economic memorandum on the current economic situation and prospects of thailand · 2016-07-12 ·...

FILE COPYReport No. 1280a-TH

Economic Memorandum on the CurrentEconomic Situation and Prospects of ThailandOctober 29, 1976

East Asia and Pacific Region

FOR OFFPCPAL UE ONLY

Document of the World Bank

This document has a restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may nototherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Currency Unit - Baht

US $1.00 = 20.00

g 1.00 US $0.05

$ 1.00 million US $50,000

j 1.00 billion US $50 million

The Baht was maintained at a parity of $ 20.8 = US $1.00 untilJuly 1973 when it was revalued to $ 20.0 = US $1.00. In thisreport, an average exchange rate of $ 20.4 = US $1.00 has beenused for 1973 and a rate of $ 20.0 = US $1.00 has been used for1974 and thereafter.

FISCAL YEAR

The Thai fiscal year runs from October 1 to September 30.

FOR OFFICIAL USE ONLY

FOREWORD

This report is based on the findings of an economic missionwhich visited Thailand in June 1976. The mission consisted of Mr. N.Jetha (Chief of Mission), Ms. R. Dacumos (Econometrician), and Messrs.N. Gorjestani (Economist) and M. Lav (Economist). The mission bene-fited from the work of an IMF mission which was in Thailand at the sametime. A draft report was discussed with Government officials in Bangkokduring the week starting September 20, 1976, and takes account of de-velopments up to that time.

The previous Bank staff report--Thailand: Current EconomicProspects and Selected Development Issues (Report No. 924-TH)--wasissued in November 1975. The present report: (i) briefly describesrecent political and economic events, noting the opportunity that theeconomy's steady recovery provides for turning attention to longer termissues; (ii) analyzes recent trends in public finances and emphasizesthe need for an ambitious public sector development program based onthe fullest possible mobilization of domestic and external resources;(iii) reviews selected issues that have received increasing attentionfrom recent governments; (iv) assesses the domestic and external finan-cing requirements over the Fourth Plan period; and (v) points out theneed for improved coordination of economic policy and better budgetaryprocedures.

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

TABLE OF CONTENTS

Page No.

FOREWORDBASIC DATAMAPSUMMARY AND CONCLUSIONS ................................... i - v

I. POLITICAL AND ECONOMIC DEVELOPMENTS .

Recent Government Policies .Recent Economic Developments.

Growth in Output and Demand .2Balance of Payments.4Prices .6Need to Focus on Longer Term Issues .6

II. PUBLIC FINANCE: TRENDS AND ISSUES.

Summary.8Public Sector Finances: Recent Trends. Central Government ..................................... 11

Taxation ......... ................................... 13Subsidies ........ ................................... 16

Public Enterprises ..................................... 18

III. SELECTED ISSUES OF AGRICULTURAL AND RURAL DEVELOPMENT ..... 20

Decentralization of Administration .... ................. 20Land Reform ......... ................................... 23Agricultural Credit .................................... 25Pricing Policies for Paddy and Rice .... ................ 28

IV. THE FOURTH PLAN PERIOD WITH SPECIAL REFERENCE TO PUBLICINVESTMENT AND ITS FINANCING .............................. 31

Public Sector Development Expenditures andTheir Financing, 1977-81 ............................ 32

Private Investment ..................................... 35Coordination of Economic Policy ........................ 36Link Between Planning and Budgeting .... ................ 36

ANNEX I LOCAL GOVERNMENT FINANCES

ANNEX II MACROECONOMIC FRAMEWORK FOR THE FOURTH PLAN PERIOD

ANNEX III MOBILIZATION OF DOMESTIC RESOURCES

LIST OF TABLES IN THE TEXT

Page No.

Table 1 CHANGES IN EXPENDITURES ON REAL GDP . . . . . . . . 3Table 2 BALANCE OF PAYMENTS ............... . 5Table 3 PUBLIC EXPENDITURES AND THEIR FINANCING . . . . . . 10Table 4 CENTRAL GOVERNMENT EXPENDITURES . . . . . . . . . . 12Table 5 CENTRAL GOVERNMENT TAX REVENUES . . . . . . . . . . 14Table 6 PETROLEUM PRODUCTS--TAX RATES AND REVENUES. . . . . 17Table 7 LOANS AND OVERDRAFTS PROVIDED TO FARMERS. . . . . . 26Table 8 PUBLIC SECTOR DEVELOPMENT EXPENDITURES AND THEIR

FINANCING, 1972-81. . . . . . . . . . . . . . . . 33

COUNTRY DATA--THAILAND

AREA POPULATION DENSITY2

514,000km 41.9 million (mid-1975) 79 per km/Rate of Growth: 2.7% 314 per km2 of planted area of major crops

POPULATION CHARACTERISTICS (1975 est.) HEALTH (1971)

Crude Birth Rate (per 1000): 37 Population per physician: 7,250Crude Death Rate (per 1000): 9 Population per hospital bed: 820Infant Mortality (per 1000 live births): 68

INCOME DISTRIBUTION (1970) DISTRIBUTION OF LAND OWNERSHIP (1963)

% of income, lowest quintile: n,a. % of holdings of less than 2.4 ha: 50highest quintile: n.a. 7. of holdings of 10 ha. or more: 5

ACCESS TO PIPED WATER (1970) ACCESS TO ELECTRICITY (1971)

% of population - urban: 45 % of population - Bangkok Metropolitan Area: 63- rural: 15 - Other 67 provinces: 13

NUTRITION (1971) EDUCATION (1971)

Calorie intake as % of requirements: 100 Adult literacy rate %:Per capita protein intake (grammes): 56 Primary school enrollment %: 83

GNP PER CAPITA IN 19751/: US $347

GROSS NATIONAL INCOME IN 1975 ANNUAL RATE OF GROWTHUS $ mln. % (%, constant prices)

GNY at Market Prices 14,595 100.0 1960-65 1965-70 1970-75Gross Domestic Investment 3,912 26.8 7.5 8.5 6.5Gross National Saving 3,293 22.6 14.4 13.5 5.1Current Account Balance -619 -4.2 11.8 11.3 5.7Exports of Goods, NFS 2,852 19.6 -27.0 31.0 2.4Imports of Goods, NFS 3,557 24.4 9.9 6.7 6.8

11.3 12.6 3.0

OUTPUT,LABOR FORCE AND PRODUCTIVITY IN 1975

V a l u e 2 / L a o3F r / _ _ _ _ _ _ _ _ _3__ _ _ _

Value Added- Labor Force-/ V.A. per Worker -US $ mln. % Million %- US $ %

Agriculture 4,559 31.3 13.4 75.7 340 41Industry 4,442 30.4 1.4 7.9 3,170 386Services 5,588 38.3 2.9 16.4 1,930 235

Total/Average 14,589 100.0 17.7 100.0 820 100

4/GOVERNMENT FINANCE -

Consolidated Public Sector Central Government(US$ mln.) % of GD/-- (US$ mln.) % of GDP

1975 1975 1973-75 1975 1975 1973-75

Current Receipts 2,263 15.8 16.2 1,992 13.9 14.3Current Expenditures and Transfers 1,812 12.7 12.1 1,840 12.9 12.2C-rrent Surplus 451 3.1 4.1 152 1.0 2.1Capital Expenditures 730 5.1 5.1 376 2.6 2.9External Assistance (net) 68 0.5 0.5 3 ..

1/ Calculated on the same basis as the figures in the World Bank Atlas. All other conversions to dollars inthis table are at the average exchange rate prevailing during the period covered.

2/ At current market prices.

3/ Estimated.

4/ Thai fiscal years ending on September 30.

5/ Estimates for GDP during fiscal year t were derived by adding 1/4 of GDP at calender year t-l to the 3/4of GDP for year t.

Less than 0.1 percent.

COUNTRY DATA--THAILAND

MONEY, CREDIT AND PRICES

1970 1971 1972 1973 1974 1975(Billions of Baht outstanding end Period)

Money and Quasi Money 46.2 53.7 66.6 81.9 98 3 113.4Bank Credit to Contral Government 13.0 19.7 27.0 29.6 25.7 30.8Bank Credit to Private Secter 27.8 30.8 34.6 49,4 66.6 80.9

(Per-eetages or Inden Nunb-rs)

Monny and Q.as. Money as 7. of GDP 33.9 37.1 40.4 37 8 36.6 38.8GDP Deflator (1962 - 100) 113.5 311.6 121.8 145.3 172.4 177.3Annual percentage changes in:

GDP Deflator -0 6 -l 7 9.2 19 3 18.7 2.8Bank Credit to Centra1 Government (net) 53.5 51.2 37.4 9.5 -13.2 20.0Bank Credit to Pr-iate Sletor 21 5 10 7 12.2 42.9 34.9 21.4

BALANIE OF PAYMSENTSMERClANDISE EXPORTS (AVERAGE 1973-75)

1973 1974 1975 1976-/ US$ Million 7.(us$ Millon)

Exports of Goods, NFS 2,085 3,085 2,852 3,332 Rice 320 15.4Imports of Goods, NFS 2.259 3,420 3,557 3,938 Rubber 218 10.5Resoorce Gap (deficit -) -174 -335 -705 -606 Corn (Maine) 246 11 8

Tapioca produots 183 9.8Interest payments (nat) 7 36 69) -27 Tin (Metal) 122 5.9Other Factor Payments (net) -28 -37 -64) ) Sugar 179 8 5Workers' Resttaannes . . Keona and juts 42 2.0Net Transfers 1/ 145 246 8 82 40 All other ro,,-odit-n 772 37 1Current Balanac -50 -90 -618 -593 Total 2,080 100 O

Direct Foreign Investment (net)-/ 67 137 65 79 EXTERNAL DEBT, DECEMBER 31, 1975Net MLT Borrowing

Dilburs-ments 265 515 541 689 T$ MilloonA-ort-oat-o 262 265 350 367SubLotal 3 250 191 322 Publ-o Debt, incl guaranteed 615

Capital Grants , . . . Non-Guaranteed Pr-vate Debt 736Other Capital (net)

2/ 142 66 132 170 Total outstanding & disbursed 1,351

Other Items n.e.i. A/ +51 199 35 64Inor-ase in Reserves (+) 113 482 -195 42 DEBT SERVICE RATIO FOR 1975-

Gross Reserves (end year) 1,295 1,858 1,775 %Net Reserves (end year) 1,082 1,564 1,369 1,410

Publlc Debt, in1 guaranteedFools and seaIted Materials private 2 6

Imports 229 629 684 769 Non-Guarantaad Private Debt 12 8of khich petroleum 175 519 578 650 Total publsc & private non-Exports lB 15 11 10 guaranteed debt 15 4of whilh petro-em 18 15 11 10

