NATIONAL INTELLIGENCE SURVEY 42; THAILAND; THE ECONOMY

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• Collection: NIS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP01-00707R000200090026-8
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CONFIDENTIAL
4
CONFIDENTIAL
S E
jF
11
Thadar
April 1974
NATIONAL II`
CONFIDENTIAL
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For NIS containing unclassified material however, the
portions so marked may be made available for official pur-
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provided.no attribution is made to National Intelligence or
the National Intelligence Survey.
t.
Subsections and graphics are individually classified
according to content. Classification /control designa-
tions are:
(U /OU) Unclassified /For Official Use Only
e
(C) Confidential
(S) Secret
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Page
FIGU)fiFa
Page
C. Economic policy and finance
21
D. International economic relations
30
1. Government policy
21
1. Foreign trade
30
2. National budget
23
2. Direction of trade
32
3. National monetary and banking systerin
27
3. Balance of payments
32
Manpower
29
4. International organizations
34
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FIGU)fiFa
Page
Page
Fig. I
Cross domestic product (table)
9
Fig. 10
Central government revenues (table)
25
Fig. 2
Land use Ccitart)
5
Fia.: 11
Central government financing (table)
26
Fig. 3
Vegetation (map)
5
Fig. 12
Labor force by economic sector
Fig. 4
Regional production of rice table)
6
table)
30
Fig. 5
Production of principal crops (table)
7
Fig. 13
Foreign trade (table+)
31
Fig. 6
Econonic activity (man)
11
Fig. 7
Mineral production (table)
13
Fig. 1.4
Composition of merchandis4 exports
Fig, 8
Production of selected industries
(chart)
31
(table)
16
Fig. 15
ltmporb by commodity group (chart)
31
Fig. 9
Central government expenditures
Fig. 16
Direction of trade (chart)
32
(table)
24
Fig. 17
Balance of payments (table)
33
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The Economy
A. Economic appraisal (C)
'I'bailand is ogle of the few less deveioped countries
to have sustained a rapid rate of cconoruic grosvllt
during the past decade. Uk- ouomic growth for the
1962 -72 period as it whole averaged 7.V" alilowdlr.
althour.h some slowdown occurred in the last fov
years, with annual growth rates of (MM, 6.4%. sad
3.9 during 1,970 -72. As population grew about 350
anotuilly, real gross domestic product (GUI') per
capita for the period increased an average of about
.1.3 anuuaily. a very respectable performance lowlig
low- inc)itil'. calmtriel.
A remarkable feature of'1'hail:nnl's growth is that it
has been accomplished. while the evouoniv is still
largely agrieulttiral. Agriculture employs about 757c of
the labor foree; together with processing :utd
commercial activities related to f:araiiiig and forestry.
it also accounts for naore than two- fifths of GDP.
Although the imporlaace of fartning; irk national
output 6 grad u: d IN dechiii rig,
'd'ha!lantl'suciiicvcnicnt
of au avertge aiutual rate of growth of about 5 1 is
ugriculturd output during; 1962 -72 is matched by few
voutildos in Southeast Asta.'['hisgrowth wassuffieienl
to provide for an increasing cnnsump[ion of food by
Thailand's rapidly grving population aad surpluses
for export.
Bice emtimies to dominate like :agrieulhrral Wdov,
having averaged nearly three fifths the annual net
value of all craps produced from 1966 -70 :aid 229, of
:iiinual exports during 1967 -72. The average output of
paddy during; 1967 -72 was 23co shove lliat of the
preceding a years. In contrast Ili the lortg -tens
historical trend !it Thailand, where increases ill output
depended catirely oil all expansion of the cultivated
:trca, mercies over the last decade have resulted as
iiutela frorn higher yields� prhuarily because of
hupmved water cmti-ot --as frorn expanded clttiva-
tion.
Within the agricultural sector, [here has bccn a
movement tow:artl a niore diversified range of products
as well as Higher levels of production. hr 1.971 cony
replaced rithber as the second itiosl i[iiportant
agricultural commodity after rick in both pnttluctioit
atilt export vabie. Due to inefficient processing
techniques unit a long; -term decline in world prices.
rubber exports in 1 ranked 3.1%, less than in 1960.
even though the volume exported increased 91 s.
Resides curs. other crops that have increased ill
intpodaacc include keno�, cassava (tapioca), faung
heaps, surg;huin, tobacco, and sugar- Although
insignificant it decatle ago, these crops vow accotmt
for about 20% of loth, exports. Thailand is one of the
few less developed c)uatries to IMYC achieved some
measure of succw -t in diversifying its agricultural
exports.
Thailand's agricultural progress is the more
remarkable becalaSC the cauiitry is not well endowed
With natural resources. Land Is relatively abundant,
hia :ill irregular water supply aad, in sonic areas.
infertile soil snake f;lrraiag; difficult. Considerable
effort Eras beeii made to develop the nation's irrigation
system, but most arable Iaud still lacks \voter control,
and eroi7 production it] fatally areas a1 entirely
depmdeut nil weather cmditious. F �crests provide
leak, yang, alld other rood nseftal ill antstruction, as
well as banilwo, which is lased extensively throughout
the cotuatry for a variety of purposes. I1ovever, the
logging industry has been poorly 111 aaag;Gtl, anti lttltclk
of the readily amc.Lsible stock is depleted. Forestry's
contribution to CDP fell from 2.5% in 15167 to 2.15% in
1972.
Tin and fluorite are the only minerals proiduetid in
i'hailatid in yu:mtities of internntioual Agntfic:alet.
'I'!u is the country's fourth largest export (1971'), and
Thailand ranks third as a- >vorld producer. Lignite is
the only fuel :available in sig;nificao.t quardity.
'f'eiloeeo and Union, twn of st:vertl eoirrpanies
exploring for petroleum in the Gulf of Thailand,
reportedly found traces of oil ill 1972, but no
coamaercially exploitable field has been confirmed.
Despite the liniiiel resource base, it solid start has
been made toward utodemization outside of fanning.
Steadilyelainihig a largersharc of natioiial output, the
itoaagricultur:al sectors of the Thai' ecmiciniy grew
during the period 1961-72 at in:averageannual rate of
U,';. Together, these sectors increased their share of
CDP fmin 63% in 1962 to', I% in 1972 (Figure 1).
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I_1 �:tOIN 4I 7OM N =1 4 =F_m =W41I11:1111-M1 [wo] F_ !1] :1 1 1 ErIly Loy :llIrIrYIIrIIIItIrY 3
FIGURE 1. Sectoral origins of gross domestic product (U /OU)
Amoy; the MOM rapidly growiltg sectors are electric
(Value in millions of U.S. dollars; 1962 prices)
all of Wilicil llsve gro- o ai aver ge.1111111;!! rates above
1O% since 1962. 'I'hC olit of C1eetricily and tike
1962
expansion of the proeesscd water supply, for example.
2154 Over (lie
1472
i:due
Peramake
Yalu.
!'crcrntnHr
agriculture 1.1aS.9
37.1
1.854.1
�9.t
whole,alaand retait undo....... 4701.1)
15.5
1.076.10
Ui.s
\lanufacturing 432.7
14.1
1,174.0
is .3
Servimi E99,2
.9.
663.0
10.3
Transportation and COmmumication+... 222.6
7.5
418.3
6.5
Construction 057.2
5.1
:800.11
i�s
Pablie adadnistra+ion stud defense..... 137.0
4
273.6
4.3
Basuking, in,urauee, and rest} estate 71
2.3
277.-1
4�
Ownership of dwellings 51.7
217
120.2
1 5
Mining mid quarrying 36.5
1.2
58
1 '�S
Electricity and water supply.......... 15.3
-(?.r
k29.3
Total 3.0167.2
100.0
6,�llb.3
10!1.0
Forces fur their achicycrilent. Public itivestrncnt ill
trtnsptrtalion, power. and c0lllnrt11licat10oF has been
cspcciully important in providing (lie iufrastructumr
necessary to enhance it'Vestnlent prospects ill the
private scelor. As a resuit. capital has grown at very
high rtlCS. lrixccl irivesln}ertl grew it an avcrage
annual rate of 14.2 in real ternis Irnnr 1961 to 1911
and imcrcawd its share of Gi)P front 14.11% 10 25.1:4
over the sank period. Over 1110 10 -year period, 6850 of
invcslToellt has lakCil place ill the private sector.
Although rLCY'lttll' Isstled decrees restricting foreign
business and lltc employrncnt of foreigners it,
Thailand rtlay have a negativC illlpact on future
developments, traditionally the goverimmit's liberal
itivestineot lawS have offend strong inducement to
foreign participation in the CL'011011. \ouch of
'mailand's recent industrial growth l+as been spurred
by foreign investors, partict:laTly japancsc and
Americans, who have taken advantage of a favorable
tax strilclure. a Stable an(i alnvertible CASIMIcy, 131d
low-cost labor. Foreign investlaicull has been the
prineitird mechanism for iintx)rting management and
technical skills, modem dusigils, and training in
moderih business lcclnli[lucs.
Despite significant Progress in the JXISI SCVCraI years,
the '1'llai CLOIIOrTIy iS Still llrirllt)Cri by SeVeral lmljor
weaknesses. Futatre ecmomic growth is threatened by
large disparities in incomes atltong regions, by a high
birth rte that has compounded the difficulties Of
providing an adequate educatio system, by
Contmunisl- sponsored insurgency in remote rural
areas, and by a leudcncy towarl slower growth of
merchandise exports and redtived earnings from lite
U.S. mihtarv.
a
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Amoy; the MOM rapidly growiltg sectors are electric
power. hawking and inMIFU CV, alld mamifacturing.
all of Wilicil llsve gro- o ai aver ge.1111111;!! rates above
1O% since 1962. 'I'hC olit of C1eetricily and tike
expansion of the proeesscd water supply, for example.
2154 Over (lie
expaulded at an ayera9v u meal rite of
decade. "rite growth rite of w'holcs rte and entail !rude
also esr(x[Ic(I the {lacy of the ecs+nOrm as a whole. The
fast exP:msio31 of cuiuncTCc was reflect(.(' in rut
r average
rite of growth Of about l L?Sc utmually by the
flanking, insuramc', amt real estate sectors.
Manufacturing, which accounted for 18% of C DP
in 1972. is still One [if like host (hvamic sectors' of kite
ecY111[111fv, alllimigl' it, the l, few years MCSS
cupacily (its become it Problem to some industries.
