Prior to the 1960s the Thai economy was based primarily on the production of rice and other foods and goods for domestic consumption and of rice, rubber, teak, and tin for export. The government then began to promote a shift from agriculture to the manufacture of textiles, consumer goods, and, eventually, electronic components for export. By the 1980s Thailand had embarked on a solid path of industrialization; even the economic crisis of the late 20th century only slowed, but did not halt, this economic transformation.
From 1963 until 1997 the Thai economy was one of the fastest growing in the world. The adoption of the first national development plan in 1963 spurred the shift from agriculture to industry. During the 1980s and ’90s numerous export-oriented industries emerged, primarily in the areas surrounding Bangkok. The large-scale migration of young women and men from rural communities to the greater Bangkok area drained labour from the countryside. Those continuing to pursue agriculture turned increasingly to machines to make up for the shortage of workers, bringing about a shift in the rural economy from subsistence to market-oriented agriculture. Most of the investment in new technology in the agricultural sector came from the savings of family members who had gone to work in the cities.
Export-oriented industries and financial institutions, especially those created in the 1980s and ’90s, have relied heavily on foreign capital, making the Thai economy more vulnerable to changes in global economic conditions. In 1997 a sudden and rapid decline in the value of the Thai currency, the baht, triggered a financial crisis that quickly spread to other Asian countries. The crisis not only exposed the overdependence of Thailand on foreign capital but also focused attention on the consequences of unequal development and on weaknesses in several sectors of the economy. By the beginning of the 21st century, the economy had begun to recover, but the economic crisis and the emergence of a more democratic political order caused economic policies to become the object of intense public debate. A coup in September 2006 rekindled uncertainties about the future of the Thai economy. While announcing, rescinding, and subsequently reimposing various restrictions on foreign investment, the interim government promoted the king’s philosophy of “sufficiency economy,” an ideal emphasizing self-reliance and moderation in consumption, without rejecting capitalist investment.
Source: britannica.com
