Thailand Country Report

Sachi Otsuki

Thailand, officially called the Kingdom of Thailand is an independent country located in South East Asia. Thailand is a constitutional monarchy led by King Bhumibol Adulyadej, King Rama the ninth of Thailand, who, in 2006, celebrated his sixty years in reign, one of the longest in the world. Thailand is the only Southeast Asian country that was never taken over by a European

power. But the military coup in September 2006 ousted former Prime Minister Thaksin Chinnawat, which lead to many protests in the past few years. Members of the parliament elected Abhisit Vejjajiva Prime Minister, on December 17, 2008. He is the country’s youngest Prime Minister. Despite of all the political instability recently, Thailand is classified as an NIC.

Currently, Thailand is classified as a NIC, a newly industrialized country. NIC countries are “nations with economies that are more advanced and developed than those in the developing world but not yet with the signs of a developed country”. This is the category between a Least Economically Developed Countries and More Economically Developed Countries. But comparing to other NIC countries, Thailand’s GDP is lower. Thailand’s

Indicators MEDC (Japan) NIC (Thailand) LEDC (Laos)

Population growth -0.24% (2010 est.) 0.65% (2010 est.) 1.71% (2010 est.)

Life expectancy 82 75 62

GDP per capita $32,600 (2009 est.) $8,100 (2009 est.) $2,300 (2009 est.)

Education (literacy rate)

99% (2002 est.) 92.6% (2000 est.) 73% (2005 est.)

Buildings on fire in the middle of Bangkok due to the riots

GDP per capita is higher than both India and China because it has a smaller population than India and China. The GDP per capita for MEDC, more economically developed countries, are much higher than Thailand’s GDP per capita. For example, Japan, an MEDC in Asia, also one of the most developed countries in the world, has a GDP of $5.069 trillion (2009 est.) and the GDP per capita is $32,600 (2009 est.). Thailand’s neighboring country, Laos is an LEDC, has a $5.598 billion (2009 est.) and her GDP per capita is $2,300 (2009 est.). This is a great difference of $30,300. But, Thailand is in the middle of these two countries as her GDP is $264 billion (2009 est.) and her GDP per capita is $8,100 (2009 est.). Even though this is still relatively low compared to Japan, it is still quite well off compared to Laos and other countries located in South East Asia. Thailand is quite free in terms of economic freedom. Thailand has a score of 64.1 and is ranked 66 in the world. The score has improved 1.1 since last year due to the increased freedom of corruption and investment freedom.

There are many indicators that show how Thailand is an MEDC. Thailand’s population growth rate is decreasing, according to Nation Master. This also occurs with

many other MEDC countries as her population growth rate is also decreasing. Thailand’s life expectancy is an average of 75, which is ranked eighty-ninth in the world. But, the proportion of older population is increasing, while the proportion younger population is decreasing. The population pyramid in 1990 was in a shape of a triangle but then changed into a diamond shape in 2005, which means that the population growth rate was once increasing but is now decreasing. Right now, 2010, the pyramid is looking similar to the pyramid in 2005 with a triangle on top of an inverse triangle (diamond shape) on the bottom. But in the 2050, the population pyramid is looking to be a rectangle shape, which means that there is no population growth.

This is because of many reasons. 31% of the population lives and works in urban areas, which leaves 69% of the population still living in rural areas. Also, one can see from this map, most of the population (colored dark red, in blue circles) lives mainly in Bangkok and also in the northern parts of Thailand particularly Chiang Mai (North of Thailand) and Udon Thani (North east) area. Thailand is still a NIC because it has certain characteristics of an LEDC while it has a few MEDC characteristics as well. Therefore it cannot be clearly categorized as a LEDC or an MEDC. This is because there is still a large proportion of the population, especially people living in rural areas are still exposed to many diseases such as AIDS or other major infectious diseases. 1.4 percent of the population has AIDS, which is 610,000 people. This is ranked eighteenth in the world. Furthermore, there are around 3000 deaths a year due to AIDS, which is ranked seventeenth in the world. There is also high risk of other major infectious diseases such as waterborne diseases, vector borne diseases, and animal contact diseases, such as rabies. All these diseases lead to lower life expectancy in rural areas. But people living in urban areas are also exposed to other health issues such as pollution, heard diseases, sickness from stress or cancer. Furthermore, Thailand also fits into many other indicators that support LEDC’s such as a big gap between rich and poor. 9.6% (2008 est.) of the population lives under the poverty line while there are many billionaires, such as Chanchai Charuwat, chairman of Siam Paragon, one of the biggest, and most expensive, shopping malls in Asia. Lumsum and the Soponphanich are big families that own national banks, including Bangkok Bank.

