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UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS VIETNAM-NETHERLANDS PROGRAMME FOR MASTER’S DEGREE IN DEVELOPMENT ECONOMICS THE IMPACTS OF EXPORTS ON ECONOMIC GROWTH: THE CASE OF SELECTED SOUTHEAST ASIA COUNTRIES A thesis presented by Ha Manh Cuong In partial fulfilment of the requirements for obtaining the degree of MASTER OF ARTS IN ECONOMICS OF DEVELOPMENT Academic Supervisor Dr Le Cong Tru HO CHI MINH CITY, NOVEMBER 2012 i CANDIDATE’S CERTIFICATION I hereby certify that the paper has not been submitted in whole or in part for any degree before or has not been submitted at the time being to qualify for other degrees and any other academic award; All the contents of the paper is the outcome of works that I has done; any paid or unpaid material are acknowledged; and ethics standards as well as guidelines have been tightly followed Signed : _ Name : Ha Manh Cuong Date : _ ii ACKNOWLEDGEMENTS The thesis is a partial fulfilment of the requirements for obtaining the degree of Master of Arts in Economics of Development, which jointly conducted by Economics University of Ho Chi Minh City, Vietnam and the Institute of Social Studies in The Hague, Netherlands The thesis is fruit of knowledge I have gained and contributions from many other people First of all, I would like to show my deep thanks to my supervisor, Dr Le Cong Tru who gave me his caring instruction during the time I focused on doing the thesis and I did also learn so much from him the ways to write and prepare a research paper well I am profoundly grateful to the teachers and the staffs of the Vietnam Netherlands Project in Ho Chi Minh City who guided and helped me in the process of doing the thesis Besides, I would like to give my heartfelt thanks to Prof Nguyen Trong Hoai who taught me Econometrics and the ways to write a paper well Finally, I am very happy to express my profound gratitude to my parents who are always in my back to silently encourage and support me at anytime I got difficult and discouraged in doing the thesis I bear full responsibilities for all errors, omissions, and shortcomings in the thesis Ha Manh Cuong Ho Chi Minh City, 2012 iii TABLE OF CONTENTS CHAPTER 1.1 PROBLEM STATEMENT 1.2 RESEARCH OBJECTIVES 1.3 RESEARCH QUESTIONS 1.4 STRUCTURE OF RESEARCH CHAPTER 2.1 INTRODUCTION 2.2 CONCEPTS AND DEFINITIONS 2.3 THEORETICAL FRAMEWORK CHAPTER 16 3.1 INTRODUCTION 16 3.2 EMPIRICAL MODEL 16 3.3 METHODOLOGY AND DATA COLLECTION 17 3.4 DESCRIPTION OF VARIABLES 18 3.5 SUMMARY OF THE STEPS USED IN THIS STUDY 19 CHAPTER 21 4.1 INTRODUCTION 21 4.2 SELECTION REASON OF FIVE ASIAN COUNTRIES 21 4.3 HIGHLIGHTS OF EXPORT ACTIVITIES AND SOURCES OF EXPORT GROWTH OF ASEAN-5 OVER THE LAST DECADES 22 4.3.1 Economic growth of Vietnam over the studied period 22 4.3.2 Export activity of Vietnam 24 4.3.3 Comparison of correlation between Vietnam’s export growth and economic growth 25 4.3.4 Economic growth of Malaysia over the studied period: 26 4.3.5 Export activity of Malaysia 28 4.3.6 Comparison of correlation between Malaysia’s export growth and economic growth 28 4.3.7 Economic growth of Thailand over the studied period 30 4.3.8 Export activity of Thailand 33 4.3.9 Comparison of correlation between Thailand’s export growth and economic iv growth 34 4.3.10 Economic growth of Indonesia over the studied period: 36 4.3.11 Export activity of Indonesia 39 4.3.12 Comparison of correlation between Indonesia’s export growth and economic growth 39 4.3.13 Economic growth of Singapore over the studied period 41 4.3.14 Export activity of Singapore 43 4.3.15 Comparison of correlation between Singapore’s export growth and economic growth 44 4.4 SUMMARY 46 CHAPTER 48 5.1 INTRODUCTION 48 5.2 DESCRIPTIVE ANALYSIS 48 5.3 5.2.1 Correlation Coefficient Matrix 48 5.2.2 Descriptive statistics result 50 REGRESSION RESULTS AND ANALYSIS 53 5.3.1 Result analysis for Indonesia 55 5.3.2 Result analysis for Malaysia 56 5.3.3 Result analysis for Singapore 56 5.3.4 Result analysis for Thailand 57 5.3.5 Result analysis for Vietnam 57 CHAPTER 59 6.1 CONCLUSION 59 6.2 POLICY RECOMMENDATIONS 61 6.3 6.2.1 For The Selected Southeast Asia Countries 61 6.2.2 For The Case of Vietnam 62 LIMITATIONS OF THE THESIS 64 APPENDIX A 68 APPENDIX B 69 APPENDIX C 70 APPENDIX D 72 