"rite sector achieve(' ;ill average annual rile of growth
of 9.5E from 1967 through 1972 compared t4. 1 L I%
durinr, the prec'ceding 5 period. Ili part, grown
Oyer the lasl dc�ca(le reflects the expansion of industry
related to agriculture, but accelerition ill the growlll
of other industries, which Hitherto had not Played
significant rile in the 'Thai economy, as even uuirc
rapid. increased Outplt Of cement, rCfillC(I pclrolculti,
chemicals, and textiles resulted primarily from like
expansion of domestic demand aCYompanyillg overlii
growth of the ecmhoiny.
M ajor elements Irl 'I "hailalHhs impressive eivoiloolic
advance have been its stable Ixilitical atmosphere,
soun(l economic an(I financial policie s, a high Tate Of
saving and investment, and sizal)le imflows Of foreign
Capital. The g(overnnlCTA has restricted it% role ill t he
e4eim my largely to programing public itivCS i rilCrlt
expe-l(htures willtin the frtmcwvsl( 0f mullivear
(levclopmcnt plans. Plans establish targets for the
various industrial wetors but rely essentially on rnarkel
Forces fur their achicycrilent. Public itivestrncnt ill
trtnsptrtalion, power. and c0lllnrt11licat10oF has been
cspcciully important in providing (lie iufrastructumr
necessary to enhance it'Vestnlent prospects ill the
private scelor. As a resuit. capital has grown at very
high rtlCS. lrixccl irivesln}ertl grew it an avcrage
annual rate of 14.2 in real ternis Irnnr 1961 to 1911
and imcrcawd its share of Gi)P front 14.11% 10 25.1:4
over the sank period. Over 1110 10 -year period, 6850 of
invcslToellt has lakCil place ill the private sector.
Although rLCY'lttll' Isstled decrees restricting foreign
business and lltc employrncnt of foreigners it,
Thailand rtlay have a negativC illlpact on future
developments, traditionally the goverimmit's liberal
itivestineot lawS have offend strong inducement to
foreign participation in the CL'011011. \ouch of
'mailand's recent industrial growth l+as been spurred
by foreign investors, partict:laTly japancsc and
Americans, who have taken advantage of a favorable
tax strilclure. a Stable an(i alnvertible CASIMIcy, 131d
low-cost labor. Foreign investlaicull has been the
prineitird mechanism for iintx)rting management and
technical skills, modem dusigils, and training in
moderih business lcclnli[lucs.
Despite significant Progress in the JXISI SCVCraI years,
the '1'llai CLOIIOrTIy iS Still llrirllt)Cri by SeVeral lmljor
weaknesses. Futatre ecmomic growth is threatened by
large disparities in incomes atltong regions, by a high
birth rte that has compounded the difficulties Of
providing an adequate educatio system, by
Contmunisl- sponsored insurgency in remote rural
areas, and by a leudcncy towarl slower growth of
merchandise exports and redtived earnings from lite
U.S. mihtarv.
a
v l
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I_1 �:160 :1 Ili 161:a 0 :1 111 1- im:W41I1Y1LQ11![ MWO] /edN 11 1 II1 1141kily :l4lIlY4lIlYIIIIY 3
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t
Ceogriphically, vvonomic� growth has Followed the
typically uneven palters of other rapidly developing
nations. The prod uctive power of the nation has
tended to polarin ill the ffaugkok urban urea, while
tilt rurd areas have lagged fur behind. Estimates for
1968 show that per capita income ill the cenlrad plain
amounted to $262, compared to $160 in the south,
$114 in the north, and duly 882 in the northeast. Even
thotigh the share of development cxpendilure-%
allocated to reran areas has increased, regional
disparities have widened. Despite [lie influx of C apital
associated with U.S. mililury construction, per capita
nluortie ill the northeast has 5how11 little irnprovelncnl
during the past 10 years while the 50tith and north
:rod even the rurll areas of the central plain have
grown at a much slower pack Ilan the 11augkok area.
The government has sought --with limited
success --to remedy sonic of the more acute problems,
of the rural sector with it wide ra itge of transportation.
.tgriettllural, and educational programs. The highway
progrartt has vastly increased the number of all
weather routes connecting principal towns and
provincial capitals. Numemm feeder roads have -list)
been buill rider the U.S.- snpporled Aceeleraled Rural
Development (ARD) program. Nevertheless, 'Thai-
land's road net is still sparse, mid many villages remain
inaccessible, especially during the rlitiv season. Since
1960, exletrsive inestartcnt in irrigation projects has
reversed a long downward trend !it crop yields, but
yields are still among: the lowest in Sontheust Asia.
Production increases have conliuured to depend
significantly oil expausiotl of the cultivatcci mea. In
the future, growth in outpul must inereasinglydepend
fill the application of technology to aellieve increased
yields, bm -ause most of the remaining reserve land is of
warginal quality. Although Thailand"s edluralionad
system takes a veiv large proportion of the budget,
educational facililies have not kept pace Willi the
growth in population, and development is hampered
by a critical shortage of qualified manpower a ,1
technical personnel al all levels.
Since 196.5, 'Thailand has faced grooving Cont-
Tttonisl- sponsored 'lnsurgeuey, hill the pace of
ccemoritic dcvclapM111 indicalcs that the insurgency.
confined to remote areas, has had little impact on t1?e
ee nouty. Although the resources required to contain
[lie insurgency could have been used more
productively, its threat has awakened 'Thai authorities
to the gravity Of social and economic problems ill
matey parts of the country and impelled the adoption
of far reaching programs of improvement which
would not otherwise have been attempted at the time.
National securily expenditures have substantially
increased, and since U.S. assistanea began dropping
off ill 1968. they have taken an increasing portion of
the bmdgel through FY/ 197:3. Ill the oyeol of a inure�
serious insurgency problem and /or continued
deterioratimi of the military situation on its burden.
even greate, securily demands would he placed on
Thailmid's alreadv strained resources, anus severe
cutbacks in development programs would lie
11 ec'essa n',
International trade is of vital import to the
Thai economy, The oontbind value of imports and
exports in 1972 amounted to about $2.6 billion, an
amount equivalent lO over one third of CDP.
Thailand is almost entirely dependent on imports for
capital goods needed to maintain and develop the
economy. for many industrial raw materials. and for a
hirge portion of its mrmufaetured consuruer goods.
Despite some success with diversification, its export
base remains narrow, nmd earnings are highly
susceptible to world price fluctuations. In 1972. 51
of export carniugs stemmed from sales of five
cvrntuodilies: rice, rulber. tin, corn, and tapioca, with
other agricultural producls making ill) the bulk cif [he
rernaiiider; exports of manufactured products are
s111311 but growing rapidly. Japan is Thailand's
principal trading pariner for both imports and exports,
followed by [lie United States. 'Thailand sells nest of
the remainder Of its exports to other Sonthcast Asian
C(Ptlitrics, but it depends largely fin Weslern COl1otrics
for the remainder dif its imports. Imports cousistenth
e::xed exports, and trade deficits have widened as the
dentand for some Iridiiional exports slagnated. and
imports of hunt alnsunlerr and producers goods grew
a pace.
Thailand'; balance -of- payments positiou began to
deteriorate ill 1967 after immy favorable years,
although this trend was masked by certain special
factors in 1971 -72. For most of the 1960's increasing
tnide deficits had bccn more than Offset by capital
Imports, foreign borrowing, and earnings from
tOtirisrn. The forte lots infusim of $560 million from
U.S, Tuililary spendilg during the 1966 -68 period
largely offset Ills mlarding effects of drought noel
lagging exports. Poorgrcnvl}i performance of exports in
1969 -70, however, was accompunied by a decline in
U.S. military spending and a reduction of private
iuvcstmeut, resulting in a simble loss of reserves over
the 2 -year period. 'These losses we recouped ov the
ne 9 years as exports made large gairts, Vir;tnanl-
related spending ill Thailand increased after mid
1971, and tourist receipts increased.
'The Thai fiscil year hidudo it period fmm 1 Octuber to 00
Septernlrcr of the follo -Aug ycar, ii is designated by the year to
srhich it ends.
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I_1 �:160 :1 IM 161 0 :1 4 :F_F9:wW1Yy1111MMWO] Ela N 11:111 11111kilyj 3
lit the coming years. the detc�Tioratitlg trend is
(-s1x�cicd to Continue. lsxparl volume will probably
decline sh:erph iu i 6173, allhungh rccurdl hi1;h prices uF
most agricullural cxpurts will offset the lass while
foreign dlemmid for 'Thai agricultural products is
mlicctcdl to remain strong at least through 19 Over
the longer lean, powth in export earnings may fall
off. "rilis is most likely in the case of ace as traditional
imporliog cnuntrivs move closer to self sufficiency.
The outlook for other agrividwral e,,\ports is inixel but,
4111 halanc�e, it does oat suggest rapid growth. D opite
govc�tmuent auslerit� ra�asures, imports are especledl
to continue item ising, since 11milaud is almost
entirely dependent on imports for capital goods, for
touch industrial raw material. and fora large portion
of its tnammfavlured consumer goads. Based on ;t
projected widctr'rng of tit(- trade gap. and expeedel
(rather reduction in U.S. militaryspenling, prospects
art for it decline� ill resents over the next 5 years.
TImiland's healthy reserve p�r+sition, however. loaves it
comfortable margin CUT fiRL016lg bat :uuc uf-
payou�nis deficits.
F
I
.c
t
i
B. Structure of the economy (U /OU)
1. Agriculturc, forestrv. and fisheries
Agriculture, forestry, and fishing constitute by far
the most importmA sector of the Thai economy.
Together, tiles(- comportents amount for the largest
single share of national output �some 30% in 1972.
Statistics on national output, however, temp to
updtrxtale the true importance of agricultitre to the
econunny, in part because of undervaluation of the
comidembie portion of agricultural output alnsumtcl
on tike farm. More indicative of agricultlirc s
littportatice IS till' fact 1,11:1t, aCLOrding to the 1110A
recent cslitimtes, the sector employs about TV; of the
labor force. Agriculture has list) accounted for at least
8o`c of l�h :tiland's export carvings over the last 5
years. Rice and rubber have traditionally provided the
bulk of these carvings, but in the period 1961 71, their
comhined contribution dropped significantly, from
57% to 28%, while exiorts of other agricultural
commodities. particularly cY>rt and tapioca, incre:tsecb
their shwes. 'I "Imiland is sr.If- xufficicnl ill mast basic
foods, although some agricultural items nulsl Ere
imported. Imports of foodStUFFS �such as dairy
products and wheat totaled! S3�1 million ill 1971, or
about 85b of total imports, 'file most significant
agricultural imports, however, arc raw cotton and
ultmanuf.letured tobacco for use in 'Thailand's
manufacturing sector,
4
Agricultural production is dependent oa uupredict-
ablc ntatisuull rains, whiell, except ill ills extreme
southern portions of the coonlry, occur from mid May
through Sept in ber. 'rile nw;or agricultural region is
located on tine centntl ]}lain of lilt' \lac Nam Ckto
1'hrlvu.:t river that has its sources in the northern
mountains. This broad alluvial plain and delta systela
benefits from tilt� deposit of rich silt daring animal
flooding, and through a long history of canalization,
hits becrmtc tilt area of intensive riLe cultivation.
