Thailand 1353
Photo by: Kate Shephard

Kingdom of Thailand



Situated in Southeast Asia, Thailand is adjoined to Laos and Burma (Myanmar) to the north, Cambodia and the Gulf of Thailand to the east, Burma and the Andaman Sea to the west, and Malaysia to the south. Its total area, which is about twice the size of Wyoming, measures 514,000 square kilometers (198,455 square miles). The length of its coastline measures 3,219 kilometers (2,000 miles). Its capital city, Bangkok, is the most populated city in Thailand. Located in the central region, Bangkok is the center of Thailand's economic and political activities. Major cities in the north are Chiang Mai and Chiang Rai, Nakhon Ratchasima, Khon Kaen, Udon Thani, Phitsanulok, Nakhon Sawan, and Ubon Ratchathani. Meanwhile, major cities in the south are Nakhon Si Thammarat, Songkhla, Surat Thani, and Hat Yai.


The country's population in 2000 stood at 61.2 million, compared to 55.2 million in 1989, according to the CIA World Factbook. The country's population growth rate from 1988 to 1998 has been estimated at an average of 1.05 percent, according to the Asian Economic Survey . The population is expected to increase by 0.93 percent by 2010. The population is predominantly composed of young people, with 70 percent between the ages of 15 and 64, 24 percent below 15 years old, and only 6 percent older than 64 years.

The majority of the population still resides in rural areas. In 2000, the World Bank reported that approximately 40 percent of the country's population, or 25 million Thais, lived in urban areas and estimates that this will increase to 53 percent by 2010. Bangkok hosts about 12 million Thais.

The majority of the Thai population—75 percent— is of the Thai ethnic group, while 14 percent are Chinese and 11 percent are other ethnic groups. Fully 95 percent of the population is Buddhist, while 3.8 percent are Muslims and the remainder represent a variety of religions.


As of 1998, Thailand had at least 11 registered political parties, the biggest of which are the Democratic Party (Prachathipat Party) and Thai Nation Party (Chat Thai Party). The other political parties are the Liberal Democratic Party, Mass Party, National Development Party, New Aspiration Party, Phalang Dharma Party, Social Action Party, Solidarity Party, Thai Citizen's Party, and the Thai Rak Thai Party.

Political parties in Thailand serve as the breeding ground for future leaders and bureaucrats. They provide the venue by which those with political ambitions are able to familiarize themselves with the country's democratic structure and processes and obtain a certain measure of political leadership training. However, the political party system in Thailand is still in a state of evolution and can be best described as fragmented, structurally weak, and vulnerable to corruption. The cost of staging a national campaign is very high and the funds needed to finance such an endeavor are generally only available to those in the business world. Hence, businesspeople dominate most of the political parties in Thailand. Moreover, political parties in Thailand are not mass-based, have no distinct ideological differences, and lack full-time, dedicated, and qualified personnel to formulate and implement the party's programs. Since one Thai political party cannot really be differentiated from the other, switching party loyalties is not unusual in Thailand.


A huge percentage of government revenue comes from taxes which are collected at the national and local level. At the national level, the central government collects an income tax and a profit remittance tax, while the most important indirect tax is the value-added tax (VAT). In September 1997, the government announced an increase in the VAT from 7 percent to 10 percent in order to raise revenue and to meet the conditions of the US$17.2 billion loan extended by the IMF to Thailand. However, businesses making less than US$24,000 per annum were still exempted. The government levies taxes on all personal incomes including income from business, commerce, agriculture, industry, transport, construction, or contracting work. The corporate tax rate is currently 30 percent of net profits for all firms. Other taxes imposed by the central government are customs and excise taxes , and stamp duty . Local governments are authorized to collect different types of taxes such as property and land tax. Tourism and its allied services are the biggest source of revenue of the government, especially in terms of foreign currency earnings.


