Primary Exports of Thailand and Balance of Payments Outlook

Abstract

The significance of foreign trade in the Thai economy has long been under estimated. Moreover, the misinterpretation of the agricultural contribution has led many to conclude that Thailand could not be involved in international trade on a large scale. But Thailand is among the world's largest exporters of many commodities. In 1973, the ranking of Thailand in world agricultural export trade was as follows: (1) cassava (first); (2) jute and allied fibres (second); (3) natural rubber (third); and (4) rice (third). Perhaps the overall volume and value of Thai trade are small in comparison with those of manufacturing countries. However, in terms of Thailand's GNP, foreign trade is quite considerable. Agriculture alone contributes 75 % towards the yearly earnings from exports. The reliance on the agricultural sector is thus very substantial. Prior to 1958, the average earning of the agricultural sector relative to total exports was 74%. After two decades of industrialization this proportion has begun to change. From 1967 onwards the ratio of agricultural export value to the total export value decreased from 72 % to 70 % and continued to decrease until 1970. By 1970, the ratio was 59 %. This change is the result of diversification of agricultural products and industrial development. At the same time, it could be the result of the external disturbances which are beyond Thailand's control. Having established the important role of agricultural exports, we should proceed to the industrial sector. Before 1955 the National Economic and Social Development Board (NESDB) did not exist. Neither was there a Board of Investment to promote investments as there is today. Thai exports were agriculture-oriented : rice, rubber, jute, tin and teak. Today rice, rubber, tin and jute are still the main exports. Teak has more or less dropped from the picture. From 1955 the exports of manufactured goods began to gather momentum. Textiles, sugar, and gunny bags increased the foreign exchange revenue for the country.