Economy of Thailand

Ayutthaya era (1351–1767) Thailand, formerly known as Siam, opened to foreign contact in the pre-industrial era. The diverse natural resources of Siam were underutilized. However, coastal ports and cities at the river mouths were early economic centers which welcomed merchants from Persia, Arab countries, Chinese dynasties and various kingdoms in South and Southeast Asia. The rise of Ayutthaya during the 14th century was connected to renewed maritime trade with China, India and Southeast Asia. Ayutthaya became one of the most prosperous trade centers in Asia. However, the Burmese–Siamese War (1765–1767) caused immense economic harm with trade disruption and the eventual destruction of Ayutthaya in 1767. Rattanakosin era (1782–1932) When the capital of the kingdom moved to Bangkok during the 19th century, foreign trade (particularly with China) became the focus of the government. Chinese merchants came to trade; some settled in the country and received official positions. A number of Chinese merchants and migrants became high dignitaries in the court. From the mid-19th century onward, European merchants were increasingly active. The Bowring Treaty, signed in 1855, guaranteed the privileges of British traders. The Harris Treaty of 1856, which updated the Roberts Treaty of 1833, extended the same guarantees to American traders. There were multiple costly conflicts with French Indochina from the 18th till the mid 20th century. Siam lost major disputed territories such as Laos and Cambodia to the French colonists. The British Empire gained control over Siamese provinces in the Malay peninsula and on the western border with British Burma. Nevertheless, Thailand was the only Southeast Asian country that remained sovereign from European colonial powers. The domestic market developed slowly, with serfdom, slavery related to the sakdina system as major causes of domestic stagnation. Most of the male population in Siam was in the service of court officials, while their wives and daughters may have traded on a small scale in local markets. Those who were heavily indebted might sell themselves as slaves. King Rama V abolished serfdom and slavery in 1901 and 1905, respectively. Thailand was a member of the Allies of World War I. From the early 20th century to the end of World War II, Siam's economy gradually became globalized. Major entrepreneurs were ethnic Chinese who became Siamese nationals. Exports of agricultural products (especially rice) were very important and Thailand has been among the top rice exporters in the world. The Siamese economy suffered greatly from the Great Depression, a cause of the Siamese revolution of 1932. Significant investment in education in the 1930s (and again in the 1950s) laid the basis for economic growth, as did a liberal approach to trade and investment. Bhumibol era (1946–2016) Post-war era (1945–1955) Postwar domestic and international politics played significant roles in Thai economic development for most of the Cold War era. From 1945 to 1947 (when the Cold War had not yet begun), the Thai economy suffered because of World War II. During the war, the Thai government (led by Field Marshal Plaek Phibunsongkram) allied with Japan and declared war against the Allies. After the war, Thailand had to supply 1.5 million tons of rice to Western countries without charge, a burden on the country's economic recovery. The government tried to solve the problem by establishing a rice office to oversee the rice trade. During this period, a multiple-exchange-rate system was introduced amid fiscal problems, and the kingdom experienced a shortage of consumer goods. In November 1947, a brief democratic period was ended by a military coup and the Thai economy regained its momentum. In his dissertation, Somsak Nilnopkoon considers the period from 1947 to 1951 one of prosperity. As a result, from 1950 onward, Thailand received military and economic aid from the US. The Phibunsongkram government established many state enterprises, which were seen as economic nationalism. The state (and its bureaucrats) dominated capital allocation in the kingdom. Ammar Siamwalla, one of Thailand's most prominent economists, calls it the period of "bureaucratic capitalism". During this period, the market-oriented Import-Substituting Industrialization (ISI) led to economic expansion in the kingdom during the 1960s. According to former President Richard Nixon's 1967 Foreign Affairs article, Thailand entered a period of rapid growth in 1958 (with an average growth rate of 7 percent per year). Economic problems (1970–1984) From the 1970s to 1984, Thailand suffered from many economic problems: decreasing US investment, budget deficits, oil-price spikes, and inflation. Domestic politics were also unstable. With the Vietnamese occupation of Cambodia on 25 December 