The Economy

Until the mid-1980's, Thailand's economy was overwhelmingly based on agriculture and the processing of agricultural goods. In an effort to develop a more broadly based economy, the Thai government established a series of economic development plans beginning in 1961. Special emphasis has been placed on diversifying crops, expanding irrigation, developing hydroelectric power, improving transportation, and establishing new manufacturing industries. Much of the work has been carried out by the government, the rest by private enterprise.

By the mid-1980's manufacturing had overtaken agriculture in terms of importance to the economy. By the 1990's, manufacturing industries accounted for nearly three-fourths of the country's export earnings. Because of its relatively low cost of labor, Thailand attracts large amounts of foreign investment in its industrial sector.

Despite many economic advances, Thailand remains relatively poor. Many Thais, particularly those living outside of the Chao Phraya valley, live at the subsistence level.

Thailand's basic currency unit is the baht.

Thailand's limited cultivated land—roughly a fourth of the total area—supports about 65 per cent of the people through farming. In the Chao Phraya valley tenant farming prevails; elsewhere, Thai farmers usually own their land. Farms are quite small, and most of the farming is done by hand with the aid of simple implements and animal-drawn equipment. Water buffaloes are the most widely used draft animals. In some upland areas, especially in the north, a shifting kind of farming is practiced. Plots are cleared and used for several years until the soil becomes exhausted. Then a new site is chosen, and the cycle begins again.

Rice is grown on some 60 per cent of the cultivated land, and rice is a major export. Production is extremely heavy in the fertile Chao Phraya valley—one of the great rice-producing areas of Asia. Most of the rice-growing depends on the annual flooding that comes with the monsoon rains. In some areas rice is grown with the aid of irrigation, allowing two crops to be grown each year.

Thailand is the world's leading producer of pineapples and of natural rubber. Other crops grown include sugarcane, cassava, kenaf (for fiber), coconuts, tobacco, cotton, soybeans, and peanuts. Many fruits and vegetables are grown in abundance on small patches for family use. Chickens are the most common farm animals. Other farm animals include hogs and cows, which are raised mainly on the Khorat Plateau.

Fish provide the main source of protein in the Thai diet. They are caught in great numbers and variety along the coast and in the rivers and canals; in some areas fish are raised in ponds. Much of the catch is exported, most of it to Japan and the United States.

Forests covered about 55 per cent of Thailand in 1965. By the early 1990's, however, only about 25 per cent of the country was forested. The depletion of the forests has occurred largely because of widespread clearing for agriculture and the use of large amounts of wood domestically for fuel and construction. Virtually all of the forest land is government owned. Teak, cut in the northern forests, is the most valuable species harvested.

Hundreds of factories have been built since the early 1960's, by both Thai and foreign companies. Manufacturing provides jobs for about a tenth of the labor force and accounts for more than a quarter of the gross domestic product. The Bangkok metropolitan area is the principal manufacturing center.

From the 1960's to the early 1980's textiles were Thailand's most important manufactured item. Since the mid-1980's, however, electronic items have rivaled textiles in importance. These items include radios, television sets, and computers. In general, electronic components are imported and products are assembled in Thailand. Most of the finished products are exported. Other manufacturing industries produce chemicals, fertilizers, pharmaceuticals, rubber, cigarettes, cement, and processed foods.

Until the 1960's an obstacle to the development of manufacturing was the lack of adequate electric power. To ease this situation, large oil- and lignite-burning plants and hydroelectric dams were built. The largest hydroelectric project is Bhumibol Dam on the Ping River.

Though employing less than one per cent of the workforce, the mineral industry is economically important. Zinc, mined in the Dawna Range, is the chief mineral produced. Other minerals include tin, lignite, feldspar, limestone, gypsum, and a variety of gemstones. Natural gas is produced in the Gulf of Thailand as well as inland.

Lines of the State Railway of Thailand extend mainly from Bangkok to the outlying areas of the country. Two of the lines have border connections into Cambodia and Malaysia. Though the railways now carry most of the freight, Thailand's waterways remain a traditional and important means of moving goods, especially in the Chao Phraya valley. Bangkok is the leading port.

Most of Thailand's roads are unsurfaced and serve primarily as feeders to the rail and waterway systems. First-class paved highways are relatively few. The highway system, however, is steadily improving and carrying an increasing amount of traffic. Thai Airways Company Ltd. serves the principal interior cities; Thai Airways International Ltd. is an international carrier. Don Muang, near Bangkok, is one of the busiest airports in Southeast Asia.