Other regions are relatively less favored agricullurdjv.
The narrow punitlsula of the south is tllconly region in
which rain falls the year round, bat nounlaiv ridges
extend almost to tilt' sea in manly arras alotig the
western coast. limiti. ;tg rice land largely to the coastal
pl ;tins (if the ear:,, Rubber is grown extensively eon the
infertile s :uuly and clan soils in the far south.
IIarTllan! is scarce ill the seven provinces of t1W nortii
:ltd is limited to narrow valleys and adjacent slopes.
NOWT(- lilt� IMIU tiny irrigated soils arc rchttively fertile.
:1t higher elevations, a }lldlndl rice and other crops are
grown under tilt' method (if silifling cultivation. The
northeast, where rainfall is less Ithltrldanl 4111d1 more
vrritic, is the most poorly endowed rogion. Flat terrain
:tad ina eepuMe1% drained sails in the area make
effective irrigation difficult, and 111v region differs
from both flood dantoge in tits rlim season and
serimis droughts tit the dTy season. Unlike the central
plain, flooding provides little positive effect in the
marthcast, SiTlCe lilt' silt is composed mainly of
s:uldstone, which does little to revitalixv the soil.
-Of "i'huiEau:d's Will area of 125.5 millioli acres.
farrnhoid in 1965 accounted fop Some30 million acres.
82c of which was under cultivation Figoms 2 and 3).
�Clot following shows the percentages of land area and
total farm) ;old accounted for by each region in lilt
oriel- 196(ys:
'['lie lmdolnin:uice of the central plain is explained by
both the physical factors cited above and its proximity
to the major markets and ports. In the last few years,
the central region's sitars of cultivated area has
probably decreased. since most of the expansion in
troll acreage scents to have been in other regions,
particularly ill the northeast. Some virgin land ix still
available ontside tide delta region, but in must :areas all
arable land is already being cultivated.
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L.ca AISN_a
FARM LAND
Central
36
43
Northeast
33
33
North
17
6
South
14
!8
Total
100
100
'['lie lmdolnin:uice of the central plain is explained by
both the physical factors cited above and its proximity
to the major markets and ports. In the last few years,
the central region's sitars of cultivated area has
probably decreased. since most of the expansion in
troll acreage scents to have been in other regions,
particularly ill the northeast. Some virgin land ix still
available ontside tide delta region, but in must :areas all
arable land is already being cultivated.
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I_1 �:160 :1 IM 161 0 :1 1111 1_F9:wW1Y1LQ11ll [:3Wd /edN 11:111 1111 Loy /:l4tIlY4tItYIIIIY 3
i
iw
is held under titles that confer less than full ownership.
land is !his category is normally unam-eptable as
collateral against loans. holdings average ahoul 10
acre~ in si'r.'. and are often divided into widely
Total Area scattered parcels, int4M.101m11 utilization of irrigation
128.5 Million Acres
and inability to use modern equil.menl result from this
fragmentation.
Far these, art(] other reasons� introduction of new
techniques has been rather slow in 1'haitand. and
fanning; by traditional methods still predominates.
Crop rotation is rarely practiced. Plattting and
harvesting are gcnerally dome with haucitools and
draft allinials: 11mIlvr11 egllipolent is scarce and is used
FIGURE 2. land use, 1965 (U/OU)
y
..4
nluinly on larger fauns or by farmers' cooperatives.
1.3 Annual fertilizer usage, which averages about 7
pounds per acre, has tripled since 1J60. IHO it is still
Other lower than in many Asian countries, primarily because
Land
In contrast to many less developed countries.
problems of l and lenure arc not particilarly pressing.
The last agri4utturll census io 1%. *3 revealed dial
nearly 13,35 of farmers owned all or part of the land
[hey cullivaled. Tenancy is virtually nonexistent in the
knsurgent- troubled northeast. It is more prevalent in
Ilse central plain, where one -third to one-half of paddy
fields are tenant- oper,ltel.
j 56.2% 23.5%
r
I..,ack of clear land titles and the fragmented nature
Forest, includiirg sav open
of holdings, h0WCVCr, nIC Serious constraints out
scrub, and arland
government sponsored land development plans,
used lorshifting
particulatly in areas outside the central plain.
cultivation
'I rldilionaliv farmers have been able to obtain land
Cmde.wsiae.s
merely by cicaring and cultivating it. This systetn
r 9ol,
prevailed to sonic extent even after official titles wen:
t
instituted at the tirn of the century. Until recently,
Rice
fanners in many areas have been able to secure land
51.4%
rather easily by complying with liberal and often-
�7. t
�r ignored government regulations. As a result, only o
i
FIGURE 2. land use, 1965 (U/OU)
y
..4
nluinly on larger fauns or by farmers' cooperatives.
1.3 Annual fertilizer usage, which averages about 7
pounds per acre, has tripled since 1J60. IHO it is still
Other lower than in many Asian countries, primarily because
Land
In contrast to many less developed countries.
problems of l and lenure arc not particilarly pressing.
The last agri4utturll census io 1%. *3 revealed dial
nearly 13,35 of farmers owned all or part of the land
[hey cullivaled. Tenancy is virtually nonexistent in the
knsurgent- troubled northeast. It is more prevalent in
Ilse central plain, where one -third to one-half of paddy
fields are tenant- oper,ltel.
a
I..,ack of clear land titles and the fragmented nature
.Y y'"' s
of holdings, h0WCVCr, nIC Serious constraints out
Tioyraia nacc++
a.a
government sponsored land development plans,
r ^l
particulatly in areas outside the central plain.
p1deCQUO"
M
'I rldilionaliv farmers have been able to obtain land
Cmde.wsiae.s
merely by cicaring and cultivating it. This systetn
prevailed to sonic extent even after official titles wen:
t
instituted at the tirn of the century. Until recently,
fanners in many areas have been able to secure land
rather easily by complying with liberal and often-
�7. t
�r ignored government regulations. As a result, only o
FIGURE 3. Vegetation (U /OU)
a i
,.e S r c. a; r r:: x> r.. Arr. 4:., as- da� aa+ f: Pr=. o. u wFN- svv.. F m we w r. x. axrts .v; ,,;,a,.'...r
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I_1 �:160 :1 IM 161 0 :1 4 :F_F9 :W*41Y711113#i NWO] Ela N 1 1 :111 11111kilyj 3
i
of the relatively Irigh fertilimr costs that Dave wstihed
From proteC!IHIg ant 104flCie)l( donit�StiC indnslry.
The problem of water eootrol remains a greal
obstacle to increast'd prothictivity. Water for dry
season crops is available oil]% oil a frtc'tion of the
irrig:ded land. lit the central piaiii virtually all +:der
for irrigation is provided by the overflowielg of the
rivers ill lltr Nlae Nam Chao Phraya sysU m. Dallis
and canals luelp to disperse the eater spilled over the
l:utd. "I'llk Method sul)plies a constant fluor of .rater
while the riven are in flood- stage, ])tit floes not provide
for regulation of water levels in individual fields. tons.
it is not suitable for cultivation of (tic new high
yielding varieties of ri(e that require precise grater
cvmtrol. "I'hroughout much of the plaiii, the wafter
sul)ply is too high at its rnaxinlu111 for any crop other
illali rive and ton low at it's tltirlimrnn for ally crop to
follow rice.
Fur lack of a year -round water supple. doubde-
eroppiiig is restrk--ted to small areas. The pattern of
e lllnblC�Crnl)i)]ng prCV :tililtg in the ttorth is rice for the
first crop. followed by tohatco. peanuts, soybeans, or
garlic. S01110inies, hnw�e'CT, anollier crop of ricv is
grown. A second crop of rice predominates in tw rest
of the country's double- cropped area, but some corn,
sorghurn. pcanols. Sovbaans, nlung beans. and variotes
other vegetables are also planted.
Thai farmers, although ill equipped in both
leclmolorgy and re; mrces. have, nevertheless, been
reslwrlsive to market incentives, as refleeleel by the
sigiiifica t expansion of crops searll as vor11. easszwa,
and keiiaf. The incentives plus effective government
programs for improving lransportatimi, providing
irrigation facilities. and informing fanners of
profitable opl)ortimilies have been largely responsible
for some widening of Thailand's agricultural export
[),INC.
a. Rice
Rice is lire mainstay of'Ihailatid's agricollurc and
liar retained its preeminent role 4espite the rapid
dcvcloplrtent of othe crops. it is grow'11 ill all parts o f
the country end, with the exception of the smith and
in sonic wars the northeast, is at least sufficient [or
domestic needs. Production is still concentrated in a
sitti;le annual crop harvested front November through
January. "I'hr centr area, s[retcltitlj same 4 i0 atilt:
north from Bangkok, 1=01114S for the bulk of the
nation's output. 'I'll(- most remit regional breakdown
of rice planting, production, arld yields is given in
Figure �I.
Most Thai tice is of tilt: wet, or lowland, variety,
atid the remainder is mainly floating, or deep- water,
rier, which is broadcast rather than tr Or It
limite quantities of upland rice are cultivated by hill
tribes. The nonglutinmis type of rier predominates,
but local tastes ill the extreuu� Ilortit and norilleast
favor the gdutinaus or sticky type, which accounts for
about one-third of total rice pmdacli011_
FIGURE 4. Production, area, and yields of rice (U /OU)
S
4 :.1 rat -I acre.
rhailamt's National St
i by TImilnnd's Ministry of
6
atisticol Office ptodnctim totals are inconsistent with those ))ravidad
Agriculture (Itice Department) ns shown in Figure 5.
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1967 I
I9ris 1
1 1
1970
Art pianted (1,0110 rui):'
Cooral nod North......... 2
2 2 2
21,907 2
23,410
'22.h10
15,420 1
19, lot 2
20,210 2
20.071)
S011rh 3
3,�100 3
3.300 3
3,720 3
3.420
9'ond 4
41,Ei10 4
44,308 4
47,400 4
46. L00
Production (1,000 metric tuns):
Centr4ltunt North 7
7,50(1 7
7,810 7
7.550 7
7.900
\ortli cast
.11,306
�1
IAA
SOt1rh
870 9
983 9
980 9
910
T otal 1
11,190 1
1 �_,�rfill 1
13,410 1
13,270
Yields (kilognunsirnD:
Centrai and North 3
3211,9 3
3- 3
331.5 3
350.0
Northeast............ 1
1.32.9 2
2' -'5 .4
220.2
Cnuth 2
251.4 3
397.8 2
2113.1 2
258.3
Average Field 2
268.9 2
28_'.1 2
2s2.9 2
237.8
4 :.1 rat -I acre.
rhailamt's National St
i by TImilnnd's Ministry of
6
atisticol Office ptodnctim totals are inconsistent with those ))ravidad
Agriculture (Itice Department) ns shown in Figure 5.
