The Rise and Fall of Thailand's Export-Oriented Industries

In the past three decades, with the exception of the Asian financial crisis in 1997-98, the Thai economy was propelled by the rapid growth of manufactured exports. There were 18 years of a double-digit export growth, averaging 20.5 percent per year. In 2009, Thailand's exports collapsed after the 2008-09 global financial crisis, but rebounded sharply in the following year. Thailand's exports growth significantly slowed down in 2011 and 2012. From 2013 to 2016, Thailand's exports experienced negative growth. The global recession and China's slowdown contributed to the dismal export performance. There was also a supply factor responsible for the negative growth, however. The dwindling level of foreign direct investment (FDI), caused by Thailand's political turmoil and pessimistic business sentiment, has diminished export capability and competitiveness. The fall of Thailand's export-oriented industries can be attributed to the country's inability to attract FDI inflows. Some industries that are able to secure continuous flows of FDI remain competitive, whereas others that cannot will progressively retreat from the world market.