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| Thailand |
| Economic
Overview |
| Key
Economic Indications |
| (GNP)
1996 |
3,117,700
million Baht or 3,117 billion Baht |
| GNP per capita
(1996) |
75,956 Baht (US$
2,214) |
| GDP
(1996) |
4,665,400
million Baht or 4,665 billion Baht (US$ 184,112 mn) |
| GDP growth rate
(real) (1996) |
6.7% |
| GDP per capita
(1996) |
77,753 Baht (US$
3,068) |
| GDP sector shares
as percentage of GDP |
|
| Manufacturing
|
29.2% |
| Trade |
16.1% |
| Fishery |
10.4% |
| Finance |
7.3% |
| Construction |
7.0% |
| Balance of payments
(1996) |
US$
2,169 million |
| Exchange rates
as at end August 1997 |
1 Baht= 3.48
Yen |
| Inflation (1996) |
4.9% |
| Total external
debt (end 1995) |
US$ 56.8 million
(Foreign debt is believed to have increased in the latter
half of 1997 due to emergency borrowing to defend the
Baht, following the financial crisis) |
| Debt service
ratio (1995) |
10.2% |
| Employment |
Total workforce
(1995) 34.7 mn |
| Unemployment
rate (1995) |
2.5%
(Unemployment increased in the last half of 1997 and continues
to increase due to the financial crisis) |
| The
recent currency crisis has cast a shadow over the Thai
economy. The Asian Development Bank and other leading
bodies have revised their projectors on the crisis. If
it will be weathered will depend on the skills of the
government, but analysts believe Thailand has tremendous
growth potential. |
| Major agricultural sectors: |
Rice, sugar cane, cassava (tapioca), maize,
rubber, coconut |
| Major industry sector: |
Mining and quarrying - diamonds, tin, tungsten,
led, copper, zinc |
| |
Energy - natural gas, crude
oil
Manufacturing - textiles and garments, electronics and
electrical
goods, cement production, petroleum refining, automobile
construction, petrochemical Iron and steel |
| Trade (1996): |
752,100 mn Bhat |
| Commodities: |
Tapioca, rubber, sugar cane
|
Tourism
Tourism is the principal source of foreign exchange. In 1996,
7.80 million tourists visited Thailand and earnings totalled
to approximately 241.74 billion Baht.
Investment Policy
The remittance of investment funds into Thailand is free from
any exchange control restriction. However, the repatriation
of such funds and the returns there from requires approval.
Foreign investments in promoted industries are accorded various
incentives and privileges, including a guarantee on repatriation
of profits, dividends, interests and imported capital.
| |
| Investment |
| Direct
investments in Thailand in 1996 by country are: |
Country
|
Cases
|
Value (mn
Baht) |
| Japan |
254 |
156,894 |
| USA |
53 |
70,108 |
| UK |
28 |
14,786 |
| Taiwan |
66 |
69,630 |
| Singapore |
57 |
47,152 |
| Republic of Korea |
21 |
22,291 |
| Netherlands |
18 |
23,260 |
| India |
14 |
8,777 |
| Germany |
20 |
8,155 |
| |
| Investment
by Industrial Category -1996 (mn Baht) |
| Agricultural Products |
8,892 |
| Minerals and ceramics |
74,585 |
| Metal working & machinery |
50,324 |
| Light Industrial products |
4,679 |
| Electrical and electronic
products |
68,541 |
| Industrial chemicals and paper services |
30,603 |
Thailand's Foreign Direct Investment (FDI) peaked in 1995 on
the back of large influxes of capital into large-scale steel
and petroleum refining projects.
Investment fell by nearly 20% in 1996 and based on midyear figure
comparisons, FDI in 1997 has experienced a sharper decline.
Thailand's most important investors have come from Asia and
Japan in particular, but in 1996 investments from Japan and
other newly industrialized countries reduced. This is in contrast
to investment trends from European and US sources. On a value
basis, foreign investment from western countries has remained
stable.
Thailand's economic policy has placed a great deal of priority
on the development of supporting industries, specifically industries
such as metal plating, casting and forging tools and so on.
From 1997, this recognition has been extended to the software
industry as well, which will receive investment subsidies.
Investment Outflows
Thailand's foreign direct investment outflow increased five-fold
between 1992 and 1995, rising from 3.5 billion Baht to 19.5
billion Baht. Growth slowed considerably to only 2.9% (20 billion
Baht) in 1996. However, investments to Hong Kong more than doubled,
reflecting a sharp increase in investment to the household appliance
sector. Thailand has also maintained a steady pace of investment
to Indochina and neighbouring countries.
Bi-lateral, Multi-lateral and Regional Agreements
Thailand is a founder member of the Association of South East
Asian Nations (ASEAN). Under the framework Agreement on Enhancing
ASEAN Economic Co-operation signed at the 4th ASEAN Summit in
Singapore in January 1992, Thailand joined the other members
of the ASEAN to set up the ASEAN Free Trade Area (AFTA) within
15 years. After this agreement the member states including Thailand
agreed to a regional tariff arrangement known as the Common
Effective Preference Tariff (CEPT), whereby tariffs among the
member states would be reduced to 5% or less by the year 2003.
Although CEPT is called a joint tariff, tariff rates vary by
country and there are no plans to reduce them to a single uniform
rate.
Under an agreement at the 5th ASEAN Summit in Bangkok, Thailand
also became a signatory to the ASEAN Industrial Co-operation
Scheme (AICO), which is an advance form of selective tariff
liberalization within the ASEAN, whereby low tariffs are applied
before 2003 to the manufactures of firms that have received
authorization from trading countries within ASEAN. The aim is
to thereby promote intra-regional trade, expand the horizontal
division of labour and attract foreign investment.
An agreement for liberalized trade among the less developed
member countries of the Economic and Social Commission for Asia
and the Pacific (ESCAP) was reached in 1975 of which Thailand
was a signatory. The agreement provides for tariff concessions
on some goods, chemicals and minerals. The agreement provides
for continuing negotiations under the auspices of ESCAP, to
increase the range of tariff concessions.
A commercial and economic co-operation agreement between the
European Community and the ASEAN provides for mutual most-favoured-nation
treatment and studies to remove trade barriers create new trade
patterns and recommend trade promotion measures.
Thailand also participates in a number of commodity agreements
and arrangements - The Asian and Pacific Coconut Community,
the Association of Natural Rubber Producing Countries, International
Rubber Agreement, International Sugar Agreement, International
Agreement on Tropical Timber and Association of Tin Producing
Countries.
Major Development Programmes that give Opportunities
for Sri Lanka
Since Thailand produces high quality agro products such as mushrooms,
tropical fruits and kankun, its expertise could be obtained
for research and development, obtaining mother plants and quality
seeds in order to develop these products for export.
It is also suggested that we could request Thai investors to
invest in the diamond cutting and polishing industry and gem
industry of Sri Lanka, to make use of the skilled, low cost
labour available here, since diamonds and gems are our major
exports to Thailand.
Since Thailand has an advanced jewellery making industry, Sri Lanka could obtain Thai assistance/investment for our jewellery
manufacture to train Sri Lankans in new techniques and designing. |
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