Will Globalization Help Thailand Improve Its Economy?

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Table of Contents

Introduction
Economic issues in Thailand
Will globalization help Thailand improve its economy?
Conclusion
References

Introduction

Globalization has been seen from many dimensions by different scholars, each trying to show the positive and the negative aspect of it. Globalization takes in the concept of trade and the long-term direct foreign investments from the multinational corporations. It also looks into the aspect of the flow of capital in a particular country. According to Bhagwati (2005), globalization needs also to cover issues of migration and the integration and transfer of technology among the different countries.

On the other hand, globalization and economic globalization are taken in different aspects in terms of particular dimensions like the accessibility of mass media internationally or the rate of increase in enrollment cases of foreign students. In this respect, the idea of globalization in a particular nation must be looked at from its broad perspective, taking into consideration the merits and demerits and its impact on the economy of a country. This study looks at the ideas put across by Bhagwati in his book In Defense of Globalization and analyses whether globalization should be of benefit to a country like Thailand or not. It tries to bring out the facts as pointed out in the book and whether they justify the applicability of globalization in Thailand’s economy.

Economic issues in Thailand

Thailand’s economy is one of those economies in the world that are highly dependent on exports. Its exports amount to two-thirds of the total gross domestic product and with its high purchasing power, it has been ranked second in its economic growth in Southeast Asia. Its economic recovery in the 1997-1998 financial crises was made possible by its high rates of exports, among other factors. Thailand’s labor force depends mainly on agriculture, but this does not outdo the contribution of exports to its GDP. Tourism industry has also been improving over the last few years despite the high rates of political instability and this has added to its economic growth rate and a rise in the gross domestic product between 5-7% in the past five years (Lechner, 2004).

Thailand’s growth rate has ranged from 8% to 9.4% from 1985 to 1996 and this has made it be ranked as a tiger economy. Its participation in international trade has also helped it work towards the overcoming the 1997-1998 financial crisis. Some of the other economic issues that the country has been a current account deficit in the year 2005, resulting in a -4.3% deficit in the gross domestic product. In the following years, it improved to a surplus and the economy was able to get to its feet once more. Other activities that contribute to the country’s economy include forestry, fishing, mining and manufacturing.

Will globalization help Thailand improve its economy?

Globalization has been seen by many as one of the factors that negatively affect the growth process of both the rich and the poor countries’ economies. However, as Bhagwati (2005) puts it, globalization involves a cultural exchange and Thailand has been involved in exports and attracting tourists into their country and this has been one of the positive impacts of globalization. A country that depends heavily on the global market for its economic development means that globalization may have a significant positive impact in future.

Thailand has been able to use globalization to increase the country’s political and individual freedom and it has also been able to develop its culture by integrating with other well-developed nations. Technology has improved, hence resulting in an increase in industrialization and statistics show that industry increased at a percentage rate of 3.4% between 1995-2005, the industries mainly dealing with manufacturing. Improved manufacturing processes were obtained from the United States and the country has been able to export most of its products to this country, among other nations of the world.

Besides exporting most of its products, Thailand also imports commodities like oil and natural gas from developed countries, mainly Britain and hence it has been able to obtain energy through globalization. The country’s domestic consumption in energy exceeds its production and it has to import to cater to the needs of its people.

Tourism is another effect of globalization that has impacted Thai’s economy. A large number of workforce is employed in this sector and since the country has a good reputation in the global economy, it is able to attract a large number of tourists. The country’s tourism industry contributes to approximately 44.7% of the total gross domestic product.

Conclusion

In summary, despite the fact that most scholars take globalization as a way of creating dependence of a country on the powerful nations like America, Thailand has been one country that has benefited from it. It has brought a more positive impact on the country’s economy and it can be said to be one of the ways of gaining freedom from the restrictions of geography. It is, therefore, countries engage in the globalization process for their development.

References

Bhagwati, J (2005). In Defense of Globalization: Oxford University Press, USA.
Lechner, F (2004). The Globalization Reader: Oxford University Press, USA.

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