Introduced in the latter part of the 1970s, economic policies have become more outward looking. This is most probably due to the fact that Thai businesses had been well established, and ready to compete in the world markets. The outward looking strategies adopted by the Thai government, such as “expanding merchandise exports, tourism and investment activity” had an extremely positive effect on the Thai economy. It meant that, as a proportion of GDP, manufacturing overtook agriculture. As a result, it brought the acquisition of much newer technological know-how, “stronger links with the world market” which meant that it “strengthened Thailand’s ability to maintain the momentum of its economic transformation”
During the global recession during the early 1980s, there was a “real effective devaluation” of the Thai Baht, which is another form of outward looking policies. This meant that Thailand could recover very quickly from the recession because they maintained a comparative advantage over many other countries in manufacturing. Unlike many of the other countries at the time (such as the UK) their exports managed to pick up sharply. What indicates that this was an extremely effective policy by Thailand was the fact that the ratio of Thai exports or goods and services to GDP increased by 39.5% in just 5 years from 1985 to 1990. This shift was also assisted by another outward looking strategy – a shift from the public sector to the private sector.
Since 1990, with the growth of the middle class – which has led to higher unit labour costs, the current account has gone into a deficit. However, it is clear that through effective leadership by the Thai government, they have balanced this out since the early 2000s by encouraging large amounts of FDI. It could be argued that this FDI is a bad thing for Thailand due to tied investment, which means that although there is investment going into a country, it is then subsequently being spent on workers and materials from abroad.
I think that overall, Thailand’s outward looking strategies have been primarily beneficial for their economy, because their index value of world trade (as seen in the diagram) has exponentially increased. This is only a good thing for the country, as it is the best type of growth (export led growth) and leads to a large accumulation of foreign exchange. There are negatives however, that although haven’t been explored in the article that could affect the outward looking strategies. The government leaving much of the economy to the free market could leave it susceptible to outside shocks in the world economy. Also, it would seem according to the article that there is also rather a large primary product dependency on a “manufacturing base.” With rising incomes, the population’s demand switches