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The South-East Asian countries have executed many different development strategies and
results are diverse. Half a century ago Thailand with its neighboring country Myanmar was
economically weak and bankrupt, but, after employing globalizing development strategy it has
prospered while their neighbor is in decay. Countries of South-East Asia provide many learning
lessons as this work will be focused on providing solution to Thailands negative impact of
growth on its economy.
Thailand is different amongst the middle-income developing nations in many aspects. Firstly,
this country was never colonized which has made Thailand fearlessly to adapt deep trade
policies and investment alliances with the rest of the world. Its trade, macro-economic and
investment policies are very open for the business communities.
Freedom: individuals have right to produce and exchange production, labor and capital
as they see it.
Competition: individual have right to compete in the production and exchange of goods
and services.
Justice: actions of individuals must be just and honest, according to the rules of society.
As Adam Smith states that when there is an open market there is aggregate demand on rise
and it was witnessed in Thailand only hindrance was from the supply-side. Many of the sources
for investment were incurred from major private savings and then Central Bank of Thailands
increasing the interest rate gained many foreign investors confidence to bring their investments
and earn profit, that helped investment and establishing of Industries. As the Data shows how
much the manufacturing industry has contributed to the economy with employing much
unskilled labor, transforming them to semi-skilled ones. Specializing in the specific fields
especially in the area of Manufacturing gave Thailand a boost to employment and industrialists
advantage of cheap labor resulting in good quality products for citizens and for exports at
competitive prices.
Thailands acceptance of Liberal policies, one can easily analyze the economic growth and
adaptation of David Ricardos theory on international trade and comparative advantage.
Thailands Physical capital stock is one of the reasons for its progress accounting for 70% of
output, importing capital machinery; new technology to compete with the world it established
its Industries base with leading example of stability management. Specializing in Electronics,
Auto mobile parts, rubber and plastic products and jewelry products cost less in production that
has lead to specialization of taskforce to export these goods at good price, thats why they have
great market share in South Asian region. Thailands focus on its architecture, fashion and
design development has motivated foreigners to exploit and encourage investing and touring
which is constantly contributing to the growth (2011 data). The last recorded total economic
growth for Thailand is 5.1% with improvement from recession.
Short-term capital inflows were of great help can be considered in Foreign Direct investment
(FDI) with Bank of Thailand but again it only accounted for 5% and private savings with govt.
injections of funds were main source. However, as the growth incurred, FDI accounted for 61%
of long-term foreign capital due to loans from IMF and South Asian Development funds. The
great deal of mobile foreign-owned capital exceeded the Bank of Thailands reserves in 1997-99
that caused bail-out from IMF because Thailand was unable to defend withdrawal of funds by
the owners which gravely affected there Fixed Exchange rate. Then, after crisis it adapted
floating rate let the market decide, in 2000-2011 it continued to depreciate at slower rate but it
appreciated in 2009.
the link to World economy in order to provide sustainable and growth-oriented economy. As
Soon as the Labor Protection Act passed 1998, the act countered the labor laws which were in
great favor of Rich and Wealthy of Thailand than for working poor class.
References:
http://www.nationsencyclopedia.com/economies/Asia-and-the-Pacific/Thailand-POVERTY-ANDWEALTH.html
http://www.isiswomen.org/index.php?option=com_content&task=view&id=302&Itemid=191