It's strategicallylocatedalongthebusiesttraderoutesintheworld, andit's become a surprisinglypopularcenterfor a newageoflaborthat's buckingthetrendofglobalmigration.
Nowfor a developingandindustrializingeconomythismaynotsoundtoosurprising, howeverthereare a lotofeconomiesintheworldtodaythatshouldbehighlysuccessfulbecauseofendowmentsinnaturalresources, largelaborforces, greatgeographicpositions, orjustbecausetheyhavemajorindustriesthatstillaren't.
When I'm indeepfocusmodedivingintothecomplexitiesofglobaleconomieslikeThailand I sometimesforgetabouteasybutcrucialthingslikedrinkingenoughwaterthroughoutthedaytostayhydrated.
That's wheretoday's sponsorElementcomesintoplay.
Elementis a zero-sugarelectrolytedrinkmixedwitheverythingyouneedandnothingyoudon't.
TounderstandhowThailandoperateseconomicallythereare a fewhistoricaldevelopmentsworthmentioningthatmakeituniquecomparedtoitsneighbours.
Asidefrom a fewlittleinvasionshereandtherethecountryistheonlysoutheastAsianterritorytoavoiddirectcolonialrule.
Moreover, whileactingas a zoneseparatingFrenchandBritishcoloniesitmanagedtoactas a hubfortradeandaftertheopeningoftheSuezcanalThailandbecametheprimaryexporterofriceintheregion, a trendthatcontinuestothisveryday.
Althoughthismayappeartobe a profitableseriesofeventsforboththeleadershipandthepeopleofThailand, it's economicprosperitywasoftenseparatedfromthepublicbytechnocratsmanagingthebulkofexchangesasitcontinuedtoindustrialise.
Domesticbenefitswerenotyetrealisedandthiscontinuedtobe a trendfordecades.
InfactThailand's economyasitexiststodayreallygotstartedinthemid-1980s whentheplazaaccordpre-sharedtheUSdollaragainstthecurrencyoftheUK, France, WestGermanyandespeciallyJapan.
TheChinesemarketwasstilljustopeningup, soJapanstartedlookingatthestrategictradeadvantageThailandheldatthecrossroadsoftheSouthChinaSeaandtheMalaccaStrait, a channelprimeforshippingbetweentheIndianandPacificOceans.
Thiscouldnothavecomeat a bettertimeasThailandhadbeenmakinganefforttoderegulateindustriesandopenitsdoorstomoreforeigninvestment, whichplayed a massiveroleinenticingJapanesefirmstomaketheleapandplantfactoriesandoperationsinthecountry, traininguptheworkforcetochangethemfromfarmerstofactoryworkers.
ThisalsopairedwellwithandencouragedThailandtomaketheleapfromagrarianself-sufficiencyto a modelofexportingthegoodsitcouldproducemostcompetitivelyandimportingwhateveritneededwiththemoneyitmadefromsellingthosegoods, leadingto a rangeofthoselong-awaiteddomesticbenefits.
Hemorrhagingcashaswellasinternationalfaith, Thailandhadnochoicebuttoraiseinterestrates, intheshortterm, by 25%.
Nowintheory, whenthingsarerunningsmoothly, thisseemslike a powermove.
Basicallyifonesees 10% interestratesitmightlooklike a goodinvestment, butifonesees 20% interestratesitstartstolooklike a desperateattempttogetmoneybyanymeansnecessary.
Thecountry's decisiontojointheInternationalMonetaryFund, orIMF, in 1949 turnedouttobefiscallyresponsibleaswell.
Afterpayingoffloans, theyweresubsequentlybailedout a strikingtwodecadesinadvanceofinitialprojections, andtheydidthisbyfocusingontherealeconomywithintheirborders, allwhileadding a highlevelofprudenceandgeneraldisciplinetotheirexport-ledeconomy.
Thisdevelopmentinparticularwasalmost a blessingindisguise, astheylearntearlythat a heavyrelianceonfinancialinstitutionsandspeculationwouldleavethemvulnerableiftheywereconfrontingsimilarcrises.
Additionally, asreferencedearlier, utilisingtheMalaccaStrait, Thailand's legendaryreputationforriceexportswas a godsend, andeventhatis a bitofanunderstatement.
See, riceisconsideredtobeaninelasticgood, meaningthatwhenthepriceofsaidgoodchanges, thequantitydemandeddoesn't changethatsignificantly, becauseit's moreorlessanessentialformofsustenancetobillionsofpeople.
AndgiventhelocationofThailand, closeto a largenumberofcountriesthatconsumericeas a mealtimestaple, dessert, andnecessity, therewasalwaysgoingtobe a largeconsumerbaseeagertopurchaseit, meaningthateventhoughitmaynotbethemostprofitableexport, itwasalwaysgoingtobeindemand.
Thecountryisverywelcomingandaccommodatingofforeignworkersandevenforeignerswhowanttosetuptheirownbusinessesinthecountryorbuy a home, butthereareseverelimitationsonthingslikepropertyownershipnotusedas a primaryresidence.
Thenomadsgetthepleasureofparticipatingin a growingmarket, whiletheThaipeoplegettofeedoffthelargestsliceofthepie.
It's a methodthattheoreticallyprovidesuniversalbenefitstoall, andthiscouldbe a bigwinforThailandbecausethesepeoplebring a lotofmoneytothelocaleconomyandalsospreadtheirtechnicalknowledgeinsomethingbeingdubbedreversebraindrain.
But, andthisis a bigbut, inThailandthishasn't reallyhappenedbecauseithasanelitecoupculture.
Infactthecountryissousedtocoupsatthispointthatithasjustbecometheexpectation, andmostindustriesoperateinthecountrywiththeunderstandingthatif a newgovernmentwantstoseizepowertheycan't messthingsuptoobadly.
Therecalibrationofeconomicpowerisalmostinevitably a post-coupoutcome, goingrightbackto 1932.
Thecoupswillmostlikelycontinuetooccur, butitbasicallyendsupbeinganisolatedfeudalskirmishfortheapprovalof a familytheyhavegenerationallydeemedtobesacredanduntouchable, effectivelyleavingforeignersandmostcitizenstoconductbusinessasusualtomaintainthestatusquo.
Andforthisreason, andmanyothers, Thailandis a bitofaneconomicparadox, onewithmanylessonsfortherestoftheworld.
Ifnothingelse, it's handlingofskilledmigrationinto a stillrelativelypoorpopulationissomethingthatputsother, farmoreestablishedcountriestoshame.
Startingasalwayswithsize, thecountryhas a GDPofjustoverhalf a trilliondollars, makingitthefourthlargesteconomyinAsia, behindonlyIndonesia, Japan, andofcourseChina.
Andthismakesit a majorglobaleconomybysizealone, anditgets a 7 outof 10.
ThatGDPisspreadoutover a populationof 71 millionpeople, whichmeansdespiteitsstrongnominalfigures, itonlyhas a GDPpercapitaof $6,910, orroughlyhalftheglobalaverage.
Thisisimprovingforallofthereasonsweexploredinthisvideo, butfornow, Thailandisstillearlyonthedevelopmentprocess, anditgets a 3 outof 10.