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I_1 �:160 :1 IM 161 0 :1 4 :F_F9 :wW1Yy1111 WO] Ela N 1 1 :111 11111kilyj 3
FIGURE S. Production of prittcipol crops M OW
f Thousands of metric tons)
1972�
Noll
19115
11111
HIM
1971
1 KxTOIATF.0
Paddy riee......
11,770
(1, lgo
10,770
13,315
13,-111}
11,'.111
H ubbor......
1181
260
2+0
28::
325
rte
Corn (mairc)
:313
1,509
1,700
1,0511
2,:300
1A.50
('aaeu touts...,.
I.tISS
!,610
2,701)
3,000
:3,300
ear
�1.35!1
S,ti511
6,740
7,:355
5.925
9,1110
Mung beans............
ib
IS-5
200
210
230
No
I'eanal
1'!5
111[1
{S1
1`15
2uel
220
Soybeans.....
25
�1.)
1113
li0
oil
55
l$
20
20
20
:30
2:i
Cnronut.
9115
{,100
'.,110
1,1111
mt
rut
Caslur brm
195
.10
10
55
55
M
Seed cotton
35
I311
130
50
s0
111
Jttic
till
5
5
5
rfffy
fill
licnnt
30
:315
350
:31111
370
1.10
Tobacco......
3.i
00
911
/,1
lt10
919
S0t93lllll1 ,sass
'10
55
70
1311
135
130
on Dille not at ^t{lnblc.
�Crup year 11171177:3,
lraddv prodoeliom� although subjeet (1) wide %car
to -year flUetuatiO-u, has iacm;lsed upprcci ;lbly over
the last decade (Figure 191. Output reached I�L2
million metric tons ill 1971/12 compared to 8,2
Million nlc(ric (tins in 1961/111 bstinlats
Average yielels are lose, but the relatively short
growing season of 90 to 120 days allo farmers a
second, planting of corn or tome other crop in the j uly-
September period. The bulk of like corn is produccd in
the central region, with *.cost of the remainder corning
from adjacent areas in the northeast. Inereasrug
amounts of corn arc used domestically, but most is
exported, tnuinly to jupasn and Toic.an. Exports
arnomtlexl to sonic 1.8 million tons in both 1971 and
1972, although price declines dropped the value from
$103 million to $95 million. 11ccause of thesetback in
197- production caused bydnrught, export tonnage in
1973 will be sharply reduced.
Th nest- runking grain crop is Production
of srrrghu.r increased signifieanliv after its introduc-
tion to'I'hailand in the early 19611 s. Exports reached
100.000 mtrtric tons in 1,166. declined in tlae nest 3
years as low farm prices nil other iactors caused
farmers to shift out of so rghum. and rose again in
1970, In 1971 record exports of 131,0110 metric �ens
netted $7.5 million and 1972 exports are estinnated to
have been at about tite saune quantity anti value.
Growth in foreign demand also spurred the
production of cassava, Thailand"s fifth ranking
export. An umimportatil crop in 1956. camava has
bcctime the principal cash crop in southeastern
Thailand, particularly in the provinces 4 Chonlrnri
and Rayong. Planting begins in these provinces in
November and elsewhere, generally in tMay. The crop
can he harvested 7 to 8 months after planting. but
requires I5 months for }rest weight and quality.
Production of cassava mots tripled over the last
decade. reaching 3A million toils ire 1971. and Only a
small share was consumed domestically. Sonic cassava
is'processed domestically into Hour for use in food
preparation, but roost is pelletized and c %ported for
use as a fattening argent in animal Fred orupounds.
Cassava exports in 1972 arnounicil, to 1.3 million
metric to ils, valued it S74 million. EEC countries,
particularly the Netherlands and Ii'est Germany. are
the largest Customers for tapioca pellets, and the
United States takes considerable amounts of tapioca
flour.
Under government encouragement to curtail
imports of refined sugar, sugarcane production rose
from 4.4 million metric tons in 1960 to 9.4 million
.Iric toms in 1872. Sugarcane is grown principally on
small farms; however, a number of major u, :11s have
their own plantations. Chonbud Province in
sautheasturn Thailand is 'tile center of sugar
cultivation, although sonic cane is grown in all
regions. Sugarcane is generally planted in March
May, and milling begins in November. Sugar
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y.
cFy
t'i..
s 7
produetion in 1972 was estimated at 683,000 tons
compared to 550,000 tom+ in 1971. Exports of raw an
plantation white sugar, have become an important
foreign exchange earner, reaching 427,000 metric tons
in 1972 (valued it $60 million) compared .0 175,000
metric (oils (valued at $1S million) in 1971. [n July
]471, 'Thailand withdrew from the International
Sugar Organization and since then has had little
difficulty marketing its sugar surpluses abroad. 11
sought reentry to the organiz ition in 1973, however, as
a guarantee of rnarke'% in the future.
Thailand ranks fifth among '1110 evsrld's coconut
producers, but its role in .world trade in this
commodity is negligible, as about nino- tenths of
production is consumed fresh domestically, thereby
providing a major source of fat in the diet. Coconut
palms are planted throughout the country, but
production is concentrated in the peninsula and in (he
eonslal areas of the central region. Annual production
is on the order of 1 million to 1.5 million tons frorn
approximately 22 million hearing palms. Some trees
bear year -round, but the bulk of tine harvest is from
October through January. Exports of copra (dried
coconut meat) reached 11,273 metric tons in 1972.
Coconut oil production, however, does not even meet
the modest domestic demand, and small amounts are
imported.
Tobacco has become a very important cash crop
both in the north and to a I�esser extent in the
northeast. The bulk of the crop is harvested in
February. "That farmers ;row both a native sun -dried
and a flue -cured Virginia variety. Production of the
latter is largely ,nder the control of the Thailand
Tobacco Monopoly, a government commercial
enterprise which ;maintains a strict monopoly o^ the
manufacture and sale of cigarettes. leaf is sold in
independent curers. however, as well as to monopoly-
owned curing barns. In addition, private exporters
may buy the c.x.mss over the Monopol purchase
quotas. Total production of all types of tobacco
reached an estimated. 99,000 tons in 1072, of which
the Virginia variety accounted far about half.
Toliactio exports have grown markedly because of
increased demand from Thailand's principal buyers:
Nest Germany. the United Kingdom, and Japan. The
widespread embargo against Rhodesian tobacco has
also stimulated prodnetionof'rhai flue -cured tobacai.
Indigenous Thai varieties, by contrast, represent only
a small portion of total extorts, [n 1972 total tobacco
exports were an estimaled 18,000 tons valued at $14
million, compared to only 1,5W tons valued at $1
million in 1960. 'Thailand also imports large amounts
of better- stradc Icaf primarily for blending in the
production of domestic cigarettes. Imports in 1972
(almost cttlirek fmnt the United States) were valued
at $28 million, or twice the value of tobacco export,.
c. Industrial crops and forestry products
Industrial crops Consist primarily of rubber and
various fibers. Virtually all tubber is produced it; the
southern half of ppninsalar 'Thailand and in the
southeastern lip of central 'Thailand, where. heavy
rains favor its growth. Thailand is the world's fourth
largest supplier of natural rubber, but it still accounts
for .nly about 7% of a large world market. Almost all
rubber is exhorted, only a small share being retained
for domestic production of tires, tubes, and footwear.
Despite a steadily increasing volume of exports since
1960, declining world prices have sharply rettucecl
earnings from this crop. [it 1972 rubber exports
reached a record :325,000 Ions valued at $92 million,
ecsrnpared to 169,000 tons 1960 valued at $174
million. Rubber accounted for roughly 10% of exports
in 1972, making it Thailand's third most important
agricultural commodity after rick �cod corn.
The rubber industry has a number of basic
problems. fat contrast to tine efficient system of estate
cultivation in ;Malaysia, it is hased on fragmented
holdings averaging less than 8 acres in size. Trcec are
overaged, and yields are very low. Poor handling and
crude processing methods result in production of j oior
quality sheet, with less than 10% being rated first-
grade. [n addition, competitiosa froen synthelics is
expected to cause long -tern downward trend in
rubber prices to continue.
Kenaf, kapok, and cotton are the principal fiber
crops produced, with kenaf (a substitute for jute)
being by far the most important. Grown almost
exclusively in the northeast, where it is the principal
upland crop, ken ;J is used pri marily in the production
of gunny bags; however, small quantities are used for
ropemaking. Kenuf production, only 27,518 tons in
1951160, reached a peak of 637,000 tons in 1966/67,
largely because of favorable government programs
and price incentives. Exports in 1 arnounled to
473,000 tons; valued at $7$ million, malting it
Thailand's third- ranking export in that year. Annual
kenaf output has varied widely with conditions in
1111'eign markets, particularly India and Bangladesh,
but since 1966 it has shown a significant downward
trend. fit 1972 increased local use of kenaf in the
production of gunny begs for export offset much of the
decline of raw fiber exports. In 1972 gwilly bag exports
amounted to 231,000 tuns valued at $52 million. "'lie
overall outlook for kenaf exports is unfavorable,
however, unless new uses for the crop are found
9
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through research. Tralr is also hampered by 'Thai
problems in quality control as well as tilt- luck of u
tlelx loll; rl>le seater supply for netting, a highly labor
intensive process of separtling fiber from stock.
Kapok and coltmi together occupy a subs(asltially
sm:;;ier plumed area than kentf, but they do lease
imtporlant uses in 'Thailand. Kapok production'
mainly in the northca -.t, is aboal 100,000 tons of fiber
amutally. This silky white fiber is used dmIllCStiCaliV
for furniture and mattress sltnffing. f:xporls have
shown no significant change in Lite last decade,
aver,�giog aboul 15.000 tons annually anti amounting
to about S7 million in 197?. Colton is cultivated in a
number of areas but is evntered in Stikholloui a -id Loci
Provimcrs. Prodnetium received a number of severe
selbacks in the last few years. The area planted in tilt
1959/70 season declined by one Third, after the
previous years crop was hit Isar[ by drought and
insect damage. This drastically redmed area again
suffered frow drought are([ insects, which reportedly
desiroved �105b of the crop. As a rcitih, output of seed
cordon in 14170 amounted to 50,(x)0 loos (compare to
130,1xx) lolls ill 1968) and had fallen Us �10.000 lolls by
1972. The supply of row collon is far helow domestic
requirctncuts, and the� tiuthok forsubshamtiaE incrcasta
in output is slot gootf because malty fastness have
abaodnucd Colton as a cash entprasa result of the high
risks.
rf. Livestock
That livestock prodtictioit, which probably accounts
for somCwhat more than io% of total agricultural
output, is still rather backward, although then: have
been substantial signs of progress in remil years. L.css
than one -half of total production is commercially
slaughtered.
