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Thailand - General Overview

 

Geography and Climate

Thailand covers a total land area of 513,115 square kilometers. It shares boundaries with Myanmar on the west and northwest frontiers, the Lao People's Democratic Republic on the east and northeast, Cambodia on the southeast, and Malaysia to the south. The Gulf of Thailand is located south of Bangkok and east of the southern peninsula, and the Andaman Sea lies to the southwest. Its total coastline is approximately 2,700 kilometers.
Thailand is divided into four natural regions: North, Central Plains, or Chao Phraya River Basin, Northeast, or the Korat Plateau and the South, or Southern Peninsula. The North is a mountainous region comprised of natural forest, ridges, and deep, narrow alluvial valleys. The Northeast region is an arid region characterized by a rolling surface and undulating hills.
Central Thailand is a lush, fertile valley--the richest and most extensive rice-producing area in the country. The southern region is hilly, thick in forests, and rich deposits of minerals and iron ores. This region is the centre for the production of rubber and the cultivation of other topical crops.
Thailand lies within the humid tropics and remains hot throughout the year. Average temperatures are about 29oC, ranging in Bangkok from 35oC in April to 17oC in December.
There are three seasons: the cool season (November to February), the hot season (April to May), and the rainy season (June to October), though downpours rarely last more than a couple of hours.

History

Formerly known as Siam, Thailand means "land of the free," and throughout its 800-year history, Thailand can boast the distinction of being the only country in South-East Asia never to have been colonized. Early in its history, the territory of what is modern-day Thailand was strongly influenced by the ancient Indian civilization, which laid the ground for kingship, art, administration, and language that lasted several centuries. The great Khmer civilization of the 7th through 13th centuries also had a strong influence on the early states of Thailand and controlled virtually all of what is now Thailand.
The first Thai state, Nan Chao, was established in 650 A.D. and lasted until 1250. Located in southern China, a great number of people from Nan Chao migrated south as far as the Chao Phraya Basin and settled down over the Central Plains under the sovereignty of the Khmer Empire, whose culture they probably accepted.
The Thai people eventually founded their independent state of Sukhothai around 1238.
Sukhothai, considered the golden era of Thai history, religion, and culture, lasted until 1378, when it was annexed by the Ayutthaya Kingdom.
Ayutthaya flourished from 1350 until 1767. An invasion from a Burmese kingdom destroyed Ayutthaya and forced the Thais to settle in the area of present day Bangkok.
Thailand traces its modern history to 1782, when Chao Phraya Chakri became the first king of the Chakri Dynasty. Since that time, nine kings have succeeded the thrown. The most famous of these is King Chulalongkorn, also known as Rama V (1869-1910), who is credited with the modernization of Thailand (then known as Siam) and for his skill in retaining Siam's freedom when all around him countries were succumbing to European colonialism.
During the reign of King Prajadhipok, Rama VII (1925-1935), Siam changed from an absolute monarchy to a constitutional monarchy. The country's name was changed from Siam to Thailand with the advent of a democratic government in 1939.
The present monarch, King Bhumibol Adulyadej, is King Rama IX of the Chakri Dynasty and is currently the world's longest reigning monarch (since 1946).

Population

Thailand has a population of about 60 million people. Ethnic Thais form the majority, though the area has historically been a migratory crossroads, and thus strains of Mon, Khmer, Myanmar, Lao, Malay, Indian and most strongly, Chinese stock produce a degree of ethnic diversity. However, the highly successful integration of most ethnic groups over the centuries has created a generally unified population. Thailand also has about 10-20 hilltribes, depending on how they are categorized. The hilltribe population is estimated at 550,000. The hilltribes live primarily in the mountainous regions of the northern part of Thailand, and several of them still retain semi-nomadic lifestyles.

Language and Culture

The official national language is Thai. Unlike Western languages, Thai is tonal, meaning that the pitch given to a particular syllable determines its meaning. With five tones, the same syllable can be spoken in five different ways, all of which have a different meaning. Most polysyllabic words in the vocabulary have been borrowed, mainly from Khmer, Pali and Sanskrit. Dialects are spoken in rural areas, with the most well-known being Isan, which is a form of Lao in the northeast region. Other languages are Chinese and Malay, along with the various hilltribe languages. English, a compulsory subject in public schools, is widely spoken and understood, particularly in Bangkok and other major cities.
Buddhism, the national religion, is the professed faith of 85-90 percent of the population. Islam, Christianity, Hinduism, and other creeds comprise the remaining percentage.
The urbanized areas of Thailand have infused several aspects of modern Western culture into traditional Thai culture. The more rural areas and mountainous areas still retain much of their traditional culture, including music, dance, and rural lifestyle.