Thailand’s work

sectors are divided into three, agriculture, service and manufacturing sectors. But, 42.4% (2008 est.) of the population still works in the agriculture sector, which leads to most of the population living in rural areas. But even though 42.4% of the population works in agriculture, the agricultural sector only contributes 11.6% (2008 est.) of the country’s GDP.

The most produced agriculture goods are rice and different types of fish. But Thailand also has many natural resources such as tin, natural gas, which is only used domestically, not imported, tungsten, tantalum, timber and lead. The manufacturing sector and service sector is still not as large as the agriculture sector. But these two sectors are increasing in increasing in importance while the agricultural sector is decreasing. Another issue why Thailand is still a NIC instead of a MEDC is because Thailand has a relatively large informal sector, people who do not work in offices or factories. These are, for example, taxi drivers, peddlers (people who sell food and goods on cars and trolleys). To become a MEDC, Thailand needs a smaller informal sector, and a larger formal sector, the people who work in offices and factories, and this allows the government to know who works, as these people have to pay tax and can be given benefits.

The service sector is expanding as more people are being educated. 37.9% of the populations are turning towards working in the service sector that includes banking, hotel management and tourism, as Thailand is a popular tourist destination. But another issue that has occurred in the past few years is the decrease number of tourists in Thailand during the political unrest. Due to political unrest, the Western embassies shut their doors and had been warning their citizens to not travel to Thailand for a few months, especially Bangkok, where most of the violence occurred. The manufacturing sector is also increasing. The manufacturing sectors GDP has been increasing in time and now contributes to 43.3% of the GDP. As Thailand has a relatively cheap labor cost, domestic and international companies are producing their products in Thailand. Thailand’s manufactured goods are mainly textiles and garments, agricultural processing, beverages, tobacco, cement, computers and parts, and automobiles and automotive parts. Thailand is also the world’s second-largest tungsten producer and the third-largest tin producer. Because of their increasing productivity, Thai manufacturing companies are starting to gather trust from buyers and consumers all around the world, which is helping with their economy and for the future economy.

Thailand does not have a lot of capital stock, leading to the import of machinery and other technologies from other countries. Thailand needs foreign direct investments (capital goods), such as building factories, as well as financial investments, such as buying and investing in stocks, to bring capital in the country. Furthermore, investing in human capital is also an important factor for economic growth. For example, improving in education and health and social welfare. Thailand has spent the largest proportion (about 25%) of government budget on education. Therefore, the next step to improve the country is to improve on the health and social welfare and to improve further on education.

In the past year, most countries in the world, including Thailand, has suffered from the economic crisis. The Thai government used various measures to stimulate the economy, both to increase consumption as well as long-term investments. This has led to a higher economic growth rate this year. With increasing exports and increasing investments, Thailand can look towards a brighter future. Thailand has been investing in large infrastructure projects to improve her future development. Thailand has the potential to be a MEDC, but Thailand needs to improve technology and innovations. There is not much leadership in management ability. Recently, in 2008, the United Nations Educational, Scientific and Cultural Organization (UNESCO) have held a seminar promoting entrepreneurship in secondary schools.

According to this report, UNESCO held this seminar to teach secondary school students (future working population) to become entrepreneurs. They want to increase the awareness of entrepreneurship and want to teach these students how to become an entrepreneur so they can use their knowledge to help raise entrepreneurship in Thailand in the future. Thailand has been taking some steps in improving her economy, for example by training students to improve in technology and business management, which, if succeeds, can improve the future greatly. This can also lead to more people working in the manufacturing sector, resulting in moving people away from the agriculture sector, which is one of the indicators for a country to become a MEDC. This can also lead to more exports and imports, which in turn, can produce to a higher GDP for the country. More and more, Thailand is qualifying for the factors of becoming a MEDC country. Even though they are far away, there is still some possibility that one day, they might become a MEDC.

References

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