1978, Thailand became the front-line state in the struggle against communism, surrounded by two communist countries and a socialist Burma under General Ne Win. Successive governments tried to solve the economic problems by promoting exports and tourism, still important for the Thai economy. One of the best-known measures to deal with the economic problems of that time was implemented under General Prem Tinsulanonda's government, in power from 1980 to 1988. Between 1981 and 1984, the government devalued the national currency, the Thai baht (THB), three times. On 12 May 1981, it was devalued by 1.07 percent, from THB20.775/US$ to THB21/US$. On 15 July 1981, it was again devalued, this time by 8.7 percent (from THB21/US$ to THB23/US$). The third devaluation, on 5 November 1984, was the most significant: 15 percent, from THB23/US$ to THB27/US$. The government also replaced the country's fixed exchange rate (where it was pegged to the US dollar) with a "multiple currency basket peg system" in which the US dollar bore 80 percent of the weight. Calculated from the IMF's World Economic Outlook Database, in the period 1980–1984, the Thai economy had an average GDP growth rate of 5.4 percent. Economic boom (1985–1997) Concurrent with the third devaluation of the Thai baht, on 22 September 1985, Japan, the US, the United Kingdom, France, and West Germany signed the Plaza Accord to depreciate the US dollar in relation to the yen and the Deutsche Mark. Since the dollar accounted for 80 percent of the Thai currency basket, the baht was depreciated further, making Thailand's exports more competitive and the country more attractive to foreign direct investment (FDI) (especially from Japan, whose currency had appreciated since 1985). In 1988, Prem Tinsulanonda resigned and was succeeded by Chatichai Choonhavan, the first democratically elected prime minister of Thailand since 1976. The Cambodian-Vietnamese War was ending; Vietnam gradually retreated from Cambodia by 1989, enhancing Thai economic development. After the 1984 baht devaluation and the 1985 Plaza Accord, although the public sector struggled due to fiscal constraints, the private sector grew. The country's improved foreign trade and an influx of foreign direct investment (mainly from Japan) triggered an economic boom from 1987 to 1996. Although Thailand had previously promoted its exports, during this period the country shifted from import-substitution (ISI) to export-oriented industrialization (EOI). During this decade the Thai GDP (calculated from the IMF World Economic Outlook database) had an average growth rate of 9.5 percent per year, with a peak of 13.3 percent in 1988. Many loans were backed by real estate, creating an economic bubble. By late 1996, there was a loss of confidence in the country's financial institutions; the government closed 18 trust companies and three commercial banks. The following year, 56 financial institutions were closed by the government. In the government, there was a call from Virapong Ramangkul (an economic advisor of Prime Minister Chavalit Yongchaiyudh) to devalue the baht, which was supported by former Prime Minister Prem Tinsulanonda. Yongchaiyudh ignored them, relying on the Bank of Thailand (led by Governor Rerngchai Marakanond, who spent as much as US$24 billion – about two-thirds of Thailand's international reserves) to protect the baht. On 2 July 1997, Thailand had US$2,850 billion remaining in international reserves, The country's GDP dropped from THB3.115 trillion at the end of 1996 to THB2.749 trillion at the end of 1998. In dollar terms, it took Thailand as long as 10 years to regain its 1996 GDP. The unemployment rate went up nearly threefold: from 1.5 percent of the labor force in 1996 to 4.4 percent in 1998. A sharp decrease in the value of the baht abruptly increased foreign debt, undermining financial institutions. Many were sold, in part, to foreign investors while others went bankrupt. Due to low international reserves from the Bank of Thailand's currency-protection measures, the government had to accept a loan from the International Monetary Fund (IMF). Overall, Thailand received US$17.2 billion in aid. The crisis impacted Thai politics. One direct effect was that Prime Minister Chavalit Yongchaiyudh resigned under pressure on 6 November 1997, succeeded by opposition leader Chuan Leekpai. The second Leekpai government, in office from November 1997 to February 2001, tried to implement economic reforms based on IMF-guided neo-liberal capitalism. It pursued strict fiscal policies (keeping interest rates high and cutting government spending), enacting 11 laws it called "bitter medicine" and critics called "the 11 nation-selling laws". The Thai government and its supporters maintained that with these measures, the Thai economy improved. In 1999, Thailand had a positive