Economy and business in Thailand are dominated by
industry and service industries. The industry comprises 36.2
and the service industries 55.6 per cent of the economy,
while the previously important agriculture comprises 8.2 per
cent (2017). However, agriculture is still very important
for the country, as 31.8 per cent (2015) of the working
population are directly employed in agriculture.
COUNTRYAAH, Thailand has a gross domestic product (GDP) of US $
17,900 per capita (2017). GDP grew by just over 3 per cent
each year in the years 2015–2017.
In 2015, less than 7.2 per cent of the inhabitants lived
below the poverty line. All the ten poorest provinces
(measured in GDP per capita) are in the northeast. Growth in
the economy has also brought with it other social
inequalities. Among other things, the country's economy is
only dominated by a few powerful families.
Thailand's economy grew very rapidly from the 1970s until
a regional crisis (the so-called Asia crisis) occurred in
Thailand in 1997. Between 1985 and 1995, the country
benefited from one of the world's highest growth rates.
Thailand was referred to as a successor to the rapidly
industrializing countries of Taiwan and South Korea. Unlike
in Taiwan and South Korea, however, government participation
in the Thai economy has been minimal. Moreover,
industrialization in Thailand was to a much greater extent
than in Taiwan and South Korea based on imports of foreign
capital and technology. The economy is characterized by
major inequalities, and growth has mainly taken place in the
Growth in the Bangkok region has created new, large
income gaps in the country and growing social tensions. In
the capital, the population rose from three million in 1970
to nearly ten million at the turn of the millennium. The
economy seriously accelerated towards the end of the 1980s
and continued at a record pace throughout the 1990s. A sharp
setback came in 1997 with an acute financial sector crisis,
first with an actual devaluation of the currency by about 40
percent. The International Monetary Fund (IMF) supported a $
16 billion loan.
Since the 1950s, Thailand has regularly had large trade
deficits abroad. Foreign trade has changed character since
the 1980s. In the past, agricultural and fishery products
were the main concern, but after the turn of the millennium,
industrial products accounted for over four-fifths of
exports and Thailand was granted Newly industrialized
country (NIC) status.
In the years following the Asian crisis, Thailand had
steady economic growth with annual growth rates of 4.5–7 per
cent. The military coup in 2006 obviously had serious
financial consequences, with fewer tourists, new investments
and weakening private consumption. In 2007-2008, GDP growth
was about four per cent - the lowest of all the countries in
Southeast Asia. In 2008, the economy was hit on two fronts -
by both the global financial crisis and the severe riots in
the streets. For 2009, negative growth was expected.
However, the economy is considered to be significantly
better equipped than in 1997, when Thailand's faltering
government finances triggered a financial crisis that not
only affected the entire Asian region but had major
Tourism suffered a temporary setback when Thailand was
severely hit by the tsunami disaster in Asia in 2004. Around
8300 people lost their lives. Among the victims were 2,500
foreign tourists, including 84 from Norway, 543 from Sweden
and 46 from Denmark. Island groups and tourist sites in the
Phuket region were particularly hard hit. In 2006, the
tourism industry was in good shape again, and in 2007 and
2008 more than 14 million foreign tourists arrived.
However, violent political confrontations led to a sharp
decline in the fourth quarter of 2004. After both Bangkok's
main airports were occupied and blocked by protesters in
November 2008, a time 350,000 foreigners were stranded,
according to the tourism organization. New riots in April
2009 also led to many cancellations. The new main airport
Suvarnabhumi was opened in 2006, but soon a number of
serious shortcomings came to light. Extensive repair work
was needed, including cracks in the runway. The old airport,
Don Muang, had to be re-used for international traffic for a
period of 2007.
Thailand's natural resources primarily include the
country's huge agricultural potential. Agriculture is
traditionally the country's most important industry,
although the industry's share of the country's total economy
has fallen to less than ten per cent in recent years.
Because of the large population still living in the
countryside, agriculture is very important. In total, three
quarters of the population is expected to be directly or
indirectly dependent on agriculture for their livelihoods.
Thailand is the world's largest exporter of rice, rubber
and manioc and the world's second largest exporter of sugar.
Agriculture is generally little modern. Rice is the main
ingredient in the diet, and is grown all over the country,
mostly in small family farms. The arid northeast region
accounts for close to half of rice production and the
northern region accounts for a quarter. However, the most
intensive cultivation of rice takes place in the central
part of the country, especially in the plains along Chao
Phraya. Corn, manioc, cotton and pineapple are grown in the
plateau, while rubber is produced in the south. The country
is plagued by floods during the rainy season. During the dry
season, especially the northeast plateau may be plagued by
Animal husbandry for meat production is also very
important. Thailand was the world's third largest exporter
of chicken meat until the country was hit by bird flu in
2004. Exports were later largely shifted from exports of
fresh and frozen meat to cooked meat. In the low-mechanized
countryside, buffalo are still important as migratory
Timber was previously an important export product. In
1938, 70 percent of the land was covered by natural forest,
but uncontrolled harvesting reduced the area to around 15
percent. A general nationwide ban on harvesting was
introduced in 1989, but is not fully enforced. In order to
remedy deforestation, a forest planting program has been
Thailand has 150,000 fishermen on 50,000 vessels, of
which 17,000 are sea trawlers and factory ships. The catches
are usually distributed by two thirds in the Gulf of
Thailand and in the South China Sea, one quarter on the west
coast of the Andaman Sea and the rest in rivers and lakes.