v LIST OF FIGURES Figure 3-1: Analysis framework for the impact of exports on growth 19 Figure 3-2: Summary of steps used in data analysis 20 Figure 4-1: GDP growth of Vietnam in the period of 1991 - 2010 23 Figure 4-2: Export growth of Vietnam in the period of 1991 - 2010 26 Figure 4-3: GDP growth of Malaysia in the period of 1991 - 2010 27 Figure 4-4: Export growth of Malaysia in the period of 1991 - 2010 29 Figure 4-5: GDP growth of Thailand in the period of 1991 - 2010 32 Figure 4-6: Export growth of Thailand in the period of 1991 - 2010 36 Figure 4-7: GDP growth of Indonesia in the period of 1991 - 2010 38 Figure 4-8: Export growth of Indonesia in the period of 1991 - 2010 40 Figure 4-9: GDP growth of Singapore in the period of 1991 - 2010 42 Figure 4-10: Export growth of Singapore in the period of 1991 - 2010 45 vi LIST OF TABLES Table 2-1: Summary of researches studying on impact of exports on growth 13 Table 3-1: Summary of variables in the model 18 Table 4-1: Vietnam exports by sector, 2010 25 Table 4-2: Malaysia exports by sector, 2010 29 Table 4-3: Thailand exports by sector, 2010 34 Table 4-4: Indonesia exports by sector, 2010 39 Table 4-5: Singapore exports by sector, 2010 44 Table 5-1: Correlation matrix of variables (all countries) .49 Table 5-2: Summary of Descriptive Statistics (All countries) 52 Table 5-3: Regression Results (Fixed Effects Method with Dependent Variable: GDP growth rate) 53 vii The Impacts of Exports on Economic Growth: The Case of Selected Southeast Asia Countries ABSTRACT The thesis aims to answer the question that how is exports affect on the economic growth in the five selected Southeast Asia countries, including Indonesia, Malaysia, Singapore, Thailand and Vietnam, during the period of 1991-2010 by using the neoclassical growth model established by Romer (1986) and Lucas (1988) In the period of 1991-2010, economic growth of the five Southeast Asia countries were growing very fast in tandem with the strong growth of exports This is because the economies of the five Southeast Asia countries largely relied on trade activities, especially exports, with developed countries such as USA, Japan, and European countries, etc… Therefore, determining and examining the impact of exports on economic growth are important to help these countries keep their growth sustainable In this paper, the augmented Solow Growth Model was adopted to find the impact of exports on growth Also, the key model employed to run regression is Linear Exports-Growth Model with a panel data of the five Southeast Asia countries To capture the different impact of exports on growth over the selected countries, fixed effect regression model is chosen to apply in the paper The main findings of the paper point out that only Malaysia, Singapore and Thailand of which exports have statistically significant positive impacts on economic growth at the levels of significance of 1%, 1% and 10%, respectively Oppositely, Indonesia and Vietnam showed a negative impact on economic growth, however, these impacts were not statistically significant In addition, to measure and compare the different impacts of exports on growth over the selected countries, the fixed effect regression model is employed The results showed that the more developed the economy is, the stronger impact of exports on economic growth is More specifically, the impact levels of exports on growth at the five selected Southeast Asia countries are ascendingly arranged based on development of the economy as follows: Vietnam (-0.029%), Indonesia (-0.016%), Thailand (0.151%), Malaysia (0.196%) and Singapore (0.495%) Chapter INTRODUCTION 1.1 PROBLEM STATEMENT Economic growth is often the final goal of the economy To accelerate economic growth, it is vital to know where sources of economic growth come from and this is subject of controversy amongst economists One side, economists such as Solow (1957), Romer (1986), and Lucas (1988) reckoned that TFP laying residual brings about growth in long term Romer (1986) emphasized research and development while Lucas (1988) stressed on role of human capital formulation as significant cause of growth Trade far ago was an effective way that human being used to exchange products they had and received other essential products that they were unable to produce to