GDP growth rate for the first time since the crisis. Many critics, however, mistrusted the IMF and maintained that government-spending cuts harmed the recovery. Unlike economic problems in Latin America and Africa, they asserted, the Asian financial crisis was born in the private sector and the IMF measures were inappropriate. The positive growth rate in 1999 was because the country's GDP had gone down for two consecutive years, as much as −10.5 percent in 1998 alone. In terms of the baht, it was not until 2002 (in dollar terms, not until 2006) that Thailand would regain its 1996 GDP. An additional 1999 loan from the Miyazawa Plan made the question of whether (or to what extent) the Leekpai government helped the Thai economy controversial. Early 21st century An indirect effect of the financial crisis on Thai politics was the rise of Thaksin Shinawatra. In reaction to the government's economic policies, Thaksin Shinawatra's Thai Rak Thai Party won a landslide victory over Chuan Leekpai's Democrat Party in the 2001 general election and took office in February 2001. Although weak export demand held the GDP growth rate to 2.2 percent in the first year of his administration, the first Thaksin Shinawatra government performed well from 2002 to 2004 with growth rates of 5.3, 7.1 and 6.3 percent respectively. His policy was later called Thaksinomics. During Thaksin's first term, Thailand's economy regained momentum and the country paid off its IMF debt by July 2003 (two years ahead of schedule). Despite criticism of Thaksinomics, Thaksin's party won another landslide victory over the Democrat Party in the 2005 general election. The official economic data related to Thaksinomics reveals that between 2001 and 2011, the GDP per capita of Isan, the country's large north-eastern region, more than doubled to US$1,475, while, over the same period, GDP in the Bangkok area rose from US$7,900 to nearly US$13,000. The cost of air and water pollution in Thailand is around 1.6–2.6% of GDP per year based on a 2004 indicator. in 2004. The Indian Ocean tsunami affected the economy Thaksin's second term was less successful. The 2004 Indian Ocean earthquake and tsunami caused a big human toll, damage and negatively impacted the first-quarter Thai GDP in 2005. The Yellow Shirts, a coalition of protesters against Thaksin, also emerged in 2005. In 2006, Thaksin dissolved the parliament and called for a general election. The April 2006 general election was boycotted by the main opposition parties. Thaksin's party won again, but the election was declared invalid by the Constitutional Court. Another general election, scheduled for October 2006, was cancelled. On 19 September a group of soldiers calling themselves the Council for Democratic Reform under the Constitutional Monarchy led by Sonthi Boonyaratglin organized a coup, ousting Thaksin while he was in New York City preparing for a speech at the United Nations General Assembly. During the last year of the second Thaksin government, the Thai GDP grew by 5.1 percent. Under his government, Thailand's overall ranking in the IMD Global Competitiveness Scoreboard rose from 31st in 2002 to 25th in 2005 before falling to 29th in 2006. After the coup, Thailand's economy again suffered. From the last quarter of 2006 through 2007, the country was ruled by a military junta led by General Surayud Chulanont, who was appointed prime minister in October 2006. The 2006 GDP growth rate slowed from 6.1, 5.1 and 4.8 percent year-over-year in the first three-quarters to 4.4 percent (YoY) in Q4. Thailand's ranking on the IMD Global Competitiveness Scoreboard fell from 26th in 2005 to 29th in 2006 and 33rd in 2007. The government was under pressure from the 2008 financial crisis and the Red Shirts, who refused to acknowledge Abhisit Vejjajiva's prime ministry and called for new elections as soon as possible. However, Abhisit rejected the call until he dissolved the parliament for a new election in May 2011. In 2009, his first year in office, Thailand experienced a negative growth rate for the first time since the 1997 Asian financial crisis: a GDP of −2.3 percent. In the first two-quarters of 2011, when the political situation was relatively calm, the Thai GDP grew by 3.2 and 2.7 percent (YoY). The 2011 GDP growth rate fell to 0.1 percent, with a contraction of 8.9 percent (YoY) in Q4 alone. The country's overall competitiveness ranking, according to the IMD World Competitiveness Scoreboard, fell from 27 in 2011 to 30 in 2012. In 2012, Thailand was recovering from the previous year's severe flood. The Yingluck government planned to develop the country's infrastructure, ranging from a long-term water-management system to logistics. The Euro area crisis reportedly harmed Thailand's economic growth in 2012, directly and indirectly affecting the country's exports. Thailand's