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GDP (2002): $126 billion.
Annual growth rate (2002): 5.3%; (2003, projected): 6.0%.
Per capita income (2002): $2,004.
Natural resources: Tin, rubber, natural gas, tungsten, tantalum, timber, lead, fish, gypsum, lignite, fluorite.
Agriculture (9% of GDP): Products--rice, tapioca, rubber, corn, sugarcane, coconuts, soybeans.
Industry: Types--tourism, textiles, garments, agricultural processing, cement, integrated circuits, jewelry, electronics, auto assembly.
Trade (2002): Exports--$67 billion: textiles and footwear, fishery products, computers and parts, electronics, electrical appliances, jewelry, rice, tapioca products, integrated circuits, rubber, automobiles. Major markets--U.S., ASEAN, Japan, EU, Singapore, Hong Kong, China. Imports--$63 billion: machinery and parts, petroleum, iron and steel, chemicals, vehicles and parts, jewelry, fish preparations, electrical appliances, fertilizers and pesticides. Major suppliers--Japan, ASEAN, EU, U.S., Middle East, China, Taiwan, South Korea.
Economy of Thailand
The Thai economy is export-dependent, with exports accounting for 60% of GDP. Thailand's recovery from the 1997-98 Asian financial crisis relied largely on external demand from the United States and other foreign markets. The Thaksin government took office in February 2001 with the intention of stimulating domestic demand and reducing Thailand's reliance on foreign trade and investment. Since then, the Thaksin administration has refined its economic message, embracing a "dual track" economic policy that combines domestic stimulus with Thailand's traditional promotion of open markets and foreign investment. Weak export demand held 2001 GDP growth to 1.9%. In 2002, however, domestic stimulus and export revival fueled a better performance, with real GDP growth at 5.3%.
Before the financial crisis, the Thai economy had years of manufacturing-led economic growth--averaging 9.4% for the decade up to 1996. Relatively abundant and inexpensive labor and natural resources, fiscal conservatism, open foreign investment policies, and encouragement of the private sector underlay the economic success in the years up to 1997. The economy is essentially a free-enterprise system. Certain services, such as power generation, transportation, and communications, are state-owned and operated, but the government is considering privatizing them in the wake of the financial crisis.
The Royal Thai Government welcomes foreign investment, and investors who are willing to meet certain requirements can apply for special investment privileges through the Board of Investment. To attract additional foreign investment, the government has modified its investment regulations.
The organized labor movement remains weak and divided in Thailand; only 3% of the work force is unionized. In 2000, the State Enterprise Labor Relations Act (SELRA) was passed, giving public sector employees similar rights to those of private sector workers, including the right to unionize.
Roughly 60% of Thailand's labor force is employed in agriculture. Rice is the country's most important crop; Thailand is a major exporter in the world rice market. Other agricultural commodities produced in significant amounts include fish and fishery products, tapioca, rubber, corn, and sugar. Exports of processed foods such as canned tuna, pineapples, and frozen shrimp are on the rise.
Thailand's increasingly diversified manufacturing sector made the largest contribution to growth during the economic boom. Industries registering rapid increases in production included computers and electronics, garments and footwear, furniture, wood products, canned food, toys, plastic products, gems, and jewelry. High-technology products such as integrated circuits and parts, electrical appliances, and vehicles are now leading Thailand's strong growth in exports.
The United States is Thailand's largest export market and second-largest supplier after Japan. While Thailand's traditional major markets have been North America, Japan, and Europe, economic recovery among Thailand's regional trading partners has helped Thai export growth (5.8% in 2002). Further recovery from the financial crisis depends heavily on increased exports to the rest of Asia and the United States.
Machinery and parts, vehicles, electronic integrated circuits, chemicals, crude oil and fuels, and iron and steel are among Thailand's principal imports. The recent increase in import levels (4.6% in 2002) reflects the need to fuel the production of high-technology items and vehicles.
Thailand is a member of the World Trade Organization (WTO) and the Cairns Group of agricultural exporters. Tourism contributes significantly to the Thai economy, and the industry has benefited from the Thai baht's depreciation and Thailand's stability. Tourist arrivals in 2002 (10.9 million) reflected a 7.3% increase from the previous year (10.1 million).
Bangkok and its environs are the most prosperous part of Thailand, and the infertile northeast is the poorest. An overriding concern of successive Thai Governments, and a particularly strong focus of the current government, has been to reduce these regional income differentials, which have been exacerbated by rapid economic growth in and around Bangkok and the financial crisis. The government is trying to stimulate provincial economic growth with programs such as the Eastern Seaboard project and the development of an alternate deep-sea port on Thailand's southern peninsula. It also is conducting discussions with Malaysia to focus on economic development along the Thai-Malaysian border.
Although the economy has demonstrated moderate positive growth since 1999, future performance depends on continued reform of the financial sector, corporate debt restructuring, attracting foreign investment, and increasing exports. Telecommunications, roadways, electricity generation, and ports showed increasing strain during the period of sustained economic growth and may pose a future challenge. Thailand's growing shortage of engineers and skilled technical personnel may limit its future technological creativity and productivity.