Economy

Between the mid-1980s and 1995 Thailand set the standard for economic development with its record-breaking growth rates. With annual growth in that period averaging over eight percent, Thailand appeared to have perfected the formula for industrialization. Thailand served as a model for other developing countries because of its success and due to the fact that its achievements were essentially led by the private sector, which is a sharp contrast from the heavily state-guided models of the Republic of Korea, Japan, Taiwan Province of China, and Singapore.
However, after these years of rapid economic growth and industrialization, Thailand’s runaway economy came to an abrupt halt in mid-1997, with the onset of what developed into the Asian economic crisis. Years of high annual growth rates, at times exceeding 10 per cent, gave way to a severe recession that saw Thailand experience declining growth in 1997 of one percent and a contraction of 10.2 percent in 1998. While not alone in suffering from a major reversal, Thailand has been forced to confront the structural deficiencies that underlie its economy and political system. Many of the factors that enabled it to achieve unprecedented growth rates and achievements also sowed the seeds for the rapid decline.
Signs of an economic slowdown appeared in 1996, when Thailand’s exports declined 1.9 percent, its current account deficit rose to eight percent of GDP, and the country’s foreign debt amounted to US$90.5 billion. Of this US$90.5 billion, nearly $74 billion was private sector debt. By 1997 the economy began to unravel. The stock market continued its plunge from over 1,200 points in mid-1996 to 370 at the end of 1997 and as low as 253 by the third quarter of 1998. The Thai currency, the baht, faced increasing pressure as speculators began to attack what had become a vulnerable and over-valued currency, forcing the Bank of Thailand (BOT) to expend billions of dollars in foreign reserves defending its pegged value of 25 baht to a basket of currencies dominated by the US dollar.
With foreign reserves nearly depleted at US$800 million, the Thai government decided on July 2, 1997 to float the value of the baht. Thailand’s currency immediately depreciated, which in turn opened up a Pandora’s Box of other problems, including triggering a regional currency crisis. The baht began a downward spiral, made worse by the eventual depreciation of other currencies in the region, and hit an all-time low of 56.2 to the US dollar in January 1998.
The heavily indebted private sector could no longer afford to repay short-term debt to foreign institutions and domestic lending institutions, thereby setting off a financial and banking crisis in Thailand. The early stages of the crisis exposed the irregular practices of Thailand’s financial and banking institutions and the inadequate regulatory framework and supervision by the government. The end result was the closure of 56 finance firms by the end of 1997 and the nationalization of six commercial banks in 1998.
Other sectors of the economy, such as manufacturing and agriculture, also faced severe setbacks as they were confronted with falling world prices, fierce export competition from other crisis-struck countries, low domestic demand, tight liquidity, and high interest rates.
There were various causes of the crisis, and all of them were complex and highly interrelated, but at the core of Thailand’s problems was the one factor that led to the country’s exceptional growth: financial liberalisation. When Thailand liberalised its financial structure in the 1980s, huge sums of foreign capital flowed into the country, but the eventual problem was that this capital in-flow was unchecked and poorly managed, both on the part of the public and private sectors. The more specific causes of the crisis can be categorised as excessive investment in high-risk sectors; over-borrowing and over-lending; an unsound financial sector, including the regulatory framework; higher wages without a corresponding climb in the value chain, and a rigid pegged exchange rate of the Thai baht.
The Thai government recognised the challenge of regaining macroeconomic stability in mid- 1997, and so it reached an agreement for a US$17.2 billion assistance package with the International Monetary Fund (IMF) on August 20 of that year. Thailand’s policy makers committed to a set of comprehensive measures to rehabilitate and restructure the economy.
The reform package was prepared with assistance from the IMF, the World Bank, and the Asian Development Bank.
The Thai government willingly accepted the conditions of the IMF assistance package, including the economic and political reforms required under the loan. The original terms of the deal in August 1997 called for the Thai government to reduce its current account deficit, raise taxes, reduce government spending to produce a budget surplus of one per cent of GDP in 1998, privatize selected state enterprises, and reform various components of the economic and political sectors.
The comprehensive rehabilitation plan encompassed five main areas: financial sector reform; monetary and fiscal policies; bureaucratic reforms and privatisation; industrial and agriculture restructuring; and social and environmental agendas.
While Thailand has not fully emerged from the economic crisis and its causes, the reform process is clearly paying dividends. Exports and foreign investment are rising, the growth rate appears to have achieved the forecasted 4.5 percent for 2000, and the non-performing loans are gradually lowering. Clearly Thailand's continued recovery is a function of the health of the regional and global economies, but there is also widespread recognition that Thailand needs to get its house in order to achieve sustainable development.