GDP grew by 6.5 percent, with a headline inflation rate of 3.02 percent, and a current account surplus of 0.7 percent of the country's GDP. On 23 December 2013, the Thai baht dropped to a three-year low due to the political unrest during the preceding months. According to Bloomberg, the Thai currency lost 4.6 percent over November and December, while the main stock index also dropped (9.1 percent). Following the Thai military coup in May 2014, Agence France Presse (AFP) published an article claiming that the nation was on the "verge of recession". Published on 17 June 2014, the article's main subject is the departure of nearly 180,000 Cambodians from Thailand due to fears of an immigration "clampdown", but concluded with information on the Thai economy's contraction of 2.1 percent quarter-on-quarter, from January to the end of March 2014. Since the cessation of the curfew that was enacted by the military in May 2014, the Federation of Thai Industries (FTI)'s chairman, Supant Mongkolsuthree, said that he projects growth of 2.5–3 percent for the Thai economy in 2014, as well as a revitalisation of the Thai tourism industry in the second half of 2014. Furthermore, Supant also cited the Board of Investment's future consideration of a backlog of investment projects, estimated at 700 billion baht, as an economically beneficial process that would occur around October 2014. Thailand's flagging economic performance led, at the end of 2015, to increased criticism of the National Council for Peace and Order's (NCPO) handling of the economy, both at home and in influential Western media. The country's economic growth of 2.8% in the first quarter of 2019 was recorded to be the slowest since 2014. Vajiralongkorn era (2016–present) The military government unveiled its newest economic initiative, "Thailand 4.0", in 2016. Thailand 4.0 is the "...master plan to free Thailand from the middle-income trap, making it a high-income nation in five years." The government narrative describes Thailand 1.0 as the agrarian economy of Thailand decades ago. Thailand 1.0 gave way to Thailand 2.0, when the nation's economy moved on to light industry, textiles, and food processing. Thailand 3.0 describes the present day, with heavy industry and energy accounting for up to 70 percent of the Thai GDP. Critics of Thailand 4.0 point out that Thailand lacks the specialists and experts, especially in high-technology, needed to modernise the Thai industry. "...the government will have to allow the import of foreign specialists to help bring forward Thailand 4.0," said Dr. Somchai Jitsuchon, research director for inclusive development at the Thailand Development Research Institute (TDRI). "...that won't be easy as local professional associations will oppose the idea as they want to reserve those professional careers for Thais only". The Thai government reduced the jet fuel tax between April 2020 and June 2023. In August 2024, the dismissal of Thai Prime Minister Srettha Thavisin exacerbated Thailand's economic difficulties, impeding the implementation of significant financial measures. This political upheaval intensified existing issues such as high household debt and economic stagnation, further undermining investor confidence and economic stability. ==Macroeconomic trends==

The following table shows the main economic indicators in 1980–2021 (with IMF staff estimates in 2022–2027). Inflation under 5% is in green. Over the past 32 years, the economy of Thailand has expanded. The GDP at current prices shows that from 1980 to 2012 the Thai economy has expanded nearly sixteen-fold when measured in baht, or nearly eleven-fold when measured in dollars. This makes Thailand the 32nd-biggest economy in the world, according to the IMF. With regard to GDP, Thailand has undergone five periods of economic growth. From 1980 to 1984, the economy has grown by an average of 5.4 percent per year. Regional businesses account for 70 percent of GDP, with Bangkok contributing 30 percent. After the 1984 baht devaluation and the 1985 Plaza Accord, a significant amount of foreign direct investment (mainly from Japan) raised the average growth rate per year to 8.8 percent from 1985 to 1996 before slumping to −5.9 percent per year from 1997 to 1998. From 1999 to 2006, Thailand averaged a growth rate of 5.0% per year. Since 2007, the country has faced a number of challenges: a military coup in late 2006, political turmoil from 2008 to 2011, the 2008 financial crisis, floods in 2010 and 2011, and the Euro area crisis. As a result, from 2007 to 2012 the average GDP growth rate was 3.25% per year. According to the IMF, in 2012 Thailand ranked 92nd in the world in its nominal GDP per capita. ==Industries==

