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In
Thailand's open economy, foreign trade accounts for a major
portion of the national product. Its importance has grown
substantially over the past 20 years as its share in the national
income increased from 34 percent in 1961 to 67 percent in 1993. As
the economy becomes more open, it is increasingly susceptible to
change in world economic conditions.
Exports.
During 1988-1992 total value of exports increased at an annual
average of 20.3 percent. Total value increased from about 18
percent of the Gross National Product in 1984 to approximately
29.5 percent in 1993.
There
have been improvements in the structure of Thai exports value,
most notably the diversification of export commodities. The share
in total exports held by the country's seven major agricultural
products, (rice, tin, rubber, maize, sugar, kenaf and tapioca)
declined from about 54 percent in 1978 to 81.0 percent in 1993. An
impressive rate of export growth has also occurred for textile and
garment, electronic equipment, frozen squid, canned pineapple,
fish meal and canned marine products, gems and jewellery.
Thailand's
traditional export markets are concentrated in the East Asia
region. In 1993, Japan tool up 17.05 percent of total exports and
three other countries in the region --- Malaysia (2.8 percent),
Hong Kong 95.29 percent), and Singapore (12.07 percent). With the
high rate of growth in the East Asia region, as well as the
growing economic interdependency between Japan, the newly
industrialized countries in Asia and ASEAN, the prospect for
future export expansion looks bright.
Imports.
Thailand's import bill increased from 242,284 million baht in 1984
to 1,143,000 million baht in 1993. Most of the increase was
experienced after 1986 when the country started a period of
economic boom. Between 1961 and 1973, the portion of the total
Gross National Product spent on imports stood at between 18 and 21
percent. During 1973-1982, the ratio increased to 28 percent as a
direct result of substantial rises in the import price of
petroleum. In 1993 expenditures on imports accounted for about
36.6 percent of the Gross National Product.
Import
structure has changed in recent years. The proportion of
consumption goods imports has continually declined from 23.7
percent of total import value in 1967 to only 9.6 percent in 1993
as a result of the government's industrial development policy
oriented towards import substitution. At the same time, imports of
raw materials and capital goods increased substantially to about
73 percent of total imports by the end of 1993.
Thailand
relies on imports from certain major trade partners, particularly
Japan and the United States. In 1993 imports from these two
countries accounted for 42.3 percent of toe total. Over the period
1978-1988, the proportion of imports from West Germany and the
United Kingdom declined from 9.67 percent of the total to about
8.3 percent while imports from Saudi Arabia and Qatar, the major
exporters of petroleum, increased substantially. During the period
under review there has been no significant change in the direction
of imports from ASEAN countries. Imports from Malaysia and
Singapore totaled respectively 6 percent and 9 percent of the
total in 1993.
Terms
of trade. With the continuing increase in fuel prices, world- wide
inflation, and the decline of primary product prices in the world
market since 1975, the terms of trade have become less favourable.
However, there was a significant improvement in 1992/1993 with the
sharp rise in primary commodity prices in the world market.
Balance
of payments. Thailand's trade deficit has been increasing
gradually over the past two and a half decades. Trade deficit of
221,000 million baht was registered during 1993. the main reason
for this deterioration was the huge demand for import of raw and
semiprocessed materials, and capital goods created by the
expanding industrial sector.
At
the same time, the world price of many Thai export commodities
continued to decline, resulting in a lower growth rate in export
earnings. While the trade deficit grew bigger, income from
services and foreign capital inflows were insufficient to offset
the tremendous gap. Consequently, the balance of payments
registered a record deficit of 13,298 million baht in 1978. Since
then however, the situation has turned around, thanks to tight
fiscal and external debt management, lower oil prices, and
substantial increases in capital inflow, exports, and tourism. the
balance of payments has registered a surplus since 1984. By the
end of 1993, Thailand's official foreign reserves stood at US$
25,438.8 million, equivalent to about seven months of imports.
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