Crisis In Thailand Research Articles

Thailand's crisis

This is a review of what the IMF did, who got hurt, what worked and what failed in the economic and social management of Thailand's economic crisis. It shows how political change got bound up with economic crisis, resulting in a new constitution, a seismic shift in the political landscape and greater asssertiveness by civil society. It examines how the economic turmoil changed the ways people reacted to political scandal, viewed their own society and imagined their future. The final chapters review the changes and lessons from 1997-2000 and speculate on how these changes will frame the future.

Changes in the Labor Market and International Migration since the Economic Crisis in Thailand

The economic crisis in July 1997 led to a sharp increase in unemployment and underemployment, particularly among workers with primary and lower secondary education, a drop in real earnings, and an increase in poverty incidence. Labor surplus and poverty pressures during the economic downturn likely boosted labor migration. New government measures in promoting overseas employment and the facilitation of recruitment agencies and migrants' social networks encouraged the outflows. Data from the Ministry of Labor indicate higher levels of overseas labor migration, especially to Taiwan. Most Thai overseas workers have a primary education and are engaged in unskilled labor. Although the government has started to provide skills training to help workers adjust to the needs of the labor market, more measures are needed to promote sustainable employment and human resource development, especially in the rural areas. Better protection for Thai workers overseas is another priority.

Economic Crisis in Asia: The Case of Thailand

The economic crisis in Asia has been analyzed by neoliberal and neo-Weberian scholars as a financial crisis, with the neoliberals asserting that its causes are internal to the countries in question, the neo-Weberians asserting the causes to be external. This paper offers an alternative, Marxian explanation of the crisis, focusing on the outbreak of the crisis in Thailand. Using Harvey’s ideas about capitalist crises and capital switching, along with conceptions of crisis dynamics in peripheral societies based in the works of economic geographers and dependent development theorists, I argue that the crisis in Thailand was a fully economic crisis involving all circuits of the economy, linking domestic and international accumulation processes, and stemming in part from struggles over appropriation of the surplus. In order to demonstrate this, I analyze the crisis in Thailand at both national and international scales and show that it was rooted in declining profitability of manufacturing in a context of increased global export competition and overcapacity. This context created the strong likelihood of economic downturn throughout the region, with Thailand falling first because of its specific liabilities, and other countries being pulled into the maelstrom of devaluation through financial contagion effects.

(Ir)Relevance of Currency Crisis Theory to the Devaluation and Collapse of the Thai Baht

This paper provides a detailed study of the crisis in Thailand with the goal of determining the usefulness of existing currency crisis theory to the breakdown of the baht's de facto dollar peg in 1997-98. We do not attempt to provide a comprehensive survey of the currency crisis literature; nor do we add directly to the empirical and theoretical literatures on currency crises. Rather, our goal in this paper is to examine, through the lens of the existing currency crisis literature, the sequence of events culminating with the devaluation of the Thai baht in July 2, 1997 and the financial and economic collapse thereafter. But why do we concentrate on Thailand in particular? First, the devaluation of the baht is widely acknowledged as the dawn of the East Asian crisis. Second, and in relation to this, given that Thailand was the first domino to fall, there seems to be greater debate/disagreement as to whether the Thai crisis was 'fundamentals-based' or due to 'self-fulfilling expectations'. Given our emphasis on Thailand, we do not address the issue of the reasons for the widening and deepening of the crisis from Thailand to the rest of East Asia and beyond (i.e. 'contagion').

The Political Economy of Class Struggle in Modern Thailand

The 1997 economic crisis in Thailand was a crisis of modern capitalism. The predominant relations of production and the state in Thailand have been capitalist for over a century. Today, Thailand has a population just slightly larger than Britain, with a working class and peasantry each making up approximately 40% of the working population. Politically, Thailand has a bourgeois-democratic system comparable with the West and, just like in the West, rights and freedoms have been attained by continuous class struggle from below. Marxism allows the political developments in modern Thailand to be understood as the result of struggle between the working class and the bourgeoisie. Marxism can also explain the causes of the Thai economic crisis which were not fundamentally different from those of any other capitalist crisis: a declining rate of profit and overproduction in an unplanned global market system. Finally, a Marxist analysis can both explain the current ruling-class structural offensive, which is taking place against the interests of the working class in the aftermath of the crisis, and point the way forward in resisting this offensive.