SMEs Virtually all of Thailand's firms, 99.7 percent, or 2.7 million enterprises, are classified as small or medium-sized enterprises (SMEs). , SMEs account for 80.3 percent (13 million) of Thailand's total employment. Despite the large number of SMEs, their contribution to the nation's GDP decreased from 41.3 percent of GDP in 2002 to 37.4 percent in 2013. Their declining contribution is reflected in their turnover rate: seventy percent fail within "...a few years". Agriculture, forestry and fishing . Forty-nine percent of Thailand's labor force is employed in agriculture. In 2008, agriculture, forestry and fishing contributed 8.4 percent to GDP; in rural areas, farm jobs supply half of employment. It is a major exporter of shrimp. Other crops include coconuts, corn, rubber, soybeans, sugarcane and tapioca. Thailand is the world's third-largest seafood exporter. Overall fish exports were worth around US$3 billion in 2014, according to the Thai Frozen Foods Association. Thailand's fishing industry employs more than 300,000 persons. In 1985, Thailand designated 25 percent of its land area for forest protection and 15 percent for timber production. Forests have been set aside for conservation and recreation, and timber forests are available for the forestry industry. Between 1992 and 2001, exports of logs and sawn timber increased from 50,000 to 2,000,000 cubic meters per year. The regional avian-flu outbreak contracted Thailand's agricultural sector in 2004, and the tsunami of 26 December devastated the Andaman Sea fishing industry. In 2005 and 2006, agricultural GDP was reported to have contracted by 10 percent. Industry and manufacturing . In 2007 industry contributed 43.9 percent of GDP, employing 14 percent of the workforce. Industry expanded at an average annual rate of 3.4 percent from 1995 to 2005. The most important sub-sector of industry is manufacturing, which accounted for 34.5 percent of GDP in 2004. Electrical and electronics Electrical and electronics (E&E) equipment is Thailand's largest export sector, amounting to about 15 percent of total exports. In 2014 Thailand's E&E exports totaled US$55 billion. But problems may loom for Thailand's high-tech sector. In January 2015, the country's manufacturing index fell for the 22nd consecutive month, with production of goods like televisions and radios down 38 percent year-on-year. Manufacturers are relocating to nations where labour is cheaper than in Thailand. In April 2015, production will cease at an LG Electronics factory in Rayong Province. Production is being moved to Vietnam, where labour costs per day are US$6.35 versus US$9.14 in Thailand. Samsung Electronics will site two large smartphone factories in Vietnam. It made around US$11 billion worth of investment pledges to the Vietnamese economy in 2014. As technologies evolve, e.g., as HDDs are replaced by solid-state drives (SSDs), manufacturers are reexamining where best to produce these latest technologies. As many as 73 percent of automotive sector workers in Thailand face a high risk of job loss due to automation. Construction Thailand's construction industry is projected to grow to THB 489.6 billion in 2026, driven by public infrastructure projects such as the Eastern Economic Corridor. Gems and jewelry Gem and jewelry exports are Thailand's third-largest export category by value, trailing automotive and parts and computer components. In 2019, gem and jewelry exports, including gold, exceeded US$15.7 billion, up 30.3% from 2018 (486 billion baht, up 26.6%). Key export markets included ASEAN, India, the Middle East, and Hong Kong. The industry employs more than 700,000 workers according to the Gem and Jewelry Institute of Thailand (GIT). Mining Thailand is the world's second-largest exporter of gypsum (after Canada), although government policy limits gypsum exports to support prices. In 2003 Thailand produced more than 40 different minerals, with an annual value of about US$740 million. In September 2003, to encourage foreign investment in mining the government relaxed its restrictions on mining by foreign companies and reduced mineral royalties owed to the state. As of 2025, Thailand's Monetary Policy Committee is expected to cut interest rates from 1.5%, likely two times by the first half of 2026, bringing the rate down to 1%. Thailand's insurance industry is currently valued at approximately US$27 billion (THB 918 billion) as of 2024. Leading insurance companies in the country include Bangkok Insurance, Deves Insurance, Muang Thai Life Assurance, Roojai Insurance and Thai Life Insurance. Thailand's Ministry of Finance approved four licensed brokers and dealers of cryptocurrencies in the country: Bx, Bitkub, Coins and Satang Pro. The country still did not elaborated regulation for ICOs, though it announced in late 2018 to loosen the rules. Education Healthcare Real estate and housing Retail Retail employs more than 6 million Thai workers. Most are employed by small businesses. Large multinational and national retail players (such as Lotus's, 7-Eleven, Siam Makro, Big C, Villa Market, Central Group and The Mall Group) are estimated to employ fewer than 400,000 workers. This accounts for less than seven percent of Thailand's total employment in retail. ==Budget==

