Industrialization and Labour Fragmentation in Thailand

Abstract

Thailand’s economy is presently undergoing a structural crisis, which is a result of a bubble economy — the divergence between speculative investment and the “real” economy. In 1987, the Thai economy went into a boom, and Thailand was in line to be the fifth “Asian Tiger” (as South Korea, Taiwan, Singapore, and Hong Kong were dubbed). The only question was when it would happen. A Time magazine story even trumpeted Thailand as the up-and-coming “Tiger,” and the International Monetary Fund (IMF) predicted that Thailand would be one of the next newly industrializing countries (NIC) by the year 2000. Ten years later, in 1997, the boom became a bust. Now, speculation centres on how long the crisis will last. The IMF predicts that the crisis may last 2 to 3 years if a Structural Adjustment Program (SAP) is strictly implemented. The Thai government sees a return to prosperity around the corner, and it has already launched big publicity campaigns to promote this idea. My impression is that Thailand’s economic crisis is here to stay. We are not yet at the depths of the crisis — it is only the beginning, and we are rolling down the hill. The crisis is structural. I may be pessimistic, but we have to wake up from the dream of the “Asian miracles” and trace our own destiny. We cannot let the market do that.