meet their daily life Trade at that time played a vital role as a blood vent in a human body and was the best way that human being had in daily life, production activities and social development Nowadays, the importance role of trade in modern society and economy is significantly increasing, especially exports Exports have helped many countries reach impressive economic growths and become very rich and powerful countries such as Japan, China, Korea and Taiwan, etc From the origin of theories of reputable economists with classical school thoughts in hundreds of years ago such as: Adam Smith (1776) and David Ricardo (1817), and being connected recently by a series of theoretical works of other well-known economists Misselden (1623) The ratio of investment to GDP I/Y (Gross Fixed Capital Formation used as a + proxy of I/Y) GL Labor growth rate + GE Export Growth + 3.5 SUMMARY OF THE STEPS USED IN THIS STUDY Below are the figure for analysis framework and the table for a summary of steps used in data analysis The analysis framework describes the interaction between variables, model used, theories and empirical studies based on Figure 3-2 is a workflow for processing data that including main steps used in the paper: Figure 3-1: Analysis framework for the impact of exports on growth ECONOMIC GROWTH * Quadratic model * Fixed -Effects Method of Panel Data Augmented Solow Model Control variables Physical capital Macro-economic Theories involved in Growth Labor force Empirical studies Open Trade 19 Investment Positive effect Labor growth Export growth Negative effect Figure 3-2: Summary of steps used in data analysis First, data on real GDP, real GDP growth, real exports, gross capital formation (as a proxy of I/Y), labor force of the five Southeast Asia countries (including Indonesia, Malaysia, Singapore, Thailand and Vietnam) is collected from the World Bank website The data is then calculated and transformed into a suitable form of the four variables included in the model (GDP Growth Rate, Growth Rate of Capital to GDP, Labor Growth and Growth Rate of Exports) Next, the transformed panel data set will be used to conduct regression analysis using Eviews v 6.0 econometric software It is worth noticing that, descriptive statistics method is applied to check the relationship between variables first And then, quantitative econometric method with Ordinary Least Square (OLS) regression using Fixed Effects Model is employed for an empirical estimation 20 Chapter OVERVIEW OF EXPORT AND ECONOMIC GROWTH IN THE SELECTED SOUTHEAST ASIA COUNTRIES 4.1 INTRODUCTION This chapter is to have an overall look on policies, orientations of export and economic growth in Southeast Asia countries It, at the same time, is an overview of economic achievements and highlights of five economies in Southeast Asia over the last two decades In addition, statistic tables are also inserted to illustrate more clearly main happenings of the five Southeast Asia countries’ economies 4.2 SELECTION REASON OF FIVE ASIAN COUNTRIES The following reasons are explainable to why the country selection to study the impact of exports on economic growth is Asean and Vietnam These countries have the same location in Southeast Asia and are official members of ASEAN and APEC They have the same export orientation for their economies: Export-Oriented Economy Thanks to exports, these countries have been enjoying rapid and stable economic growth and have been or have been becoming new developed countries 21 4.3 HIGHLIGHTS OF EXPORT ACTIVITIES AND SOURCES OF EXPORT GROWTH OF ASEAN-5 OVER THE LAST DECADES In recent year, The Southeast Asia has been enjoying its prime growth period since 1990 Most of ASEAN countries have reached high economic growths of from to 9% lasting over the last two decades The rapid development of ASEAN countries was started from Singapore, Malaysia These two countries had good export-oriented policies and in a short time gained brilliant economic achievements to have become developed countries and “Economic Dragon”, “Economic Tiger” of the Asia and the world From the successful case of Singapore and Malaysia, other economies in ASEAN have appreciated Singapore and Malaysia and considered these two countries as the best economy model to pursue Government of these countries has promptly