The Kingdom of Thailand's FY2017 budget was 2.733 trillion baht. In May 2018, the Thai Cabinet approved a FY2019 budget of three trillion baht, up 3.4 percent—100 billion baht—from FY2018. Annual revenue is projected to reach 2.55 trillion baht, up 4.1 percent, or 100 billion baht. Overall, the national budget will face a deficit of 450 billion baht. The cabinet also approved a budget deficit until 2022 in order to drive the economy to a growth of 3.5–4.5 percent a year. ==Labour==

Thailand's labour force has been estimated at from 36.8 million employed (of 55.6 million adults of working age) to 38.3 million (1Q2016). About 49 percent were employed in agriculture, 37 percent in the service sector and 14 percent in industry. In 2005 women constituted 48 percent of the labour force, and held an increased share of professional jobs. Thailand's unemployment rate was 0.9 percent as of 2014, down from two percent in 2004. In fiscal year 2015, 71,000 Thais worked abroad in foreign countries. Taiwan employed the most Thai employees overall with 59,220 persons, followed by South Korea at 24,228, Israel at 23,479, Singapore at 20,000, and the UAE at 14,000. Most employees work in metal production, agriculture, textile manufacturing, and electronic part manufacturing fields. As of 2020, Thai migrant labourers overseas generate remittances worth 140 billion baht. The number of migrant workers in Thailand is unknown. The official number—1,339,834 registered migrant workers from Cambodia, Laos, and Myanmar—reported by the Office of Foreign Workers Administration under the Ministry of Labour, represents only legal migrant workers. Many more are presumed to be non-registered or illegal migrants. The Thailand Development Research Institute (TDRI) estimates that there may yet be more illegal migrant workers than legal ones in Thailand. ==Foreign trade==

China has replaced the United States as Thailand's largest export market while the latter still holds its position as its second-largest supplier (after Japan). While Thailand's traditional major markets have been North America, Japan, and Europe, economic recovery in Thailand's regional trading partners has helped Thai export growth. As of 2022, China is Thailand's largest trading partner with 3.69 trillion baht ($106 billion) worth of trade, accounting for almost 20% of all Thai foreign trade. In 2022, China also became the largest foreign investor in Thailand, totaling 77.4 billion baht, more than Japan and USA. Recovery from financial crisis depended heavily on increased exports to the rest of Asia and the United States. Since 2005 the increase in export of automobiles from Japanese manufacturers (particularly Toyota, Nissan and Isuzu) has helped improve the trade balance, with over one million cars produced annually since then. Thailand has joined the ranks of the world's top ten automobile-exporting nations. The Bangkok area is one of the most prosperous parts of Thailand and heavily dominates the national economy, with the infertile northeast being the poorest. A concern of successive Thai governments, and a focus of the recently ousted Thaksin government, has been to reduce the regional disparities which have been exacerbated by rapid economic growth in Bangkok and financial crisis. Although little economic investment reaches other parts of the country except for tourist zones, the government has stimulated provincial economic growth in the eastern seaboard and the Chiang Mai area. Despite talk of other regional development, these three regions and other tourist zones still dominate the national economy. Although some US rights holders report good cooperation with Thai enforcement authorities (including the Royal Thai Police and Royal Thai Customs), Thailand remained on the priority watch list in 2012. The United States is encouraged that Thailand's government has affirmed its commitment to improving IPR protection and enforcement, but more must be done for Thailand to be removed from the list. Although the economy has grown moderately since 1999, future performance depends on continued reform of the financial sector, corporate-debt restructuring, attracting foreign investment and increasing exports. Telecommunications, roads, electricity generation and ports showed increasing strain during the period of sustained economic growth. Thailand is experiencing a growing shortage of engineers and skilled technical personnel. Major Trade Partners The following table shows the largest trading partners for Thailand in 2021 by total trade value in billions of USD. == Regional economies ==