Thailand is one of the world's largest exporters of both
shrimp and mackerel (tuna). However, the outlook for the
country's fisheries is mixed as a result of considerable
overfishing in domestic waters, conflicts in foreign
countries' waters and unstable export markets. In addition,
in December 2004, the tsunami hit the country's fisheries
hard. A total of 4529 fishing vessels and a number of
aquaculture facilities were destroyed.
Mining and energy
Thailand is not particularly rich in mineral resources.
However, tin, lignite, plaster, tungsten, lead, antimony,
manganese, copper, gold, zinc, rubies, sapphires and silver
are mined. Gemstones and other jewels are important export
products. The largest deposits of lignite are found in the
north. The extraction of natural gas and crude oil is
undergoing strong development in the Gulf of Thailand.
In 2017, the production of electrical energy was 176.6
TWh. Around 60 per cent of self-generated power is produced
using natural gas, while coal contributes around 20 per
cent. In addition, there will be import power from Laos
which in 2017 accounted for around 9 per cent of
Thailand imports large quantities of natural gas via a
pipeline from Myanmar, but domestic production has increased
in recent years. In 2016, own crude oil production was
257,525 barrels per day.
Development of the industry started around 1960 and
followed the advice of the World Bank, but only after 1967
did development begin to accelerate. Until 1971, an import
substitution strategy was focused on. Later, more emphasis
has been placed on export promotion measures. With the
exception of the electricity supply, the petroleum industry
and the petrochemical industry, the state authorities have
been very reluctant to invest directly in business. A very
large proportion of industrial growth has been through
foreign investment and foreign technology, especially from
Japan, but also from the United States, Europe and other
countries of East and Southeast Asia. In the 1980s, much of
the industrial growth in labor-intensive production such as
textiles, toys, shoes and construction products occurred. In
the 1990s, most of the growth occurred in the production of
more advanced products such as semiconductors, integrated
circuits, hard disk drivers and electrical appliances, as
well as passenger and trucks.
Several American and Japanese car manufacturers have
established production units in Thailand. In particular, a
significant number of pickup cars are produced. The growth
in vehicle production has led to strong growth in steel
production. Several new oil refineries have also been built
since 1996. The transition from labor-intensive to
sophisticated high-tech production has been painful.
Competition from other countries with lower labor costs has
led to parts of labor-intensive production, including
textiles, being moved to other low-cost countries. As a
counterbalance, efforts are being made to develop Bangkok as
a fashion center for Southeast Asia. The development of
high-tech production, for its part, suffers from a shortage
of skilled labor in several areas, partly caused by the high
degree of imported technology.
Most of the industrial growth has taken place in the
Bangkok region. Since 1985, most of the growth has been
along the eastern side of the Bay of Bangkok in an area
called the Eastern Seaboard, which extends from Bangkok to
Rayong. The main regional industrial centers are Chiang Mai
and Nakhon Ratchasima.
The tourism industry has been growing rapidly since the
latter half of the 1980s, from 4.2 million foreign visitors
in 1988 to 10.1 million in 2003 and 35.38 million in 2017.
The country's culture and nature attract a large number of
foreign tourists each year. In addition, the country is seen
as a generally stable society and safe to visit for Western
tourists. Among the most attractive areas are Bangkok,
Phuket, Pattaya and the areas in the north.
Foreign trade has expanded significantly since 1960, and
especially after 1988. In 2016, industrial products
comprised 86 percent of export value, and agricultural
commodities - mainly rice and rubber - eight percent. Since
1995, computer parts, electronic consumer goods and vehicles
have been the country's most important export products,
against earlier textiles and footwear. Thailand is an
export-oriented economy: exports account for about 65
percent of the country's GDP. The main import goods are raw
materials and semi-finished products, including parts for
the automotive industry.
The ASEAN (Association of South-East Asian Nations)
partner countries are, in sum, the most important trading
partners. The most important single export markets are the
United States, Japan and China. A quarter of the imports
come from Japan.
Transport and Communications
Thailand had a total of 180 053 kilometers of roads in
2006, of which 95 per cent were classified with a fixed
tire. The development of the road network has closely
followed the increase in the number of vehicles, and major
traffic problems have developed, especially in the Bangkok
region. The railway network covers 4 127 kilometers (2017).
There are four main lines out of Bangkok: north to Chiang
Mai, northeast to Nong Khai, east to Ubon Ratchathani, and
south to Hat Yai and further to Malaysia and Singapore. In
Bangkok, the first section of an elevated tram network
opened in 1999, while the first subway line opened in 2004.
International airports can be found at Bangkok
(Suvarnabhumi), Chiang Mai, Chiang Rai, Hat Yai, Ko Samui,
Krabi, Phuket, Surat Thani. Bangkok's port in the Klong Toei
district can ship up to 10,000 gross tonnes. Two new deep
water ports at Laem Chabang and Map Ta Phut southeast of
Bangkok are built to relieve Khlong Toei. In the central
plain, a network of channels is still important for