implemented export-oriented economic policies to expectedly lead their countries from developing economies to developed economies, specifically Thailand, Indonesia and Vietnam Below are highlights and achievements which the five countries gained with their own export-oriented economic policies: 4.3.1 Economic growth of Vietnam over the studied period Vietnam is a densely-populated, developing country that in the last 30 years has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally-planned economy After many years of protracted wars, political isolation and economic stagnation, Vietnam is now rapidly getting integrated with the global economic and political mainstream Since 1986, Vietnam has embarked upon a policy of “Doi Moi” (Economic Renovation) to introduce market economy In a liberal investment climate, investors from all parts of the world are evincing ever-growing interest in Vietnam Vietnam nowadays is still an agricultural production-based country of which export products are mainly from output of agricultural production (rice, coffee, rubber, aquatic products, etc…) and natural resources (crude oil and mineral products), and other light industrial activities such as textiles and footwear that are still labor-intensive After initiation of “Doi Moi”, 22 particularly Resolution No 10 of the Central Committee of the Party on Agricultural Economic Management Reform, agricultural production was completely untied, from a food shortage country Vietnam became one of the top rice exporters on the world and simultaneously contributed to well stabilize national food security Figure 4-1: GDP growth of Vietnam in the period of 1991 - 2010 Vietnam’s annual GDP growth has been 8-9.5% over the decade till 1997 However due to the Asian economic crisis, the growth came down to 5.8% in 1998, 4.7% in 1999, after which it again started showing up, registering 6.7% in 2000, 7% in 2002, 7.7% in 2004, 8% in 2006 and 8.5% in 2007 Vietnam had an average growth in GDP of 7.1% per year from 2000 to 2010 The GDP growth was 8.4% in 2010, the second largest growth in Asia According to Vietnam's Minister of Planning and Investment, the government targets a GDP growth of around 8.5% for 2007 On November 7, 2006, Vietnam became the World Trade Organization's 150th member, after 11 years of preparation, including years of negotiation Vietnam's access to WTO was intended to provide an important boost to Vietnam's economy, to ensure the continuation of liberalizing reforms and create options for trade expansion However, WTO accession also brings serious challenges, requiring Vietnam's economic sectors to open the door to increased foreign competition Although Vietnam’s economy, which continues to expand at an annual rate in excess of 7%, is one of the fastest growing in the world, the economy is growing from an extremely low 23 base, reflecting the crippling effect of the Vietnam War (1954–75) and austerity measures introduced in its aftermath 4.3.2 Export activity of Vietnam Because of being an agricultural production-based country, exports in agricultural products were the leader during many previous years: 1990-1996 with approximately 37% on average in total exports In following years, exports in agricultural products are not only mainly rice but also aquatic products, coffee, rubber, and pepper In recent years, Vietnam agricultural exports are under increasing difficulties due to fierce competition from competitor countries including Thailand, China and import barriers from main importers such as America and EU countries The next is crude oil and light industrial products Light industries as textile, footwear, and wood products are considered as labor-intensive industries that directly contribute to reducing unemployment Their values were ranking behind the value of rice export in the period of 1990-1996, but they have been growing faster to become key contributors in recent years This is a crucial change of production structure in the process of industrialization Although changes in export structure are positive but all of them are still low value-added products and heavy dependence of some labor-intensive industries on import materials Moreover, Vietnam's earnings are primarily from crude oil export and agriculture receipts, so it is vulnerable to the