IBRD/IDA LENDING, JUNE 30, 1976 (US $ illion)RATE OF EXCHANGE 6/ IBRD IDA

Outstanding & Disbkrsed - 313.1 6.6Through July 1973 Undisborsed 2880 25.4[IS $ 1.00 = B 20 8, B 1.00 = USR D,48 Outstanding cl Undilsbursed - 601 1 32 0

Sonce Jaly 1973US S 1.00 = B 20.0, B 1 00 = US5 0 50

I/ Includes offoorol and pr-vate transfers.Z/ Equity capital only.3/ Includes short-term psbllc and private capital and portfolio Investment.4/ Includes SDR allocations, profits from achange realignments, and errors and omissiono.5/ Ratio of debt service to e-parts of goods and non-factor ser-ces6/ Net of Bank of Thailand partioopot-oa in IBRD loans.e/ Estimate

Not applicable

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-' AUGUST 1976

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SUMMARY AND CONCLUSIONS

Recent Economic Developments and Their Implications

i. The Thai economy has recovered steadily from the slowdown ineconomic activity which started in the second half of 1974. The rate

of growth of real GDP rose from 4.6 percent in 1974 to 5.5 percent in1975, and a growth rate of close to 6.5 percent is expected for 1976.The operations of the public sector provided a much-needed stimulus todemand in both 1975 and 1976, with a strong expansion in export receiptsreinforcing the growth of domestic demand in the later year. Althoughin both 1975 and 1976 the balance of payments registered much highercurrent account deficits than in the previous years, largely as a resultof hikes in oil prices that contributed to a decline in the country'sterms of trade of almost 20 percent between 1973 and 1975, capital flowshave been adequate to finance these deficits and maintain reserves at fourmonths' imports. A large measure of price stability has also been restored.

The consumer price index in 1975-76 is estimated to have risen at an annualaverage rate of 5-6 percent, a sharp deceleration from an annual averageincrease of 20 percent over 1973-74. Current information indicates, how-

ever, that private investment is lagging.

ii. In the last few years, recurring short-term crises have diverted

attention from a proper consideration of longer term issues; yet it has

become increasingly clear that solutions to many of Thailand's problemsrequire carefully formulated long-term strategies and sustained effortover time. With the economy improving steadily and no longer plagued by

serious short-term economic problems, favorable circumstances now existto reconsider some of the short-term measures of recent years in a longer

term perspective and to launch an aggressive long-term program of economic

and social development.

iii. A reasonably ambitious development program for the next few yearswill require much greater efforts to mobilize both domestic and external

resources than over the Third Plan period. The desired improvement in thelevel of private economic activity requires that the recent declining trend

in the rate of public savings, resulting in part from the need to stimulatethe economy, must be reversed. At the same time, the deterioration in the

country's terms of trade has raised substantially the external capital

flows needed for achieving a reasonable rate of growth.

Decentralization of Administration

iv. Decentralization has emerged as a major policy concern in

recent years. The tambon program constituted a major experiment indecentralization. But further development of local government willrequire the strengthening of the local authorities' administrative and

technical capacity. It will also necessitate the development of the

- ii -

local tax system and broadening of the scope of revenue sharing arrange-ments. Local initiative and responsibility will be difficult to developif local authorities have to rely almost wholly on Central Governmenttransfers. Measures to widen the local authorities' tax base should,therefore, be given early consideration. However, until the local taxsources can be significantly expanded, it would be desirable to attachcontinued emphasis to block grants in the form of transfers to tambons(subdistricts) and changwats (provinces) so that recent progress in theevolution of local government is not interrupted.

v. The property tax, which is to be introduced in 1977, could filla serious gap in local finances, provided the initial structure andfuture development of the tax are closely related to the local authori-ties' revenue requirements. Since it is not easy to find major sourcesof revenues for rural local authorities, it is particularly important thatthe changwats' revenue needs are fully taken into account in working outthe details of the tax. In this connection, it is strongly recommendedthat the exemption for agricultural holdings should be kept low, the taxschedule should provide for the variation of tax rates with the value ofthe holding, and the bulk of the proceeds should be returned to thechangwats. Otherwise, changwats are unlikely to derive much benefitfrom the tax. The possibility of allowing municipalities to vary the taxrates within a certain range should also be considered to increase theflexibility of municipal tax structures. Another measure that deservesserious consideration as a means of raising changwats' tax revenues is anincrease in the rate of business tax surcharge and the adoption ofpopulation as the criterion for the allocation of the proceeds. To compen-sate Bangkok for the loss of revenue that this measure would entail forthe metropolis, a surcharge might be levied on personal income taxpayable by its residents.

Selected Issues of Agricultural and Rural Development

vi. The report reviews policies in the areas of land reform,agricultural credit and paddy pricing, emphasizing the interrelationshipbetween these policies and the importance of developing institutions withthe requisite administrative and technical skills for implementing thepolicies. Since the paddy price is probably the single most importantdeterminant of rural incomes, and the success of land reform and agricul-tural credit programs is bound to depend critically on the kind of pricingpolicy adopted for paddy, the country's pricing policy will provide a testfor its commitment to rural development. In this connection, the reportsuggests that the primary objective of the paddy pricing policy should beto avoid excessive fluctuations in domestic prices rather than to permanent-ly depress domestic rice prices below the world levels as has mostly beenthe case in the past.

vii. On land reform, the report stresses the need for a moredetailed articulation of the program, including a careful study of itsfinancial and administrative implications. Finally, to enable the publicsector to play an active and growing role in the provision of agricultural

- iii -

credit, the report recommends that high priority should be given to thepreparation of a five-year lending program for the Bank of Agricultureand Agricultural Cooperatives.

The Fourth Plan Period and Financing Needs

viii. The draft Fourth Plan sets out a growth target of 7 percent perannum for the period 1977-81, as compared to an estimated 6.2 percentachieved over the Third Plan period 1972-76. It proposes public sectordevelopment expenditures of B 252.2 billion ($12.5 billion). This repre-sents a doubling of development expenditures in real terms as compared tothose in the Third Plan period. However, if the expected increases inpublic investment in 1976 and 1977 materialize, the planned figures wouldnot imply any subsequent increase in the ratio of public investment to GDP.The draft Plan envisages a very substantial increase in domestic effort:the share of domestic resources in the financing of development expen-ditures is projected to increase from 84 percent in the Third Plan to 87percent for the Fourth Plan, despite a substantial expansion in developmentexpenditures.

ix. Not only for raising revenues, but also to improve thedistribution of incomes and the allocation of resources, far-reachingchanges in the tax structure will be needed. Consequently, tax reformmust be given careful and urgent consideration. The formulation of amedium-term tax strategy would facilitate the pursuit of an active taxpolicy over the Plan period. Such a strategy would make it easier toforesee the administrative implications of anticipated tax changes,thereby helping to reduce delays in implementation. An explicit taxstrategy would also help to focus attention on the timing of taxchanges, which acquires special significance in the context of financ-ing targets since a tax change made in a particular year affects notonly the availability of resources in that year but also in futureyears. The chances of raising required revenues will be greatlyimproved if some of the major tax proposals are introduced in the firsttwo years of the Plan period. The new taxes proposed as part of theFY77 budget (property, estate and bank interest taxes) and recentimprovements in tax administration are, therefore, to be welcomed.

x. The needed public savings will not be forthcoming unless publicenterprises are also required to pursue realistic pricing policies.While the Government policy of encouraging greater financial autonomy andresponsibility in public enterprises is eminently sensible, the policywill not achieve its main objective if public enterprises see domesticborrowing as a substitute for making the necessary changes in theirtariffs. The recent rapid growth of capital spending by public enterpri-ses has been accompanied by a progressive decline in their savings as asource of finance, although the overall picture conceals a great dealof variation from enterprise to enterprise. Besides directly reducinginvestible funds, a low level of self-financing can also affect anenterprise's ability to raise external funds. Therefore, the generationof growing internal surpluses through the pursuit of realistic pricingpolicies must be made a central feature of the public enterprises'financial policies.

- iv -

xi. Subsidies, which are presently pre-empting substantialresources that could be used for development purposes, are another areawhere prompt action is needed. Because of its high cost and thedistortions it is likely to introduce in the allocation of resourcesover the long term, the petroleum subsidy, in particular, should bephased out as soon as possible. This is obviously a difficult decisionand requires political courage, but a policy reversal will become evenmore difficult with passage of time. The object should be to reinstatepetroleum taxes as a major and growing source of revenues. The presentprice of gasoline of B 3.62 per liter ($0.18) is among the lowest inSoutheast Asia, and higher taxes on gasoline alone could bring substan-tial revenues.

xii. The draft Plan's emphasis on self-reliance is highly commend-able. While the ambitious target for domestic financing is worth aimingat, its full realization over a short period will present difficulties.Furthermore, the mission's analysis of the balance of payments prospectssuggests that the country's external capital requirements are likely tobe larger than projected in the draft Plan. In view of the desirabilityof ensuring a steady expansion of development expenditures, it would,therefore, be prudent to also aim at a higher level of external financingfor development expenditures than the net disbursements of $1.5 billionassumed in the Fourth Plan. In the mission's judgment, a target of netexternal public borrowing of between $2 and $2.5 billion is needed. Toraise the suggested net external resources for financing the public sectordevelopment program, commitments of official and commercial loans ofabout $3.5-4 billion would be required over the Plan period. Althoughthese commitments are much larger than the commitments of official externalloans of about $1.4 billion over the Third Plan period, Thailand would havereasonable prospects of meeting the higher external capital requirements ifplanning and implementation procedures can be strengthened. The countryshould, however, be prepared to raise about $500-700 million over the Planperiod from international capital markets.

xiii. All projections of external capital requirements are to beregarded as rough orders of magnitude. Thailand's external capitalrequirements over the next few years will be very sensitive to trends incommodity prices. If over the course of the Plan period it is foundthat mission's external financing estimates are on the high side, seriousconsideration should be given to expanding the size of the developmentprogram, provided a more ambitious development effort is not constrainedby the country's implementation capacity.

xiv. Over the past year, there has been a noticeable improvement inthe management of the external borrowing program. Initiatives takenfollowing the Consultative Group meeting in December 1975 have helped toexpand some of the ongoing aid programs. In addition, as a means ofdiversifying the sources of external financing, the country obtained itsfirst loans from the Eurodollar market and the Kuwait Fund. Projectpreparation has also proceeded well and further progress has been made insecuring commitments for projects in the pipeline. As a result, a fairlyfirm borrowing program for 1977 and 1978 of about $400-500 million for

each year has emerged. Additional projects for these two years withforeign financing totalling $500-600 million are being prepared. In viewof the satisfactory progress being made in project preparation, commit-ments of about $600-700 million per year should be sought for 1977 and1978, and recourse to private loans or suppliers' credits should beseriously considered if without such finance high priority projects wouldhave to be postponed. There would be substantial opportunities forcombining assistance from the ADB and the World Bank with commercialfinancing sources.

xv. The external borrowing requirements envisaged by the missionshould not place a heavy burden on the country's debt servicing capacity.The total debt service ratio (debt service payments as a percentage ofexports), which amounted to 15.4 percent in 1975, should remain below17 percent over the Fourth Plan period. The public debt service ratiofor 1981 is projected at 4.7 percent.

