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Thailand - Macroeconomic Business

 Thailand’s economy expanded continuously during the 1980s up until 1997, when the economy contracted -1.7 percent. Table 18 displays the GDP growth rates for the 1990s and projections for 2000. The first full year of the crisis, 1998, led to an even greater downturn of -10.2 percent.


Table 1. Thailand’s GDP growth, 1990-2000

Year GDP (% change)
1990 11.2
1991 8.6
1992 8.1
1993 8.5
1994 8.9
1995 8.8
1996 5.5
1997 -1.7
1998 -10.2
1999p 4.2
2000p 4.5-5.0
Sources: Bank of Thailand and National Economic and Social Development Board

Note: p indicates projection
From 1987 until 1996 the manufacturing sector increased its contribution to GDP between seven and 18 percent per year, while services grew annually at a rate of six to 13 percent.
The economic growth in the 1980s and 1990s was fuelled by the expansion of Thailand’s manufacturing and services.
Before the crisis, construction achieved some of the highest sector growth rates, such as 22 percent in 1990, but its overall percentage of GDP remained much smaller than manufacturing and services. Agriculture performed erratically over the same period with contractions or no growth in 1987, 1990, and 1993, but interspersed among growth of 3-10 percent in other years. Table 2 shows the performance of the major sectors of the economy from 1990 to 1999.

Table 2. Growth of real GDP by sector, 1990-1999 (in percent)

Sector 1990 1991 1992 1993 1994 1995 1996 1997 1998p 1999p*
Agriculture -4.6 6.5 6 -1.9 5.5 3 3 -0.13 -0.43 -1.9
Industry 15.7 11.7 11.3 11.1 9.3 11 10 2.96 -9.73 17
Construction 22 13.6 4.7 9.5 13.8 10.7 8.2 -22.2 -37.7 10.3
Trade,services, other 12.7 6.6 7.3 9.1 8.6 8.2 7.5 -1.13 -8.08 3
Source: National Economic and Social Development Board

Notes: p indicates projection
* comparison between 1998 Q3 and 1999 Q3
Manufacturing accounted for only 16 percent of GDP in 1970, but by 1998 it comprised approximately 36 percent of GDP (see Figure 1). Agriculture, the dominant sector in terms of employment, has seen a gradual decline in its contribution to GDP. In 1998, agriculture made up 12 percent of GDP. Services are currently the dominant sector in terms of percentage of GDP, totaling over 48 percent.

Figure 1. Percentage of GDP by sector, 1998


Source: National Economic and Social Development Board

Despite the sharp drop in the value of the baht since the outbreak of the crisis, inflation has remained manageable. Over the past five years, only in 1998 did inflation rise above six percent. Figure 2 shows the annual inflation rate change.

Figure 2. Annual inflation rate change (in percent)


Source: Bank of Thailand

Main Economic Sectors

Diversification is a continuous theme for Thailand’s economy. Extensive structural changes have occurred in the economy between the 1960s and 1990s, as seen in the progressive development from a predominantly agricultural economy in the 1960s, to simple manufacturing in the 1970s and 1980s, to the current movement towards more sophisticated industries, such as petrochemicals, high-tech electronics, and computer components. These newer high tech industries are also spurring the growth of numerous support industries and services.

Agriculture and fishing

Formerly the mainstay of the Thai economy, agriculture remains one of the key sectors in the economy in terms of employment and its contributions to GDP. Agriculture employs over 45 percent of the Thai workforce and generates 12 percent of the national income. Thailand is one of the world’s top five overall food producers and is the number one rice exporter.
Thailand is among the world’s leading producers in several other categories as well, such as seafood production, tapioca, chicken exports, and rubber.
Thailand’s top five agricultural products are rice, rubber, sugar cane, cassava, and maize (see Table 1). Rice is the principle crop, and paddy production utilizes nearly half of the cultivated land in Thailand. Other major agriculture commodities include shrimp, coconut, and soybeans. Thailand’s agriculture sector is expected to remain an important contributor to GDP due to an expanding range of value added activities in the processing of frozen seafood, poultry, fruits, and vegetables.