vicissitudes of international commodity price fluctuations (O' Neill, 2003) In general, Vietnam exports are remarked by encouraging achievements over the last decades Export turnover went up significantly from US$ 2.4 billion in 1990 to above US$5.4 billion in 1995 and reached approximately US$14.5 billion in 2000 From 2005 to 2008, the value of exports was recorded at an impressive growth of US$49.5 billion in 2008 as compared to US$32.5 billion in 2005 In line with the increase of export value, the ratio of exports to GDP was also positively improved over the past years: 30.8% in 1990, 46.5% in 2000, 61.3% in 2006 and stood at a high level of 68% in 2008 (This is higher than many other countries, ranked the fourth in the Asian region, the fifth in Asia and the eighth of the world) (GSO, 2009) Export turnover per 24 capita also had a sharp increase from US$36.4 in 1990, US$186.8 in 2000, US$391 in 2005 and US$557 in 2008 (GSO, 2009) There are many reasons to explain the boom of Vietnam exports including the expansion of export market, the effective economic reform and the increasing competitive capacity of Vietnam In 2010, Vietnam’s merchandise exports were valued at US$71.6 billion, increasing by 25.5% in comparison to 2009 Vietnam’s principal exports were crude oil (8%), footwear (8%), fisheries products (8%), electronics (6%) and rice (5%) The main destinations of Vietnam's exports were the United States (18.4%), Japan (13.69%), Tukmenistan (9.19%), Australia (7.98%), Singapore (5.61%), Germany (3.37%), and the United Kingdom (3.15%) In 2007 Vietnam ran a trade deficit of US$14.1 billion, but the trade deficit for the first half of 2008 alone was measured at US$14.8 billion Major Exports (2010): Crude oil, marine products, rice, coffee, rubber, tea, garments, shoes 4.3.3 Comparison of correlation between Vietnam’s export growth and economic growth Table 4-1: Vietnam exports by sector, 2010 PRODUCTS Share (%) Agricultural products 29 Food and beverages 14 Machinery and transport Crude oil and gas 12 Footwear Services Metals Chemicals Passenger cars 25 35.0% 29.9% 30.0% 25.6% 24.7% 25.0% 24.0% 20.0% 23.0% 16.0% 21.1% 20.0% 19.9% 19.0% 16.0% 14.7% 17.8% 15.0% 17.2% 9.5% 9.3% 5.8% 8.2% 8.5% 7.8% 6.3% 5.3% 6.8% GDP growth (annual %) Exports 5.0% -10.1% 2010 2009 2007 2006 2005 2004 2003 2002 2001 2000 1999 5.0% 1998 1997 1996 1995 1994 1993 8.2% 1992 10.0% 8.4% 7.3% 7.1% 4.8% 6.0% 1991 6.9% 6.8% 8.8% 2008 9.1% 8.6%8.1% 11.3% 11.1% 10.4% 0.0% -5.0% -10.0% -15.0% Figure 4-2: Export growth of Vietnam in the period of 1991 - 2010 In term of export merchandises by product, in Table 4-1 Vietnam’s export composition is mainly from agricultural products and crude oil accounting for nearly 40% of total export value As such, it is obvious that major export products of Vietnam are still low value products with labor-intensive technology This proves that contribution that exports bring to Vietnam’s economy is not high Figure 4-2 indicates that Vietnam’s export growth had not much impact on its economic growth The export growth curve and GDP growth curve not show any consistency in increase as well as decrease over the studied period Export growth over the last years was high of over 10%, but this high growth is still not a driven force for Vietnam’s economic growth Vietnam’s economy is still not an export-oriented economy as expected from its policy makers 4.3.4 Economic growth of Malaysia over the studied period: Malaysia is considered as one of the most successful non-western countries that has reached a relatively good transition in modern economic growth over the last decades Malaysia has 26 followed the step of the four tiger economies of Asia: Taiwan, South Korea, Singapore and Hongkong with commitment of transforming from an agricultural and mining-based economy to a manufacturing-based economy With the support of Japan and Western countries, its heavy industries have prosperiously developed during many decades Exports have become a top growth machine of Malaysia Malaysia was consistent in development policies and achieved a GDP growth of more than 9% and a low inflation level in 1990s From the end of the 19th century, it has been a main supplier of primary products for other industrialized economies such as: Tin, palm oil, timber, rubber, natural gas