Video #11 - Thai Economy/Privatization
Monday, January 09, 2006BACKGROUND INFORMATION
The Songkran water-splashing festival-the traditional Thai lunar new year which falls between April 12 to 16- is the country's most ceremonious and most fun-filled annual celebration. Thailand becomes a sea of joy, with people across the nation splashing water at each other. To mark this year's Songkran as a historical event, the government allocated US $700,000 to spend on a giddy spectrum of events around the country, including water-splashing, parades, concerts, traditional operas, dances, light-and-sound shows, beauty contests, open-air movies, an elephant procession and a world's longest motorcycle march of over 300 kilometers.
"Despite unfavorable external conditions, Thailand maintained a 1.8 percent economic growth last year, and the growth rate will accelerate to over 3 percent this year. This deserves a grand celebration for all the Thais," said Minister of the Prime Minister's Office Somsak Thepsutin, overseer of the Songkran celebration activities. Analysts said the robust economic recovery this year has effectively boosted the revenue of the country's "holiday economy," with tourist arrivals expected to reach 1.6 million during this year's Songkran period, up 5 percent from that of 2001.
Furthermore, a recent survey among some 600 foreign investors found the country ranks first among all Southeast Asian nations in terms of investment promotion and in "friendliness to foreigners". Thailand also got good marks in the areas of raw material supply, political stability, the market potential and infrastructure. According to the Board of Investment (BOI), Thailand's foreign direct investment in the first quarter this year was 40 percent above the previous year's levels, to reach 830 million dollars.
Adding to the bright picture is a prospective free trade agreement between Thailand and Australia. A study commissioned by both governments found that Thailand's economy would benefit significantly more than Australia's under such an agreement, with Australia's Gross Domestic Product standing to increase by $12 billion over 20 years, while Thailand's GDP would grow by $46 billion over the same period.
Lower tariffs in agriculture would increase market access for Australian exporters while Thai exporters would have entree to Australia's higher-spending food consumers. In the auto sector, the study found that "the complementary nature of the two vehicle industries (with Thailand focusing on small cars and light commercial vehicles and Australia on larger cars) would lead to significant economies of scale." Component manufacturers, clothing wholesalers and retailers, education and tourism, banking and professional services firms were all named in the study as possible areas of cooperation between the two nations.
In another sign of Thai recovery, an AP Worldstream report said that the government was planning a 30 billion baht ($680 million) fund to boost demand in the sluggish Thai stock market. Finance Minister Somkid Jatusripitak said the first part of the capital for the new Thailand Opportunity Fund would come from the Government Pension Fund, the state-run Krung Thai Bank and the Stock Exchange of Thailand. This measure was targeted to double investors in the market to 400,000 by the end of the year. The new fund would invest in undervalued, quality stocks on the Stock Exchange of Thailand over the next five years, according to Visit Tantisunthorn, the secretary-general of the Government Pension Fund.
Additionally, the Thai government has promoted a high-profile economic program to help poor villages, starting with an exhibition to showcase handicrafts such as brass bowls, cotton tablecloths, hand-woven silk fabric, wooden statues of Buddha and rattan baskets among some 159 products. The initiative, called the "One Tambon (village), One Product" program got underway in October 2001, in the first year of Thai Prime Minister Thaksin Shinawatra's government.
Finally, the Thai economy is being helped by the auto industry. Ford/Mazda and General Motors built assembly plants in Thailand in 1996 to manufacture trucks and minivans aimed largely at export markets. In 2001, almost two in three of all domestic vehicle sales were 1-ton pickups, making Thailand the largest market for these trucks outside the United States. Economies of scale, a willing and trainable work force and reasonable costs have made Thailand attractive to the automakers. James Marshall, research director of independent investment banking group Finansa, says the auto industry is one of the few in which Thailand has a competitive advantage.
All things considered, the outlook for Thailand's economy seems brighter than that of most other Asian nations.
SOURCES
"Study finds big boost for Thailand in free-trade agreement." AAP General News (Australia), May 7, 2002.
"Thai Auto Industry Gets Second Wind." United Press International, March 4, 2002.
Macan-Markar, Marwaan, "Thailand: Government Promotes Village Handicrafts Scheme." Inter Press Service English News Wire, May 22, 2002.
Qingchuan, Yang, "Thais Look to Better Future in Celebrating Traditional New Year." Xinhua News Agency, April 15, 2002.
LESSON PLAN
GRADE LEVEL/SUBJECT: 10-12/Economics, International Relations, World History, International Baccalaureate Programs (IB), Current Events
PURPOSE:
To present activities to be used in a variety of classroom situations in order to enhance student understanding of the Asian economy and its significance globally.
OBJECTIVES:
Students will be able to:
- Locate Thailand on a World map.
- Locate Thailand on a map of Asia.
- Describe the history of the Thai economy.
- Evaluate the current state of the Thai economy.
- Develop a scenario for the future of the Thai economy.
MATERIALS:
- Background information provided.
- Resources on Thailand available at your school's Media Center and the Public Library System in your area.
- Background information available through Internet "search engines."
ACTIVITIES:
May be assigned as group activities or as individual tasks. They may also be designed as preparation for related presentations either by individuals or groups.
- Assign cooperative learning groups to research the political and economic relationship between Thailand and other countries in Asia, Europe and the Americas. Use charts and graphs to present their research to the class.
- Locate the countries being discussed on a world map in the classroom.
- Allow students to develop pamphlets promoting economic opportunities and/or products in Thailand. Require groups to present their promotions. Ask students to evaluate each other's product.
- Using the information gathered above, develop a panel discussion presenting the pros and cons of investing in Thailand.
- Write an editorial or a position paper on a particular aspect of the Thai economy.
EVALUATION:
Individual assignments should be graded by the teacher using established criteria.
Group activities, presentations and projects may be evaluated by teachers and students using the following criteria and scale:
Content Creativity Clarity
1 = Superior (A) 2 = Excellent (B) 3 = Good (C) 4 = Fair (D) 5 = Poor (F)
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