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Country profile - Thailand

thailand

On the 19th September 2006 while Prime Minister Thaksin Shinawatra was at the UN General Assembly, political uncertainty in Thailand culminated in a military coup. The country's economy had been performing well, with export-oriented manufacturing such as automobile production driving growth. There have been concerns, however, that intense industrial production could negatively affect the country's agricultural sector and the environment. And while the country has recovered well from the devastation of the 2004 tsunami, interest rates and oil prices are rising. It is too early to tell whether recent political events in Thailand will have an impact on other South-East Asian economies, but the Asian Development Bank has recently decreased Thailand's growth forecast for 2006 and 2007 to a level below that of regional rivals. Despite the recent strength of Thailand's industrial economy, which has made an impressive recovery following the South-East Asian financial crisis of 1997, the rural economy is weak. Agriculture remains the leading source of income for the rural poor but generates roughly 10 per cent of the national GDP. Tourism contributes a further six per cent. Drawn to its tropical beaches and the relentless vivacity of its capital city Bangkok, Thailand attracts more visitors each year than any other country in the region.

Rubber, palms and coconuts

Agriculture remains the leading source of income for the rural poor but generates only 10 per cent of the national GDP
Agriculture remains the leading source of income for the rural poor but generates only 10 per cent of the national GDP

Thailand is the world's largest producer and exporter of natural rubber, accounting for roughly one third of the world's production. In the south of the country, rubber is the main cash crop for small-scale farmers, but is not an easy source of income, even though prices paid for rubber are high. Rubber trees take up to six years to reach the stage where they can be tapped, and have to be replanted every 20 to 30 years. In addition, most of the costs involved in production are in the preparation and planting, so farmers often need to borrow money. However, rubber can be intercropped with banana plants, coconut trees, hot pepper, bamboo or neem, in order to generate more income sooner. Despite the advantages of rubber production, farmers in the south of the country have been encouraged to produce palm oil, which accounts for between 60 to 70 per cent of the country's cooking oil consumption. With its potential to produce biofuel, and as the prices of biofuels soar, domestic production of palm oil this year is expected to increase by one third. The Ministry of Energy has emphasised the need to diversify the country's biofuel portfolio, so the production of alternatives such as Jatropha, tallow and coconuts is also likely to be encouraged. Coconuts are a diverse crop, they are important to small-scale farmers and have a cherished place in Thai culture. The green and fibrous outer layer is used as a fuel, as a stuffing for mattresses and to make thatch. Coconut milk, known as nam kofee, is a key ingredient in Thai cuisine, where it is combined with distinct flavours of hot chilli, lime and sugar. Thailand's second largest island, Koh Samui, exports over 2 million coconuts each month to Bangkok, where most of the fruit is pressed into sweet oil. 'Samui' means coconut, and the crop is the island's main cash crop. In addition to these tree crops, Thailand is also one of the region's leading net exporters of high value fruit and vegetables.

Rice

Thailand's fertile plains have made it a leading international exporter of rice
Thailand's fertile plains have made it a leading international exporter of rice

Thailand's fertile plains have made it a leading international exporter of rice, including higher value varieties such as black glutinous and jasmine rice. The crop is the country's staple food and an important income earner for the rural poor. But while production has doubled in the past four decades, further increases are constrained by urban development and poor water management. Flooding and drought both cause significant crop loss, with droughts exacerbated by high urban and industrial demand in some areas. Newly developed submergence-resistant rice varieties, developed by the International Rice Research Institute in the Philippines, could provide a solution to the losses caused by monsoon flooding. (See Flood proof rice getting closer)

Tides of change

Fisheries range from small-scale family owned businesses, to large commercial operations. It is estimated that 30 per cent of fish caught are of low value, fed directly to fish farms or used to make fish meal and oil for livestock. The country's coastal fisheries suffer from poor management, with declining stocks further affected by the 2004 tsunami. As well as claiming 8,500 lives, the tsunami caused massive physical damage, destroying coastal mangroves and the livelihoods of many fishing communities. However, as the biggest producer of canned tuna in the world, Thailand imports around 700,000 tonnes of tuna each year to be canned and exported globally. Thai agriculture has many challenges ahead. The former agriculture Minister has warned that management of the farming sector must be improved, pointing out that while prices for key commodities such as rice, sugar and rubber have soared in recent years, Thai farmers remain in debt. Avian flu is another challenge, and has already had a serious impact on the farming economy. The world's biggest poultry exporter until 2004, outbreaks of the virus have badly hurt Thailand's poultry industry, and at the time of writing sixteen human deaths had been reported to the World Health Organisation. Newly sworn in interim prime minister Surayud Chalanont, has indicated his intention to tackle political divisions and bring an end to an Islamic insurgency in the south of the country. With a reputation for being incorruptible, Chalanont is regarded as an appropriate choice by most Thais, although less so perhaps by the poor, who favoured his predecessor's policies on cheap medical care and debt relief. Celebrating this year the 60th anniversary of King Bhumibol Adulyadej's accession to the throne, Thailand must now hope that its recent coup will lead to greater political stability and renewed economic growth.

Statistical information
  • Country: Thailand
  • Capital: Bangkok
  • Area: 514,000 sq. km
  • Population: 64,631,595 (July 2006 est.)
  • Population growth rate: -0.68% (2006 est.)
  • Life expectancy: 72.25 years
  • Ethnic groups: Thai (75%), Chinese (14%), Other (11%)
  • Languages: Thai, English, ethnic and regional dialects
  • Inflation: 4.5% (2005)
  • GDP: purchasing power parity $560.7 billion (2005 est.)
  • GDP: per capita: $8,300 (2005 est.)
  • GDP composition by sector: Agriculture 9.9%, Industry 44.1%, Services 46% (2002 est.)
  • Land use: arable land: 27.54%, permanent crops: 6.93%, other: 65.53% (2005 est.)
  • Major industries: tourism, textiles and garments, agricultural processing, beverages, tobacco, cement, light manufacturing, computer hardware, furniture, plastics, automobiles and automotive parts; tungsten, tin
  • Agricultural products: rice, cassava, rubber, maize, sugarcane, coconuts, soybeans, palm oil, horticulture
  • Natural resources: tin, rubber, natural gas, tungsten, tantalum, timber, lead, fish, gypsum, lignite, fluorite, arable land
  • Export commodities: textiles and footwear, fishery products, rice, rubber, jewellery, automobiles, computers and electrical appliances
  • Export partners: US 15.5%, Japan 13.7%, China 8.3%, Singapore 6.8%, Hong Kong 5.6%, Malaysia 5.2% (2005)

Date published: November 2006

 

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