Planning and Implementation

xvi. The draft Plan has performed the valuable task of delineatingthe country's major objectives, constructing the macroeconomic frameworkand analyzing sectoral issues and strategies in broad terms. The nextstep that needs to be accorded high priority is the completion of adetailed and integrated public sector investment program, at least forthe next two to three years. Without a public sector program that issufficiently detailed to be amenable to implementation, the Plan willhave little operational significance. Effective planning and implementa-tion will also require close cooperation between the main economicagencies and strengthening of the link between planning and budgeting.

I. POLITICAL AND ECONOMIC DEVELOPMENTS

Recent Government Policies

1.01 The minority coalition Government of M. R. Kukrit Pramoj, leaderof the Social Action Party, was in power for just over a year. It wonvotes of confidence on its policy statement and FY76 budget that indicatedparliamentary support for its major policies. However, the emergence ofrivalries and dissensions within the coalition over the course of the yearincreasingly threatened the Government's initial cohesiveness. The growingdifficulties of maintaining a viable Government crystalized in the riceprice protest. In December 1975, the Government increased the controlledretail prices of rice and sugar to bring them in line with the minimumguaranteed prices previously announced for paddy and sugarcane. The priceincreases encountered considerable opposition in the parliament and fromcertain segments of the population, and faced with a distinct possibilityof his Government's defeat on a vote of confidence, the Prime Ministerrequested King Bhumipol to dissolve the parliament.

1.02 The elections for a new parliament, held on April 4, 1976 haveresulted in a concentration of power among fewer parties: four major partiesnow hold 243 seats (as compared to 163 previously) while an additional 15parties share 36 seats. The Democrat Party remained the largest singleparty and emerged with 114 seats, compared to 73 previously. The SocialAction Party won 44 seats (a gain of 22). The three main socialist partiessustained losses; the seats held by the Socialist Party of Thailand, theUnited Socialist Front and the New Force fell from a total of 37 to 6.

1.03 Following the elections, the Democrat Party formed a four-partycoalition Government with the Chat Thai, Social Justice and Social Nationalistparties, which had also participated in the previous Government. M. R. SeniPramoj, the leader of the Democrat Party and Kukrit's elder brother, became thenew Prime Minister. Seni's coalition Government represents 206 out of the 279seats in the new assembly.

1.04 In his Government's policy statement to the National Assembly onApril 30, 1976, the Prime Minister, eschewing sharp departures from policiesbegun by Sanya and Kukrit governments, proposed a strategy for economic andsocial progress based, inter alia, on rural development and an equitable dis-tribution of public services and taxation. The economic policy proposalsinclude: (i) a land reform program to alleviate the tenancy problem; (ii)increased provision of agricultural credit through the Bank for Agricultureand Agricultural Cooperatives; (iii) maintenance of reasonable prices foragricultural products, especially paddy, through adjustments in ricepremium and export tax, if necessary; (iv) expansion and strengtheningof the cooperative movement; (v) decentralization of administration throughthe development of local government; (vi) revision of both structure andrates of direct taxation; (vii) promotion of industrial investment by bothThai and foreign investors; (viii) the setting up of a State Labor Bureauto promote orderly labor relations; (ix) accelerated implementation ofsmall-scale irrigation projects, especially in the Northeast; (x) increasedemphasis on rural roads; and (xi) acceleration of rural electrification.

- 2 -

1.05 In the social sphere, ambitious targets for education andhealth services stand out in relief. To achieve the objective ofsix-year compulsory primary education, the expansion of upper elementaryfacilities will be accelerated to cover every tambon (subdistrict) withinfour years. Moreover, every amphoe (district) is to have a secondaryschool within the same period to remedy the uneven distribution ofsecondary school facilities in rural areas. As a major effort towardsimproving the availability and quality of public health services, thesetting up of a second class health center in every tambon and a hospitalin every amphoe within four years is proposed. The other social policyobjectives include acceleration of the family planning program andcontinuing involvement by the public sector in the provision of housing.Some of the above policies are reviewed in Chapter III.

1.06 While some differences from the Kukrit Government in the fieldof domestic policy have emerged, the Seni Government has continued toimplement a foreign policy that builds on developments of the past year.The foreign troop withdrawal agreement negotiated by Kukrit has beencarried out. Both diplomatic and trade relations with the People'sRepublic of China have continued to strengthen, as have relations withCambodia and Laos. And more recently, formal relations have been estab-lished with Viet-Nam.

Recent Economic Developments

1.07 Growth in Output and Demand. The Thai economy is steadilyrecovering from the slowdown in economic activity experienced during thesecond half of 1974 (see Table 1). Real GDP in 1975 grew by 5.5 percentas compared to 4.6 percent in 1974. All major sectors recorded someimprovement. Agricultural production, which had suffered from adverseweather in 1974, rebounded in 1975 and grew by 4.5 percent as higherfarmgate prices for major crops such as paddy and sugar, and greaterapplication of fertilizers, particularly on sugarcane and dry season paddy,combined with favorable weather to produce bumper or near bumper crops ofrice, sugar, maize, tapioca and tobacco. Remunerative prices led to anexpansion of area planted for most crops; yields were also generallyhigher than in the previous year. The manufacturing sector, which hadremained depressed since mid-1974, began to advance towards the end of1975, and industrial production rose by 6.9 percent in 1975 as the sugar,textile and clothing industries expanded their output. The constructionindustry showed signs of a turnaround after years of stagnation, asthe pace of public investment quickened and an estimated one-third of theoutlays under the tambon program went into the construction of ruralinfrastructure./1

1.08 The operations of the public sector dominated the growth ofdemand in 1975, in sharp contrast to the situation in 1973-74, when theexternal sector and private investment provided the main stimulus to

/1 See Table 2.3a.

growth. A 6 percent fall in export volume, reflecting weak overseas demandthrough most of 1975 and the effect of adverse weather in the previous yearon the exportable surpluses of all major agricultural commodities exceptsugar, and a slight decline in the overall level of export prices combinedto reduce export earnings in 1975. At the same time, political uncertaintyand excess capacity in certain major industries, caused by sluggish externaldemand, discouraged private investment. Private consumption grew at a slightlyhigher rate than the rate of growth in GDP. Both consumption'and investmentin the public sector grew substantially, with the more rapid growth occurringin public investment./1 As a result of the public sector's strong investmentperformance, total fixed investment rose by almost 10 percent in real termsand accounted for 22 percent of GDP, or a somewhat higher level than in thepreceding two years./2

Table 1: CHANGES IN EXPENDITURES ON REAL GDP

(constant 1962 prices; annual percentage changes)

1972 1973 1974 1975 /a 1976Estimate

Consumption 6.2 8.2 4.1 7.7 6.5

Private 6.9 7.9 4.7 6.9 5Public 1.7 9.9 -0.2 12.7 15

Fixed capital formation -0.2 5.1 6.9 9.3 12

Private -1.9 19.0 17.4 4.3 4/bPublic 3.6 -23.3 -26.4 35.0 44

Exports (GNFS) 19.4 0.8 5.1 -6.3 14

Imports (GNFS) 6.8 19.6 -2.6 -3.1 6.5

GDP 4.3 10.3 4.6 5.5 6.5

/a Preliminary.

/b On the basis of recent import data, it appears doubtful whether theincrease in private investment in 1976, projected at 4 percent by theGovernment, will materialize.

Sources: Table 2.6 and IBRD mission estimates.

/1 Developments in the public sector are discussed in detail in Chapter II.

/2 See Table 2.6.

1.09 The growth performance improved further in 1976, and preliminaryestimates suggest that the economy attained a growth rate of between6 and 6.5 percent. Agricultural production increased by an estimated 3-4percent, despite an early drought during the planting season which damagedpart of the paddy and maize crops. Area expansion and higher yieldsproduced a bumper sugarcane crop, and there were also sizeable increases inthe output of rubber and tapioca. Industrial production rose by an estimated7-8 percent, as economic recovery in major industrial countries began to bereflected in improved overseas demand for Thai exports, particularly textilesand clothing. The construction sector advanced further.

1.10 The expansion of domestic demand in 1976 was reinforced by astrong expansion in export receipts. Despite slightly lower prices for mostcommodities, export earnings increased by an estimated 17 percent, as largecarryover stocks from the previous year and a good agricultural performancein the 1975-76 crop year helped to achieve large volume gains in the exportof rice, sugar and tapioca. However, lagging private investment continuedto mar an otherwise brightening economic scenario.

1.11 Balance of Payments. Thailand's balance of payments situationchanged markedly in 1975. Largely due to a 6 percent decline in the volumeof merchandise exports and an 8 percent decline in the terms of trade, thedeficit on the current account increased from $90 million in 1974 to $618million in 1975. As already mentioned above, quantities of all major exportsother than sugar either declined or stagnated owing to a poor agriculturalperformance in 1974. Moreover, the overall export price index changedlittle as a result of divergent trends in its components: prices of riceand rubber fell by 25-35 percent, while those of sugar, tapioca and kenafincreased by 15-20 percent. Although tourism earnings continued theirupward trend, total service receipts remained virtually unchanged becauseof a further reduction in US military expenditures. Hence, exports ofgoods and services fell by 7 percent in current terms (see Table 2).

1.12 Slow economic recovery held down import demand in 1975 and reducedthe volume of merchandise imports by 3 percent. With the exception of ferti-lizers, the volume of all categories of imports declined. Intermediate goodsexperienced the sharpest decline, falling by nearly 12 percent as high carry-over inventories from the previous year and weak demand in textile, chemicaland base metal industries reduced imports substantially. Capital goodsimports declined somewhat as the greater proportion of the increase in fixedinvestment took the form of construction. Petroleum imports also fellslightly because of weak industrial demand. Import prices, however, rosemoderately, pushing up the import bill by 4 percent. A sizeable drop in netprivate transfers, resulting from the cessation of capital flight intoThailand from the Indochinese countries from the spring of 1975 as well asa slowdown in border trade, also contributed to the enlarged currentaccount deficit.