Pork is Il,c principal meal crutsttmC(I in 'Thailand.
Water buffaloes and cattle are present on mast farms
bill are sold for meat only when they are no longer
useful as draft animals. There are very ftnv dairy cattle
in tale coxmtry, but attempts arc heing manic to
inlrothice them. Consumption of milk, especially
e910en5 -milk. is increasing, Will dairy product
imporls in 1972 amounted to $28 million. Large
numbers of poultry are grown throughout "Thailand.
and poteltry and eggs account for more -than one -third
the value of all livewtock production. The livestock
population tilt farms in 1970, accimling to iviofficial
estimates, was as follows, in thotmands:
'I'licie are nn direct govmmieul support payments for
livestock production; hon in an effort Ion improve
the quality of livestock. the government has
established 15 livestock stations throughout the
country to provide artificial insemination Of licc�stmck
at it giotninal coup. Despite the relatively small output
Of livestock pnx m-N some 40,040 head of cattle an.i
I0.0t}f) lolls of hides and skins were exported frnto
'I'hailaud ill 1972.
e. Fisheries
Visiting is one of the fastest- gwwirig m onomic
activities ice Thailand, the tolal a illmal catch rising
front 256,000 torts in 1960 to 1.15870)(3 !ails in 1971.
Fish provides it large portion of animal protein in the
'Thai diet, and fishing has traditionally played ate
important role ill the eetrnomy of southern 'I'llaiiand.
II currently ace mots for :bola 4 of GI)P.
The share of marine fish to the total calrh increased
from 7050 in 1062 to 93% in 19 1, largely because of
Ilse increased use of moloricea trawlers. Ahnnst 80 of
Ilse marine catch comes front tine coastal .eaters of the
Gulf of Thailand. "11he government leas had some
success in limmoling deep-sea trawling. but fishing in
the Audautan Sea is still relatively unexploited.
Principal species landaf include duck fish, mackerel,
shrimp, and otliershcllfish. Probably only at fraction of
Thailand's freshwater catch is recorded; subsislence
fishing its inlaid waters is important and widespread,
and this catch shokild continite to increase with the
growing numbers of large inland impoundments.
A small btit increasing portion of the value of
Thailand's exports is derived from lisp and fish
products. In 1.971 exports, principally to Malaysia and
Japan, totaled 32,22`1 loos, valued at $21.6 million,
These consisted mostly of shellfish, particularly
shrimp. which :logic aecrunted for 55% of export
earnings from fish prodttcis, The volume of shrimp
exports, however, actually shows it dediiiing trend
from the high of 5,829 Ions (eaclmd in 1967. largely
because of increasing domestic consumption. rising
prices in world markets have maintained average
exports for the last 5 years at about $12 million
amttiaily. 'I'tnailai d's Third Platt calls for reversing the
decline in export tonnages and increasing shrimp
exports to I4.(XX) lolls by 1976, more dean dm(bling
the 6,200 tons exported in 1971.
f. Forestry
E
Water buffaloes 5,734
Cattle 4,6M han_�sts cYrer 72 laid ?ion acres, or almost 56% of
Hogs 5,132 'Thailand". total land area, bid-only one -half o that is
L. Chickens 58,791 accessible because of a poorly developed road system
i Ducks 7,109 and dense vegetation. ivlom,over, heavy cutting of
i, 10
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tineber has depleted nnrch of the readily accessible
Stock. The emitributlon (if forestry to COP, which
aneounted to some 35 ill 1950, has steadily declined
for the last severa; years to only about 2% in 1972.
Nearly all forests are state owned. and gorcntnrent
regulation has been imposed Somewhat helatediv to
protect existing reserves. hr 1970 it was rstiol;tted that
Mural cutting amonmled to twice that leg"'IN
harves!(xi by the I ore.�st Deparinreot. Repi'amting of
teak, ;ter importautl forest product grown in the north,
has been extremely slow. Official figures show that
teak production although well below the itigh
reached in the 1950's expanded front 103,665 cubic
meters ire 1961 to 223,300 cubic meters in 1970. 'Peak
is still 'I'iraihaud's most important forest product in
terms of foreign exchange eumirtgs, although its
irrspiurtance steadily de�liuexd through the 1960's with
more domestic use of teak, lsxpo'rts a noun(ed to
29,000 tons in 1970, ceanpared to 100,000 tons in
1960. to the lust 2 rears, however, exixorts showed a
substantial rise, reaching �1QW) torts in 1972, valued
at $10 million,
The forests also provides pang, valoCd for its timber
and resin. and a variety of other useful woods. Fang
production during the 1960's followed the same
pattern as teak, with exports declining as output
increased. 1sxlxrrts dropped steadily from 1(7,000
cubic rttcters in 19M 11) all estimated 13,000 cubic
meters in 1970, then rose to NAM euhic meters ill
1972, valited at less thrill $1 million.
Extraction of firewood +And charcoal totaled about
1.6 million cubic meters in 1970. Official figuresshow
that both have remnlly declined ire hnpxrtu+lce with
the increased use of other feels. Other forest products
include tire all�irnpurL. nt hameboo, with its varied uses
ranging from house construction to fishing proles;
several hgx`s of gums and oils that arc also usL d fora
variety of purimses: and three forms of lac.
for oily about 2 Although data are unavailable on
other cncrgy sources, firewood, charcoal, rice husks.
and similar agricultural wastes arc si.L'reificant fuels for
cvnunercial and domestic uses in rural areas.
Petroleum refining was the most rapidly growing
industry during the 1966 -71 period, expanding at an
annual vale of 13.5`c (Figure 6), Until 19CO a small
refinery at Iang was the only proeessing facility in Ihc-
euunlry. Since that lime. three neore refineries have
started producing. The Thai Oil and Ilefinery
Company, 1.1d. (TORC), at Si Racha. with a 65,000
harrel -1wr -day (h.p.d.) capacity, is the couutn s
largest producer of gasoline anti also produces large
quantiCes of diesel oil, jet f, =el, aloof kerosene. 'I'Ite
Stinimit Industrial CTrporationrcfiucryal Hang Chak,
a Bangkok suburb, with a 65,000- b.p.4. capacity.
produeeS lieptefied ixlroleum gas ligill naphtha
reftxnuales, kerosene, jet furl, gas, Will diesel oil, The
ulltcr refinery is the E Standard 'Thailand, 1.td.
s
r
2. Fuels and power
EhailaurI is Iw or ire energy resources. PMrolcturt
pnxluets are by far the most important primarysotrrce
of energy, accounting for more than four Fifth-, of
reported 1 4`ttic nmptiore. Virtually all crude oil is
importeil. AJlhaoiph traces of oil have been found in
the Cwlf`of ii;�a1; nd, commercially exploitable crude
oil dci?, "yet. stave yet to he Confirmed Actual
prodltctinii 1 4 crude oil is confined to a small piomping
station in the Nang Basin that supplies less li3an 1:4) of
annual crude nil requirements. Plydmclectric power,
of increasing importanLe but still it relatively new
source of energy, provides abput one- severtlh of
reported energy consmnptiott, while lignite accounts
w
i re Infio"S
Economic Activity
l.gr,ea,TUral are. TeN
R.W. L.J 0 0- fowl
Map+dam s4
MDUSTRY AND DIMMING
q v"ra,wm ree.,. y 5. T.,
M Cl6Wtl F. 1�
T-sn 4. F P.W.
Hfdrx'KOc W T,.g,,,s
PD -04,1
sums sa. FIGURE 6. Economic activity (UJOU)
II
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facility, which opened in February 1972 at Si Racha.
This plant has a capacity of 35,000 b.p.d. and
produces automotive diesel oil, jet furl, light and
niediuni fuel oil, kerosene, and five grades of asphalt.
Although domestic consumption, estimated at 100,000
b.p.d., is well below capacity of the existing refineries,
a fourth plant is now under consideration, which
would have a 50,000 b.p.d. capacity and would
distribute petrolcurtr products by means of all
overland pipe system. Despite the surplus capacity,
Thailand still imports large quantities of refined
products, principally diesel oil, lubricants, and special
fuels.
't''tailand' only significant solid [Lie] is lignite
(brown coal), which has !cell nriued singe 1957 and is
ell consumed domesticaliv. Production of lignite from
the two existing miges reached a high of 441,000 tons
in 1971. The one oat Krahi provided fuel to a 60,000
kilowatt powerplant on the southern peninsula. The
other �al Ma^ Mo in the north supports both a
powerplant and a fertilizer plant. [loth lignite -fired
powerplants are under the control of the Electricity
Generating Authority of Thailand (EGAT). The
country has no known deposits of exploitable natural
gas or coal, and nuclear generation is still in the
planning; stages.
Thailand*s electric power industry has expanded
cwsiderably in support of the growing national
aconomy. installed capacity reached 1,613,000
kilowatts (kw.) at the end of 1.972, haviiag more that(
doubled since 1968. Production during 1972
amounted to about 6.2 billion �kilowatI hours (kw. hr.),
corresponding to a per capita output of [70 kw. hr.
Over two !berets of the national capacity is in thermal
plants (almost :11 of w hich are pet roheum-fired). and
the others are in hydroelectric facilities.
Development has been aimed at satisfying a
steadily increasing industrial demand. The significant
gain in power c:tpacity' during lire past 3 years is
reflected in a 23% average annual increase in
consumption. This orientation toward industry has led
to a concentration of power use in larger urban
complexes, resulting in a low national level of
electrification. fn the Bangkok metrropolitan ciea, the
largest consumer center, service is provided to
approximately 60% of the people. Nationally,
ho-eever, less than 207c of the total population and
only about 105o of the rural inhabitants use electricity.
Operation of the predominantly government -owned
prayer industry is distinctly centralized, although there
are some significant regional facilities. 1GAT is the
principal controlling organization, accounting for
almost all of the power output. The verysrnall balance
12
!:E`'`.Y.I;Sx -4' V. uc] C, u�_ ww>. a_ w.-. tw+ m..+-...
is provided by another govcn'irrrent agency, the
Provincial Electricity Authority (PEA), which is
responsible for rur0. power, and by industrial plants
for their own use. 'Three large installations contain
nearly three fourths of tie total capacity, and four
Others rcpresznt almost an additional IOSc. Two of the
three in ijor facilities are thermal plants in 3ang4 -6k:
Bangkok South has a 460,000Aw capacity and
Bangkok North has a 267.500 -kw- capacity. 'rite third
is tlae 420,00044, Yan fee hydroelectric plant in the
north. Tani Her is the principal supplier to the
couMry's transmission network. serving the north -con-
tral region, including the capital city. A regionally
important posverplant in the south is the 60,(1(10 k.v.