However, since 1970 Malaysia has changed its development strategy with leading sectors that are a series of export-oriented industries such as: Textile, rubber products, electric and electronic goods In 1990, Malaysia mostly met standards for a Newly-Industrialized Country (NIC) (30% exports including manufactured goods) Domestic and foreign investments have played a remarkable role in the transformance of Malaysia’s economy Manufacturing industries accounted for 30% of GDP in 1999 Agricultural and mining industries made up more than 25% of GDP in 1990s Figure 4-3: GDP growth of Malaysia in the period of 1991 - 2010 GDP in 2004 of Malaysia was US$ 65.3 billion, in 2005 was US$ 122 billion thanks to high price of oil In 2004, the economic growth reached 7.1% highest since 2000 thanks to the increase of domestic & foreign consumption demand Its budget deficit decreased to 4.3% of GDP in 2004 lower than the forecasted figure of 4.5% In 2005, the GDP growth speed stood 27 at 5.3% The government of Malaysia kept speeding up its economic growth by policies to improve bussiness environment Though Malaysia’s economic growth in 2010 was recorded at 7.2% that was higher than the forecasted figure of 6% from the government But, as assessed by economists the economy of Malaysia is going behind the neighboring countries when it is gradually losing the competitive ability and its public debt is increasing day after day Economies of the neighboring contries surpassed Malaysia with 14.5% of the economic growth from Singapore, 6.2% of Indonesia that was considered as lower than its true ability because Indonesia did not have to confront with economic recession in 2009 like Malaysia and Singapore The economy scale of Malaysia now is approxiately equal to Singapore with around US$239.96 billion compared to US$239.33 billion of the neighboring country The reason that Malaysia, a rich natural resource country, was not come over by Singapore in 2010 was thanks to the appreciation of its currency against US dollar During the last twelve months, its currency was higher than by 12% against US dollar Economic growth of Singapore has caught up and is threatening the third position of largest economies in the region that Malaysia has been holding for a long time after Indonesia and Thailand Singapore had a growth of two number with a strong recovery of 29.7% in its manufacturing sector while the same sector of Malaysia was only 11.4% 4.3.5 Export activity of Malaysia In 2009, Malaysia reached US$ 193 billion of total export value In 2010, the export value was much higher at US$ 237.8 billion with an export growth recorded at 9.9% Major export products: Electronics, plastic and chemical, timber and wooden product, steel, oil Primary export partners: USA (19.8%), Singapore (15.6%), China (11.5%), Japan (8.4%), Thailand (4.6%) 4.3.6 Comparison of correlation between Malaysia’s export growth and economic growth 28 Table 4-2: Malaysia exports by sector, 2010 PRODUCTS Share (%) Transistors, valves, etc 15.3 Fixed veg Fats, oils refined not soft 6.6 Natural gas 6.1 Automatic data processing equipment 5.5 Parts & acc., for office machine 5.4 Petroleum oils 4.9 Petroleum products 4.0 Telecomm equipment parts 2.7 Television receivers etc 2.7 Electrical switcher relays, circuits 2.5 25.0% 21.9% 20.0% 19.0% 16.1% 15.8% 5.5% 5.4% 6.1% 7.3% 5.8% 5.4% 6.6% 6.5% 6.8%5.3% 7.2% 5.8% 5.1% 4.8% 4.1% 1.7% -1.6% 0.5% 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 0.5% 1991 10.0% 8.3% 2010 9.2% 9.9% 8.9% 2009 10.0% 9.2% 8.9% 13.2% 9.8% 2008 9.9% 2007 11.5% 9.5% 15.0% 16.1% 12.6% 5.0% GDP growth (annual %) Exports 0.0% -5.0% -6.8% -7.4% -10.0% -10.5% -15.0% Figure 4-4: Export growth of Malaysia in the period of 1991 - 2010 With data from Table 4-2, Malaysia’s export activity tends to be high-tech products with high value-added for example: Transistors, valves, refined oils This indicates the stability and good 29 contribution of its export activities into the economy With exporting high-tech products, Malaysia’s export activity brings high value to GDP growth and is efficient in helping Malaysia’s economy grow up Figure 4-4 indicates that Malaysia’s economy largely relies on export growth Over the studied period, Malaysia’s GDP growth was up and down, but its fluctuation was very