Wednesday, November 5, 2008

Thailand Economic and Political Overview

Economic indicators | Foreign Trade in figures | Sources of economic information | Political outline

Economic indicators

Thailand's economical (as well as political) situation remains highly uncertain following the military coup on 19th September 2006, though it is unlikely that the county would go through major policy changes. Thailand’s economy is mainly driven by the manufacturing sector. Since 2005, the GDP growth rate varies from 4% to 5% depending of the years. Thailand suffers from the emerging competition in the manufacturing sector from China besides rise in global oil prices. Inflation is decreased to 2% in 2007. The financial sector is still fragile as it has not still recovered completely from the 1997-98 Asian financial crises.

GDP Indicators20042005200620072008
GDP (billions USD)161.35176.22206.34225.82e239.88e
GDP (constant prices, annual % change)6.34.55.04.0e4.5e
GDP per capita (USD)2,479.152,706.513,137.673,399.85e3,575.81e
Inflation rate (%)2.84.54.62.0e2.0e
Unemployment rate (% of the labor force)1.51.41.2n.c.n.c.
Current Account (billions USD)2.77-7.853.248.27e5.23e
Current Account (in % of GDP)1.7-4.51.63.7e2.2e

Source: IMF - World Economic Outlook DatabaseILO, Laborstat - Yearly Statistics

Note: (e) Estimated data

 
Socio-demographic indicators200420052006
Unemployment rate (%)1.51.41.2

Source:

 

Main sectors of industry

The economy is heavily agriculture based contributing nearly 10% to GDP and employs more than 50% of the active population. Thailand is one of the leading producers and exporters of rice. Other major crops are rubber, sugar, corn, jute, cotton, and tobacco. Fishing is an important activity - Thailand is a major exporter of farmed shrimp. Tin, by far the most valuable mineral, is a major export item. Thailand has substantial potential for hydroelectric power generation. The manufacturing sector amounts to nearly 46% of the GDP and is well diversified: electronics, automotive and steel industries are driving the economy. Thailand is a hub for assembly of well known international car brands. The textile sector employs almost 25% of the active population but is no longer a buoyant sector as compared to tourism which has become the main source of foreign exchange. The services sector (includes tourism) contributes nearly 43% to the GDP.

Breakdown of economic activity by sectorAgricultureIndustryServices
Value added (annual % change)-14.44.79.1
Value added (in % of GDP)9.845.844.4
Employment by sector (in % of total employment)42.620.237.1

Source: World Bank - World Development Indicators - last available data.

 
Monetary indicators20022003200420052006
Average annual exchange rate for 1 USD42.9641.4840.2240.2237.88

Source: World Bank - World Development Indicators

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Foreign trade in figures

Thailand is very much open to international trade and is an active member of ASEAN. The share of foreign trade in country’s GDP has reached more than 150%. The top three export partners of the country are: the USA, Japan and China. The commodities mainly exported are electric & electronic equipment, machinery, vehicles, rubber, and plastics. The top three import partners are: Japan, China and the USA. Thailand mainly imports electric and electronic equipment, mineral fuels & oils, machinery, iron & steel, and plastics. Thailand is also a major trans-shipment point for illicit heroin and has become a drug money-laundering centre.

Foreign trade indicators20022003200420052006
Imports of goods (millions USD)57,00866,90984,193105,995113,400
Exports of goods (millions USD)66,08978,08394,979109,199128,212
Imports of services (millions USD)16,72018,16923,07727,12032,018
Exports of services (millions USD)15,39115,79819,04020,16324,089
Imports of goods and services (annual % change)13.78.513.59.40.6
Exports of goods and services (annual % change)12.07.09.64.38.4
Imports of goods and services (in % of GDP)57.558.966.075.470.2
Exports of goods and services (in % of GDP)64.265.770.773.871.4
Trade Balance (millions USD)9,08111,17510,7853,20414,813
Trade Balance (including service) (millions USD)7,7518,8046,748-3,7536,884
Current Account (millions USD)4,6914,7722,759-7,8573,230
Current Account (in % of GDP)3.73.31.7-4.51.6
Foreign trade (in % of GDP)121.7124.6136.7149.2141.6

Source: World Bank - World Development Indicators

 

Main partner countries

Main customers
(% of exports)
2006
United States15.0%
Japan12.7%
China9.0%
Singapore6.5%
Hong Kong5.5%
Main suppliers
(% of imports)
2006
Japan20.1%
China10.6%
United States6.7%
Malaysia6.6%
United Arab Emirates5.6%

Source: 2006

 

Main products

Main exports
(% of exports)
2006
Machinery and mechanical appliances18.3%
Electrical machinery and equipment17.8%
Vehicles other than railway or tramway7.7%
Rubber6.7%
Mineral fuels, mineral oils5.0%
Main imports
(% of imports)
2006
Mineral fuels, mineral oils19.9%
Electrical machinery and equipment19.6%
Machinery and mechanical appliances14.1%
Iron and steel5.5%
Plastics3.6%

Source: 2006

 

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Political outline

Executive Power
Governed by a constitutional monarchy, Thailand has a bicameral legislature system with a House of Representatives and a Senate. Thailand’s 76 provinces each administered by an appointed Governor are divided into districts, sub-districts (tambons) and villages.
The King is the chief of the state and the monarch is hereditary. he has little direct power but commands enormous popular respect and moral authority which he has used on occasion to resolve political crises that have threatened national stability. Following national elections for the lower house of the parliament, the leader of the party that can organize a majority coalition is appointed as Prime Minister by the King for a four-year term. Prime Minister is the head of the government and holds all the executive powers including implementation of the law in the country and running the day-to-day affairs. The cabinet is appointed by the King on recommendation of the Prime Minister.
Legislative Power
The legislature in Thailand is bicameral. The parliament called National Assembly consists of: Senate (the upper house) having 200 seats with its members elected by popular vote to serve six-year terms and the House of Representatives (the lower house) having 500 seats with its members elected by popular vote to serve four-year terms. The executive branch of government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. Government cannot veto the acts passed by the parliament. When not under military rule, the people of Thailand enjoy considerable political rights. The coup of September 2006 has taken place after 15 years of civilian and democratically-elected governments. The junta appointed a 250-member legislature, called by some critics a "chamber of generals" and others claimed that it lacks representatives from the poor majority.In this interim constitution draft, the head of the junta was allowed to remove the Prime Minister at any time. The legislature was not allowed to hold a vote of confidence against the Cabinet and the public was not allowed to file comments on bills.This interim constitution was later surpassed by the permanent constitution on 24 August 2007. Martial law was partially revoked in January 2007. The ban on political activities was lifted in July 2007 following the 30 May dissolution of the Thai Rak Thai party. The new constitution has been approved by a referendum on 19 August, which led to a return to democratic elections on 23 December 2007.
Main political parties
Thailand has a multi-party system. The major political parties in the country are: 
- TRT (Thai Rak Thai Party) – has no clear ideological platform, but is commonly described as a ‘populist’ party;
- DP (Democratic Party) – the oldest party in the country, opposes any kind of military dictatorship, pro-democracy;
- TNP (Thai Nation Party) – a conservative nationalist party;
- Great People's Party – advocates left-wing ideology.
Current political leaders
King: PHUMIPHON Adunyadet (since June 1946) – hereditary
SAMAK Sundharavaj (since march 2008) Somchai Wongsawat was elected by the National Assembly of Thailand as Prime Minister of Thailand on 17 September 2008 and assumed office upon endorsement by King Bhumibol Adulyadej.
Next election dates
Senate: April 2012
House of Representatives: Year 2011

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