Trends and expectations for research and technology in weed science in Thailand

There are many possible ways to improve the economic crisis in Thailand, and it is agreed that development of agricultural production is ideal for improving the economic situation in an agricultural country such as Thailand. A strategic plan for agricultural and agro-industry research is included in the national research agenda and can be classified into nine groups covering different research areas. Most research is based on the agricultural production of four main product groups: (i) crops; (ii) aquatic animals/plants and fisheries products; (iii) poultry, livestock and animal products; and (iv) forest resources. Trends in research and development in weed management for crop production will continue to support the food demands and the development of efficient production of quality products.

Misalignment of the Baht, Trade Imbalances and the Crisis in Thailand

This paper examines Thailand's exchange rate policy, focusing on the degree of the country's real exchange rate misalignment pre-crisis, and their consequent effects on Thailand's trade balance with its two large trading partners, the US and Japan. We estimate misalignment as the difference between actual and exchange rates. We use three key exchange rates of the Thai baht, viz. the real effective equilibrium exchange rate of the Thai baht against its twenty two major trading partners; the bilateral real equilibrium exchange rates of the baht against the US dollar; and the bilateral real equilibrium exchange rate of the baht against the Japanese yen. Our sample period spans two decades (Q1: 1981 to Q3: 1999).

Singapore and the Asian Economic Crisis: An Assessment of Policy Responses

Singapore seems to have weathered the financial storm of East Asia better than most in the region. Yet it was not spared from contagion. Economic growth slowed from 7.8 per cent in 1997 to 1.5 per cent in 1998. The declining regional demand for Singapore's exports due to contraction in the crisis economies and loss of competitiveness in the face of competitive devaluations posed new challenges for Singapore which had to adopt policies to combat the crisis. This article examines the effects of proposed policies using a computable general equilibrium model. We find that the wage reduction and devaluation policies are more promising than domestic demand stimulation. I. Introduction Singapore seems to have weathered the financial storm of East Asia better than most in the region. Yet it was not spared from contagion. Economic growth slowed from 7.8 per cent in 1997 to 1.5 per cent in 1998. The crisis impacted different sectors unevenly. Sectors such as commerce, transport, tourism, and financial services, which have large regional exposures, were badly hit. The declining regional demand for exports and the challenge of maintaining international competitiveness despite competitive devaluations mean that Singapore had to adopt effective policy responses. This paper uses a computable general equilibrium (CGE) model to simulate the effects of policies adopted by Singapore. Section II is a brief discussion of the Asian crisis and its implications for Singapore. Section III reviews Singapore's policy responses to the crisis. Section IV presents the results. Section V concludes. II. The Asian Crisis and Its Implications for Singapore The Asian crisis began as an exchange rate crisis in Thailand and spread quickly to the Philippines and Indonesia, and then to Malaysia. This led to financial crises which, in turn, produced severe downturns in real economic activity in these, and other, countries. While a full discussion of the causes, propagation channels, and effects are beyond our scope,1 some points need to be made to show how, and to what extent, Singapore was caught up in the crisis. We focus on Thailand, the first domino. An overvalued exchange rate pegged to the US$,2 declining exports,3 and a growing current account deficit made Thailand vulnerable to a speculative exchange rate attack. The falling yen and an effective depreciation of about 10 per cent of the yuan4 contributed to reduced export competitiveness. The resulting devaluation triggered a financial crisis. Substantial capital inflows, about 6 per cent of GDP, had fuelled price bubbles in real estate and the stock market. Although these bubbles peaked at the end of 1993, by the end of 1997 share prices fell to about 29 per cent of their 1995 levels while the property company share index fell to 10 per cent of its 1995 level (Edison, Luangaram and Miller 1998, p. 4). In addition, relatively high domestic interest rates and the pegged exchange rate led to increases in foreign short-term borrowing5 that was largely unhedged. As the exchange rate fell, financial institutions suffered large capital losses as the value of their foreign denominated debt increased. These losses were magnified since most bank lending was backed by collateral, particularly real estate. Financial system solvency, already impaired, was further damaged as the value of the banks' collateral collapsed6 and non-performing loans increased. New domestic credit dried up, as did foreign credit with capital outflows of about 2 per cent of GDP. Otherwise viable firms were unable to finance working capital and new investment, leading to widespread bankruptcies and sharp declines in aggregate demand and real output.7 Financial system weaknesses (including implicit government guarantees against risk, inadequate monitoring, and supervision) prevented the devaluation from stimulating the economy as exporting firms were unable to take advantage of their increased price competitiveness (Montes and Popov 1999). …