Table 2: BALANCE OF PAYMENTS

(millions of US dollars) /a

1972 1973 1974 1975 1976Estimate

ExportsMerchandise, f.o.b. 1,046 1,532 2,450 2,219 2,713Nonfactor services 486 553 635 633 619

Total 1,532 2,085 3,085 2,852 3,332

ImportsMerchandise, c.i.f 1,473 2,062 3,165 3,226 3,568Nonfactor services 154 197 255 331 370

Total 1,627 2,239 3,420 3,557 3,938

Resource Balance -95 -174 -335 -705 -606

Investment income receipts 58 71 146 194 173

Investment income payments -74 -92 -147 -189 -200Net private transfers 30 117 219 57 15

Net public transfers 29 28 27 25 25

Current Account Balance -52 -50 -90 -618 -593

Private capitalDirect investment net /b 56 67 137 65 79Loans and suppliers' credits, net 80 -47 187 88 93

Disbursements (247) (179) (416) (392) (413)

Repayments /c (-167) (-226) (-229) (-304) (-320)

Public capitalPublic loans, net 8 50 63 103 229

Disbursements (62) (86) (99) (149) (276)Repayments (-54) (-36) (-36) (-46) (-47)

Other capital, net /d 33 42 63 132 170 /eErrors and omissions 51 -20 40 87 64

Overall Balance 176 42 400 -143 42

SDR allocation andrevaluation adjustments 16 71 82 -52 -

Year-end net reserves 969 1,082 1,564 1,369 1,410

/a Exchange rate: US$1.00 equals B 20.8 in 1972, B 20.4 in 1973, and B 20.0

in 1974-76./b Equity capital only./c Includes interest payments on suppliers' credits which are not available

senarately./d Short-term public and private capital and private portfolio investment./e Includes borrowing of SDR 67 million under the IMF's compensatory financing

scheme.

Sources: Tables 3.1, 3.13 and 3.15, and IBRD mission estimates.

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1.13 In spite of increased foreign borrowing by the public sector, thetotal net capital inflows were lower than in the previous year because of asubstantial reduction in net private capital inflows. Private directinvestment declined from $137 million in 1974 to $65 million in 1975, andprivate loans and credits also fell significantly, as sizeable repaymentscommenced on loans contracted in 1974. As a consequence of the foregoingdevelopments, reserves, which had increased by $480 million in 1974,declined by $195 million to $1,369 million.

1.14 The balance of payments in 1976 is likely to register a deficiton the current account of roughly the same order of magnitude as in 1975,although a good export performance is expected to reduce the trade deficitby about $100 million. Export earnings should display an impressive growthprimarily because of volume gains. Export volumes of rice and sugar areexpected to advance particularly strongly, by 75 percent (0.9 to 1.6 millionmetric tons) and 80 percent (0.6 to 1.1 million metric tons) respectively.Continued growth of textile and clothing exports is also expected. Exportreceipts will be further bolstered by higher prices of rubber and tin. Withthe depletion of inventories, further improvement in industrial productionand an estimated 5.5 percent increase in prices, import expenditures areexpected to rise faster than in 1975. Private capital inflows are unlikelyto change significantly from the 1975 level. Public capital inflows, onthe other hand, will increase substantially as the country's first Eurodollarloan of $100 million is drawn down and project loans committed in 1974-75begin to be disbursed. On the assumption that SDR 67 million will be usedunder the IMF's compensatory financing scheme, the overall balance of pay-ments could show a small surplus. The country's reserves at the end of1976 should equal about four months' imports.

1.15 The major reason for the emergence of larger current accountdeficits is the deterioration in Thailand's terms of trade. Between 1973and 1975, the country's terms of trade declined by almost 20 percent. In1974, mainly due to the hike in oil prices, the import price index roseby over 50 percent; a substantial improvement in prices of most of thecountry's major exports, however, helped to limit the decline in the termsof trade to about 10 percent. In 1975, on the other hand, although importprice increases moderated, there was a further substantial fall in the termsof trade as export prices either stabilized or fell. In the short term, themain effect of the recent trend in the terms of trade is to raise theexternal capital flows required for a reasonable rate of growth. Thecountry's external resource needs over the Fourth Plan period must, there-fore, be expected to be much larger than over the Third Plan period. Overthe longer term, the price trends that are expected to persist must be takeninto account in the country's development strategy and measures taken tosecure appropriate changes in the allocation of resources.

1.16 Prices. Thailand achieved a large measure of price stability in1975. Slower demand growth, stable export prices and a moderate increasein import prices limited the rise in the consumer price index to 5.3 per-cent, a sharp deceleration from an annual average increase of 20 percent

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over 1973-74. Food prices increased at a slightly lower rate than pricesof nonfood items. The rate of inflation in 1976 is not expected to exceed5-6 percent. The rates of inflation for 1975 and 1976, while not unreason-able by international standards, are, nonetheless, much higher than therate of inflation of between 2 and 3 percent per annum experienced priorto 1973. Price forecasts for Thailand's major imports and exports suggestthat the country will need to adapt to higher rates of inflation thanthose that prevailed in the 1960s.

1.17 Need to Focus on Longer Term Issues. The country is adjustingreasonably well to higher oil prices which quadrupled its oil import bill,and the rate of inflation has also subsided. The rates of growth achievedover the past two years, while below those justified by the country'sresources, are by no means unsatisfactory in the context of worldwiderecession. In the last few years, recurring short-term crises have divertedattention from a proper consideration of longer term issues; yet, it hasbecome increasingly clear that solutions to many of Thailand's problemsrequire carefully formulated long-term strategies and sustained effortover time. With the economy improving steadily and no longer plagued byserious short-term economic problems, favorable circumstances now exist toreconsider some of the short-term measures of recent years in a longer termperspective and to launch an aggressive long-term program of economic andsocial development.

1.18 The country, however, faces more difficult circumstances wherethe financing of development is concerned. The financing of a reasonablyambitious development program for the next few years will require muchgreater efforts to mobilize both domestic and external resources than overthe Third Plan period. The need for more vigorous efforts to mobilizedomestic resources is discussed in Chapter II in the light of the recentfiscal developments. The domestic and external financing implications ofthe public sector development expenditures proposed in the draft FourthPlan are assessed in Chapter IV.

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II. PUBLIC FINANCE: TRENDS AND ISSUES

Summary

2.01 In the fiscal year 1977, the relative share of the public sectorin the country's resources is expected to be restored to that prevailingbefore 1973-74, when public spending declined in real terms as the resultof an anti-inflationary policy. The substantial growth of public expendi-tures that has occurred since 1975 is attributable to a continued use offiscal policy for stabilization purposes and a growing reliance on publicexpenditures for achieving the country's social and economic objectives.

2.02 The implementation of the various programs announced by theGovernment will require a steady increase in public expenditures overthe next few years and the fullest possible mobilization of both domesticand external resources. The desirability of maintaining a high levelof public spending and the needs for public expenditures in major sectorswere discussed in detail in Thailand: Current Economic Prospects andSelected Development Issues, Report No. 924-TH, November 14, 1975 (to bereferred to in the remainder of the text as the 1975 Economic Report).Public capital expenditures should be planned on a long-term basis andvariations in public capital expenditures should not be heavily relied onfor stabilization purposes. Instead, other measures should be used forrestraining demand when necessary. The growth of public capital expendi-tures since 1975 has not required substantial tax increases because of theneed for deficit financing to stimulate the economy. However, now thateconomic conditions have improved, the Government will need to adopt a moreactive policy with respect to the mobilization of domestic resources ifpublic capital expenditures are not to bear the main brunt of a policy ofdemand restraint as in 1973-74. The ambitious target for domestic financingover the Fourth Plan period, discussed in Chapter IV, further stresses theimportance of reversing the declining trend in the rate of public savingswithout delay. To raise the rate of public savings, formulation of a taxstrategy and a policy on user charges that takes account of the publicenterprises' requirements for capital funds, and the phasing out of sub-sidies, which are pre-empting resources that could be used for developmentpurposes, need careful and urgent consideration.

Public Sector Finances: Recent Trends

2.03 Between 1973 and 1976, the public sector showed remarkable flexi-bility in responding to the economy's changing needs (see Table 3). Theunprecedented inflationary pressures of 1973 and 1974 resulted in a size-able increase in revenues, particularly tax receipts, while public expendi-tures were allowed to decline sharply in real terms. Between 1972 and 1974,revenues increased from 16.4 percent to 17.5 percent of GDP and total expen-ditures declined from 21.5 percent to 16 percent of GDP, with the resultthat an overall fiscal deficit amounting to 5 percent of GDP turned into a

surplus of 1.5 percent of GDP. One serious casualty of these policies waspublic investment: public sector capital expenditures fell by 30 percentin real terms and their share in GDP fell even more steeply from 7.4 percentto 4.6 percent, the lowest rate of public investment since the early sixties./l

2.04 The overall demand conditions in the economy have dictated thepursuit of expansionary policies since 1975. A major consequence of thesepolicies has been the resumption of an upward trend in public expenditures,which received strong momentum from the Central Government's stimulativeFY76 budget. Between FY75 and FY76, total public expenditures increasedfrom 18 to 20 percent of GDP and public capital expenditures increased from5 to 7 percent of GDP. All three entities comprising the public sector -Central Government, public enterprises and local authorities - contributed tothe growth of capital spending. The growth of capital spending by publicenterprises has been particularly rapid, with the result that their share inpublic capital expenditures has risen from one-quarter in FY72 to one-thirdin FY76.

2.05 The growth of public capital expenditures in FY76 was accompaniedby a substantially increased utilization of external resources. Externalborrowing, which rose from B 1.4 billion in FY75 to B 4.3 billion in FY76,financed about 20 percent of capital expenditures as compared to 10 percentin the last few years. The raising of a US$100 million Eurodollar loan (theproceeds of which are to be transferred to public enterprises) by the Govern-ment accounts for a significant fraction of the increase in external borrow-ing. The bulk of the proceeds from external borrowing (about 90 percent)went to public enterprises.