Table 1. Thailand’s leading crop production, 1990-1998 (Thousand metric tons)

Crop 1990 1991 1992 1993 1994 1995 1996 1997 1998
Paddy 1/ 17,026 19,809 20,184 19,098 20,125.5 20,678.6 22,069 23,088.8 22,999
Rubber 2/ 1,250.0 1,340.0 1,500.0 1,553.0 1,737.0 1,810.0 1,937.0 2,032.7 2,100.0
Maize 3,800.0 3,600.0 3,400.0 3,300.0 3,900.0 4,060.0 3,970.0 3,831.6 4,986.4
Tapioca roots 19,705.0 20,356.0 20,203.0 19,091.0 15,374.0 17,387.8 18,087.9 15,590.6 16,506.6
Sugar cane 40,563.0 47,430.0 34,711.7 37,568.6 50,458.9 57,693.4 56,190.0 42,270.0 52,839.1
Mungbean 303.0 304.0 261.0 231.0 255.5 234.0 237.9 199.9 233.1
Groundnuts 161.0 157.0 137.0 136.0 150.3 147.0 151.6 126.5 146.4
Soybeans 500.0 436.0 435.0 513.0 527.6 386.0 352.3 337.8 334.9
Sesame 29.2 32.0 31.5 32.8 31.8 33.5 34.3 34.7 36.0
Coconut 3/ 1,426.0 1,379.0 1,411.0 1,462.0 1,476.0 1,412.6 1,410.0 1,419.0 1,372.0
Castor beans 23.0 28.0 12.0   7.0 5.7 5.6 6.0 7.1
Cotton 97.0 129.0 99.0 67.0 77.9 80.7 75.1 51.4 42.6
Jute and Kenaf 191.0 139.1 151.0 144.0 126.8 79.0 109.3 96.6 51.4
Tobacco leaves 66.8 85.4 93.6 50.8 48.8 59.8 72.4 74.3 79.3
Source: Office of Agricultural Economics, Ministry of Agricultural and Co-operatives

Notes: p = preliminary
1/ Paddy production in year t includes the first crop in year t/t+1 and the second crop in year
2/ Rubber Research Institute, Ministry of Agriculture and Co-operatives
3/ Production converted at 1.25 kg pernut

Manufacturing and industry

Up until the 1960s, Thailand’s manufacturing sector was closely related to the agricultural industry, centred on rice and sugar mills, tobacco plants, and other food processing activities. However, the roles have been reversed, as agriculture now constitutes 25 percent of the activities in the manufacturing sector. Thailand’s manufacturing and industrial sector averaged 10-11 percent annual growth throughout the late 1980s-mid-1990s and has bloomed into a diverse and productive sector that makes up the largest percentage of Thailand’s exports. It also employs approximately 20 percent of the labour force.
Thailand’s manufacturing base centred mainly on textiles, plastics, and footwear early in the drive towards industrialization, but now the sector consists of numerous business activities utilizing higher technology and value added products. Several industries that began in the 1980s, such as electronics, computers and components, integrated circuits, automobiles and parts, are now major industrial activities.
Textiles, cement, and electronics are still major products, but Thailand is rapidly becoming one of the world’s largest manufacturers of automobiles and trucks. At present, Thailand is the second leading manufacturer of pick-up trucks. Several of the big auto companies have established factories in Thailand’s Eastern Seaboard, including Ford, GM, Honda, Mazda, and Toyota. Heavy industries, including steel and petrochemicals, are also increasing their contributions to the economy. A burgeoning petrochemical industry is developing alongside the oil refining activities, and both upstream and downstream activities are being undertaken.

