"We must accept that the global economic landscape in the new millennium is much different than in preceding decades."
- Thaksin Shinawatra, Prime Minister of Thailand
Prior to the Asian Economic Crisis sparked by the collapse of the Thai baht
in 1997, Southeast Asia looked like a sure bet for a long period of high sustained
economic growth. Its membership in the elite group of industrialized countries
seemed assured. The crisis came as a complete surprise to many area experts,
and brought an end to the era of the "Asian Miracle." While growth
rates are gradually edging upwards, the region has not been able to restore
the pre-crisis mechanisms that propelled many of its countries out of poverty
and into near affluence.
As a region, Southeast Asia's economies are the most open to international
trade. While such openness spurred their growth for several decades, in the
post 1997 period it has left them increasingly vulnerable to adverse economic
and political shocks. The region suffered a tremendous blow to its technology
exports when the 2001-02 recession spread to the region following the collapse
in America's information technology investment. Increasing competition with
China for foreign investment and export markets is also making it harder for
Southeast Asian economies to sustain growth rates approaching those attained
in the pre-1997 period.
Greatly compounding the region's economic woes was the powerful Bali terrorist
attack and its impact on tourism. U.S. and other Western intelligence sources
have confirmed the presence of powerful terrorist networks throughout the
regionIndonesia, Malaysia, Singapore, Thailand and Philippines. The
openness of these economies makes them especially vulnerable to terrorist
Despite these challenges, the Thai economy began accelerating from a growth
rate of 1.9 percent in 2001 (the year Dr. Thaksin was elected Prime Minister)
to 5.3 percent in 2002, to a projected 6.5 percent in 2003, with forecasts
of even higher rates in the next several years.
Compared with the Thailand that went hat in hand to the IMF in 1997, Thailand
today is a nation transformed: in addition to its impressive growth, its foreign
debt has dropped by two-thirds, and the stock market soared 69 percent during
the first three-quarters of 2003.
Thailand has built on its recent economic successes to quickly become one
of the United States' most valued allies in Asia. The country has cooperated
closely with the United States in regional counterterrorism operations and,
unlike many nations, has actually made good on its on pledges to send troops
to Iraq as well as Afghanistan. The payoff is
sure to be substantial, as evidenced by the United States' recent designation
of Thailand as a major non-NATO ally, and the
beginning of negotiations for a free trade agreement between the two countries.
Finally, the country's recent economic success has in the eyes of many observers
elevated its Prime Minister Thaksin Shinawatra to the status of likely successor
to fill the void left as Malaysian Prime Minister Mahathir Mohamad steps down
as head of APEC (Asia-Pacific Economic Cooperation).
Clearly, under Thaksin Thailand is becoming one of the pivotal states in Southeast
What is especially interesting about Thailand is the unique set of economic
policies implemented during this period of accelerated growth. Often dubbed
"Thaksinomics," these policies represent a distinct break from the
past. To Thaksin's followers the new economic measures are not only capable
of returning Thailand to the pre-1997 glory days of high growth, but perhaps
even more importantly, enabling the country to successfully coexist economically
with China, while, at the same time, making Thailand a less fertile ground
This website examines the phenomenon of Thaksinomics. What does it replace?
What are its main assumptions? The key policies and programs implemented to
date? The likelihood of its success? Implications for the United States?