The military has played a large role in Thailand's political history and national development. In less than 3 decades, from 1932 to 1958, Thailand underwent 12 coups d'etat. Since 1958 there have been 6 more coups, half of which were successful in overthrowing the government. Since the transition from an absolute monarchy to a constitutional monarchy in 1932, the country has been led mostly by military leaders.

Against this scenario, it is important to analyze the contribution of military leaders to Thailand's current economic development since they had a hand in crafting most of Thailand's economic strategies. For instance, the rule of Field Marshal Sarit Thanarat after a coup in 1957 laid the foundation for Thailand's economic development. One of the most important contributions of his regime was the formulation of a national economic development policy, the first of its kind, which was implemented beginning in 1961. Numerous technocrats were tapped in the crafting of Thailand's economic strategy for development. His other achievements include the establishment of universities in the north, northeast, and southern regions, the enticement of foreign investors to invest in Thailand by offering incentives such as tax holidays , and hastening the completion of infrastructure projects such as dams, roads, and bridges. Succeeding regimes followed Sarit's example and crafted their respective development strategies after his, a key factor in Thailand's present economic progress.


Thailand's road networks cover over 170,000 kilometers (105,638 miles). To help alleviate the traffic in Bangkok, an elevated train system was opened in December 1999. An underground subway system is also under construction and is expected to be operational by 2003. A total of US$700 million was allotted for these mass transportation projects. Originating from Bangkok, Thailand's rail network spans 3,981 kilometers (2,474 miles) and transports people to the major regions, namely Chiang Mai, Nong Khai, Ubon Ratchathani, Padang Besar, and Sungai Kolok. The State Railway of Thailand expressed its plans to spend US$4.2 billion between 1997 and 2001 to improve and expand its rail network.


Thailand is working on its goal to become the aviation hub of Southeast Asia. It is expanding its existing international airport to accommodate 36 million people by 2003. At the same time, a second international airport, 30 kilometers east of Bangkok, is currently under construction. Presently, Thailand has a total of 106 airports. Of these, 6 are international airports while 29 are domestic airports, with several more provincial airports in the offing.


There are 8 international deep seaports in different parts of Thailand, with the major ports in Bangkok, Laem Chabang, Phuket, and Songkhla. In order to reduce the traffic in the over-utilized main port in Bangkok's Klong Toey district, the government is upgrading and constructing additional ports, particularly in the Eastern Seaboard and southern region, along the Gulf of Thailand and the Andaman Sea.

The importance of the Eastern Seaboard is increasing due to the establishment of industrial parks and export processing zones around the sea port in Laem Chabang. The government foresees that the port areas in the south will grow in importance to equal existing main ports.


As of 1998, there were 5.4 million land lines and 2.3 million mobile phone subscribers in the country. As incorporated in the Telecommunications Master Plan for 1997-2006, Thai authorities have set a goal of increasing the number of telephones per 100 people from 4 in 1993 to 18.2 by 2001. In 1999, the government completed the Rural Long Distance Telephone project and is currently operating a total of 20,732 lines or 47 percent of its target. A number of projects are currently underway, including the Fibre Optic Submarine Cable Network Development and the Telecommunication Satellite Network Development.

As of 1999, Thailand had 204 AM stations, 334 FM stations, and 6 short wave facilities servicing about 13.96 million radios. In addition, 5 television broadcast stations provide service to 15.19 million television sets in all of Thailand as of 1997.


In the past, Thailand was heavily dependent on imported crude oil. After the world oil crisis in the 1970s, however, Thailand began to explore indigenous sources of energy and was rewarded with the discovery of a natural gas field in the Gulf of Thailand in 1981. As of 1996, 20 fields are in operation with daily oil production reaching 2,500 barrels per day, and of gas reaching 1,200 million cubic feet per day.

Due to the continued expansion of industries, the future demand for energy has been forecasted to increase by 7 percent in the period between 2002 and 2006. Demand for petroleum will still lead this increase at 49 percent, followed by imported coal at 12.4 percent. Demand for electricity has been forecasted to double from 10,203 megawatts in 1996 to 20,400 megawatts in 2006, according to the Asia Pacific Economic Compendium (1996).