Services

As Thailand’s economy became more focused on manufacturing, there was a corresponding increase in the services necessary to support a modern industrial economy. In 1998, services comprised over 48 percent of GDP and employed over 4.1 million people. Among the expanding services available to businesses, both local and foreign, are consulting firms, corporate legal offices, convention and exhibition halls, and transportation companies.
Thailand’s famed tourism industry is one of the leading sources of income. Over 7.76 million tourists arrived in 1998 to enjoy Thailand’s world-renowned beaches and cultural attractions, bringing in nearly US$8 billion. Several complementary service industries sprung up to support the tourism sector, such as hotels, restaurants, handicrafts, and travel agencies, all of which contribute to one of the most reputable travel service industries in the world.

International Trade

 

Overview

Dating back to the 1400s, Thailand has been actively involved in the international economy.
In recent times, Thailand’s governments since the 1970s made a conscious decision to tie into the global economy by adopting an export-led growth strategy. Thailand’s expanding overseas market shares during the past few decades and its own liberal domestic market have fully integrated Thailand into the regional and global economies.
Fuelled by rising incomes in the 1980s, Thailand’s imports outpaced exports and led to increasingly larger trade deficits. However, since the economic crisis the demand for imports has declined and Thailand now enjoys a trade surplus. In 1998 Thailand had a positive balance of trade of US$12.1 billion. Exports for that year topped US$54.5 billion and imports stood at US$42.4 billion.
The pattern of exports has shifted greatly between 1980 and the late 1990s. In 1980 agricultural products accounted for nearly 47 percent of Thailand’s exports, with manufacturing taking up only a 32 percent share. Currently, manufactured goods comprise 82 percent of Thailand’s exports and agriculture has seen its share of exports drop to 11 percent. The US and Japan rank as Thailand’s top export markets, while in the region Singapore, Hong Kong, Malaysia, and Taiwan Province of China are the major destinations for Thai goods.Other important export markets include Germany, the United Kingdom, and the Netherlands. As for imports, Japan, the United States, Singapore, and Germany are the leading sources of goods brought into Thailand. Figure 1 indicates the pace at which Thailand’s trade with the rest of the world has expanded, with two exceptions. Thailand has registered a trade deficit every year since 1987; however, the bulk of its imports have been used in productive investment.

Figure 1. Thailands trade with the world (in million baht)


Source: Ministry of Commerce

Exports

Thailand has been extremely successful in expanding its exports, with growth rates between 14 percent and 28 percent per year from 1990 until 1998. Compared to the structure of exports in the 1970s or even the 1980s, the structure of Thailand’s exports in the 1990s has clearly diversified into a wide variety of products. Table 1 shows the breakdown of exports by sector.

Table 1. Breakdown of exports by sector, 1990-1998

Sector 1990 1992 1994 1995 1996 1997 1998 1999 (Jan-Oct)
Manufactured products 74.7 77.0 81.1 81.9 81.5 82.4 82.3 84.5
Agricultural products 16.9 15.0 11.4 11.4 11.8 10.2 9.4 8.3
Fishery products 5.5 5.9 6.0 5.1 4.5 4.0 4.0 3.6
Others 2.9 2.1 1.5 1.7 2.1 3.4 4.3 3.8
Total exports (value in billions baht) 590 825 1,138 1,406 1,412 1,807 2,248 1,795
Source: Bank of Thailand

Exports continued to be the main factor preventing the Thai economy from contracting. In 1998, export volume grew by 8.1 percent during the first half of the year. Exports which showed substantial volume increases were manufacturing exports using high technology, including electronics and automobile products, and agricultural exports, such as rice and canned fish. Nevertheless, total export value decreased by 6.8 percent, resulting from the slowdown of the world economy and financial crises in Asian countries. The value decline was caused mainly by the 13.8 percent reduction in export prices following intense price competition among Thailand’s major competitors, whose currencies also depreciated substantially, while the export volume increased at a lower rate than in the previous year.
Looking at Thailand’s major export markets, the North American Free Trade Area (NAFTA) countries, especially the United States, are the largest export market with the export share rising from 21 percent in 1997 to 24 percent in 1998 (see Table 2). This is partly due to the baht’s depreciation and Thailand’s ability to retain market share. The second largest market is the European Union (EU) with the export share rising to 17.8 percent. Japan remains Thailand’s largest single market. Meanwhile, the export value to the Asia Pacific (comprising ASEAN, GMS, China, Taiwan Province of China, Hong Kong, China, and the Republic of Korea) declined by 18.6 percent.