2.06 Preliminary forecasts for FY77 suggest that the recent rapid growthof the public sector is likely to continue. Substantial expansion of CentralGovernment's capital spending is envisaged. The projected shares of bothtotal public expenditures and public capital expenditures in GDP, at about22 percent and 8 percent of GDP respectively, would surpass their previouspeaks if the expenditure proposals are implemented fully. On the other hand,since the ratio of revenues to GDP is expected to be maintained at the pre-vious year's level of 15 percent, the overall deficit is likely to widenfrom 5 percent of GDP in FY76 to nearly 7 percent of GDP in FY77. Expectedmovements in various components of demand suggest that the projected deficitneed not put undesirable strain on domestic prices and the balance of pay-ments.

/1 For a detailed account of fiscal developments in 1973 and 1974, seethe 1975 Economic Report.

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Table 3: PUBLIC EXPENDITURES AND THEIR FINANCING /a

(billions of baht; Thai Fiscal Years ending September 30)

1973 1974 1975 1976 1977Estimated Projected

Current revenues 30.8 44.7 45.3 48.5 54.0

Current expenditures /b 25.2 29.1 36.2 41.1 49.0

Current surplus 5.6 15.6 9.1 7.4 5.0

Capital expenditures 11.5 11.7 14.6 22.4 29.0

Fiscal surplus/deficit -5.9 +3.9 -5.5 -15.0 -24.0

Financing:

Net foreign borrowing 1.0 1.0 1.4 4.3 3.5

Net domestic borrowing

Commercial banks 2.6 0.3 3.0 3.9Bank of Thailand 1.5 -0.8 0.6 3.6Use of cash balances -1.6 -5.4 0.4 2.7Other /c 2.4 1.0 0.1 0.5

Total 4.9 -4.9 4.1 10.7 20.5

Memorandum Items: Percentage of GDP

Revenues 15.1 17.5 15.8 15.2 15.1Current expenditures 12.4 11.4 12.7 12.9 13.7Capital expenditures 5.7 4.6 5.1 7.1 8.1Deficit -2.9 +1.5 -1.9 -4.7 -6.7

/a Consolidated expenditures of Central and Local Governments and stateenterprises.

/b Includes transfers.

/c Including borrowing from the Government Savings Bank and the public.

Sources: Tables 5.1 and 5.2, and Bank of Thailand.

Central Government

2.07 FY76 is notable for a number of major developments in CentralGovernment expenditures. Capital expenditures rose by 60 percent (about50 percent in real terms), but were still marginally below their 1971peak in real terms. Capital expenditures on agriculture and water supplymore than doubled, and education (46 percent), transport and communications(50 percent) and health (45 percent) also absorbed substantially largeramounts. Partly as a result of these developments, the structure of Gov-ernment expenditure changed significantly. The share of economic servicesin total Central Government expenditures increased from 17 percent in FY75to 20 percent in FY76, mainly because of increases in shares of agri-culture (from 7 percent to 9 percent) and transport and communications(from 9 percent to 10.5 percent). The share of social services increasedfrom 25 percent to 26 percent, primarily reflecting an increase in theshare of health from 3 percent to 4 percent. The share of transfers tolocal authorities, which had increased from 1 percent in FY74 to 7 percentin FY75 as a result of the tambon program, rose further to 9 percent inFY76. Defense, police and general administration absorbed 35 percent ofCentral Government expenditures as compared to 39 percent in FY75 (seeTable 4).

2.08 The budget proposals for FY77 provide for a 17 percent increasein expenditures, from B 54 billion in FY76 to B 64 billion in FY77. Capitalexpenditures are to be expanded from B 12 billion to B 17 billion. Revenuesare projected to increase from B 44 billion in FY76 to B 50 billion in FY77,or by about 14 percent. Besides levying higher taxes on cigarettes, whichwill bring an additional B 1.3 billion, the Government proposes to introducethree new taxes. These proposals imply an overall cash deficit of B 14 bil-lion, as compared to B 11 billion in FY76. External borrowing is expectedto provide B 830 million of this amount, and the remainder of the deficitwill be largely covered through domestic borrowing.

2.09 The budget contains B 3.7 billion for a wide range of specialprograms. The previous Government's programs of providing free medical ser-vices at public clinics (B 410 million) and free bus services for studentsand people in low-income groups (B 40 million) are to be continued, but thetambon program is to be restructured and transfers to local authorities forsuch a program are to be reduced from B 3.5 billion in FY76 to B 1.2 billion.The emphasis placed by the Government on agricultural development is reflectedin the allocations of B 250 million for land reform, B 200 million for small-scale irrigation projects and another B 200 million to provide increasedequity capital for the Bank for Agriculture and Agricultural Cooperatives.To accelerate the implementation of free, universal six-year primary educa-tion, B 236 million has been included for the distribution of school books,uniforms and educational supplies. The special programs also provide foran oil price subsidy (B 600 million) and the "cheap rice" program (B 100million). /1 Finally, the ambitious housing program initiated by the lastGovernment is to continue; as in FY76, the required finance is to be raisedthrough borrowing by the National Housing Authority (NHA).

/1 The rice subsidy is discussed in Chapter III.

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Table 4: CENTRAL GOVERNMENT EXPENDITURES

(millions of baht; Thai Fiscal Years Ending September 30)

1973 1974 1975 1976 1977Estimated Estimated

Defense, police, admin-istration 13,546 14,922 17,363 18,875 19,908

Economic services 6,039 6,160 7,497 10,879 14,069Agriculture 2,330 2,535 3,051 4,748 5,855

of which: Irrigation (1,398) (1,421) (1,700) (2,765) (3,564)Industry and mining 110 151 210 304 282Power 68 26 29 50 87Transport and

communications 3,384 3,276 4,012 5,718 6,450of which: Highways (3,152) (2,997) (3,629) (5,094) (5,927)

Other economic services 147 172 195 59 1,395

Social services 7,654 9,631 11,196 13,924 19,686Education 5,936 7,588 8,632 10,682 13,988Health 988 1,230 1,387 2,294 3,004Water supply and sewerage 197 175 160 454 607Other social services 533 638 1,017 494 2,087

Transfers 1,564 1,020 4,129 5,614 3,635Local Government 661 588 3,110 4,809 2,061State enterprises 903 432 1,019 805 1,574

Interest payments 2,852 3,344 3,501 4,309 5,016

Other 522 581 634 554 1,262

Total 32,177 35,658 44,320 54,155 63,576

(of which: capitalexpenditures) (6,893) (6,923) (7,521) (11,918) (16,976)

Memorandum Items

Total expenditures aspercentage of GDP 15.8 13.9 15.5 17.1 17.8

Capital expenditures aspercentage of GDP 3.4 2.7 2.6 3.7 4.7

Total expenditures in 1973prices (billions of baht)32.2 30.1 36.3 42.0 46.3

Sources: Table 5.3 and Bank of Thailand.

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2.10 New expenditure proposals imply some significant changes in thepattern of government spending. The share of economic services shouldincrease modestly. On the other hand, the share of social services isexpected to expand substantially, partly because of the continued rapidgrowth of educational (particularly primary, secondary and technical) andhealth (particularly health centers) expenditures and partly because ofthe growing cost of subsidies. Transfers to local authorities will, however,account for a much smaller proportion of total Government expenditures(3.3 percent) than in the previous two years (about 8 percent). The shareof defense, police and general administration is also expected to decline.

2.11 Taxation. Substantial progress was made in the strengthening oftax administration during FY76. The yield of personal income tax rose byover one-third (from B 2.6 billion to B 3.5 billion) as both methods ofassessment and enforcement were improved through a wider use of the networth concept and detailed investigations. Improved enforcement of thetax, particularly in relation to hotels, restaurants and other serviceestablishments, where the operation of the tax is intrinsically moredifficult, contributed significantly to the 13 percent (from B 7.8 billionto B 8.8 billion) increase in business tax receipts. Efforts to improvetax administration are continuing, although the substantial revenue gainsmade in FY76 cannot be expected to be realized each year. Nevertheless,the experience clearly demonstrates the considerable scope that exists forraising revenues through sustained improvements in tax administration andwhat can be achieved given the political determination to combat taxevasion and avoidance (see Table 5).

2.12 Consistent with its policy to stress the use of direct taxation,which presently accounts for less than one quarter of total tax receipts,the present Government is considering the introduction of a property taxalong lines similar to its predecessor's; an estate duty, coupled with agifts tax; and a tax on interest received from commercial bank deposits,as a first step towards the full taxation of interest income at a laterdate./l The property tax will replace the existing local government houseand rent tax, and land development tax, which together bring only B 500million owing to wide-ranging exemptions, extensive use of concessionalrates and poor administration. The new tax, when in full operation, shouldprovide close to B 1.5 billion annually, of which a proportion, would betransferred to local authorities. Complete details of the structure ofrates and exemptions have not been finalized yet. The estate and giftstaxes, details of which are not available, are not expected to yield morethan B 100 million per year. The tax on interest income from bank depositsis to be levied at a flat rate of 10 percent, with the first B 5,000 exemptfrom tax; the tax will be withheld at source. This measure essentiallyextends the treatment of interest paid by finance companies to interestfrom bank deposits; its annual yield is estimated at B 470 million.

/1 It is expected that the new taxes will come into force from January 1977.

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Table 5: CENTRAL GOVERNMENT TAX REVENUES

(millions of baht; Thai Fiscal Years ending September 30)

1973 1974 1975 1976 1977Estimated Estimated

Taxes on income 3,168 4,729 6,102 7,500 8,970Personal (1,700) (2,045) (2,593) (3,500) (4,000)Corporate (1,468) (2,684) (3,509) (4,000) (4,500)Bank deposit tax - - - - (470)

Taxes on property 1,300Property tax - - - - (1,200)Estate and gifts taxes - - - - (100)

Major indirect taxes 15,804 22,013 22,850 26,150 30,130Import duties (6,366) (8,563) (8,270) (9,600) (10,760)Business taxes (5,097) (7,288) (7,770) (8,800) (10,300)Excises (4,341) (6,162) (6,810) (7,750) (9,070)

Export taxes /a 821 4,373 2,105 1,065 1,100Rice premium (276) (2,752) (795) (55) -

Other (545) (1,621) (1,310) (1,010) (1,100)

Profits of fiscalmonopolies 993 1,020 1,370 1,719 2,283

Other 1,935 3,105 1,983 2,174 2,349

Total 22,721 35,240 34,410 38,608 46,132

Memorandum Item

Tax Revenue aspercentage of GDP 11.2 13.8 12.0 12.2 12.9

/a In 1975, 80 percent of the receipts from rice and sugar premiums weretransferred to the Farmers' Aid Fund; since 1976, the full proceeds havebeen transferred.

Sources: Table 5.4 and Bank of Thailand.

