Thailand Case Analysis

Thailand has been the major exporter of agriculture products in the worlds for decades, but they, also, have been gradually industrializing themselves in recent years. Thailand's international trade has expanded over 600% over the past 20 years. Manufacturing exports hold 86% of the country's total exports as of September 2014 ("BOI: Thailand Investment Review," 2014). Manufacturing industry nowadays has become one the major factors encouraging the economy performance of a country and so as Thailand.

The economic boom of 1977 to 1997 had a dramatic impact on Thailand’s northern villages. While the center of the country, Bangkok, was rapidly industrializing, the north fell behind. Due to a lack of income and resources, the north had to watch the

World trade organization is an international governing body which deals with trade between countries. In regard to various nations which are under the World Trade Organization, the goal is to help producers of supplies of services, exporters and importers conduct their activities. The WTO has decreased the level of tariffs, but a boost in non tariff measures in rural areas which is obstructing trade. This will be discussed furthermore in the assignment.

Thailand’s most important exports were manufactured goods. It accounted for 81% of exports. These included clothing, electronic parts and components, furniture and jewelry.

Research into Thailand showed that Thailand’s budget deficit narrowed to $4.2 billion (USD) from $5.1 billion (USD) in 2009. This demonstrates that the government is committed to meeting its foreign debt obligations and has not overextended itself concerning external borrowing. The baht (Bt) will remain strong against the United States dollar and the Bank of Thailand (central bank) will continue to intercede in the market if necessary to limit currency instability. Thailand’s banking sector is currently in a healthy state. It is adequately capitalized and has recorded strong profits in the last couple of years. Thailand’s political risk remains high due to the impending passing of the king and the difficulties that the prime minister has had with the House of Representatives. The economic structure risk is minimal even though the GDP growth has been low in the recent years, but Thailand has demonstrated a strong rebound in 2010 (Economist Intelligence Unit: The Economist [EIU], 2011).

Tourism trend within selected country 2 Thailand: even if with the political instability within Thailand, the Thai locals manage to do well within their tourist industry. This includes both inbound and outbound travelling and the main sources of tourists for both inbound and outbound tourists are from those ASEAN countries such as Malaysia, Singapore, Hongkong and Indonesia etc. due to the new entrant of low cost carrier such as Thai Lion Air, more frequent and regular travelling will help to bring international and domestic tourists in and out of Thailand. The growing trends and prospects for Thailand travelling industry is very good and

the post-colonial nations in the world are still searching for ways to compete in an increasingly globalized, consumption driven economic environment. Many developing countries have speculated that Tourism is an effective catalyst for development as well as increased international understanding. Thailand, who has embraced tourism as the key to its modernization strategy, has been hailed by many as a paradigm for success. Over the past twenty years Thailand has enjoyed one of the fastest economic growth rates of any developing country. This rapid progress has allowed Thailand to emerge as an economic leader in the Third world. The $4 billion a year in tourism revenue is the core

Free trade is something that WTO encourages globally and insists that no government interference should take place in international trade and that this will be followed by specialisation and an increase in countries welfare. Countries however want a competitive advantage and to obtain this interference takes place in the form of restrictions. Most highly competitive countries are well-off economically, has respectable infrastructure, high levels of education and technology, steady political and social status and strong international positioning. Restrictions are set in motion for several reasons, all of them follow.

Southeast Asia has gone through large changes in its social landscapes during the late twentieth centuries that resulted from globalization, urbanization and authoritarian regimes. Particularly in the last three decades of the twentieth century, Thailand has been undergoing radical social and economic changes in which its practices and politics has transformed its social and cultural realities. Increasingly influenced by globalized economic and social institutions, Thailand has come to confront crises that made her people insecure in the present and anxious about the future.

It has been estimated that investors have moved approximately THB6.3 billion from the Thai stock market to the Indonesian stock market. The president of Toyota Motor Corporation in Thailand has even warned long term investors to invest in countries such as Indonesia or Vietnam. If this political unrest continues, Thailand’s economy will most likely shrink instead of grow, resulting in a possible recession throughout the country.5

In July 1997, Thailand experienced a financial crisis that required outside assistance. Few years before, investors outside of the country, were looking for emerging markets to invest in. They believed it was in the South East Asia. The countries were Thailand, Korea, Indonesia, Malaysia and the Philippines.

Module #4 of the Global Economics necessitates an evaluation of global governments efforts in assuring developing countries obtain a fair and adequate share of the global trade (Poolen, 2013). To this, a response to the interventions of global governments and their need or desire to intercede in third world economics must be indicated. All of which must be derived from chapter #6 & #7 of Carbaugh’s discussion within the text to both support and extrapolate a conclusion (Poolen, 2013) (Carbaugh, 2011) . Developing nations’ problems, trade policy, export growth, or industrial policies should be addressed as topical discussion for this assignment.

Such tends to have the effect of increasing the ratio of the trade outcome. As a country’s growth in income rises the shift towards spending more and leaving more luxurious increases. The basic requirement and need like food, cloth and other manufacturing products which can offer importance for product differentiation, diversification and international trade.

According to the trade policy reviews conducted by the World Trade Organization, more than 70% of the exports of the Philippines consists of electronics, automotive products and garments. Within four years, the number of exports have shown to increase by 7%. Despite having a large market of exports, these markets are mostly owned by foreign companies such as the United States (35% in 1997), the European Union (16% in 1997) and Japan (16% in 1997). Thus, the economy and the people of the Philippines do not gain as much as the market owners from the other countries. However, the three countries listed previously also provides most of the imports of the Philippines. Policies regarding tariffs forced a more open economy because tariffs were reduced as well as non-tariff barriers were removed. There are still remaining policies to protect markets that are import substitution led creating more of a competition with export markets. Despite creating a more open economy to foreign investment, there are still some barriers that exist to protect domestic markets that practice import substitution (World Trade Organization).

It has assumed a leadership role among developing nations in global trade negotiations, and played a critical part in the Doha negotiations.Regional and Bilateral Trade AgreementsIndia has recently signed trade agreements with its neighbors and is seeking new ones with the East Asian countries and the United States. Its regional and bilateral trade agreements - or variants of them - are at different stages of development:  * India-Sri Lanka Free Trade Agreement, * Trade Agreements with Bangladesh, Bhutan, Sri Lanka, Maldives, China, and South Korea. * India-Nepal Trade Treaty, * Comprehensive Economic Cooperation Agreement (CECA) with Singapore.  * Framework Agreements with the Association of Southeast Asian Nations (ASEAN), Thailand and Chile.  Preferential Trade Agreements with  Afghanista, Chile, and Mercosur (the latter is a trading zone between Brazil, Argentina, Uruguay, and Paraguay).World Bank InvolvementAs a number of research institutions in the country provide the Government with good, just-in-time, and low-cost analytical advice on trade-related issues, the World Bank has focused on providing analysis on specialized subjects at the Government’s request.In the last three years, the Bank has been working with the Ministry of Commerce in a participatory manner to help the country develop an informed strategy for domestic reform and international negotiations.Given the sensitivity of trade policy and negotiation issues, the