Table 2. Thailand’s major export markets by geographic region (billion baht)

Region Value in 1996 Value in 1997 Value in 1998 Growth 1997 Growth 1998 Share in 1997 Share in 1998
NAFTA 270.7 379.1 537.4 40% 42% 21% 24%
EU 224.9 290.4 401.4 29% 38% 16% 18%
ASEAN 1/ 296.3 380.8 396.7 29% 4% 21% 18%
Japan 237.5 270.8 308.5 14% 14% 15% 14%
NIEs 2/ 143.8 187.7 212.3 31% 13% 10% 9%
Middle East 54.7 62.3 77.5 14% 25% 3% 3%
China 47.4 55.5 72.9 17% 31% 3% 3%
GMS 3/ 41.1 51.0 66.2 24% 30% 3% 3%
Former USSR 5.4 4.9 3.6 -9% -27% 1% 1%
Eastern Europe 12.3 14.6 13.0 18% -11% 1% 1%
Others 76.9 156.2 159.3 103% 2% 8% 7%
Total 1,411.0 1,806.7 2,248.8 28% 25% 100% 100%
Source: Bank of Thailand

Notes: 1/ includes Myanmar, Vietnam, and Lao People’s Democratic Republic. 
2/ includes Taiwan Province of China, Hong Kong, China, and the Republic of Korea. 
3/ Myanmar, Vietnam, Lao People’s Democratic Republic, and Cambodia, excluding Yunnan. Figures may not sum due to rounding.

Imports

Generally, imports are examined by looking at the economic purpose and the major import products. In terms of purpose of imported goods, it is clear that more than three-quarters of Thai imports are capital goods, intermediate products, and raw materials. These types of goods and materials are used in expanding industrial capacity and supply inputs into many of Thailand’s export industries. Table 3 organizes imports according to economic classification, with growth rates for 1996 to 1998.

Table 3. Thailand’s imports by economic classification (billion baht)

Economic classification 1996 1997 1998 (%) Increase 1997 (%) Increase 1998
Capital Goods 832.2 925.8 886.5 11% -4%
Machinery and parts 459.2 474.1 411.4 3% -13%
Metal manufactures 54.4 62.5 85.8 15% 37%
Fertilisers and pesticides 22.6 22.0 23.2 -3% 5%
Scientific and optical instruments 47.9 51.6 46.8 8% -9%
Construction materials 0.6 0.4 0.3 -32% -35%
Other 247.5 315.2 319.0 27% 1%
Intermediate products and raw materials 530.1 552.5 535.8 4% -3%
Chiefly for consumer goods 334.6 349.3 370.2 4% 6%
Chiefly for capital goods 195.5 203.2 165.6 4% -19%
Consumer Goods 151.1 160.7 154.5 6% -4%
Non-durable goods 51.8 58.6 56.0 13% -3%
Durable goods 99.3 102.1 98.5 3% -4%
Fuels and lubricants 160.6 178.3 142.1 11% -20%
Vehicles and parts 123.3 67.3 18.9 -45% -72%
Other imports 35.6 39.6 36.2 11% -9%
Total 1,832.8 1,924.3 1,774.1 5% -8%
Source: Bank of Thailand

Note: Figures may not sum due to rounding.
The value of imports in 1998 was 1,774.1 billion baht, an eight percent decline from the previous year when the financial crisis hit Thailand. Nearly one-quarters of Thai imports originated in Japan (see Table 4). This reflects Japan’s high level of investment in Thailand.
The NAFTA, the ASEAN, and EU member countries are other major source countries.