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2.13 The new taxes will contribute significantly to the equity aswell as the allocative efficiency of the tax system. Further developmentof these taxes, and particularly of property and interest taxes, will,however, be necessary if their impact is to be maximized. The property taxcould facilitate the implementation of Government policies aimed at thedecentralization of the administrative structure, provided the initialstructure and future development of the property tax are tied closely to

the evolution of local government./l Since it is not easy to find majorsources of revenues for rural local authorities, the changwats' revenueneeds must be fully taken into account in working out the details of thetax. In this connection, it is strongly recommended that the exemption foragricultural holdings should be kept low, the tax schedule should providefor the variation of tax rates with the value of the holding, and the bulkof the proceeds should be returned to the changwats. Otherwise, changwats

are unlikely to derive much benefit from the tax. The possibility ofallowing municipalities to vary the tax rates within a certain range shouldalso be considered as a means of increasing the flexibility of municipal tax

structures.

2.14 Besides correcting one of the inequities of the Thai tax system,the full taxation of interest, through the aggregation of interest incomewith other income and the application of the relevant marginal rates of

tax, would encourage the growth of a more diversified financial system,as the attractiveness of other savings instruments increases in relationto bank deposits. It could also yield twice as much revenue as the bankinterest tax. Nevertheless, seen as a first step towards the full taxa-tion of interest, the bank interest tax must be judged as a significantdevelopment. However, a shorter period of transition for the integrationof interest tax with income tax than the three to five years presentlyenvisaged would be desirable. Also, now that interest will be partiallytaxable, there is a strong case for reducing the present generous deduc-tions for dividends. At present, the taxpayer and his spouse can eachdeduct the first B 5,000 of dividends and 20 percent of the balance; thereis no limit on the maximum amount that may be deductible. The treatment ofdividends received from "listed" companies is even more generous.

2.15 The proposed new taxes and recent improvements in tax adminis-tration will strengthen the capacity of the tax system to assist in themobilization of domestic resources and redistribution of incomes. Furtherchanges in taxes will be required in each of the next few fiscal years ifpublic investment is to be maintained at a high level. Consequently, earlyconsideration of other tax changes that may be made would be desirable.Furthermore, a plan for further tax changes will be an important factorin improving the chances of development. This is further discussed in thecontext of the financing needs over the next Plan period in Chapter IV.

/1 Local government finances are discussed again in the context of decen-tralization in Chapter III and Annex I.

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2.16 Subsidies. The subsidies for petroleum, sugar /1 and rice consti-tute one of the most serious short-term problems which the Government musttackle. Unless some of the subsidies are phased out fairly sOon, the annualbill could total B 2 billion rather than the B 1 billion provided in thebudget. This is obviously a difficult decision and requires political courage,but a policy reversal will become even more difficult with passage of time.

2.17 Responding to the massive increases in international oil prices,the Government raised the controlled retail prices of petroleum productssharply in November 1973 and again in December 1973. Substantial furtherincreases were made in February 1974. However, since then the retailprices have not been changed, except for higher fuel oil prices introducedin October 1974. Controlled ex-refinery prices were adjusted in December1975 to take account of the 10 percent increase in oil prices by OPEC fromOctober 1975. The previous Government had intended to raise retail pricesof petroleum products from January 1976 but had to postpone such increasesbecause of the rice price protest. Therefore, to maintain their marketingmargins, oil marketing companies have been subsidized since February 1976.

2.18 The cost of the subsidy is running at the rate of B 90 millionper month. Even this amount does not give a full measure of the burdenimposed on the budget. The stabilization of retail prices has alsorequired reductions in "internal" taxes (excise, business and municipaltaxes), which are now 30-40 percent below their 1973 levels in real terms.Consequently, the revenue derived from such taxes on petroleum products hasdeclined from 11 percent of Government tax revenues in 1973 to 7.5 percentin 1975 (see Table 6). Assuming the retention of the subsidy, the revenuefrom petroleum products, after allowing for the cost of the subsidy, islikely to account for under 5 percent of Government tax revenues in FY77.

2.19 Because of the constraint it imposes on the country's abilityto raise development capital, and the distortions it is likely to intro-duce in the allocation of resources over the long term, the petroleumsubsidy should be phased out as soon as possible. The object should be toreinstate petroleum taxes as a major and growing source of governmentrevenues. The present price of gasoline of B 3.62 per liter ($0.18) isamong the lowest in Southeast Asia and higher taxes on gasoline alone couldbring substantial revenues.

2.20 A subsidy which is negligible at present but which could assumegrowing dimensions relates to housing. The Government's ambitious programaims at the construction of 120,000 housing units by the NHA over theFourth Plan period. Of the 24,000 units to be constructed annually,10,000 units will be for households earning less than B 1,500 per month,

/1 A guaranteed sugarcane price of B 300 per ton for the 1975/76 seasonand controlled wholesale and retail prices of white sugar of B 5 andB 5.50 per kilo respectively have implied losses for millers on sugarproduced for the domestic market. Millers are, therefore, paid asubsidy of B 920 per ton on the 480,000 metric tons of white sugar theyare required to produce for the domestic market. The total cost of thesubsidy is estimated at about B 400 million.

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11,200 for those earning B 1,500-3,000 per month and the remaining 2,800for those earning B 3,000-5,000 per month./I While subsidies are notenvisaged for households in the last category, the provision of housing forthose earning less than B 3,000 per month could involve substantial sub-sidies. For example, households in the less than R 1,500 category areexpected to be charged a rental of B 300 per month as compared to aneconomic rental of B 800 per month; based on a capital cost of B 75,000,repayable over 20 years at an interest rate of 8 percent per annum. Formiddle-income households, that is households earning between B 1,500 and3,000 per month, the subsidy component envisaged is also almost as large.Although a portion of the subsidy could be covered from profits generatedfrom other elements of land development, the subsidy might still beexcessive.

Table 6: PETROLEUM PRODUCTS - TAX RATES /a AND REVENUES

Tax Rates (baht per liter)1972 1973 1974 1975

Gasoline (premium) 0.8856 1.4435 1.2383 1.0701Gasoline (regular) 0.8773 1.4273 1.2313 1.0666Gas oil 0.1578 0.3719 0.3911 0.3110Industrial diesel 0.1566 0.3677 0.3796 0.3064Kerosene 0.3862 0.4103 0.2231 0.2644

Tax revenues frompetroleum products 1,829 2,570 2,905 2,594(millions of baht)

Tax revenues frompetroleum productsas percentage of total 9.7 11.3 8.2 7.5Central Governmenttax revenues

/a Excise, business and municipal taxes.

Source: Thai Authorities.

2.21 Subsidies for low-income housing may be justified in certaincircumstances. But unless the subsidy per unit is held at a moderatelevel and subventions for other types of housing are severely restricted,the progress towards meeting the housing needs of low-income householdsis likely to be slow. The Government is showing a growing awareness of

/1 About 14,000 housing units were under construction in June and at least6,000 additional housing starts were expected before the end of FY76.

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the kind of solutions required to meet the needs of the poorest families,and is considering a 3,000-unit site and service scheme and a slum improve-ment project covering 2,000 units. It is to be hoped that as experienceis gained in the implementation of these pilot schemes, the present housingstrategy will be modified so as to keep unit costs and thus subsidies to aminimum.

2.22 At the same time, it is important that whatever subsidies aregiven are closely reflected in the budget. Recently, commercial bankshave been required to take up NHA bonds totalling B 1 billion and yielding5.5 percent, or substantially below the market rate of interest. To makeinvestment in such bonds attractive, the proportion of the commercial banks'7 percent cash reserve ratio that could be composed of Government bonds wasraised from 50 percent (or 3.5 percent of total deposits) to about 57 percent(or 4 percent of total deposits). By enabling the commercial banks to switchpart of their idle cash to Government bonds, the measure helped to increasethe effective yield on NHA bonds. Policies of this kind should be avoidedin the future. Apart from obscuring the true extent of housing subsidies,the manipulation of commercial banks' cash and liquidity ratios for purposesother than those for which they were designed could weaken the effectivenessof monetary policy.

Public Enterprises

2.23 Capital spending by public enterprises, which fell in real termsbetween FY69 and FY72 and showed only moderate improvement in FY73 andFY74, has risen rapidly since FY75. Its growth was particularly rapidin FY76, when it rose by two-thirds, from B 4.5 billion to B 7.4 billion,as the major public utilities, and particularly the Electricity GeneratingAuthority of Thailand (EGAT), the Provincial Electricity Authority (PEA),the Telephone Organization of Thailand (TOT) and the Metropolitan WaterWorks Authority (MWWA) undertook large investments. With investment inhousing by NHA supplementing expanded investment programs by public util-ities, capital spending by public enterprises should maintain its recentmomentum in FY77.

2.24 The Government introduced new financial guidelines in 1975 toencourage greater financial autonomy and responsibility in public enterprises.These have already had some effect on the public enterprises' sources offinance, particularly where domestic borrowing is concerned. Domesticborrowing rose from B 0.8 billion in FY75 to B 2.1 billion in FY76. Foreignborrowing grew from B 1.9 billion in FY75 to over B 4 billion in FY76, butmost of the increase is due to the expected relending by the Government ofthe proceeds of the US$100 million (B 2 billion) Eurodollar loan to publicenterprises./I However, despite the tariff changes effected by certain

/1 The funds are expected to be allocated as follows: EGAT (B 560 million),PEA (B 564 million), TOT (B 512 million), MWWA (B 500 million), FishMarketing Organization (B 29.1 million) and Cold Storage Organization(B 25.8 million).

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public utilities, including the State Railways and TOT, towards the end of1975, the current surplus available for financing investment fell sharply inFY76. Preliminary estimates for FY76 suggest that savings will finance only10 percent of investment as compared to an average of over 40 percent overthe five-year period FY71 to FY75, although these averages conceal a greatdeal of variation from enterprise to enterprise. A low level of self-finan-cing could also adversely affect an enterprise's ability to raise externalcapital. Therefore, the generation of growing internal surpluses throughthe pursuit of realistic pricing policies must be made a central feature ofthe financial guidelines if investment by public enterprises is not to beseriously constrained. It will be well for the Government to clarify itsguidelines.

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III. SELECTED ISSUES OF AGRICULTURAL AND RURAL DEVELOPMENT

3.01 This chapter reviews certain selected policies - decentralization,land reform, expansion of agricultural credit and maintenance of reasonableprices for paddy - which have attracted increasing attention from recentgovernments. Partly because deep public concern for issues that haveprompted these policies is of a relatively recent origin and partly becauseof the intrinsic complexity of the issues, a great deal remains to be doneboth in the precise formulation and implementation of the announced policies.

