The document discusses Thailand's economic recovery following the 1997 Asian Financial Crisis. It notes that GDP growth has recovered but private investment remains sluggish. Exports have been a key driver of growth, particularly in automobiles and electronics, due to regional integration and trade reforms. However, competition is increasing from lower-cost countries. The document argues for continued reforms to investment climate, trade facilitation, skills development, and innovation to sustain strong and inclusive growth.

1. REFORMS & RECOVERY Kazi Matin Archanun Kohpaiboon Kirida Bhaopichitr

4. GDP Recovery Next to Korea’s

5. Private Cons Growth Similar to Korea

7. GDP Shares: 1994-95, 2004-05

8. PRIVATE INVESTMENT Can it revive more strongly?

10. Private Investment Recovery

13. STRONG EXPORT GROWTH DURING RECOVERY Can it Continue?

15. Export Performance Strongest

19. Reforms Made Thailand More Open

21. East Asia’s countries have high shares of FDI from other East Asian countries -- promoting REGIONAL INTEGRATION

22. Percentage point change in extra-regional and intra-regional market shares between 1994-96 average and 2002-04 average Regional Integration Major Driver of Exports in E. Asia

23. Regional Integration – Production fragmentation to lower costs changes production network allocation to benefit diff. countries

24. Multinational Corporations Decide Where to Locate Parts of Production within E. Asia & World Whether THAILAND or some other country benefits – depend on their relative costs & on their integration with domestic economy

25. Competition for Thailand -- Lower-income China experienced notable technological upgrading

26. Thailand’s Upgrading, More Modest Source: MOC 2.0 0.7 HS28,29 and 30 Chemical and pharmaceutical products 2.0 2.2 HS90 and 91 Scientific instruments, watches and photographic equipment 0.7 0.5 HS8541 (Semiconductors) 5.7 5.7 HS8517-8531 (Communication equipment) 18.3 16.5 HS85 exc.8541 Electrical machinery (other than semiconductors) 10.4 9.7 HS8469-8473 (Computer and office equipment) 17.5 14.0 HS84 Non-electrical machinery 7.4 1.2 HS87 More skill/technology intensive: Road motor vehicles 7.5 17.1 HS41-43 and 50-65 Labor-Intensive Exports: Leather, textiles, apparel, footwear 2005 1995 HS code

29. Exports of Vehicles & Parts

30. All Thai Production, except Design

32. Way Forward Policy Reforms