Table 4. Thailand’s major import suppliers by geographic region (billion baht)

Region Value ’96 Value ‘97 Value ‘98 Growth ‘97 Growth ‘98 Share ‘97 Share ‘98
Japan 518.1 492.1 420.3 -5% -15% 25% 24%
NAFTA 246.7 286.3 265.7 16% -7% 15% 15%
ASEAN 1/ 243.3 245.4 265.6 1% 8% 13% 15%
EU 276.1 268.5 221.8 -3% -17% 14% 12%
Others 548.6 632.0 600.7 15% -5% 33% 34%
Total 1,832.8 1,924.3 1,774.1 5% -8% 100% 100%
Source: Bank of Thailand

Notes: 1/ includes Myanmar, Vietnam, and Lao People’s Democratic Republic. Figures may not sum due to rounding.

Thailand’s trade figures by selected regions and countries

This section contains a series of charts demonstrating Thailand's trade figures over the past few years with selected regions and countries. The charts show Thailand's imports and exports with the United States, Japan, ASEAN, the EU, China, and the GMS.

Figure 2. Trade between Thailand and the United States (in million baht)


Source: Ministry of Commerce


Figure 3. Trade between Thailand and Japan (in million baht)


Source: Ministry of Commerce


Figure 4. Trade between Thailand and ASEAN (in million baht)


Source: Ministry of Commerce


Figure 5. Trade between Thailand and the European Union (in million baht)


Source: Ministry of Commerce


Figure 6. Trade between Thailand and China (in million baht)


Source: Ministry of Commerce


Figure 7. Trade between Thailand and the GMS (in million baht)


Source: Ministry of Commerce

Thailand’s major exports to the GMS countries include basic industrial goods and raw materials, and agro-processing products (see Table 5). Meanwhile, Thailand imports light consumer goods, raw materials, and agricultural commodities from those countries.

Table 5. Thailand’s leading exports and imports with the GMS (in million baht)

Exports to GMS Value in 1997 Value in 1998 Imports from GMS Value in 1997 Value in 1998
Motor vehicles and parts 5,375.8 10,051.7 Electrical machines and parts 4,160.4 7,306.5
Polymers in primary forms 2,125.4 3,402.0 Wood 2,981.9 1,978.8
Refine fuels 3,570.0 3,312.6 Wooden products 346.4 261.9
Chemical products 2,283.3 3,272.6 Raw hide and leather 205.3 254.6
Iron or steel products 2,007.8 2,860.6 Jewellery including silver bars and gold 114.6 224.6
Cement 1,725.3 2,183.6 Metal manufactures 14.6 193.8
Machinery and parts 1,243.6 1,923.7 Shrimps and prawns 118.3 183.3
Woven fabrics 1,453.0 1,814.3 Fish and crustaceans 148.7 171.7
Rubber products 1,283.5 1,751.4 Crude oil 253.0 166.0
Beverages 1,215.7 1,086.5 Textile fibres 61.0 146.2
Source: Ministry of Commerce

Investment

 

Foreign investment in Thailand

For many years now Thailand has capitalized on the large amounts of foreign direct investment (FDI) that have flowed across borders throughout the world. The combination of its favorable investment climate, resources, and labour force has attracted foreign investors from all over the world. Net foreign direct investment soared in 1988, when it multiplied three-fold over the previous year, and then doubled in 1990 to US$2.5 billion. FDI in Thailand continues to grow despite the economic crisis. For 1998, Thailand’s net FDI amounted to US$5 billion (US$6.9 billion if the financial institutions are included) compared to US$3.7 billion in 1997. In 1999, net FDI slowed a little to US$3.6 billion (see Figure1).

Figure 1. Net foreign direct investment (US$ million)


Source: Bank of Thailand

Note: Figure for 1999 is preliminary
The main sources of FDI are Japan, the United States, Singapore, and Hong Kong, China, which accounted for approximately 70 percent of Thailand’s total FDI in 1998 (see Table10). In recent years the sectors attracting the most foreign investment are chemicals and paper, minerals and ceramics, electronics, trade and services, automobiles, agro-industries, and machinery (see Table 1). The large-scale manufacturing projects are stimulating investment in various support industries, such as parts and component manufacturers for the auto industry and electronics.