Thailand continues to explore other sources of energy within its territory and from neighboring countries. In addition, it continues to construct different projects to meet its energy requirements. Among these are the Greater Bangkok Area Transmission System, the Yadana-Ratchaburi Gas Pipeline, the Ratchaburi Power Plant, and the Eighth Power Distribution System Improvement and Expansion Plan.


Agricultural production is focused on 7 major crops—namely rice, tapioca, rubber, maize, sug-arcane, mung beans, and tobacco leaves—which are grown mostly for export purposes. Fifty percent of the country's cultivated land is devoted to planting rice; Thailand continues to be the world's top exporter of rice, exporting 6.8 million tons of its total production of 23.3 million tons in 1999, worth 7.1 billion baht. Based on Bank of Thailand statistics, exports of rubber amounted to 2 million tons worth 43.9 billion baht, while maize amounted to 80.7 thousand tons worth 528 million baht, according to Business Monitor International. Crop production is expected to increase as genetic research on plants improves yields and as cultivated areas are expanded. However, falling global prices and adverse weather conditions are likely to reduce farm incomes.


The second largest component of agriculture is livestock production, which accounted for 1.3 percent of GDP in 1993. The decline in the prices of field crops and the reduced productivity of land have caused farmers to turn to contract farming of broiler chickens, cows, and pigs. A single broiler contract growing project employs about 145 families who earn an equivalent of US$350 monthly, after paying for the bank loans needed to buy broiler houses and equipment. Research to improve egg production and feed conversion has also been successfully undertaken, making Thailand a leading producer and exporter of frozen chicken. The government also helps this sector by facilitating the improvement of beef and dairy production through cross-breeding and artificial insemination using high-grade breeds imported from the United States, Switzerland, Germany, Denmark, and Australia. Thai beef is exported to Singapore and Hong Kong, and the sector is angling to gain entrance to the Japanese market.


The wood industry relies on the wide variety of hard and softwood available in the country's forests. Among these are tropical evergreens, hill evergreens, mangroves, and other trees which are processed to produce firewood, stick lac, gum benzoin, rattan, and bamboo. Rattan is then manufactured into furniture, while bamboo is used for furniture and paper. Dyes, tanning bark, and medicinal herbs are also harvested. The growth of the output from forestry fell from 2.6 percent in the period between 1967-71 to 0.25 percent in the 1982-86 period due to the massive depletion of the country's forest resources. The devastation is caused mainly by the destructive practice of slash-and-burn agriculture by villagers as well as illegal logging. Uncontrolled logging resulted in the felling of 1.5 percent of the country's total forest acreage every year. After heavy floods in 1988 washed away entire villages, the government banned logging and conducted reforestation efforts. Currently, 23 percent of the country is covered with forests following legislation in the early 1990s which called for the maintenance of a proper percentage of forestland.


The country's 3,000-kilometer (1,864-mile) coastline produces an average of over 3 million metric tons of marine products annually, which amounts to about US$2 million. Its fishing industry, which is one of the largest in Asia, exports frozen shrimp, tuna, squid, and cuttlefish. There is also an abundance of freshwater fish in rivers, lakes, and streams as well as flooded paddy fields where farmers purposely raise them. The Fisheries Department also promotes freshwater aquaculture by farmers in large ponds. Forty-five freshwater fishery stations have been set up by the government to promote freshwater aquaculture. In 1999, fishery products accounted for 3.6 percent of total exports. However, its total contribution to GDP has diminished due to the exhaustion of resources in Thailand's coastal waters.


Canned foods constitute the main export earner of this sector, and Thailand is the world's leading exporter of canned pineapple and tuna. Its export growth rate increased by 6.8 percent between 1998 and 1999. This sector has shifted from basic refining to value-adding (increasing the value of a good in the process of production), hence, the biggest growth segments include ready-to-eat meals like canned traditional Thai dishes, processed seafood, and snacks. Though still largely patronized by the domestic market, 2 rice dishes—namely khaolam , a rice dessert baked in bamboo trunks, and krayasart , a sticky rice dessert—are already being sold in China and Japan. Production of ready-to-eat halal food is another avenue to be explored, to tap the regional Islamic market.