Sino—Thai Corporate Profligacy and the Financial Turmoil of 1997

This paper seeks to examine the 1997 financial crisis in Thailand through an analysis of the structure and performance of Sino–Thai companies in banking, finance, and property. It argues that the crisis exposed structural weaknesses which had long been evident in Chinese corporations in South East Asia, and that, although many institutions – for example the Bangkok Bank – were able to survive by restructuring, a large number simply collapsed. The paper, which has a strong historical dimension, examines the relationships between Sino–Thai banks and business groups, the growth of finance companies in Thailand during the boom of the 1980s and early 1990s, the heavy inflows of foreign capital into the kingdom during the boom, the behaviour of the stock market and the property market, and the failure of Thai financial regulators to impose discipline on the Thai financial sector in the years leading to the crisis.

Health impacts of rapid economic changes in Thailand

The economic crisis in Thailand in July 1997 had major social implications for unemployment, under employment, household income contraction, changing expenditure patterns, and child abandonment. The crisis increased poverty incidence by 1 million, of whom 54% were the ultra-poor. This paper explores and explains the short-term health impact of the crisis, using existing data and some special surveys and interviews for 2 years during 1998–99. The health impacts of the crisis are mixed, some being negative and some being positive. Household health expenditure reduced by 24% in real terms; among the poorer households, institutional care was replaced by self-medication. The pre-crisis rising trend in expenditure on alcohol and tobacco consumption was reversed. Immunization spending and coverage were sustained at a very high level after the crisis, but reports of increases in diphtheria and pertussis indicate declining programme quality. An increase in malaria, despite budget increases, had many causes but was mainly due to reduced programme effectiveness. STD incidence continued the pre-crisis downward trend. Rates of HIV risky sexual behaviour were higher among conscripts than other male workers, but in both groups there was lower condom use with casual partners. HIV sero-surveillance showed a continuation of the pre-crisis downward trend among commercial sex workers (CSW, both brothel and non-brothel based), pregnant women and donated blood; this trend was slightly reversed among male STD patients and more among intravenous drug users. Condom coverage among brothel based CSW continued to increase to 97.5%, despite a 72% budget cut in free condom distribution. Poverty and lack of insurance coverage are two major determinants of absence of or inadequate antenatal care, and low birthweight. The Low Income Scheme could not adequately cover the poor but the voluntary Health Card Scheme played a health safety net role for maternal and child health. Low birthweight and underweight among school children were observed during the crisis. The impact of the crisis on health was minimal in some sectors but not in the others if the pre-crisis condition is efficient and healthy and vice versa. We demonstrated some key health status parameters during the 2-year period after the 1997 crisis but do not have firm conclusions on the impact of the economic crisis on health status, as our observation is too short and there is uncertainty on how long the crisis will last.

Locally made instruments for endoscopic carpal tunnel release.

Endoscopic carpal tunnel release (ECTR) was introduced into Thailand when this technique became widely accepted. However, the technique was limited to only a few institutions because of the training required and the very high cost of the instruments. Because of the economic crisis in Thailand, most hospitals in the public health ministry had no budget to invest in new instruments. However, new technology cannot be ignored so the authors modified some unused instruments in conjunction with an arthroscope in order to perform ECTR. A 5 cm by 4 mm slot was made at the mid-portion of an old unused 5 mm arthroscopic sheath. One end of this sheath was reshaped to fit the meniscectomy hook blade. A 4.5 mm Steinmann pin was reshaped to be the obturator of the arthroscopic sheath. ECTR was performed with this instrument in conjunction with an arthroscope (modified from Chow's 2-portals technique). The transverse carpal ligament was clearly viewed and identified, and the transverse carpal ligament was completely divided by the menisectomy hook blade. The operation time was 10 to 20 minutes. 30 patients received ECTR with this set of instruments, and they were completely relieved from the symptoms and returned to work early without any complications. The advantages of this instrument are that it is very cheap, it has a low learning curve, and it is safe and effective.