Table 1. Net flows of foreign direct investment in Thailand, by major countries, 1990-1999 (in million US$)

Country 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 (Jan-Oct)
Japan 1,117 624 343 305 123 556 523 1,351 1,528 778
USA 246 237 472 286 155 260 429 824 913 749
UK 45 10 129 161 44 55 57 118 134 230
Hong Kong 281 463 582 193 318 279 215 472 460 420
Singapore 245 259 269 61 184 136 275 314 530 1,151
Sources: Bank of Thailand and Board of Investment

Table 2. Foreign direct investment by sector, 1998-1999

Sector 1998 1999 (Jan-Oct)
US$ million % share US$ million % share
Financial institutions 2,618 37.5 2,165 45
Trade 849 12 868 18
Construction 146 2 -125 -2.6
Mining and quarrying 64 1 -51 -1.1
Agriculture 0 0 2 0
Industry 2,054 29 1,275 26.5
Services 295 4 452 9.4
Investment 314 5 n.a. n.a.
Real estate 493 7 88 1.8
Other businesses 135 2 134 2.8
Source: Bank of Thailand

Thailand’s outward investment flows

Prior to 1993, Thai outward flows were lower than US$200 million. Thailand’s outward investment began to surge from that time and reached a peak in 1996. Even in 1996, the outward flows started to increase slightly. In 1997, Thai outward investment dropped suddenly, primarily due to the drastic slowdown in economic activity and liquidity problems faced by the private sector (see Figure 2).

Figure 2. Thailands outward investment flows, 1988-1997 (US$ million)


Source: Bank of Thailand

Major destinations for outward investment include the ASEAN countries, the GMS, and China. These investments were channelled mostly into the manufacturing industry and services sector (see Table 3).

Table 3. Thailand’s outward investment by sector, 1990-1997 (US$ million)

Sector 1990 1991 1992 1993 1994 1995 1996 1997
Trade 2.7 9.7 13.8 10.1 23.7 27.9 26.1 92.4
Manufacturing 119.9 66.5 49.4 90.3 138.9 190.3 304.3 185.9
Financial Institutions 9.9 23.7 17.2 14.0 30.3 34.5 27.3 19.0
Services 0.8 28.1 12.9 87.1 85.6 294.3 232.8 118.3
Other 2.4 46.6 43.1 87.5 101.4 229.1 199.8 155.4
Source: Bank of Thailand
 

Thailand's investment figures with selected regions and countries

This section contains a series of charts showing Thailand's investment figures with selected regions and countries. Like in the section on trade, the charts cover Thailand's investment with the United States, Japan, ASEAN, the EU, China, and the GMS.

Figure 3: BOI-approved US investment in Thailand, projects and investment value,


Source: Board of Investment

The US receives the large portion of overseas Thai investment funds. Thai business people have invested over 100 million US$ in the US in 1997. This is equivalent to approximately 18 percent of total Thai overseas direct investments.

Figure 4. Thailands investment in the United States (US$ million)


Source: Bank of Thailand

Figure 5. BOI-approved Japanese investment in Thailand, projects and investment


Source: Board of Investment

Figure 6. Foreign direct investment from ASEAN countries, 1990-1998 (million baht)


Source: Board of Investment

Figure 7. Thailands investment in ASEAN countries (US$ million)


Source: Bank of Thailand

Figure 8. Investment flows between Thailand and the EU, 1990-1997 (US$ million)


Source: Bank of Thailand

Figure 9. Thailands investment in China (US$ million)


Source: Bank of Thailand
Thailand had been an active investor in the neighbouring countries of the GMS. As Figur 19 indicates, significant outflows began only after 1992, with total outward flows roughly doubling in 1995, and again in 1996. Nevertheless, the economic downturn has virtually stopped Thai overseas investment, including in the GMS countries.