The government has thrown its support behind agro-processing by promoting the establishment of industrial estates that are located near prime sources of raw material. Several multinational companies have also established their presence in the country, namely the Heineken and Carlsberg breweries; Nestle, whose 8 plants are producing a wide range of products from ice cream to mineral water; and Kellogg, which uses local rice as raw material for its ready-to-eat cereals.


The country is currently the regional center for vehicle assembly and the manufacturing of motor parts, and is the second leading manufacturer of pick-up trucks in addition to the long-established motorcycle industry. Between 1991 and 1996, vehicle assembly peaked at 560,000 per year, in addition to 1.5 million units of motorcycles. The financial crisis debilitated this sector in 1997 and 1998, but it managed to rebound and produced 327,233 units of vehicles following a sharp increase in export orders in 1999, along with 725,425 units of motorcycles. Shipments in motor vehicles and parts in 1999 amounted to US$1.6 billion. Among the auto companies who have established factories in the Eastern Seaboard are Ford, GM, Mazda, Honda, and Toyota.


This sub-sector produces a wide range of products from low-tech consumer goods , such as TV tubes and computer monitors, to advanced microchips. In 1999, total electronic exports amounted to US$21.4 billion. The government has encouraged its growth by offering official investment incentives to foreign investors. Among the multinational corporations that have been attracted by these incentives are Fujitsu, Seagate, IBM, Sony, and Matsushita Electronics, which produces the National Panasonic brand. However, the sector is undermined by lack of skilled scientific and professional workers and heavy reliance on foreign technology.


Natural gas discovered in the Gulf of Thailand is being tapped for the raw materials upon which to develop a globally competitive petrochemical industry. This sub-sector was greatly affected by the financial crisis due to the massive debts that it accumulated during its development in the early 1990s. However, its performance is picking up with an increase of 2.1 percent in output in 1999, due to higher export demands. Foreign investment is expected to fuel its resurgence with Germany's Phenolchemie, Chevron, Bayer, and Montell pumping in fresh investments.


The services sector is Thailand's fastest growing sector, largely fueled by the boom in tourism. In 1997, services accounted for over 49 percent of GDP and employed over 4.1 million, or 31 percent of, Thai workers.


The beauty of the country attracts millions of tourists annually. Thailand boasts beautiful beaches, cultural attractions such as Buddhist temples, bountiful food, affordable high-quality goods such as textiles, and hospitable people. Beckoned by these attractions, tourists have steadily generated income for the country since 1982, with tourism posting a growth rate of 16 percent per year. In 1994, 6.16 million tourists visited Thailand. In 1998, 7.76 million tourists spent nearly US$8 billion. This was exceeded by the 1999 figure, which posted the arrival of 8.5 million tourists. In 1992, tourism employed 1,693,005 workers (5.1 percent of the total labor force), with 923,822 employed directly and 769,183 employed indirectly. The boom in tourism spurred the growth of related service industries which generated employment. Of the total number of workers in the tourism industry, 37 percent were hired by hotels, 26 percent by restaurants and food shops, 11 percent by leisure and entertainment, and 26 percent by the souvenir industry, travel agencies, and other related enterprises. In recognition of the importance of this industry, the Tourism Authority of Thailand works closely with other agencies to develop tourism resources efficiently by promoting investment in tourist-related facilities.


The continuous expansion of the Thai economy led to the increase in the need for business services including legal, advertising, employment, and general management. In 1997, legal and accounting firms reported the highest revenue while advertising bore the brunt of the financial crisis. The demand for financial restructuring services including merger, acquisitions, and debt collection remained high in 1998, which led to an increase in the sector's employment. To illustrate, one accounting company expanded its debt restructuring division from 2 to 20 people in 1997. Top international consulting firms have offices in Thailand, including Baker & McKenzie and Tilleke & Gibbins for law; Andersen Consulting and Boston Consulting Group for management consulting; Arthur Andersen and Price Waterhouse for accounting; and J. Walter Thompson and AC Neilsen for advertising and media.


