Development Path of Thailand
Abstract
After World War II, most countries faced severe social, economic, and political challenges, which had adverse effects on the country’s economy. One such country was Thailand, considered to be a developing country; however, they have recorded a progressive development and transitioned to modernity. Some of the factors that contributed to the growth of their economy included socio-economic factors, the legal system, advancements in technology, and environmental factors. The HDI values from 1990 were 0.574 and increased steadily to 0.765 in 2018. While the GNI PPP $ in 2018 was $ 16,129 as compared to the $6,562 of 1990.
Table of Contents
Abstract…………………………………………………………………………………2
INTRODUCTION……………………………………………………………………..4
Economic Factors………………………………………………………………………4
Technological Factors………………………………………………………………….5
Social Factors…………………………………………………………………………..5
Environmental Factors………………………………………………………………….7
Legal Factors……………………………………………………………………………7
The Customer Analysis…………………………………………………………………8
Economic Statistics of Thailand…………………………………………………………8
Figure 1 above shows the GNI PPP$ of Thailand from 1990-2018…………………….9
Development Theories………………………………………………………………….10
Conclusion………………………………………………………………………………11
REFERENCES…………………………………………………………………………12
INTRODUCTION
After the Second World War, most countries faced severe social-economic and political challenges, which had adverse effects on the country’s economy. One such country was Thailand, which is considered to be a developing country; however, they have recorded a progressive development and transitioned to modernity. According to the World Bank, by 2011, Thailand rose to an upper-middle economy due to a progressive social and economic development within a shorter period. The Gross National Income (GNI) per capita for Thailand was $16, 129 in 2018. In 2017, her economy grew steadily with a reduction in poverty level from 69%-7.8% for the last 30 years. In contrast, there is a gradual increase in the Human Development Index (HDI) from 0.503 in 1980 to 0.765 in 2018. The driving forces for all these development were the economic, social, technology, environment and hereditary factors, and the current customer analysis.
Economic Factors
There was a faster development of Thailand’s economy from 1985-1995, as announced by the World Bank. However, there was an economic crisis in 1997 due to foreign debt, which began to slow down the economy. As a result, several businesses lost their income and profit. The country’s economy improved to a justifiable degree from 1997. Nonetheless, despite this survival, there was an immense discomfort in Thailand because the dissemination of welfare was unequal. Quality of life was declining more so at the capital (Bangkok) due to overcrowding in the streets, pollution of the environment, traffic jams, accidents, increased prostitution, and a long-term environmental concern due to forest devastation (Marty, 1993, p. 397).
Within a short span, the Thai economy has proved to recuperate. This is evident during the 1998 depression year, thanks to its improved economic structures and mechanisms in place either internally or externally, such as climbing of oil values. Some key currencies also being realigned. However, these shocks have short-term impacts on economic development. (Hogue, 2006). Thai uses similar assets that promoted its steady growth in the previous years. For instance, engaging in agricultural activities, fishing, agroforestry, and its fascinating culture, which attracts foreigners (Boraas, 2003, p.35).
Technological Factors
Much concern has been raised on the strategies the Thai used in manufacturing, mostly on the inadequate development of power technology to steer its manufacturing sector. Their strategy was weak as compared to other neighboring countries, and since 1980 Thai’s advancement in technology and industrialization sectors significantly differed from other Asian countries. They lacked innovative structures and competent technologies, making them lag behind their Asian counterparts. (Turpin, 2007, p.235). Innovations of Thai in science and technology ranked below the international competitiveness performance in trade revealed through critical indicators at the macro levels. As a result, there was a need for them to respond swiftly in order to address these scientific and technological issues.
Several factors had derailed technological developments in Thailand: financial risks, remote education, and government policies. These factors are confusing and unproductive continued uncomplimentary institutions, slow learning of technology; however, a progressive industrial developmental change has been realized.
To counter this, Thai manipulated natural resources and relied on existing activities of agriculture. The mechanization of the economy was central in increasing industrialization and improving its manufacturing and technological capacity. These mechanisms may be slow due to the economic crisis faced, but they have long-term investment solutions (Sadoff, 1995, p.27).
Social Factors
Thailand has been transformed into a developed country from a developing one through a perceptional demographic view. There is a steady rate of fertility at 1.82. In contrast, the expectancy rate of life for both women and men is 75 and 70 years, respectively. Furthermore, the age median that can counterbalance a decline rate of birth is 33; therefore, a workforce for an aging population is achieved.
Every society is faced with societal challenges, and Thai is not left behind. Due to over-population in this state, the current administration of the Thai setting is done based on social rank. Moreover, it is also defined by the status of an individual’s wealth, age bracket, monetary values, and position in society. The hierarchical social status controls the behavior of Thai people in different institutions such as schools, hospitals, families, established business premises, and government institutions.
The occupants of higher ranks in Thai are the nominated and elected representatives who are the leaders of citizens and climb the social ladder. The collaboration of people with challenging status is inhibited by those holding higher hierarchy. This has led to increased egocentrism and selfishness, especially by the urban dwellers of Thai people who holds higher ranks and have neglected the norms of their society and ethnicity.
Every aspect of Thai society is faced with a deep-rooted infiltration of inequality. Much emphasis is put on the current economic weakness of Thai by addressing strategies supporting the development of sustainable goals and welfare, which drops such inequalities (Marshall et al., 2006, p.256). In matters of religion, the Thai people practice Buddhism, and it reflects their culture. Statistically, 93.4% are Buddhists, while Muslims are 4.9%, 1.2 % Christians, and 0.2% have no religion. Moreover, religion plays a vital role among the Thai people as it teaches people to harmonize with each other. Thailand is referred to as the Land of smiles because Thai people can be approached easily, has a high degree of honesty, and are supportive of a deeper relationship among the communities. These values of grateful connection are the foundation of gratefulness towards each other (Hongladarom, 2007, p.141).