Krabi thermal plant, which supports a small local
transmission fretwork. In the northeastern region, three
hydroelectric plants- Zhe 40,000 -kw. Narn Phrom
plant, the 25,000 -kw. N:an Yang plant, and the
21,000 -kw. Lam Dom ;Noi plant �are the maior
suppliers. The northeastem area alms is supplied with
power purchased from the -kw. Nam Ngam
Hydroelectric plant in Laos under at 10 -year eontravt
signed in June 1971. These four hydroelectric plants
and the Yan flee Hydroelectric plant account fnr40%
of national prrzluction. The four are joined into a
transmission system v. provides local service and
also is interconnected with the main network for
added flexibility.
The heavy concentration of power consumption in
larger cities is reflected in the design of the
lrarrsmissior networks. The three main systems,
serving the north central, northeastern, and southern
areas, are intended primarily for channeling electricity
for the main load centers to the neglect of smaller
towns and rural areas. Bangkok, the countr s largest
urban area principal industrial and commercial
hub, consumes nearly three- fourtlis of all available
electricity. Nationwide, industry accounts for about
two thirds of the total consumption and domestic and
commercial users for most of tine remainder.
Scheduled development calls for an increase in
national capacity by over 2 million ku% by the end of
1980, which will mote than doule the end -1972
capacity During the 1973 -75 period, principal
projects to be undertaken are the expansion of the
Bangkok South thermal plant by two 300,000 -kw.
units and construction of the 373,000 -kw. sirikit
hydroelectric plant in the north. Both are financed
partly by loans from the International Bank for
Reconstruction and Development, as were the Yan
Kee and some other plants -.n the past. The new
capacity will permit extension of the transmission
networks; the system in the south is to be linked to the
Bangkok area, and an additional connection from
y.
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Sirikit to Bmigkok will strengthen network integration.
Other inlereonnections to the northeastern area will
join the major plants into a national nctsvork�
Expansion in the period from 1916 to 1980 is to Etc
ace0inplished mainly through construction of the
360.000 -I.w. Quae Yai hydroelectric plaltt northwest
of tilt capita'-city, the 150,(M Mae iIvioli thermal
plank at a lignite mine in the north, and the country s
first nuclear powerplant of about 5IX},IKK) ktt'. near
Bangkok_ The decision to eslablish a nuclear facility
was illf ocotrd by the absence of domestic fossil fuels,
it limited hydroelectric potential, and the need to
reduce rcltaore on high cost pcl role uIII iingnlrls.
Development also is projected for the I'vIckong; river to
the northern bordcrarea with Leos, under the auspices
of the iatlernatinnal Mekong Committee.
A long -range project erivistges grachial electrifica-
tion of rural areas over a period of 25 years, viding
patter to .I lark: sginent of thu population pro and ulnas
altering the pattern where service is available only to
larger urban centers. Still in the planning stages, rural
electrification is recommended iw the United States
Agency for International Development, USAII) would
;'lore the foreign exchange portion of the total cr ust of
US�$650 million with the lnlcmational Hunk for
Reconstruction and Development and the Asian
Development Bank. The ultimate goal is k, furnish.
power to �10,!}01) villages, thereby extending electricity
to an additional -1 million people.
3. Metals and minerals
lvlining is important tu'I'hailand's foreign trade hilt
is a relatively minor economic activity in the context
FIGURE 7. Mineral produce �on (UfOU)
(Thousands of metric Pons)
Tin or,..
T ungolen ore
Lead ore
:Antimony:
Ore.....................
Metal
Jtangaaene ore:
Battery grade
Metallurgical grade
Chemical Kra&
Iron ore
Gypsum
Lignite..
Fluorite.
Marl....
na Data not xvnihtble.
of fatal national output. In 1972 mineral exports Nvere
valued at 8110 million, about 13 of total export
value, but this sector accounted for only 2.1 1`a of C1)I'.
Some 7.50 mines provide jobs for about 50,000 workers,
or about 0.35o o! the country's labor force, iiccently,
the annual rate oaf growth of mining output hasslowed
significantly, from 10.3% during 1965 -68 to 3.7o in
1 969 -72.
Tin is Thailand's leading primary product outside
the agricultural /forestry sector, omimnting for 65% of
the value of mine output and 70% of mineral exports.
Peninsular Thailand is the main producing 01`011,
particularly the area rxtending southward from
Minting to Ko Pltuket island. About 60% of'fhail :ancd's
tin is recovered from hydraulic and gravel pumping;
operations. Onshore mining is done an small,
�Ildivid[t:dIV claims that can be worked
cheaply by (Lose methods. The move to offshore areas
with dredges, however, iscxpected to gain moincutom
over the next few years as the more aceo: land
deposits show signs of depletion.
Tin are production remained al about 30.000 tons
annually from 1968 through 1972 (figure 7). A tin
smelter, owned by Thai Sinching; and Refining
Company (Thaisarco), :I joint venture with Union
Carbide, was completed in 1965 at Phuket. Exports of
tin are were curtailed in that year by the government,
and the company, given monopoly, buying rights, has
since done all initial processing; of On carteentrtle in
Thailand. The country's lin metal exports have
declined in both c"mintih' and value front the high
retched in 1967- 26,997 metric tons valued at $88
million --to 2�,351. metric tons valued 880 million in
1000 1'308 1009 1970 1fi71 1072
10,755
32,765
28,7415
2y', 780
29,010
30,130
105
91351
1,205
1,3so
3,515
5,843
4,600
0,475
4,230
3,0351`
4,521,
3,785
nn
425
1,501)
5,545
1,305
11,I70
na
380
345_
155
Si
20
530
5,851
4,225
0,�175
5,005
5.415
no
35,'115
25,505
17,3110
8.W,
14,415
Ma
Ma
115
na
nn
25
11,4 75
440.505
�177,395
32,515
311,530
27,82(1
13,000
1:8,005
92,035
144,250
107,005
S9,805
107,785
305,335
347,810
309,870
445,0K p
345,485
3,400
245,105
207,500
317,&.50
422 6,500
305,070
434,475
1,024,,200
1,533,940
033,745
480,730
372,195
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1972. Near] all tin metal is so,el to pile United States,
japair. :lid (lip \eticrlands.
i Ire flux of foreign capitul to large Offshore u� �u :g
projects snpporls a treed toward higher technology in
Thailand's tin inchustry. The eoeutry"s first cutter
suction dredge Was put into opl-rctio0 ill 1973 off
Plinkm h% Thailand Exploration and \luting
Colupany (TEXICU), another joint venture %%itil
l'aiou Carbide. Other U,S, interests have also moved
into till mining operation's. Alcoa and Belhlellcin
Steel. each with 23 +lx?'.%erf,�M1'd; t= K'e:'t+W'Aw;%.. .m, :waea +...ww?m,i�,wxs R:- wx: ebiam ^'r... k.+x- :rss..Y.e.. w.wn.w 'w.,s::...:: m.v.oFmb wi'� 2' viFJCYaw. xr. Phm' rvS:.> aY. MrNrariar.. CW� aroad& KFatrsM2f1 'uay.yVttaetlivM'aL% =DWI! k' YT.' rMQ4" tlXlWfi+ s- KRILIY, Aic@.5..n.a;'l{Y,y'vv'Fa a. +iel 'w.
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improved collection procedures. The budget deficit is
projected at about 7 trillion bath� roughly 105 lower
than the previ year �to be financed largely front
domestic borrowings.
:1. National monetay and banking system
tU /OVf
a. Currency
s
s'e
r>
The hasic unit of 'Thai currency is the baht, divided
into IM sitlang, In October 1963, following a period
Of currency stability in which the international vaiue
of the habt was permitted to seek its own level in
foreign exchange markels, the government established
it par value of 820.80 per US$I.ol) Willi titer
International A1011ctary .Fund WWI), Authorities of
an Exchange Equalir:rlioo Fund (Goa') intervene in
llte foreign exchange market %%-licit necessary to
maintain effective rates within the margin perniilled
by the IVIF. The EEI limits its buying zinc[ selling
Operation to dollars.
BY lac-, the Bank of 'Thailand is required' to
maintain a 6051 reserve behind t haitt notes issued
In he held ill gold, foreign currency, and foreign
securities redeemable ill I year front (lie dale of
purchase. Since Iffil the Bank's holdings of gold and
foreign exchange have been sufficient to provide UW,S
cavcragc of the note issue.
b. The banking xyaferi
r +Y.tr
1
3
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tY
The 'Thai harking system Consists of tilt
government controlled central hank, privalecrinmer-
vial banks, and a number of specialived financial
institutions. The (kink of Thailand, established as an
independent entity in 19.12, is Ilse c -lt W ry s cenlyd
bunk. it is functionally divided into the lssrte
Department, which issues currency notes and manages
the currency reserve; and the Banking Department,
which manages the public debt, nets as the
government's agent for exchange control, and is the
degwsilury for tilt Elf. The Banking Department also
uperatmS is clearinghouse and,functioos as a liartk of
reserve for the commercial hanks and a rediscttinler cif
(licit (rills.
The Commercial Banking. Act of 19u2 vested the
liartk (if 'f ha'iland :with solos regulatory power over the.
money supply; including lite authority to establish
reserve require forcoi nmerc:..1 batiks, rediscount
short term commercial paper engage -in open-
market operations. The Blink also has additional
powers to- stipulale-the muxinaum amount that any
h ank may lend In cane ix,rrer ;6cr and to prescribe legal
limits oil inlerest rtucs for' -any lender (a ride, ignored
more often than respected). Under the 1962 act,
foreign hanks operating in 'Thailand ore also required
to hold a minimum arnottill of assets in the Fonu of
deposits will) doe Bank of Thailand.
The principal sunlit Operation of the Bank of
Thailand is rediscounting, or purchasing promissory
notes held by commercial hanks against the private
sector. 'Transactions of this type rose by in average
32% annually froth 1967 to 1972, when thm" loan
funds totaled 8923 million. Nlost rediscounts carry a
preferential rile and are for short -tout (mosactions,
with a maximum period of 2 to 12 utonlhs.
liedisctin fitting facilities for uunnnfacturing cover Only
operating cpeiises of certain industries. Silice July
1971, however, wdisLomiting has been extended to
cover promissoy notes of the Industrial finance
Corporation of Thailand (IF [it an effort to aid
farmers, the central hanks rediscrninting facility has
also been extended to incindc bills arising; front
agricultural production.