matching and went with export growth curve It is obvious that exports have large and positive impact on economic growth of Malaysia Every times exports grow up then it will be a driven force for Malaysia’s economy to go up as well 4.3.7 Economic growth of Thailand over the studied period Thailand is a newly industrialized economy, It is an economic mainly depending on exports, total export value accounting for more than two thirds of GDP Thailand now is not an agricultural-based economy During more than thirty years, Thailand has made a transition from a subsistence agrarian society into a rapidly industrialized and market-free country Because of export-oriented agricutural and industrial development policy, Thailand’s economy has enjoyed a fast and sustainable economic growth and has been ranked as one of the most successful countries in economic development of the world over the last two decades With six Economic and Social Development Plans (NESDP) went into operation during the last 30 years, the economic level of the country and the standard of living of the population have clearly improved Tải FULL (80 trang): https://bit.ly/3CMvzqW Dự phòng: fb.com/TaiHo123doc.net During the period of 1985 to 1996, Thailand had historically become a tiger in economic development with average growth rates of 10.4% From 1980 to 1988, under the administration and leading of Prime Minister Prem Tinsulanonda in power, Thailand began to open up their economy to the world and international trade Nevertheless, under the impact of the Asian currency crisis in 1997–1998, many financial institutions collapsed, a huge number of people became unemployed or bankrupted Until 2001, Thailand recovered with a good momentum over their currency (Baht) and economy 30 In February 2001, Thailand welcomed their 23rd prime minister, businessman Thaksin He took over with the intention of speeding up domestic activities and decreasing Thailand's reliance on foreign capital investment and trade Since then, the Thaksin’s administration has sent its new economic message, following a "dual track" economic policy combining domestic activity support with Thailand's traditional promotion of foreign investment as well as open markets This is a set of policies widely known as Thaksinomic Weak export demand caused GDP growth in 2001 slow down to 2.2% However, in the next three years: 2002 - 2004 domestic activity went up and an export recovery made better performance with growth of GDP recorded at 5.3%, 7.1% and 6.3% respectively In 2005, under a sharp rise of oil prices and deficits of trade, floods and severe droughts, rebellion in the Southern Thailand was reaching its peak that made the future of Thaksin's government uncertain combining with the tourism aftershocks of the Tsunami and Earthquake in Indian Ocean on December 26, 2004, economic growth plunged to 4.5% In 2005, Thailand also recorded a deficit of current account up to -4.3% of GDP, equivalent to US$ -7.6 billion In 2006, Thailand turned back to have a surplus in current account, the economy was also supported by a strong export growth, however, on September 19, 2006 an overthrow of the military against the prime minister and the dissolution of the 1997 constitution, along with the elections in December 2007, made uncertainty Samak Sundaravej, the present elected civilian administration, in power since January 29, 2008 calculated that the economy will reach a growth of about 5.5% to 6% Before the financial crisis in 1997, Thailand’s economy remarked manufacturing-led economic growth in many years - averaging 9.4% for the last decade till 1996 Quite abundant and cheap labor and natural resources together with fiscal conservatism, open policies for foreign investment, and support of the government for the private sector made the economy have a good growth in the years up to 1997 The economy of Thailand is a backer of the free enterprise system Most of certain services such as transportation, communications and power generation are state-owned and operated, but the government has considered privatizing them in the wake of the financial crisis 31 Figure 4-5: GDP growth of Thailand in the period of 1991 - 2010 Tải FULL (80 trang): https://bit.ly/3CMvzqW Dự phòng: fb.com/TaiHo123doc.net Recently, Thailand did experience a GDP growth