Government

Thailand is a constitutional monarchy with a parliamentary system of government. In December 1932, King Prajadhipok signed Thailand's first constitution and thus ended 800 years of Thailand’s absolute monarchy. Despite the number of successive constitutions that followed in the span of just over half a century, the basic concepts of constitutional government and monarchy laid down in the original 1932 constitution have remained unaltered. The king, currently King Bhumibol Adulyadej, is the Head of State, and the Prime Minister is the Head of Government. The king's role is not to handle day to day administration, but rather serve the people in other capacities, including signing bills into law and being the head patron of Buddhism.
From the 1930s until as recently as 1991, Thailand has experienced numerous coups d'etat. The military controlled the government for much of the 20th century, and were last in power in 1992. However, democratic regimes frequently alternated with military-controlled governments.
The 1997 Constitution, Thailand's 16th since 1932, made modifications to the political system, but most noteworthy are its more democratic aspects and making government more transparent and accountable to the people. Thailand still retains a bicameral legislature, known as the National Assembly, which consists of the House of Representatives and the Senate. Unlike previous constitutions, the 1997 Constitution requires that the Senate be directly elected by the people. The Cabinet is the executive branch of the government, led by the Prime Minister, who is formally appointed by the King upon nomination by the House of Representatives.
The most recent elections occurred in 2000 for the Senate and January 2001 for the House of Representatives.
The new constitution and subsequent legislation have also revamped the judicial system, making it more independent and less influenced by politics.
Thailand has 14 ministries, including the Office of the Prime Minister. The 76 provinces are subdivided into several levels that have corresponding governmental authorities.

Resources

Thailand is fortunate to have bountiful resources, both in terms of natural resources and human resources. Spanning over 513,000 square kilometers, 40 percent of Thailand is devoted to farmland. Many parts of the country have excellent soil for agriculture, and the climate allows a variety of crops to be grown. The most fertile soils are found in the central region, which serves as the “rice bowl” of the country. Like most industrializing countries, forest coverage is declining in Thailand. However, approximately 23 percent of the country is still covered by forests, and several pieces of environmental legislation passed in the early 1990s aim at maintaining a proper percentage of forest-covered land.
The southern region contains rich deposits of minerals and ore. Over 30 different minerals lie beneath the soil, including tin, gypsum, lignite, and fluorite. Minerals often rank in the top five foreign exchange earners for Thailand, yet there is enormous potential for more growth. Only 0.3 percent of Thailand’s total land area has been assigned for mineral concessions, meaning that there are likely plenty of untapped sources. Gems are also plentiful in Thailand and have enabled a domestic jewellery industry to flourish.
Thailand has only recently begun to tap its carbon-based resources, particularly natural gas in the Gulf of Thailand. Over 8,463 billion cubic feet of natural gas are estimated to lie beneath the Gulf, along with hundreds of millions of barrels worth of crude oil. Despite a growing domestic petroleum industry, Thailand imports approximately 75 percent of its petroleum products. The government aims to reduce the country’s foreign dependence on energy imports to less than 50 percent in the next few years.
Thailand is fortunate to have extensive maritime resources to provide a well-balanced natural resource base. The oceans surrounding Thailand contain vast stocks of aquatic life. As a result, the Thai fishing industry is one of the world’s leading producers and exporters of shrimp, tuna, squid, and other seafood.
Human resources are equally impressive with a labour force of approximately 33 million. Thailand’s literacy rate of 93 percent is one of the highest in the region. Its well-educated population possesses the capacity to engage in sophisticated industries and can adapt quickly to the latest technology. Enrolment in education in the kingdom is nearly universal, and the secondary level and higher education systems are continually expanding. The 1999 National Education Bill ensures the rights of all citizens to receive free basic education from the state for at least 12 years.
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