Environmental Factors
The decline in the quality of the environment sped due to the unresponsiveness of the public and unproductive procedures. Economic growth, especially in the manufacturing sector, has resulted in the disposal of hazardous materials into the ecosystem without proper planning, thereby slowing down effective responses from the government (Pennell et al., 1992, p.61). Moreover, the development of tourism sectors also affected the environment adversely due to the massive expansion of bars, restaurants, bungalows, cottages, and transport services in and around parks. Wastes disposal in highly populated areas is some of the issues impacting the environment negatively.
However, there is an increased awareness among the Thai people on observation of the environment. They act accordingly on aspects that promote environmental problems. Constructors that damage tourist attraction sites are stopped and regular action on practices that can harm their environment. The atmospheres around the beaches, coral reef, and fishing areas are reserved to attract tourists (Burke, 2008, p.62).
Legal Factors
They have a legal and judicial system that based on their jurisdiction on the nation’s democratic constitution and recognizes courts such as Constitutional Court, Administrative, Military Courts, and the Court of Justice. The Business Law is very instrumental in Thailand because it protects their businesses against foreign competition and possession in a market free business environment. The businesses are under government agencies, and the basic formulas used to run them include corporations, sole proprietorships, and partnerships.
The ministries of Thailand’s government work concurrently to ensure improved relationships between different stakeholders. The Industrial Ministry standardizes improvements in industry and entrepreneurship. At the same time, the Ministry of Commerce protects overseas businesses and procedures in trade by ensuring that they operate according to their set business laws. Local based businesses and organizations are supported by the Internal Trade Department and ensure that they equally compete with foreign businesses.
The Customer Analysis
The target markets built by Dusit Thani comprise the Tourists, Le Cordon Bleu Culinary School (LCBD), and the Business Group, which left an excellent reputation for Thai people. The Business Groups were categorized into the Corporates consisting of the government, airlines, and embassies. A long-term contract existed between the corporates and the Dusit Thani Bangkok and the Casual groups, which majorly comprises the Europeans whose duty was to promote and develop relationship bonds and be loyal customers in the future.
Tourists; Bangkok city has charming hotels. They were awarded an award by Trip Advisor as being the second-best tourist shopping city worldwide and in terms of monetary value as the third. Besides, the Travel and Leisure Magazine awarded them as being one of the best cities to live in in 2011.
LCBD Student; this is a societal phenomenon school that teaches people with interest in cooking Thai foods and the world’s food. The Dusit Thani group established it, and there has been a gradual increase in the number of students taking different courses in the ecotourism industry, which takes a maximum of 9 months. The tourism industry is a significant contributor to the GDP of Thailand just as aforementioned.
Economic Statistics of Thailand
In the last four decades, there has been a progressive development of the economy of Thailand. The variables used to measure this growth include the following; the Gross National Income (GNI), the Gross Domestic Product (GDP), and the Human Development Index (HDI). Other statistical data discussed in this chapter are the percentage of poverty and inequalities in Thailand.
The GNI per person is the measurement of the living standards of the Thai people compared with other countries.
Figure 1 above shows the GNI PPP$ of Thailand from 1990-2018
Thailand’s Human Development Index (HDI)
Figure 2 above shows the HDI values of Thailand from 1990- 2018.
According to the above graph, there is a steadfast increase in the HDI values from 1990-2018. The lowest value was recorded in 1990 as 0.574, while the highest value was 0.765 in 2018. Several factors influenced this progress discussed earlier, such as innovations in technology, economic, legal, environmental, and social factors.
The GNI PPP $ also showed a comparative growth from 1990- 2018. It was expressed in 2011 constant international dollars as $ 6,562 in 1990, while as of 2018, it was recorded as $ 16,129. This showed an immense increase in Thailand’s GNI PPP.
Development Theories
Some of the development theories learned in class relating to the analysis of Thailand include; the Lewis theory and Adam Smith Model. These theories played a very crucial part in the development of the economy of Thailand.
Lewis’s theory, the rural and urban settlements, played a significant role in the Thais economy. The primary concept of this theory was that dual economies availed enough labor in the industrialized urban sectors and rural, and the wages were determined by increased unemployment in agriculture. This system operates in two sectors i.e., traditional agriculture and modern industrialization. Moreover, the high surplus of labor is due to the high population, and if a few laborers are removed, the total product will remain the same; hence the marginal product of labor stands at zero. According to this theory, the process of transformation begins when the industry demand is autonomously expanded, leading to the changes in tastes of domestic consumers or international markets.
Adam Smith’s theory; states that any freedom of an individual he states should not impose any form of restriction. The pillars of economic developments rest on the division of labor, markets, and savings capability. In Thailand, the economic challenges were unlocked by the innovations in technology, which created an advanced artificial intelligence that boosted the economy. Furthermore, the labor force average value for Thailand is 72.59%.
Conclusion
Thailand is a developing Asian country that has a progressive and remarkable growth in the economy that made her be considered as an upper-middle-class country. This was contributed by several factors that positively influenced her economies, such as the legal system, socio-economic factors, innovations, and advancements in technology and the free-market, which allowed foreigners to invest in the country. Furthermore, the application of Lewis theory and Adam Smith among the Thai people ensured a stable growth in the economy.
REFERENCES
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