Download 1 Country Market: Thailand

1 Country Market: Thailand
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Introduction
Thailand is among the rare countries in the Southeast Asian region that were never colonized.
Although meaningful democracy eluded the country until the turn of the millennium, Thailand
continued to progress for most of its history over the last 100 years. Thailand shares its land
borders with Laos, Cambodia, Malaysia, and Myanmar, and has a coastline exceeding 3,000
kilometers. It shares its maritime borders with India, Indonesia, Thailand, and Myanmar. The
recent Thai political history is one of military dictatorships, civilian rule, allegations of Western
influence (especially from the United States), military coups, insurgencies, civilian uprisings
amid electoral malpractice allegations, and several other destabilizing factors. These aspects
Macroeconomic overview
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notwithstanding, Thailand is an economic powerhouse among the ASEAN countries.
Thailand is commonly referred to as a Tiger Cub Economy, as its economy relies heavily on
exports. Indeed, exports account for more than three-fifths of its GDP. Thailand engaged in
systematic industrialization spanning several decades and reaped a rich harvest. In fact, from
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1985 to 1997, the Thai economy grew by more than 12% annually. A correction was delivered in
the form of the Asian financial crisis of 1998. However, the country continues to be industrydriven, with industry accounting for close to 40% of GDP. Thailand has an early history of
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privatization; the government withdrew from nonessential sectors way back in the 1950s. In the
early 1980s, the Thai government devalued its currency, the baht, by approximately 40%
against the US dollar. Fortunately for Thailand, the US dollar was independently appreciated by
the United States and its partners vis-à-vis the Japanese yen. These developments made
Thailand an attractive export destination, especially in comparison with Japan. This fuelled the
unprecedented GDP growth from 1985 to 1997. While the 1998 Asian financial crisis interrupted
the double-digit growth, the Thai economy returned to its feet in the early years of this
millennium. By and large, these years have been marked by moderate growth punctuated by
downturns triggered by either domestic instability (as in the case of 2006), global turmoil (as in
the case of 2008 and 2009), or floods (as in the case of 2011). While there has been shrinkage
in GDP in 2013, nobody expects it to translate into a full-blown recession, as the fundamentals
of the economy remain robust.
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