Assessment Of Economic Progress In Thailand 198595

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Assessment Of Economic Progress In Thailand, 1985-95 Essay, Research Paper ASSESSMENT OF ECONOMIC PROGRESS IN THAILAND, 1985-95 Here is a list of the main measurable indicators of economic growth and structural change for Thailand to be observed by World Bank staff members who are visiting there. To ensure a successful tour of business meeting between the World Bank representatives and the Thai government and their business executives, I feel that a thorough understanding of the Southeast Asia’s (although the main focus will be Thailand’s) economic growth is necessary. Economic growth is simply a long-term increase in real output per capita and measuring it often involves an unbiased and theoretical assessment of national performance. The following are the key signs of

economic growth: 1) Agricultural Modernization and Agricultural Diversification 2) Industrial Transformation 3) Growth of Service Industry 4) Improvement in Quality of Life (including social, environmental, and economic variables) 5) Growth of Trade and Foreign Investment 6) Improvement in Technology and Infrastructure Note that in comparison to other Southeast Asian countries (except Singapore), Thailand has a relatively better performance in agriculture and service industries during the mid and late 80s. For example, the cultivation, processing, and export of agricultural products, especially rice, was traditionally the mainstay of the Thai economy. Although Thailand has long been among the most prosperous of the Asian nations, its dependence on a single crop made it extremely

vulnerable to fluctuations in the world price of rice and to variations in the harvest. The government has diminished this vulnerability by instituting a number of development programs aimed at diversifying the economy and by promoting scientific methods of farming, particularly controlled flooding of the rice fields, so that the rice harvest might remain stable even in years of few rainfalls. In the early 1990s, Thailand annually produced approximately 18.5 million metric tons of rice, up from about 11.3 million metric tons per year in the 1960s (Dutt, 1992). Another example of its notable success was the increase in tourism during the late 1980s that boosted the economy of Thailand’s service industry. There are many ways to explain the economic development of Thailand and

other Southeast Asian countries. Three things come to mind that is associated with the rise of their economic success in the 1980s to mid 1990s. The first is the increase of foreign direct investment (FDI). In the mid 1980s, there was an average $676 million dollars in FDI and by 1995, FDI flowing into Thailand’s economy had an average $2,300 million dollars. Second, the stock market grew in size between 1980 and 1996; Thailand’s market grew from a mere $1.2 billion dollars to a staggering $99.8 billion dollars (before the crash in 1997). Third, the people’s incomes in many Southeast Asian countries rose dramatically between 1980s and early 1990s. In Thailand, the gross domestic product per person rose from $444 in 1980 to $6,900 in 1996. Beginning in the early 1980s, huge

amounts of investments began pouring into Asian countries, lured by high returns, stable governments and currencies pegged to the dollar. The foreign money paid for factories and skyscrapers, and a booming export economy created a newly comfortable middle class that in turn stimulated more consumption. Other explanations of economic development in Thailand include: 1) Removal of Regional Economic Disparities 2) Diversification of the Economy 3) Industrialization 4) General Economic Development are conceived as the goals of the country Now I will look at the individual sector of Thailand’s economy and try to show the reasons for each sector’s success in its economic development. Agriculture accounts for 16% of Thailand’s gross national product. As mentioned above, rice is