The retail sector is composed of department stores, hypermarkets, supermarkets, and convenience stores, most of which are local companies. Among the international retailer stores are Carrefour, 7-Eleven, Marks & Spencer, and Makro.


As of 1999, Thailand had 639 international restaurants and 328 local restaurants, and about 15,000 fast food, mid-level family style restaurants, coffee shops, noodle shops, specialty food shops, and delivery shops to fuel the food services sector. It also had 2,350 hotels, 364 resorts, and 784 bungalows which account for higher food sales than restaurants. In 1998, total food sales amounted to US$5.385 million. In 1992, restaurants and food shops employed approximately 440,000 workers. Even though the dollar value of food service sales decreased due to the devaluation of the baht during the 1997 Asian financial crisis, the sector grew by 7 percent based on actual sales.


Thailand has 34 commercial banks, of which 13 are domestic and 21 are foreign. Among the foreign banks are Bank of America, Chase Manhattan, and Citibank. Leading local banks include Krung Thai Bank, with 646 local branches and 10 overseas branches; Bangkok Bank PCL, with 526 local branches and 21 overseas branches; and Thai Farmers Bank, with 497 local branches and 12 overseas branches. As a result of the financial crisis, some local banks have been taken over by the government and are in the process of reorganization and eventual privatization . The public financial sector includes banks geared for specific purposes including 1) the Government Savings Bank for small savings deposits; 2) the Bank for Agriculture and Agricultural Cooperatives for farm credit; 3) the Government Housing Bank for middle-and low-income housing mortgages; 4) the Industrial Finance Corporation of Thailand for industrial development projects; and 5) the Export Import bank for importers and exporters. Other financial services include finance companies, mortgage lenders, life and non-life insurance companies, and financial cooperatives.


In 1999, Thailand had a total of 1,087 private enterprise labor unions, 44 state enterprise labor unions, 19 labor union federations, 8 labor union councils, 226 employer associations, 3 employer association federations, and 10 employer councils, according to the Department of Labor Protection and Welfare. Membership in these voluntary organizations may vary from 250 to 8,000 workers. In specific industries such as textile, doll, and artificial flower making, it can be expected that the majority of the union members will be female. Female union leaders, however, are a rarity in Thailand.

One of the effects of the recession in 1997 was a marked increase in labor disputes compared to figures in the past 17 years. Approximately 80 percent of these cases involved the collection of severance pay.

Different government agencies, led by the Ministry of Labor and Social Welfare, ensure that working conditions, especially in the factories, conform to legally-established standards. However, despite periodic inspections, working conditions in the factories still need improvement. One study reports that over 20,000 Thai workers suffer occupational afflictions every year. In 1993, the Committee for Workers' Health and Safety was established after a tragic blaze that killed 188 Kader workers.

In general, Thai workers complain about low pay, excessive working hours, and inadequate medical benefits. The textile industry has been specifically cited in many studies as having some of the most dismal working conditions characterized by deafening noise, poor lighting, inadequate medical facilities, and improper ventilation. Each year about 30 percent of the industry's female workers suffer from byssinosis or "cotton sickness" from cotton dust particles. Meanwhile, women in other industries likewise suffer from other occupational hazards.

Based on 1998 labor statistics, of the total 186,498 cases covered by the workers' compensation fund, 67.8 percent involved temporary disability requiring less than 3 days of leave, 29.7 percent involved temporary disability requiring more than 3 days of leave, 2 percent involved permanent partial disability, while 0.4 percent involved death.