The ]kink ha riot always been able to use its powers
extensively of effectively. Its ability to regulate: kite
expansion of commercial credit has been limited by
Lite commercial batik practice of maintaining reserves
in excess of legal requirements, letiving little need ter,
borrow front the Bank; this has limited the
effectiveness of changes in tilt- Bank's discount rate as
a tool for :xmtrolling credit expansion. 'i he 'Thai
exchange control s }Tern permits coritrnercial hanks to
use short -lento faci l ities abroad freely, allhough
utilization of horrowed funds internally is limited to
the scope allowed under the capital -risk asset ratio. As
till indicator of the traditionally low reliance of
commercial hanks on the Batik of Thailand, tits
outstanding amount of credit from the Bank
uncounted to only 2.1% of total crnintercial hank
liabilities at (lie cud of 1972.
Commercial banks form the nucleus of the inoutey
market in Thailand iinid are glee most significant
financial establishments for generating savings and
supplying invcstmciet funds At tine end of 1972, there
were 29 commercial hanks --16 domestic and 13
foreign operating over 600 hank offices located
throughout the 72 provinces. Their facilities are,
however, concentrated in the Hangkok- Thonburi area.
Total commercial bank� deposits reached 48 billion
bald in 197 time art([ .savings deposits comprised
78% of the total, while demand deposits and other
deposits accounted for 21 and 1 respectively.
Loans and overd(u1`6 extended by the banks were
valued of 26 billion baht in 1972, an-..I discounts
totaled billion baht. The largest portion of direct
bank credit was exlendmi to domestic wholesale and
27
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retail trade. Credit to finance foreign trade.
manufacturing, personal colts ti fill) tion, services,
construction, real cstalc, financial businesses, and
agriculture accounted for Ilse nest largest portions, i1t
that order.
The receit ped0d has witnessed spectacular growth
in comtercial banking, The number of bank offices
has increased over 705c since- 1960. '['tint deposits
increased at all average atonal rate of i5ro bet well
1967 and 1972. l.ecans and overdrafts by commercial
hanks increased) an average of 15% arinrrull over the
last b years, while, credit from discounted notes
exixuided by 16% annually. Aside from increases it,
[lie money supply, a prime factor ii this rapid growth
has been the increasing ivilltngtiess of tile'I'hai people
to take advantage of expanded banking services.
Iniporlant changes have taken place Over the last 5
years in dm- p atient of cormercial bark eredil to 'Thai
business. The proportion of outstanding loans auicl
overdrafts for foreign trade dvelilled significantly front
1967 to 1972. An important cauvsal factor in this
relative decline was till, increased role o the Bank of
'Tlratiland in holdilIg trade bills. 9'h is ticvcloptncnl
facilitated an increase in Lornilicrcial bank credit for
suca other activities is supporting doinestic trade and
production, With the not able exception of a decline in
agricultural accounts, the share of domestic sectors in
loans aril overdrafts eithee renailled ti same or
inerca, d marginally.
[t addition to the Celilral Bank and the network of
commercial hanks. 'Thailand has titre speciaiixe(i
fin-ancial institutions, (lie oldest and largest of these
!icing the. Government Savings Bank. The chief
iaslit �!tion for rural savings, live Government Savings
Bank, has played an important role in channeling
fluids into development programs t hrough the
purchase and sale of gover-`iment bonds. It accepts
savings deposits. issues savings boitds, and deals in
government bonds. This bank has a network of over
100 branches and is the main subscriber to
governw-tit long -term bonds. At the end of 1972,
deposits totaled 65 billion baht, compared with 3.4
billion haht at the end of 1967. Investment in
government securities comprised 9050 of its assets at
IZie end of 1972:
Another specialized institt Lion, the Industrial
Finance Corporation of Thailand (IFCI'). was
established under government sponsorship ill 1939 to
provide long -term credits in both f.!.eigo acid local
currency for the establishment, expansion or
modernization of small= or medium -sitar private
industries especially those using local raw materials
and Promoting local cmployrnent. Corporation is
28
entpo to provide financing in any Bann
Considered appropriate to its clients and its own
interest. As a general rate its aiin is to diversify its i
financing among different F vPcs of industry with as
broad a geographical basis as acne able. It cncotiragus
the promotion of private industry by offering
entrepreneurs more attractive financing thati is
generally oblain ble from Other institutions. It is
privately owned: cti tnotercial banks have a 755,r share
holding, and the reminder is held by investment
con ipanies, insurance firms, private companies and
:ndivicluals. It has received low- interest loans Goin the
budget and has sold debentoies to the Bank of
Thailand, the Government Savings. Hank, and
eminnercial cranks. For foreign currency loading, the
IFCT itas been utiliririg existing credit lines front the
Asian development Batik and Japan.
The Bank of 'Thailand has agrceel la rediscount
IFCT pnronissory notes that arise from its Icadillg to
high priority projects, a trove which will enable the
Corporation to expand its r.1011MIC of lending and thus
play in even larger role ire the future_ The 1CY :'I' has
greatly expanded its lending role over the last 5
years �loans to the private sector at Elie atid of 1972
amounted to 585 trillion baht, more than double their
1967 level. Nonetheless, its resources are far frost
adequ to meet [fie needs Of industry, and it reinaitts
general practice for industrial undertakings to Obtain
Plant and ccluipnient on supplier credits from abroad
and burrow frtnl cortitnercial banks for working
capital.
The Bank for Agriculture and Agricultural
Cooperatives (BAAC) was established in 1966 to
relieve the great dearth of institutionally financed
capita: in the agricultural sector. The banks 55
brunches extend unsecured production loans of tip to
5,00'1 bola net subsidize-d interest rates (to cooperatives
at 95o and to individual farmers at 12%), especially to
those producing primarily for sale rather than
subsistence!, It also lends against mortgages,
governrriciiE Ixmds, or deposits up to 60% of Ihe. value
Of such collaterael. Short term loans repayable in I year
and .medium -terns loans repayable within 8years, are
extended for the financing of land clearance, land
development, irrigation, and the purchase of
agricultural egpipment. [o addition, the BAAC.has
been Permitted 16,11iscount promissory, notes on a
regular basis since :May 1972. The hank has beets
highly successful: tatting and overdrafts to the private
sector increased from 381; million bah) at the eiid of
I967 to 1.8 billion baht at-the end "of 1972. limited
working capital; however; has not allowed it to meet
all requirements.
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Notwithstanding the relativeiy well- developed
institutional framework for all types of credit
financing, many 'Thais depend on art assorlinwit of
relatives, shopkeepers, crop buyers, landlords, and
professional moneylenders as their primary source of
funds, This uaorganizoil market is not subject to real
regulation, supervision, or control. lost transactions
are in cash and repayment I>4ril ods areshort. Although
loans from relatives are sot ;ielirncs interest -fret, rules
are most often higher than those charged by
institution lenders. Monopoly eleutents du exist and
abuses are not infrequent ill some of Ihesc olhcs forms
of credit; but in general, burrowers `.have access to more
than one lender, :nod the higher rates reflect lack of
collateral all([ higher risks of default. Given a limited
supply and a veq� ;irge need for funds frequently for
nonproductive purposes --the unorganized market
does its job reasonably well at prices which appear
c'oosonio t ,vitli prevailing cwoditions.
The unorganized money market is particularly
important :is a source of agricultural credit, since
relatively few farmers are reached by lending
iustitntions. It is estimated, for example, that
coomio,rcial hanks and the flank for Agriculture and
Agriculture Gwpemitives together actirnant for only
about 1040 (if all farm credit, Shopkeepers and
relatives are by far the most important sources of farm
credit throughout the country, although crop huyers
and landlords do play a significant role in the central
plain, where average debt per family is several times
higher than in any Diller region.
front the Hank of Thailand to finance growing cash
deficits. EMernal factors were also expansiauary in
1972, however. Because of a marked list! in export
earnings as Well as a revaluation of assets, reserves
increase(! by 3200 million. At rte and of 1972 the
money supply stood at 24:7 billion babt, or ue
double the 1965 level. Charactenstic of a developing
country, dcru:uul deposits amtinucd to make 411i an
increasing share of the money supply, rising to 3950 in
1972 from 375; in 1965.
Until 1972 prices did not rise significantly in
Thailand'hecause the greater increntents in the anoncy
stack were still largely absorbed by substantial
increases in production and growing rno,mization of
tiro economy. Foreign exchange reserves were
adequate to permit a liberal import policy, and rising
imports have dampened or completely offset potential
price increases, Wholeside and consumer prices in
1,971 were both about 3.55o ah;we 19tiif levels, or
avertg+s annual increases of about I o for the -3-year
period, During 1972, however, wholesale prices
increased steadily to a level 15% over the previous
year, .while the crose.mer price index rose 10`0,
reflecting partly increases in prices of paddy and
milled rice, the two items with tilt highest Weight in
the respxactivc indexes. and partly higher import casts
that resulted from currency realignments, particularly
with Japan. It is expected, moreover, that larger
govenarnent Cash defieils will increase the pressure on
prices over the next few years. Some offset to this
might occur from increased imports, however.
c. Aloney supply and prices
4. Manpower /611)
Alter experiencing a lung period of monetary Thailand's labor force is projected to increaseat an
stability, Thailand's economy has faced expansionary at,nual rile of ahont 3 o at least for lite next decade,
pressure from a rapidly growing nroncysnpply during thus boosting annual incrcmenis to labor, front about
the early 1970's. ]n the 1960's lire achievement of m 00(i in 1973 to about 88,000 by the end of tlae
monetary stability in the face of sustained large period. Economically active, workers totaled 16.9
increases in exchange reserves was due to a high rate of million in 1971 or about 45% of the p>,ipulation
private saving and the slow growth of net government (Figure 12). Nearly all workers, whether orban or
borrowing from the ,banking system ws a �whole. rural, receive meager lficomis; Despite laixhr. laws
Money supply grew at all average annual rate of 6.2% which call. for a minimum wage of 16 balit, per day
fnim 1962 -69, which compared favorably with rcul (us$b.80), wages, are determined by market force,
growth in CDA of 7% amntalk over the same I riod. skill, and' willingness "to work and to change
From 1969 through 1972, hnjwcver, mrumq supply occupation. Uumphiymeut is purely frictional or
grew at all average annual rate of 11.2 compared to sc'usunal."
a slower annual growth in Cf)A of Since net 'the hruitt211 sizcO the nonagd ulturd sectors has
foreign assets declined from 1969. to 1197 1,. the roilial resulted in .a slow shift in the'emplbyment structumc
monetary expansion was mainly the result of iarternial tiv'6 the las't'sevcrad years: Farming still absorbs`niost
factors, particularly goveiTi ncnl finance. Tile central of the new eritrunts into labor force. They lend to
govemrucnt bus l ieco uie u mal(ir expansionary. factor' settle un new lunrl -of .incrrusingly p rxii oiva hty. u
since 1969, as current surp)lnscs have declined steadily' pattern: which will plrobably'cDntiriuc until the supply
and the govcrmneut has had to increasa,its lxtrrcawing of cultivable land' is exhausted. Itelvicen -19[iJ and
f
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af:Crl)li
Agriculture
Niiniug and rluarrybig
Munufavturiag
Construction
Fleciricity, gas, water and sanitnry serei:e..
