Region. Understand Due to its close...

Central Thailand4 days ago

Pattaya Covid-19 Safe Travel Thailand

The City of Pattaya on the East coast of the Gulf of Thailand is a self-governing region about 165km Southeast...

kohmak1000x600 kohmak1000x600
Central Thailand4 days ago

Ko Mak Covid-19 Safe Travel Trat Thailand

Ko Mak is an island in Trat Province, Eastern Thailand. It is fairly undeveloped and natural. Understand There are very few islands in...

Southern Thailand4 days ago

Ko Phayam Covid-19 Safe Travel Southern Thailand

Ko Phayam is an island in Ranong Province, Thailand. Contents 1 Understand 2 Get in 2.1 Ferries 3 Get around...

Maha-Sarakham1000x600 Maha-Sarakham1000x600
Northeast Thailand4 days ago

Maha Sarakham Safe Covid19 Travel Northeast Thailand

Maha Sarakham (มหาสารคาม, also spelt Mahasarakham) is a city and province in Isaan. Understand Maha Sarakham means "city of great...

phatum1000x600 phatum1000x600
Central Thailand4 days ago

Pathum Thani Safe Covid-19 Travel Bangkok

Pathum Thani (ปทุมธานี) is a city in the Bangkok Metropolitan Region in Thailand. Understand Pathum Thani has been a residential...

kohkood1000x600 kohkood1000x600
Central Thailand4 days ago

Ko Kut Covid-19 Safe Travel Koh Kood Trat

Ko Kut (also Koh Kood), Thailand’s 4th largest island (25 km long and 12 km wide), is in Trat Province in the Gulf of...

koh yao1000x600 koh yao1000x600
Southern Thailand4 days ago

Ko Yao Covid-19 Safe Travel Southern Thailand

Ko Yao, with Phuket to the west and Krabi to the east Ko Yao (เกาะยาว), sometimes written Koyao, is a...

yasothorn1000x600 yasothorn1000x600
Northeast Thailand4 days ago

Yasothon Covid-19 Safe Travel Northeast Thailand

Yasothon (ยโสธร) is a town and province in the Isaan region of Thailand. Understand Get in By car Use Hwy...

Thailand4 days ago

Koh Samui Covid-19 Safe Travel Thailand

Nestled on the east coast of Thailand in the Gulf of Thailand, lies Koh Samui which has become known as...

Similan Islands1000x600 Similan Islands1000x600
Southern Thailand4 days ago

Similan Islands Covid-19 Safe Travel Southern Thailand

The most famous rock at the Similan Islands of Thailand. This beach and viewpoint are often visited by Similan diving...

wattatphanom1000x600 wattatphanom1000x600
Northeast Thailand4 days ago

Mukdahan Covid-19 Safe Travel Northeastern Thailand

Mukdahan (มุกดาหาร) is a city and province in Isaan. Understand Mukdahan is the 73rd province of Thailand. Its history dates...

Advertisement

Thai Travel Warning

1. Anti-government student protests have occurred in Bangkok and other areas of Thailand. The security environment can be unpredictable and turn violent. Those attending protests can face arrest or other legal consequences. Monitor media reports from thaienquirer.com for information on protest locations and avoid public gatherings. As a foreigner take official warnings seriously.

2. Thailand has high levels of air pollution. Air pollution can make bronchial, sinus or asthma conditions worse.

3. If you can't afford travel insurance, you can't afford to travel to Thailand. This applies to everyone, no matter how healthy and fit you are.

Visitor’s Today

Free counters!

Trending Now

P