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Sector
Performance Over
the past two decades, the national income has increased by
approximately eight percent per year. Moreover, growth has been
broadly based, with all economic sectors participating in the
development process.
The
fabric of the Thai economy remained virtually unchanged up to the
late 1950s. In the early 1960s, the industrial and service sectors
began supplementing agriculture as significant income and
employment generators. Today, Thailand is still predominantly an
agrarian country, with about 57 percent of its working population
engaged in agricultural production and earning about 12 percent of
the national income. Over the years, however, the industrial and
service sectors have been increasing their shares of the total GDP.
Significant
structural changes in the Thai economy have taken place since the
early 1960s. of the national income declined steadily from about 40 percent
in 1960 to 12 percent in 1993. At the same time, the expanded very rapidly, increasing its portion of the
national income from 13 percent in 1960 to 37 percent in 1993.
Such a structural change does not, however, imply that
agricultural output failed to rise during the period. On the
contrary, it increased by about five percent per year. Moreover, a
high degree of diversificaiton took place, enabling Thailand to
boost its export items from only three major commodities namely
rice, teak and rubber in the early 1950s to more than 10 main
agricultural products in 1993.
The
industrialization process initiated during the 1960s was geared
towards import-substitution. It was succeeded in the 1970s by a
drive to produce export-oriented items. by the mid-1970s Thailand
was exporting manufactured goods ranging from cement to watch
parts, and including canned fruit, garments, chemical products,
transport equipment and television sets. In 1993 manufactured
exports accounted for about 81 percent of total export earnings.
International
trade is vital to the Thai economy. Thailand's entry into foreign
markets in the mid-19th century enabled its economy to expand
rapidly. Today, export and import transactions together account
for about half of the national income. Although there were annual
deficits in the balance of trade, the balance of payments recorded
continuous surpluses throughout the 1960s and early 1970s. Sharp
increases in oil prices since 1970, however, affected the balance
of payments position severely. Large tourist earnings and foreign
capital inflow put the balance of payments back into a surplus
position.
The
public sector supports the growth process by providing
developmental facilities through the construction of basic
infrastructure and by creating a conducive environment for the
private sector to operate effectively.
Despite
the steady increase in population, real per capital income has
doubled over the past two decades. At current prices, it increased
from 4,000 baht per head in 1970 to 53,215 baht per head in 1993.
The proportion of the country's population living at the
subsistence level has declined from around half in the early 1960s
to less than a quarter in recent years.
In
short, the performance of the Thai economy over the past two
decades has ranked high among developing countries. Some basic
economic problems such as income disparity, the need to conserve
natural resources, the uncertainty of export markets, and the need
for improving administrative efficiency, remain to be solved but
judging by past performance as well as from the present economic
outlook, it is clear that Thailand has the potential to expand its
economy and thereby improve the welfare of its citizens.
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