3.02 The policies to be discussed have a strong bearing on rural devel-opment. The main benefit of decentralization would be to make local servicesmore responsive to local needs, but decentralization could also be *used as amajor tool for narrowing regional disparities, in the availability and qualityof basic social services. Properly developed, the land reform, credit andpricing policies could have a substantial effect on rural productivity andincomes. Awareness of the close interrelationship between these policies is,however, essential. Higher farmgate prices have an immediate impact on ruralincomes, whereas the benefits of land reform will be realized over a rela-tively long period. Furthermore, paddy pricing policy is probably the singlemost important determinant of rural incomes, and the success of land reformand agricultural credit programs is bound to depend critically on the kind ofpricing policy adopted for paddy. The Government's pricing policy will,therefore, provide an acid test of its commitment to rural development.

3.03 Previous reports have emphasized the importance of institutionbuilding in Thailand. This has assumed special significance now that manynew policy concerns have emerged. Progress made in decentralization, landreform and agricultural credit will depend on the country's ability todevelop institutions with the requisite administrative and technical skills.

Decentralization of Administration

3.04 Although decentralization forms part of Government policy, verylittle is known about the Government's intentions. However, since certainmeasures affecting local government will need to be taken shortly in accord-ance with the Constitution,/l early decisions on a whole range of questionsrelating to the extent and direction of decentralization would be desirable.The Constitution requires that chief executives of all local authoritiesshould be elected; the first such elections are expected to be held shortly.The constitutional requirement for the election of the chief executive ofthe Changwat Administrative Organization (CAO), the main unit of rural localgovernment, has particularly important implications for the future of localgovernment. It would end the Governor's dual role, under which the Governoris both the head of the Central Government's provincial administration andthe chief executive of the CAO, and would confer substantial freedom on the

/1 Constitution of the Kingdom of Thailand, Chapter IX, Sections 214-217and Chapter XI, Section 237.

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CAOs in the determination of expenditures from revenues other than thosederived from specific grants. However, these powers will not mean much inpractice if local responsibilities and resources, financial as well asadministrative, are not extended.

3.05 The tambon programs of FY75 and FY76, under which B 2.5 billionand B 3.5 billion respectively were transferred, were a major experiment indecentralization. Previously tambons had negligible resources and the CAOshad spent only B 4 billion, or under 10 percent of total public sectorexpenditures. Of the total changwat expenditures, about 90 percent were forexpenditures on elementary education, which are closely controlled by theCentral Government through the mechanism of specific grants. Since theGovernor, in his capacity as the chief executive of the CAO, is responsiblefor the preparation of the CAO's budget, the changwat's influence overexpenditures out of its other resources is not much greater. The tambonprogram, by significantly increasing the resources available at the locallevel and by leaving the responsibility for the choice of expenditureslargely with the tambons, brought about substantial local participation inthe development process.

3.06 The magnitude and range of projects undertaken make an overallassessment of the tambon program a formidable task. Sample surveys con-ducted by the Budget Bureau and the Bank of Thailand shed some light onthe quality of projects. In general, they present a mixed picture. On thebasis of a sample of about 1,600 projects out of a total of over 43,000projects implemented in FY75, the Budget Bureau study found a great dealof variation in the quality of different types of projects. Projects suchas improvement and expansion of school buildings, and health centers, instal-lation of village electrical systems, and construction of water tanks andreservoirs were satisfactorily executed in the sense that the bulk of theprojects were expected to last for more than three years. On the otherhand, the performance in road construction and improvement was consideredto be poor on the grounds that about 45 percent of the roads built and25 percent of road improvements would last for less than a year. Otherkinds of projects, such as the construction of ditches and canals, wereregarded as being of an intermediate quality. However, since tambons lackedprevious experience and are severely deficient in both administrative andtechnical capability, it is by no means clear what are the appropriatecriteria against which the projects undertaken by tambons are to be judged.Furthermore, some waste is inevitable initially in programs of this kind.

3.07 Quite apart from the limitations of administrative and technicalcapacity at the tambon level, the hasty manner in which the program waspromulgated and implemented also affected the results. As pointed out inthe Bank of Thailand's perceptive study, the blame for many badly plannedprojects and the choice of inappropriate projects rests on the limitedtime (frequently only three to four days) the tambons were allowed toprepare project documents. Similarly, the requirement that projects bewholly or mostly completed during the dry season (April to July) had anadverse effect on the implementation of projects; prices of materials andlabor rose, and shortages of construction materials emerged in many areas.

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3.08 The new Government has decided to modify the program. Con-sidering the tambon as too small an administrative unit for the purposesof the program, and recognizing the greater possibilities of giving ad-ministrative and technical support to the program at the changwat level,the Government proposes to channel funds through the changwat rather thanthe tambon. The funds would be allocated to changwats on the basis ofpopulation and, possibly, other criteria, which is a welcome departurefrom the past when equal allocations were made to tambons. A committeein every changwat, headed by the Governor, would then select projects forimplementation in various parts of the changwat. Finally, the budgetallocation for the changwat program is to be reduced to B 1.2 billion inFY77. While a brief pause to evaluate the experience gained in the tambonprogram may be in order, further measures relating to local governmentwill be required if a reasonable degree of decentralization is to beachieved.

3.09 The creation of conditions conducive to the development of localgovernment will require measures in a number of areas. In particular, iflocal government is to be meaningful, the realization of the followingconditions would seem to be indispensable: (i) participation of localpeople in the determination of expenditures on most local services throughtheir representatives either at the tambon or changwat level; (ii) streng-thening of changwats' administrative and technical capacity through recruit-ment and training of staff; and (iii) placing of adequate resources at thedisposal of local authorities to make meaningful participation possible.

3.10 The relative emphasis placed on block grants in the form of trans-fers to tambons and changwats must depend on the magnitude of tax revenuesallocated to local authorities as well as the extent to which specificgrants can be effectively used to remove the vast disparities that prevailin the regional distribution of major public services. Clearly, if localauthorities are to undertake a reasonable level of services, and theirexiguous tax base is not extended, considerable reliance must be placed onblock grants on the lines of tambon and changwat transfers. If, on theother hand, local authorities' tax revenues are significantly expanded, therole of block grants could be appropriately modified.

3.11 Measures to widen the local authorities' tax base should begiven early consideration. Local initiative and responsibility will bedifficult to develop if local authorities have to rely almost wholly ongovernment transfers. Some possibilities for raising local authorities'financial resources are explored in Annex I. The reform of local govern-ment finances is a complex task and is likely to take time. Meanwhile, itwould be desirable to attach continued emphasis to block grants so thatrecent progress in the evolution of local government is not interrupted.Serious consideration should be given to raising the level of transfers tochangwats in FY78.

3.12 In a country like Thailand, with its strong tradition of central-ized Government, the development of an effective and responsible localgovernment will not be an easy task. Among the problems that will have

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to be resolved, the provision of sufficient finance may be the least dif-ficult. As the experience of the tambon program demonstrates, unless theadministrative and technical capacity of local authorities is strengthened,both the planning and implementation of projects at the local level willleave much to be desired. Moreover, for many problems, such as the develop-ment of an appropriate relationship between the provincial administrationand local government, and the degree of central control that minimizes therisk of local mismanagement and yet leaves sufficient flexibility to localauthorities, only further experience can provide workable solutions. Theseconsiderations should not, however, detract from the urgency of establishingan initial framework within which local government can evolve.

Land Reform

3.13 Recent governments have given increasing attention to land reform.A major objective of land reform proposals has been to distribute land toan estimated one-half million farm families without sufficient landholdingsto generate adequate incomes. Although the problem of land distributiondoes not appear to be as severe as in many parts of Southeast Asia, it couldbecome intractable over time if neglected.

3.14 The main cause of inequities in land distribution is the popula-tion pressure that has also virtually exhausted the supply of suitable landfor agriculture and pushed farmers onto marginal land. While farmers atthe margin are, then, forced to use lower quality land, a concomitant trendhas been a reduction in the average size of farms in areas previouslycultivated. Both of these factors have operated to reduce income per farm,and resort to moneylenders or larger farmers for credit has become morefrequent, thereby setting in train a dependency that may cause farmers tomortgage, and, in some cases, lose their land in the aftermath of a badharvest.

3.15 Tenancy rates in certain parts of the country have aroused deepconcern. The overall dimension of the tenancy problem cannot be determinedwith precision because of deficiencies in statistics and difficulties ofinterpreting the evidence. High priority should be given to improvingstatistics. Meanwhile, the available data clearly indicate that the problemhas assumed large proportions in certain changwats. The extent of tenancyis the highest in the Central Plains and the lowest in the Northeast. Allsix of the changwats where over one-half of the farmers are tenants liein the Central Plains (Pathum Thani, Ayuttaya, Samut Prakan, Nakhon Nayok,Chachoengsao and Sara Buri). In contrast, the highest tenancy ratesrecorded in the Northeast were under 20 percent. Finally, tenancy ratesranging from 25-40 percent were found in certain changwats in the North andSouth.L/

3.16 In addition to tenancy, an important aspect of the land reformproblem involves forest areas since farmers have increasingly encroached onareas legally reserved for forests. Such encroachment has been an important

/I Agricultural Landholdings, 1973-74 (Division of Agricultural Economics,

April 1975).

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outlet for absorbing the surplus agricultural labor force; but soil erosionand unproductive use of timber resources have also resulted. A policy oflegalizing squatting in areas best suited for crop production together witha reforestation program in others would have distinct benefits. By improvingthe access of squatters to services such as extension and credit, it couldhelp to raise productivity. Therefore, it would make sense to, in effect,recognize reality and encourage improved farming in these areas by transfer-ring title, or at least granting legal farming rights, to squatters.

3.17 The emerging difficulties inherent in land ownership patterns asthey are now developing were explicitly recognized in the Land Reform Lawwhich was enacted in March, 1975. The law (i) established an AgriculturalLand Reform Office (ALRO), to implement the land reform program; (ii) directedattention to areas of high tenancy; (iii) empowered ALRO to allocate up to50 rai per family; (iv) authorized ALRO to purchase lands for 25 percentcash and 75 percent Government bonds; and (v) permitted landowners toreserve no more than 50 rai of land from land reform proceedings except inspecified circumstances.

3.18 A five-year program starting October 1, 1976 has been formulatedby the Government in accordance with the Land Reform Law. The program hasa target of redistributing 10 million rai to 500,000 families over the fiveyears./l The goal is to allocate enough land to each family to generate agross income of B 20,000 per year. Current estimates suggest a typicalfigure of about 20 rai (range from 17 to 35) per family would be required,depending on water availability, soil quality, etc. It is envisaged thatmost families participating in the program would not actually need to bephysically relocated, as they would receive title (or right-to-farm certifi-cates in the case of squatters on forest land) to land they are currentlyfarming or adjacent land.