Thailand's 1997 constitution mandates equal rights and protection for men and women. However, the results of various surveys reveal that there is still some discrimination against Thai women in terms of professional advancement and wages. Most employers in the private sector hire women only when there is a difference in wage rates. Commonly, firms would rather not hire women or promote them to more important jobs because of traditional attitudes against women working outside the home. Likewise, women are not prioritized for skills training and upgrading since it is unlikely that they will be promoted to higher positions anyway. Women are commonly employed in labor-intensive industries, service and entertainment jobs, and the informal sector.

One of the negative consequences of Thailand's tourism industry is the prostitution of its women and children, especially those who have no formal schooling or only finished the first 6 years of schooling. The law prohibits women under 18 from working in nightclubs, dance halls, schools for dancing, bath and massage houses, and hotels, however, there are not enough government personnel to conduct inspections.

Thailand has been severely criticized by the international community for the proliferation of child domestic workers in its factories and brothels, or houses of prostitution. Child labor involves not only Thai children but also children of migrant workers of neighboring countries. Determining the exact number of child laborers in Thailand is difficult since parents or companies do not want to cooperate with authorities for fear of prosecution or loss of income. Different agencies have conflicting estimates of number of prostituted children in Thailand. The estimates range from 40,000 (1997) by the Thai government, to 200,000 (1997) by the international organization End Child Prostitution, and 400,000 (1998) by the BBC News. Based on the provisions of the Labor Protection Act (1998), persons between the ages of 15 to 18 can only work in non-hazardous jobs and must secure permission from the Department of Labor. Moreover, they cannot work at night or during holidays.

In the mid-1990s, only 40 percent of the Thai labor force had completed secondary or post-secondary education. Enrollment in secondary education is slowly increasing, although it is still low compared to other countries in the region. The gross enrollment ratio of formal secondary education increased from 64.8 percent in 1997 to 70.6 percent in 1999. The New Education Act of 1999, as provided for in the 1997 constitution, has mandated the extension of compulsory schooling to 9 years from the current term of 6 years and the implementation of a 12-year free education program by 2004. Moreover, the act has reduced the power of the central ministry in favor of new school districts within the next 3 years.

In its early years of development, Thailand placed too much priority on developing the primary level of education to the detriment of the quality of secondary and tertiary education. As a consequence, Thailand lagged behind other countries in terms of research and development in science and technology, which meant that its workforce was ill-equipped to handle the emerging opportunities in high technology industries. As a result, the companies that were engaged in these industries chose to set up the center of their operations in other Asian countries. It was only after the 1997 financial crisis that Thailand started paying attention to the improvement of its educational system.

Over the years, the Thai government has formulated different strategies to improve the skill level of its work-force (World Bank, 2000). Among these programs are the Vocational Training Promotion Act (1994), the Training Tax Exemption Decree (1995), and the Skills Development Fund (1997), which grants low-interest short-term loans for approved training courses that would provide skills certification.


Thailand has no territories or colonies.


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—Maria Cecilia T. Ubarra




Thai baht (B). One baht equals 100 satangs. There are notes of 50 satang and 1, 5, 10, 20, 50, 60, 100, 500, and 1,000 baht, and coins of 1, 5, 10, 25, and 50 satangs and 1, 5, and 10 baht.


Computers and parts, textiles, rice.


Capital goods, intermediate goods and raw materials, consumer goods, fuels.


US$388.7 billion (purchasing power parity, 1999 est.).


Exports: US$58.5 billion (f.o.b., 1999). Imports: US$45 billion (f.o.b., 1999). [ International Financial Statistics 1999 reports 1998 exports of US$54.46 billion and imports of US$42.97 billion.]

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This, a very well write on Thailand. Though, you have to live Thailand without self judgment to truly love and understand the process of growth. Integration of politics would be the quantum leap the people, native and expatriate, so have earned and deserve. Save for the seemingly endless stream of expatriate, cry babies and unappreciative guests. This integration would trickle onward to the population. Then Thailand could truly take its' place among world revered nations of progress and dynamic growth. Integration of policitcs is what has made the USA remain and continue to be the role model country of its' size and weight throughout the civilized world.
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