by 8.0% in 2010 this made it become one of fastest growing economies in Asia and ASEAN as well Thailand’s GDP is around 9.5 trillion Baht, or equivalent to US$584 billion (PPP) This makes it be ranked in the 24th largest economy of the world and the second largest economy in ASEAN after Indonesia Besides, Thailand also is on the midway in the spread of wealth in ASEAN thanks to being the 4th richest nation compared by GDP per capita, after Malaysia, Brunei and Singapore At the end of 2010, Thailand's economic output is $318.8 billion USD, meanwhile its foreign exchange assets were $172 billion ranked 11th in the world Thailand owns a strong automobile industry with an impressive growth of 63% in 2010 of which 1.6 million cars were produced This made it rank the thirteenth in the automobile producing countries of the world It is predicted that by the end of the year 2015, Thailand will become one of the top 10 countries of producing automobile vehicle on the world Thailand's economy has functions as a base economy for its neighboring economies such as Cambodia, Laos, Vietnam Thailand has recovered from the Asian financial crisis in 1997 1998 mainly depending on exports, between many other factors Thailand has high rank between automotive export industries of the world together with manufacturing industries of electronic goods 32 Tourism is on the rise of revenues and brings a contribution of 6% to GDP In 2010, the growth of GDP of Thailand’s economy was 8.0%, higher than previous years of - 7% Thailand is in a prime time of high consumer confidence and foreign investment Unemployment only stood at 1.2% in 2010, with estimates of going down to 1% in 2012 thus Thailand is one of countries enjoying the lowest rates of unemployment in the world Decades under high economic growth helped reduce hunger and poverty in Thailand Thailand is one of countries that have the lowest rates of poverty in Asia In 2010, Thailand, together with Taiwan, Brunei, Japan, Malaysia and South Korea were countries in Asia with under 2% of total population living below $1.25 per day Because of oil sharp rise and high food prices, the inflation for 2010 soared 3.5% in July, but it will hardly get higher rates as oil and food prices are under control of the government and Thailand has a high capital investment and foreign reserves 4.3.8 Export activity of Thailand Thailand has more than 49% of labor force employed in agriculture nevertheless this is smaller than 70% in 1980 Its agriculture has been transforming from transitional and labor-intensive methods into a more capital-intensive and competitive method Rice is still the most important crop of the country; Thailand is the number one exporter in rice market of the world Other agricultural commodities are produced in huge amounts include rubber, sugar, grain, fish and fishery products Besides, processed foods for export such as frozen shrimp, pineapples, and canned tuna are fast rising The largest contribution to growth of Thailand was the increasingly diversified sector of manufacturing during the economic boost In addition, canned food, plastic products, garments and footwear, gems, furniture, wooden products, computers and electronics, toys, and jewelry are industries rapidly increasing in production Thailand's strong growth is now being led by exports of high-technology products including electrical appliances, integrated circuits and parts, and vehicles Thailand's largest export market is USA Besides, Thailand also has traditional major markets such as Japan, North America and European countries The economic recovery from regional trading partners of Thailand also has great support to its export growth 33 6670314 ... Economic Growth: The Case of Selected Southeast Asia Countries ABSTRACT The thesis aims to answer the question that how is exports affect on the economic growth in the five selected Southeast Asia. .. OBJECTIVES The key goals of the thesis are to: (1) To determine the impact of exports on economic growths of the selected Southeast Asia countries (2) To examine the difference in the impact of exports. .. 199 1-2 010, economic growth of the five Southeast Asia countries were growing very fast in tandem with the strong growth of exports This is because the economies of the five Southeast Asia countries