Commerce
Transport, storage, cnnmmuirutit>i
S ervices
Total
lflli{I
Number Yereenlaar
of of
bborers total
20 0.2
462 9.7
71 0.6
IS 0.1
760 6,0
138 1.3
655 5.:
13,594 100.0
1071
Number
Percentup.
or
or
laborers
total
13,076
77.4
51
0.3
715
3.2
1.10
0.9
42
0.,,
1,2 r3
7.0
317
1.9
1,273
7
16,902 100.0
1971, the acgnlenl of the labor force engaged in
agrieultlire declined only 5.5,%, while labor absorption
ill ill(, Il larill fact 11 ring, comme Geld service sectors
increased by only 9.5 �b, 1.6% and 2,350, respectively.
Labor Unions arc harmed. Thailand's firs(
comprehensive labor lute authorizing labor Unions was
enacted in 1957 dirt was abrogated the following year
after the coup staged by Marshall Sarit. The country's
progress tit the last 15 %'cars has been to retrace its steps
to the 1957 law. In 1965, legislation c;,lahlished
d procedures for the settlement of labor disputes. These
were modified try a 1972 decree which also allowed for
the formation of sO- called "-,vurkers associations."
Technically these associations are granted the right to
organize, to engage ill collective bargaining, and to
strike. In fact, however, they are governed by host of
restrictions intended to insure that they remain weak
and tneffietive. in addition, the us,;ociations are
expressly forbidden to conlri6oite to political funds or
become involved in politics.
Labor strikes ;order the former military govenlnient
were infrequent, totaling only 85 from 1970 thr.,)ngh
1972. In 1973, however, labor unrest increased,
accelrrating rapidly after the changes in government
ill October. From January through Scpternber, there
were 136 strikes uriJ by the "end of the year the figure
was over 300. Nearly all strikes have been illegal.
Current laws goverliing labor dispute pirovirde for a
,.3 tortuous and time cmcun:irg Icgltl process dlcf(ire it
strike is 1writilted, Mast disputes have involved
Uancompliance of employers with tuininluni
requirements of the labor Law and civil service
aj legislation. In the private sector, (stir dispute. have
affected the textile, garment, tend steel industries;
""I taxis' scNice, hotels, and a c't rrmerciul hank. The nosh
30
of strikes hats also spread to state enterprises involved
in rail, port, telephone, and garbage collection services
as well as tobacco production.
D. International economic relations
(U /OU)
1. Foreign trade
Foreign trade accrlutted far 35 of 'Thai GDP in
1972, exports accounted for 15 and imports
accented for 2050. Between 40% and 50% of
government rev enues ate detivo6dinxtly or illdi -'ectly
front taxes on international trade. Perhaps even more
intpnntantly, foreign sources supply fuels, capital
g oods, and interinediate goods, without Wilicll
idomc-stie industry and commerce oould not have
reached their present stake of development. F(r'zign
trade moves tnainly through the tort of Bangkok;
provincial ports such as Son gkhla and P account
for only abuut 18% of exports and less than 250 of
inlporls.
Exports fluctuate markedly front year to year,
depending on weather conditions and changes in
world market prices, but the long -term Irend has been
toward a SIOWdOWn in growth (Figure 13). The
average annual rate of growth in exports deciiiiLd front
10% in the 19'i(Ys to 7% in the 1960's, Export
perforn ance was purticularly poor in the latter.parl, of
the Iasi decade, showing an average rate of,growlh of
about 150 annually from 1967 to 19M. Although
unexpectedly large increases in exports were registered
in 1971 and 1972 -1750 and 315; respectively -the
.f
slowing trend is expected to resurlle. Tile sharp gadns.iu
the last 2 y ears weer attributable to abrupt'shifts, from f
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ti
Iu
r
a
FIGURE 13. Foreign trade and gold and foreign
exchange reserves (U10U)
(A00ions of U.S. dollars)
surpluses to shotlogvs on world markets for sugar,
kenaf, and rice. which together aceomrted fur ahcnit
two -thirds of lire increase in export canihigs in 1971
and 1972.
'rile colml ry is still dependent on a narrow range of
prsxluets for the bulk of its export earnings (Figure 1.1
Poor performance Over the past several years reflects
for the most part a poor growth mcord for lratlitional
exporls such as rice and ruhLor and, in recent years.
liu, whose Combined share of total export %'little has
declined loot still atnoanled to 3(i.9;b in 19T1.
F i00%
Other
0.60"x, Murmg,(3eans 1.5%
0.02% 9upr 2.2%
a e^ 0.12%Tobs=oLeaves 1.496
0.0296 shrimp ].4%
Rubber
Tin
can
TJepioca Products
Jute and Kenai
I96I 1971
Thailand has hacl some success, hoaeyer, in
diversifying its exports. New exports such as corn,
kenaf, and tapioca shomd remarkable growth from
1938 to 1966, providing an inmporlant stlnlolIS to the
economy Ill those yearn In more recent years fluorite,
tong �tell, tobacco, cement, and shrimp haye become
important foreign exchange: earners. Additional
emir lotlities sttch as cotton fabrics, processed fish,
woad products, tropical fruits, although still relatively
unitllportant among exports. show Cosi(Isnable
promise.
Thaiiantl is heavily dependent on imports for
capital goods needed m maintain and devel the
economy, for industrial raw materials allot fuel, umi for
a large portion of its uuulufactnrCd Cmstimer goods.
Over time last dMMIC cite v:d11c of imparts inerease(l at
an average alluual rate. of 10.370. C:hatigm in lite
composilion of imports over this period inflect a rapid
rise in capital goods imports during; 11162-69. after
which investment became slaggish (Figure 15 'Cho
MJl.rnl d U.f. deJler[
soo
CaWtol L
i
ado s
L
300
196+2 1966 1969 1970 1971 1972
It'[n'raK slgre or Jnparts 6{ ram..edry crag
roe X
01hn Imports 228 22.2 i4.3 20.5 2Q1;
cap4at goods
Intl!rmMala
troauct}aad 29.0
rer matelyts
Canwme, goads,
1962 WS 1969 1970" 1971 1972
FIGURE 15. Imports by commodity group and percentage
share of Imports bjy commodity group (U 1041)
31
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(MLIJ AND raxlaas
V FAlt
r :C1
impolITt{
rXClt. %.NGr. Ill :4r.11\'!:
1011x.........
iSB
55$
495
1903......
�165
01:1
.141
1004...........
593
485
010
Igor)...........
022
7.12
70:1
19013........,..
068
840
8131
196
081
L OU
11111
HISS.,......,..
058
1,150'
938
1069...........
708
1,206
89 -1
1070...........
710
1,298
767
1071.........
831
1,388
766
1872...........
1,088
1,452
067
surpluses to shotlogvs on world markets for sugar,
kenaf, and rice. which together aceomrted fur ahcnit
two -thirds of lire increase in export canihigs in 1971
and 1972.
'rile colml ry is still dependent on a narrow range of
prsxluets for the bulk of its export earnings (Figure 1.1
Poor performance Over the past several years reflects
for the most part a poor growth mcord for lratlitional
exporls such as rice and ruhLor and, in recent years.
liu, whose Combined share of total export %'little has
declined loot still atnoanled to 3(i.9;b in 19T1.
F i00%
Other
0.60"x, Murmg,(3eans 1.5%
0.02% 9upr 2.2%
a e^ 0.12%Tobs=oLeaves 1.496
0.0296 shrimp ].4%
Rubber
Tin
can
TJepioca Products
Jute and Kenai
I96I 1971
Thailand has hacl some success, hoaeyer, in
diversifying its exports. New exports such as corn,
kenaf, and tapioca shomd remarkable growth from
1938 to 1966, providing an inmporlant stlnlolIS to the
economy Ill those yearn In more recent years fluorite,
tong �tell, tobacco, cement, and shrimp haye become
important foreign exchange: earners. Additional
emir lotlities sttch as cotton fabrics, processed fish,
woad products, tropical fruits, although still relatively
unitllportant among exports. show Cosi(Isnable
promise.
Thaiiantl is heavily dependent on imports for
capital goods needed m maintain and devel the
economy, for industrial raw materials allot fuel, umi for
a large portion of its uuulufactnrCd Cmstimer goods.
Over time last dMMIC cite v:d11c of imparts inerease(l at
an average alluual rate. of 10.370. C:hatigm in lite
composilion of imports over this period inflect a rapid
rise in capital goods imports during; 11162-69. after
which investment became slaggish (Figure 15 'Cho
MJl.rnl d U.f. deJler[
soo
CaWtol L
i
ado s
L
300
196+2 1966 1969 1970 1971 1972
It'[n'raK slgre or Jnparts 6{ ram..edry crag
roe X
01hn Imports 228 22.2 i4.3 20.5 2Q1;
cap4at goods
Intl!rmMala
troauct}aad 29.0
rer matelyts
Canwme, goads,
1962 WS 1969 1970" 1971 1972
FIGURE 15. Imports by commodity group and percentage
share of Imports bjy commodity group (U 1041)
31
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=i
I
1
i
share of capital goods in total imports, for esaniple.
rose from 28.2 in 1962 to 35.3% in 15769, then
dropped to 31.4 a in 1972. The trend lwv and impart
substitution hi cunsuruer goods industries ninliuued
throughout the decade. Imports of Lonsumer goods
declined as a percentage of lotal �ntpn while
inipv,ts of materials for consumer goods prodimlion
im�rc,vsed front 11.4% of total imports in 1962 lcr
19.2 in 1972.
Imports of consumer goods were largely nondurable
goods, mostly food especiaily hairy products) and
clotllirig. Durable goods imports consisted principally
of household gunds, electric appliances, and
motorcycles. Intermediate products and raw materials
imports were primarily base metals, chemicals, textile
fiber%, unnrmufacttrred tobacco. and paper and
paperboard. Capital goods imports were largely
machinery for industrial use, electrical machinery,
urclal ntanufuctures, fertilizers and pesticides.
scientific and optical instruments, glass, and ether
mineral manufactures. The remaining imports are
mostly crude oil and lubricants, velaicles, chassis, and
bodies.
2. Direction of trade
Japan is by far Tha �fuu