Isan The economy of Isan is dominated by agriculture, although output is poor and this sector is decreasing in importance at the expense of trade and the service sector. Most of the population is poor and badly educated. Many labourers have been driven by poverty to seek work in other parts of Thailand or abroad. Although Isan accounts for around a third of Thailand's population and a third of its area, it produces only 8.9 percent of GDP. Its economy grew at 6.2 percent per annum during the 1990s. In 1995, 28 percent of the population was classed as below the poverty line, compared to just 7 percent in central Thailand. In 2000, per capita income was 26,317 baht, compared to 208,434 in Bangkok. Even within Isan, there is a rural/urban divide. In 1995, all of Thailand's ten poorest provinces were in Isan, the poorest being Sisaket. However, most wealth and investment is concentrated in the four major cities of Khorat, Ubon, Udon, and Khon Kaen. These four provinces account for 40 percent of the region's population. Special Economic Zones (SEZ) In his televised national address on 23 January 2015 in the program "Return Happiness to the People", Prime Minister Prayut Chan-o-cha addressed the government's policy on the establishment of special economic zones. He said that the policy would promote connectivity and regional economic development on a sustainable basis. There are currently 10 SEZs in Thailand, with trade and investment valued at almost 800 billion baht a year. In 2014, the government launched a pilot project to set up six special economic zones in five provinces: Tak, Mukdahan, Sa Kaeo, Songkhla, and Trat. In the second phase, which is expected to begin in 2016, seven special economic zones will be established in another five provinces: Chiang Rai, Kanchanaburi, Nong Khai, Nakhon Phanom, and Narathiwat. Critics of the SEZs maintain that free trade agreements and SEZs are incompatible with the principles of the late-King Bhumibol's sufficiency economy, claimed by the government to be the inspiration for governmental economic and social policies. ==Poverty and inequality==

The number of Thailand's poor declined from 7.1 million people in 2014 (10.5 percent of the population), to 4.9 million people in 2015 (7.2 percent of the population). Thailand's 2014 poverty line was defined as an income of 2,647 baht per month. For 2015 it was 2,644 baht per month. According to the NESDC in a report entitled, Poverty and Inequality in Thailand, the country's growth in 2014 was 0.8 percent and 2.8 percent in 2015. NESDC Secretary-General Porametee Vimolsiri said that the growth was due to the effect of governmental policies. The report also noted that 10 percent of the Thai population earned 35 percent of Thailand's aggregate income and owned 61.5 percent of its land. Structural inequality in Thailand is frequently attributed to high levels of market concentration and the dominance of large, family-owned conglomerates in protected domestic sectors. According to research from the Puey Ungphakorn Institute for Economic Research (PIER) of the Bank of Thailand, nearly 47% of total corporate profits in 2017 were generated by firms belonging to interconnected business groups, while the top 5% of firms accounted for approximately 85% of total profits. Some researchers characterize this structure as oligopolistic, and suggest it may create significant barriers to entry for small and medium-sized enterprises (SMEs), potentially limiting social mobility and contributing to income and wealth inequality. Thailand was ranked as the world's third most unequal nation, behind Russia and India, in the Credit Suisse Global Wealth Databook 2016 (companion volume to the Global Wealth Report 2016), with one percent of the Thai population estimated to own 58 percent of Thailand's wealth. ==Shadow economy==

According to Friedrich Schneider, an economist at Johannes Kepler University Linz in Austria and author of Hiding in the Shadows: The Growth of the Underground Economy, Thailand's shadow economy ranks globally among the highest. He estimates that Thailand's shadow economy accounted for about 40.9 percent of official GDP in 2014, a figure that includes gambling and small-arms trafficking, but largely excludes narcotics. Schneider defines the shadow economy as market-based legal production that is intentionally concealed to avoid taxes, social-security payments, labour standards or administrative rules. His definition excludes purely illegal activities such as robbery, burglary or drug trafficking. The shadow economy also encompasses widespread loan sharking. Government studies estimate around 200 000 informal lenders operate nationwide, many charging interest rates that place a heavy burden on low-income borrowers. ==See also==