Bad banking in Thailand? An empirical analysis of macro indicators

It appears to be common wisdom that the basic cause of Thailand's crisis is its extraordinarily weak financial institutions. The article questions this proposition from an empirical viewpoint. It is well established that the long‐term performance of Thailand's financial system is favourable. The insight from moral hazard indicators is unexpected regarding the bad banking proposition, although not compelling. Finally, the liberalisation process produced inadequately addressed risks. However, this also applies to experienced and well‐regulated foreign banks. It is argued that the facts provided can be better explained in a framework of system change than by bad banking in Thailand.

The impact of the Asian economic crisis in Thailand

Traces the economic development of Thailand since 1945, referring to relevant research, and analyses the reasons why it was the first Southeast Asian country to collapse in the 1997 economic crisis: large current account deficits, excessive external debt, a collapse in the property sector, exchange rate mismanagement and political instability. Considers its future prospects and shows statistics on economic growth and inflation for the world as a whole and various countries and groups within it.

Once Only the Sky was the Limit: Bangkok's Housing Boom and the Financial Crisis in Thailand

This paper explores the causes of the collapse of the housing sector in Bangkok in 1997 and its impact on the financial sector and the economy of Thailand. With the liberalisation of the Thai economy and its integration into the world economy during the 1980s and the early 1990s, real estate companies gained access to US$-nominated off-shore loans at low interest rates. Because of the availability of cheap loans and the speculative demand for housing, financial institutions and real estate developers did not conduct market research and invested in doubtful projects, resulting in an enormous oversupply of housing. The close relationship between bankers, developers and politicians ensured that the government would bail out insolvent real estate companies and financial institutions. In 1996, exports fell and the economy stopped growing due to increased international competition. Unhedged foreign debts reached dangerous levels and speculative attacks forced the government to devalue the currency. Real estate companies and financial institutions would have collapsed without continued bail-outs by the government. However, the government's non-transparent policies eroded the confidence of the general public and international investors, resulting in capital flight and a serious financial and economic crisis.

Resisting globalization: a study of localism in Thailand

Recent work has suggested that the discontent over perceived negative impacts arising from liberalization and globalization need to be more carefully considered. The critiques emanating from non-governmental organizations and social movements are considered to be amongst the most significant. This paper examines one example of such criticism – localism – that emerged during the economic crisis in Thailand. This example is found to be a variety of populist reactions to the changes and inequalities generated by capitalist industrialization. The paper assesses this critique, its political strength and its potential to provide an alternative economic model for Thailand. While populist localism develops a useful moral argument regarding the impact of neoliberal globalization, it is unable to develop a sound alternative model.

Localism in Thailand: A Study of Globalization and Its Discontents

Recent work has suggested that the discontent over perceived negative impacts arising from liberalisation and globalisation needs to be more carefully considered. The critiques emanating from non-governmental organisations and social movements are considered to be amongst the most significant. This paper examines one example of such criticism – localism – that emerged during the economic crisis in Thailand. This example of localism is found to be an example of populist reaction to the changes and inequalities generated by capitalist industrialisation. The paper assesses this critique, its political strength and its potential to provide an alternative economic model for Thailand. While providing a useful moral argument regarding the impact of neoliberal globalisation, populist localism is unable to develop a sound alternative model.

