Economy

Meanwhile, as the fastest developing of Asia's "tiger" economies beyond China, Thailand shouts business opportunities at every turn. As always in Thailand, however, surface appearances can be deceptive. Try scratching the veneer of a Bangkok or a Thai Urbanite and you will find that not far below lies the same elemental strands of a country dweller. Therefore accessing Thailand's pots of potential profitability demands caution, stealth, and a rough understanding of a labyrinthine bureaucracy and internecine web of national complexities. Above all it requires patience, not just of a people who cannot be hurried but also of ingrained customs procedures, which doggedly refuses to budge for the onset of the 21st Century.

After months of speculative pressure on the Thai baht, the government decided to float the currency in July 1997, the symbolic beginning of the country's current economic crisis. The crisis—which began in the country's financial sector—has spread throughout the economy. After years of rapid economic growth averaging 9% earlier this decade, the Thai economy contracted 0.4% in 1997 and shrunk another 8.5% in 1998. In the years before the crisis, Thailand ran persistent current account deficits. With the depreciation of the Thai baht and the collapse of domestic demand, however, imports have fallen off sharply—by more than 33%—and Thailand posted a trade surplus of approximately $12 billion in 1998. Foreign investment for new projects, the long-time catalyst of Thailand's economic growth, has also slowed. The CHUAN government has closely adhered to the economic recovery program prescribed by the IMF. The cooperation afforded Thailand stability in the value of its currency in the second half of 1998 and helped replenish foreign reserves. Tough measures—including passage of adequate bankruptcy and foreclosure legislation as well as privatization of state-owned companies and recapitalization of the financial sector—remain undone. Bangkok is also trying to establish a social safety net for those displaced by the current economic crisis and is working to increase the quality of Thailand's labor force.

With an average growth rate of 8.5% for the past several years, Thailand has been touted as the next nation to join that exclusive club of the Newly Industrializing Countries (NIC). Since the 1950s, Thailand has seen the rapid extension of the industrial and service sectors, and the relative decline of agriculture. Today, agriculture contributes just over 15% of the country's GDP, while manufacturing alone contributes over one-quarter of the GDP. Rice, the main export for hundreds of years is today exceeded in value terms by textiles, electronics, and tourism.

Although the economy has diversified significantly, most Thais are still linked to the agricultural sector. The slow growth in this sector compared with the industrial sector means that there is now a wider economic gap between urban and rural folks.

This discrepancy has lead to massive migration of the population from the countryside to the towns and cities, especially Bangkok. Social and economic changes has been even more pronounced in urban Thailand. Here, new activities and culture forms have displaced tradition.