No empty boast: Thailand’s economy remains a powerhouse
There’s an old saying that a pessimist will refer to a half-filled glass as half empty while an optimist will say the glass is half full. Both observations are, of course, technically correct so the real question is what is the best way to interpret that ‘data’ for the longer term?
Take the Thai economy. Pessimists will look at a range of economic indicators and find all sorts of reasons to suggest an imminent implosion of the economic model while optimists will suggest the nation is about to embark on a period of greater economic growth.
The aim of this article is not to take either the glass half full or half empty position but more to look at the broader statistical position of the Thai economy and let the reader make his or her own conclusions. OK, the headline does make it fairly clear that we are favouring the glass half full side of the fence, but that’s probably because the overall numbers, outlined below, stack up pretty well across the board.
According to Duangjai Asawachintachit, the deputy secretary-general of the Thailand Board of Investment, Thailand has the 33rd largest economy in the world. Considering there are about 200 nations on the planet that’s a pretty strong statistic. Tellingly, Thailand is the second-largest economy in the ASEAN bloc, behind Singapore.
Just as impressively, Thailand is the 20th largest exporter of goods, which goes a long way to understanding, perhaps, why the Thai Baht always appears so strong, even against currencies like the US dollar and British pound sterling.
Thailand is also the 17th largest manufacturing economy in the world, propelled by a labour force that totals around 39 million people.
Between 2009 and the first half of 2012, Thailand’s second-biggest growth industry in terms of exports was in the assembly of motor cars, parts, and accessories. That industry grew by just over 23 per cent year on year while the rubber and electronic integrated circuits sectors contracted by just over 26 and 21 per cent year on year over the same period.
The biggest growth industry for export in the period was in the fuel refining area, which grew by a massive 48.09 per cent, albeit coming off a smaller overall base than the car and car parts industry.
The automotive industry presents a very good example of how Thailand has managed to take a strong market share in a very competitive environment. As at 2011, Thailand ranked as the world’s 15th-largest automobile producer, churning out almost 1.458 million units.
The leader, by a long way, was China with more than 18 million vehicles manufactured. Second and third places are not surprisingly held by the United States and Japan respectively, both with over eight million units. Germany and South Korea round out the top five.
Thailand, at 15th place, is just behind the United Kingdom (which has a similar population in terms of numbers), and ahead of the Czech Republic.
Almost half of Thailand’s motor vehicle production numbers are sent as exports, making the industry one of the main earners of foreign income for the nation. Naturally, these kinds of numbers mean a huge number of jobs, and it’s estimated around 525,000 people are directly employed by the industry.
Thai politicians love to use the word ‘hub’ when referring to almost anything regarding Thailand and its place in the region. To be fair, in the automotive sense, Thailand is indeed viewed as a ‘hub’ by five of Japan’s leading motor vehicle companies in terms of production.
Honda, Isuzu, Mitsubishi, Nissan, and Toyota all have major production centres in Thaland which service all of the Asia, Oceania, the European Union, Africa, and Central and South American markets. Given that ASEAN is expected to become the world’s eighth-largest automotive market, Thailand is well placed to continue its dominant role in this sector alone for many years to come.