Thailand and Globalization

CRUZ, LORENZO JOSE

MELLA, MARIA BEATRICE H.
MENDOZA, ANGELA TRINIDAD
 Governance History

In the past, Thailand, which was renamed from

Siam, was predominantly an agricultural society.
Socioeconomic condition of Thailand, related to
capitalism, turned to 2 be a primitive capitalism at
the beginning of Rattanakosin or Bangkok period,
when Bangkok was established as a capital city.
Nevertheless, the primitive capitalism was gradually
developed from the end of Ayudhaya period, the time
before Bangkok period. Until the reign of King Rama
IV,
Thai socioeconomic condition was basically under
the system of Sak dhi na, Thai feudal system,
connected with a self-sufficient economy. When
Thailand was forced to sign the Bowring Treaty in
1855 by the British Empire, Thailand was directly
forced to participate in the world economy which
created a huge impact to Thai socio-economy.
 
Political change in 1932 made Thailand to change from an
absolute monarchy to a constitutional monarchy. Instead of
establishing democratic regime, Thailand was ruled by the system
of bureaucratic as a form of military authoritarianism. Economic
strategy in that period was an imported-substitution
industrialization (ISI), showing that Thailand had started its
industrial development.

At the same time, there was a full-fledged development of

financial sector. Around 1950’s modern and private Thai banks,
such as Bangkok Bank and Thai Farmer Bank were formed which
demonstrated that Thai capitalism had developed beyond
primitive capitalism.
 History of Trade Relations

 
Hundreds of years ago, Thailand has already been engaged in
international trade with China during the Sukothai Kingdom (1249-
1438), and with Indonesia, Japan, India, Persia and European
countries like Portugal, Spain, Holland, England and France during
the Ayudhtaya Kingdom (1350-1767).
Exports of the surplus and imports were monopolized by the
government. Major exports were agricultural and forestry
products. Major imports like silk, ceramics, wood, etc.
 
This brought forth the modernization of education, health care,
public administration etc. by adoption and adaptation of the
Western models and technology.
 The Bowring Treaty

The Bowring Treaty that Thailand signed with Britain in 1855 and
similar treaties with other countries, it resulted in liberalizing
trade. Trade liberalization led to the expansion of rice production,
and became the top export item ushering in the gradual transition
from subsistence economy to commercial economy.

The other major export that showed substantial growth is teak,
which contributed to one-fourth of world supply in the early
1900’s.
After World War II, Thailand’s international trade expanded
further in response to foreign demand as seen in the growing need
for rubber, cassava, maize, tobacco, jute and sugar cane globally.
 Economic and Social Development Strategy
Thailand’s first Five-Years National Economic and
Social Development Plan was launched in 1962.
 The first two 5 years plans focused on infrastructure
development, agricultural diversification, and import
substituting industrialization to achieve high and
stable economic growth.
The Third Plan (1972-1976) turned to export
oriented industrialization,
The Fifth Plan (1982-1986) put an emphasis on
liberalization, deregulation, and decentralization. The
implementation of the plan was however obstructed by
the oil crisis and global recession.

 Some liberalization was undertaken during the Seventh
Plan period (1992-1996).
 The Eighth Plan then focused on quality of life and
quality of human resource, people participation in
development design and process.
 
FINANCIAL INSTITUTION AND
GLOBALIZATION
The most important economic aspect, associating to
the economic globalization, was the initiation of
Bangkok International Banking Facilities (BIBF).
This financial policy showed that Thailand was
entangled with economic globalization not only in
terms of trade, but also in terms of global finance
and global capital market.
 Regional and Int’l Relations

Thailand is a member of the Group of 20-plus, a bloc of nations

that are not really developed countries but are not really Third
World countries either. Created by India and Brazil in the early
2000s, it also includes China, Indonesia, Thailand, South Africa,
Nigeria, Mexico and Argentina

 Affiliations :
Asia-Pacific Economic Cooperation, Asia-Pacific Telecommunity,
Asian Development Bank, Asian Institute of Technology, Asian-
Pacific Postal Training Centre, Asian Reinsurance Corporation,
Association of Southeast Asian Nations (ASEAN) and the ASEAN
Regional Forum, Bank for International Settlements
 1993, government led by Prime Minister Chuan
introduced the BIBF, financial liberalization and
deregulation, to facilitate inflow and outflow of the
capital, and at the same time, to make Thailand a
financial center of the region.
 Industrialization and Urbanization Projects
 To cope with globalization, Thailand focused on rapid industrialization and
urbanization.
 Large scale infrastructure projects
 Construction of dams for (1) irrigation and (2) to provide electricity
  
 Economic superiority thru
 New agricultural techniques
 Increased access to services
 Improved communication and transportation
  Thailand is looking at globalization AS A WAY to increase opportunity,
investment, and economic growth
 
RELIGION AND GLOBALIZATION
 
Buddhism versus Globalization
 Buddhism is the major religion in Thailand.
 The economic aspirations of Thailand to cope with globalization is against
the teachings of Buddhism (against the concept of greed, selfishness, and
competitiveness)
 In order to balance beliefs in Buddhism and aspirations towards
Globalization, Thailand ALSO included economic, social, and environmental
sustainability in their goals.
 This is known as the Sufficiency Economy Philosophy by His Majesty the late King
Bhumibol Adulyade
 It seeks to eradicate poverty and reduce inequality as a means to achieve sustainable
development, and strike the right mindset towards the balance among three dimensions
of sustainable development (http://www.tica.thaigov.net/main/en/information/7107)
Globalization Impact on Thailand
Positive consequences, such as better management system, higher salaries,
wider choice of product, research and development (R&D), foreign direct
investment (FDI), etc. can foster business and economic process.
Inspired by the Sufficiency Economy Philosophy of the late King Bhumibol
Adulyadej, successive Thai governments have developed human capital,
reduced inequality and strengthened environmental protection.
While average growth over the past decade slowed to 3.2% from the boom
decades of the 1960s-1990s, significant welfare gains were achieved.

- The extreme poverty rate dropped dramatically from 20% in 1981 to 0.2%
in 2010 because of better access to education, healthcare and basic
infrastructure.
In contrast, negative results, such as environmental damage,
unfair competition for local businesses, labor and child labor
exploitation, changes in local 6 social lifestyles/livelihoods,
unequal development, inequality, injustice and etc. are also
evident.
 regional inequalities between urban and rural areas still
loom large. Poverty in Thailand remains primarily a rural
phenomenon with over 80% of the country’s 7.1 million poor
living in rural areas as of 2014.
In rural areas, it is estimated that up to 47% of 15 year olds
are functionally illiterate compared with the national
average of around a third.
Global Innovation Index
 Thailand’s innovation performance has not materially
changed over the past five years, whereas regional
competitors like Viet Nam have improved significantly in
2012, Thailand’s Global Innovation index score was 36.9
(out of 100). It has only inched up since, to 37.6 by 2017,
placing the country in 51st place out of 127. In contrast,
Viet Nam's score increased quite rapidly, from 33.9 in
2012 to 38.3 in 2017, overtaking Thailand's.
 
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 References

https://berkleycenter.georgetown.edu/posts/katalyn-voss-on-development-and-globalization-in-
thailand

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 
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(London: Routledge, 2007
 
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