Figure 10. Thailands outward investment in GMS (US$ million)


Source: Bank of Thailand

Lao People’s Democratic Republic: From January 1988 to early 1998, Lao officials reported that 36 countries had invested nearly US$7 billion in the country, with Thailand ranked first (38 percent of total investment, US$2,657 million). Thai business people are investing in the hotel and tourism industries, processing industry and handicrafts, banking and insurance, and telecommunication and transportation.
Myanmar: As of December 1997, Thailand ranked third in terms of the amount of capital investment in Myanmar (US$1,165 million). Thai investors have put money into hotels, fishery products, transportation, and agriculture in addition to industry projects.
Cambodia: In 1997, Thailand had a capital investment in Cambodia of US$21 million. The main industries attracting Thai investment include wood production, restaurants and hotels and tourism.
Vietnam: In 1997, Thai companies had invested approximately US$53 million in Vietnam.
The main areas of Thai investment include agro-businesses such as agricultural production, feed production, as well as industrial production of ready-to-wear clothes, jewellery, mining, and the hotel and tourism services industries.

Currency

One of the harshest impacts of the economic crisis has been the sharp drop in the value of the Thai the baht. After remaining pegged to the US dollar for a number of years at 25 baht to US$1, pressure on the baht led to the government implementing a managed float of the currency, which precipitated a huge depreciation of the baht. The baht bottomed out in early 1998 at around 56 baht to US$1 before gradually recovering. Figure 20 shows the exchange rate for the baht for selected months between January 1999 and December 2000.

Figure 1. Exchange rate (number of baht per US$1)


Source: Bank of Thailand

National Economic Policies and Priorities

In 1959 the Thai Government established the National Economic Development Board (NEDB), but its name was changed to the National Economic and Social Development Board (NESDB) in 1972 to emphasise the significant role of social development in the country’s development process. NESDB is the central planning agency, responsible for drawing up the National Development Plans, along with undertaking continuous studies on the social and economic situation of the country.
To date, NESDB has formulated eight Development Plans, with the Eighth Plan (1997-2001) in its final year.
In March 1996, the Cabinet approved the final draft of the Eighth Plan which is more directly focused on increasing the potential of human resources across the board to improve conditions and alternatives, increasing participation in the sustainable development of the country, strengthening economic capability and efficiency, and identifying guidelines for improving the state’s administrative management.

The key objectives laid out in the Eighth Plan were the following:
• Increase the people’s potential in terms of physical well-being, intellect, health, vocational skills, and ability to adapt to changes in the economy, society, and political administration.
• Develop a stable society, strengthen family and community, support human development, increase quality of life, and increase community participation in national development.
• Achieve balanced economic growth with greater stability and open up opportunities for people to participate in fostering and receiving a fair share of the benefits of growth.
• Utilize, preserve, and rehabilitate the natural resources and environment so that they can advance economic and social development and quality of life.
• Reform the administrative system in order to increase the opportunity for nongovernmental organizations, the private sector, community, and individuals to participate in national development. Number of baht per US$1 Due to the changing economy and current needs of the country since the economic crisis in 1997, it was required to revise the Eighth National Plan. On September 9, 1997, the Cabinet approved a proposal submitted by the NESDB, recommending a revision of the Eighth Plan according to the following guidelines:
• Maintain the Eighth Plan’s objective to develop human resource to full potential in order to achieve sustainable development.
• Revise macro-economic target, taking into account the current economic situation and the agreement between the Thai government and the IMF.
• Revise the investment plan.
• Set up criteria to scale down and re-phase public investment projects.
• Revise the economic structural adjustment part of the Eighth Plan to accommodate the IMF agreement and the structural adjustment loans from the World Bank and the Asian Development Bank.

According to the above guidelines, the main objective to increase people’s potential remains unchanged. The committee took into account the agreement between the Thai government and the IMF; the new Constitution; free trade and investment agreements; and economic cooperation at various levels. The revision mainly focused on a) economic and financial stability leading to confidence in the country; b) economic restructuring for self-sufficient production bases to be competitive in world markets; c) ease the adverse economic and social effects of the crisis; and d) give more importance to the poor and under-privileged groups.
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