CAPITAL FLOWS AND ECONOMIC CRISIS IN THAILAND

HE economic crisis in Thailand, which started with the flotation of its currency in July 1997, has been attributed to several factors. In my own research on the subject (Medhi 1999a, 1999b, for example), I have listed a total of six factors that contributed to the crisis: namely, financial sector mismanagement, excessive current account deficit, high domestic interest rates and uncontrolled capital flows, a rigid exchange rate, lack of economic leadership on the part of politicians, and decline in export performance. Other scholars of course have different opinions on the relevant causes of the crisis. In the above mentioned article, I have pointed to uncontrolled capital inflows as one of the factors leading to the crisis, but the amount of attention given to that factor was not sufficient. Recently, many economists have focused upon the importance of excessive capital flows into Thailand as a major cause of currency problems that eventually led to the financial and economic crises. C. H. Kwan (1998), for example, lists rapid capital inflows into Thailand following the establishment of the Bangkok International Banking Facility (BIBF) as one of the three causes of its currency crisis. Bhanupong Nidhiprabha (1999) sounds the alarm of the adverse consequences of capital flows long before the crisis struck. Chawin Leenabanchong (1999) had singles out the overflow of capital into Thailand as a major sin of the past that caused the present economic crisis. Prakarn Arphasil (1999) mentions the Thai authority’s concern over the management of economic policies aiming toward stabilization, particularly impacts of foreign capital movements on the economy. In general, the adverse effects of excessive capital flows can be applied to other economies as well. For example, Taya Teizo of the Daiwa Institute of Research of Japan puts it very bluntly: it was neither loose fiscal policy nor excessive supply of central bank credit that precipitated the Asian crisis; it was excessive capital inflows and subsequent outflows (Taya 1999).

Uneven crises: instituional foundations of East Asian economic turmoil

While rejecting arguments that locate the blame for the East Asian economic crisis in simplistic notions of ‘Crony capitalism’, this paper supplements analyses which have focused on the role of international finance capital. It does so by suggesting that threre were real internal causes of the cirsis in the countries most affectd and that these were intimately associated with asymmetrical state institutional capacities to mediate between the domestic and international economies. Nothing that the symptoms of crisis in Thailand, Malaysis, Indonesis and IIong Kong were quite different from those in Korea, the paper suggests that these differences were not coincidental. Rather they are traceable tothese asymmetric state capacities. Inter alia, the paper explores the role of Overseass Chnese conglomerates and state actors in the development of structurally weak economies in the Southcast Asian countries, and asks whether the ‘fundamentals’ of the real economies in question (including Korea)were indeed robust, as some commentators have argued. Analysing recent data on innovation and terms, of trade, the paper answers inteh negative. Throughout, the paper emphasizes the substantial institutional differences between teh East Asian crisis countries so as to combat accounts be they orthodox or radical-which advance monadic explanations for the turmoil. In so doing it insists that part of the explanation of why the crisis emerged in Thailand, Indonesia, Korea, etc., must involve an appreciation of why the crisis emerged in Thailand, Indonesia, Korea, etc., must involve an appreciation of why it has not (or at least not yet) emerged in Taiwan and Singapore. The paper, however, is not merely an account of the differing internal causes of the crisis. Ultimately it is a discourse on the uneven presence and differing forms of ‘developmental states’ in the region, and on their past, present and future possibilities for effective economic governance.

Turbulence in the World Economy

Two years ago, the tectonic plates of the world economy shifted. Within a matter of months, the crisis in Thailand had engulfed East Asia. Global financial markets were rocked a year later when Russia defaulted on forty billion dollars in foreign loans. Just as markets were starting to shrug that one off, economic panic hit Brazil this January, sending stock markets crashing and knocking down the country's currency, the real, more than 40 percent. Pundits are no longer asking if another country will be next, but who will be next.This article can also be found at the Monthly Review website, where most recent articles are published in full.Click here to purchase a PDF version of this article at the Monthly Review website.

An Investigation of Thai Listed Firms' Financial Distress Using Macro and Micro Variables

The emergence of the economic crisis in Thailand in 1997 is an interesting case for academic studies. Internationally, it had a contagion effect, spreading to countries in Asia and in other regions. Domestically, it caused a great many industrial and corporate bankruptcies. The Thai economy had been relatively stable since 1984. The recent development in 1997, however, produced a sudden economic slump resulting in closures of many Thai corporations. Using a logit regression, this study develops a macro-related micro-crisis investigation model. The significance of the model is in its ability to bridge a firm’s sensitivity to macroeconomic conditions and its financial characteristics in order to explore a firm’s financial distress. The findings indicate that macroeconomic conditions are critical indicators of potential financial crisis for a firm. The article shows that the higher a firm’s sensitivity to inflation, the higher the firm’s exposure to financial distress.