3.19 In FY77, 50,000 families are to participate in a program cover-ing one million rai. The program will be initially confined largely tothe Central Plains. It is expected that the land needed for this programwould come from land purchases from private landowners (500,000-700,000rai) and allocations from Department of Forestry and Crown lands. A totalof B 1.4 billion has thus far been allocated for land purchases. Of this,B 542 million is included in the budget, B 100 million would come from theFarmers Aid Fund, and B 750 million would be paid in bonds, the terms ofwhich are still to be decided.

3.20 Although progress has been made in defining the broad outlinesof the program, many crucial details remain to be worked out. It willbe important to formulate clear guidelines under which land would bepurchased from large landowners. Repayment guidelines for those receivingland will also need to be established at an early date, since, withoutthese, it will be impossible to decide on the appropriate level of landallocations. On the funding side, the details of the proposed bond salesneed to be decided, including the maturities that would be appropriate.

A 1 rai = 0.16 hectares.

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There also appears to be insufficient coordination with the ForestryDepartment although it is expected that substantial land would beallocated from forest lands.

3.21 It would appear that the need for land reform exists, at leastin selected areas, and the basic thrust of the Government policy is well-directed. But a more detailed articulation of the program is required.In particular, the financial and administrative implications need to becarefully studied.

Agricultural Credit

3.22 The agricultural sector receives a trifling share of totalinstitutional credit. At the end of 1974, commercial bank lending toagriculture amounted to B 1.3 billion out of a total of B 68.8 billion.The publicly-owned Bank of Agriculture and Agricultural Cooperatives(BAAC) provided a further B 2.6 billion, bringing the total institu-tional credit to just below B 4 billion. There can be little doubt thatthis amount is far below the requirements, however defined. The applica-tion of the total credit/GDP ratio to agriculture would place the agri-cultural credit requirements at three to four times the present amountprovided by institutions. While this ratio has limited analytical sig-nificance, it, nonetheless, gives a rough indication of the comparativelyunfavorable treatment of agriculture. As is to be expected in such cir-cumstances, noninstitutional credit, on terms greatly inferior to thoseoffered by institutional lenders, remains the main recourse to farmers inneed of credit. Concerned by this situation, the Government has takencertain steps to assure a higher volume of lending to agriculture bycommercial banks and is exploring ways and means of extending the role ofthe BAAC in the provision of agricultural credit.

3.23 Much of the growth in agricultural credit from institutionalsources in 1975, when it expanded from B 4 billion to B 7.5 billion, wasdue to a government regulation which required commercial banks to lend toagriculture, either directly or through the BAAC, an amount equal to atleast 5 percent of the total loans outstanding at the end of 1974. Ofthe increase of B 3.2 billion in commercial bank lending for agriculture,direct lending accounted for B 1.5 billion and loans to the BAAC forB 1.7 billion (see Table 7). To satisfy the requirement fully, a furthersum of B 880 million was pledged to the BAAC. Funds advanced to the BAACcarry an interest rate of 8 percent per annum. The target for commercialbank lending for 1976 has been raised to 7 percent of deposits at the endof 1975. Direct lending to agriculture has also been encouraged by requir-ing new branches in the provinces to lend at least 60 percent of theirdeposits to local customers, including 20 percent that must be lentdirectly to farmers.

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Table 7: LOANS AND OVERDRAFTS PROVIDED TO FARMERS /a

(millions of baht)

1970 1973 1974 1975

Commercial Banks 637 991 1,305 4,506of which: to farmers (637) (991) (1,305) (2,824)

to BAAC ( - ) ( - ) ( - ) (1,682)BAAC 1,209 1,952 2,651 4,715

Total (to farmers from commercialbanks plus BAAC) 1,846 2,943 3,956 7,539

/a Amounts outstanding.

Sources: Monthly Bulletin, April 1976 and Bank of Thailand.

3.24 Because of the importance of commercial banks in resource mobili-zation in Thailand and heavy demands on the Government's limited financialresources, it would be desirable to ensure that commercial bank lending toagriculture continues to expand at a reasonable pace each year. The ful-fillment of the lending requirement for agriculture through the channellingof the greater proportion of the funds to the BAAC was to be expectedinitially, given the banks' traditional reluctance to extend credit foragricultural purposes and their consequent inexperience. While a steadyimprovement in the banks' capacity to undertake direct lending is to beexpected as they gear themselves to the needs of a continuing program, moreambitious targets for agricultural lending may require supplementary measures,including equitable arrangements for risk sharing between the Government andcommercial banks.

3.25 In view of the past neglect of agricultural credit, however, anactive and growing involvement of the public sector in the provision ofagricultural credit is essential if rapid progress is to be made. Thepublic sector could also make a valuable contribution to broadening therange of credit facilities, and has a critical role to play in supplyingcredit to small-scale farmers, partly because commercial banks tend toconfine their operations to large and medium-scale farmers and partlybecause the public sector is frequently in a better position to providesupervised credit.

3.26 The BAAC has expanded rapidly in recent years but has stillreached only a small fraction of Thailand's farmers, and the bulk of itslending would seem to have gone to large and medium-scale farmers ratherthan small-scale farmers. Furthermore, its operations have been limited

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almost entirely to providing short-term credit as distinct from longer-termdevelopment finance. Although the need for the BAAC to provide expandedand more varied facilities is widely acknowledged, a program to guide theBAAC's operations over the next few years has yet to be formulated. Highpriority needs to be given to the preparation of a five-year lendingprogram for the BAAC that takes account of the serious deficiency ofagricultural credit, the Government's strategy for rural and agriculturaldevelopment, and domestic and external finance that may appropriately bechannelled into agricultural credit. The program would also have to dealwith staffing plans and major policy questions such as appropriate allocationof resources between short-term and development credit, and modificationsneeded in the processing, collateral and supervision requirements forreaching more small-scale farmers. Without such a program, it will bedifficult to increase and restructure operations in a consistent andefficient manner.

3.27 The BAAC's repayment record has been quite good during most ofits history. However, with the recent expansion, repayments have laggedand, in 1975, arrears amounted to about 25 percent of outstanding loans.Difficulties have been encountered not so much with individual farmers aswith cooperatives and farmers' groups./l Farmers' groups present aspecial problem since they are, in general, very weak financially andotherwise, and require considerable supervision. However, the fault for thetardy repayments lies partly with the BAAC. Loan applications are oftenprocessed very slowly so that credit is sometimes only available long afterit is needed. Therefore, cooperatives have found it desirable and possiblesimply not to repay loans at the end of a season and use the funds forrelending to members in the next season, in the process paying, in general,interest but not principal to the BAAC. Clearly, steps to improve therepayments situation will be needed before a sizeable expansion of theBAAC's operations is undertaken.

3.28 The question of appropriate policies, procedures, staffing andorganization are intricate and need to be analyzed carefully. Much remainsto be done in terms of identifying and implementing an appropriate organiza-tional structure for BAAC, training staff to operate efficiently, and adopt-ing efficient lending procedures which do not overburden staff with needlessdetail. Policies necessary for achieving sustained progress in meeting thecredit requirements of the smallholder also need to be formulated. Sinceit may well be that a major structural reorganization is required, it wouldbe desirable to seek technical assistance from countries with successfulexperience in agricultural credit programs, as a step towards developinginstitutional arrangements suited to Thailand's specific needs.

/1 Loosely-built, but juristic, groups of at least 50 farmers which havebeen legalized and promoted by the Government since 1973.

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3.29 There has been considerable debate within the BAAC recentlyregarding changes in policies and procedures and some improvements havebeen made. A modest step towards decentralization occurred recently whenfour regional managers were appointed. Additionally, cooperatives nowapply for loans at the changwat level, which enables the BAAC to promotegreater financial discipline within the cooperatives. Loan applicationforms have also been simplified somewhat.

3.30 Thus, it appears that the BAAC is in need of a comprehensiveprogram which would encompass both financial and organizational targetsthat would meet nationally accepted policy goals. The current managementof the BAAC perceives the need for both an expanded role and for revisedprocedures to increase the efficiency of the BAAC within that expandedrole. Given the large gap between the credit requirements and availability,a realistic and well-directed program would greatly benefit from externalparticipation.

Pricing Policy for Paddy and Rice

3.31 A wide variety of instruments are being used to regulate riceprices. Export premium (a special kind of export tax) and export taxeshave been the main instruments utilized for driving a wedge between theworld and domestic prices of rice. In addition, a "cheap rice" policy,under which consumers may purchase limited quantities of rice belowmarket prices at special shops, was introduced in 1966. The rice forthis purpose was obtained by requiring exporters to sell quantitiesbearing a certain relationship to exports ("rice reserve requirements")to the Government at less than market prices. The reserve requirementshave, at times, implied a significant tax on exports./l Finally, exportquotas and temporary export bans have been imposed on occasions.

3.32 With rice export prices fluctuating widely since 1973, vigoroususe has been made of export premiums and reserve requirements to regulatedomestic prices./2 Export premium per ton on high quality "5 percentrice", for instance, rose from B 3,000 at the end of 1973 to B 5,100 inMarch 1974, thereafter falling steadily to reach the present level of B 700.Additionally, reserve requirements were abolished in January 1976.

3.33 In addition to making extensive use of rice premium and reserverequirements in recent years, the Government in December 1975 also proposeda minimum farmgate price of B 2,500 per ton for the 1975/76 paddy crop as afurther step to maintain farmers' incomes. This price was to be maintained

/1 See Ammar Siamwalla, A History of Rice Price Policies in Thailand,in Prateep Sondysuvan (ed.), Finance, Trade and Economic Developmentin Thailand: Essays in Honor of Khunying Suparb Yossundara (SompongPress, 1975), pp. 141-165.

/2 See Tables 7.3 and 7.4 for rice prices and taxes.

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in the first instance by low-interest government finance for privatedealers, and, then, if necessary, by direct government purchases throughthe newly-created Marketing Organization for Farmers (MOF). This measurewas expected to raise the free market retail price of "5 percent rice" fromabout B 4.3 per kilo to B 5 per kilo. To limit the cost of the "cheaprice" program, the Government planned to modify the program. The Governmentproposed a food stamp program to cover 60 percent of the expected priceincrease for families earning less than B 1,000 per month. However, theproposal to increase retail prices provoked a general strike and induced achain of events which in the end toppled the Government.

3.34 The Seni Government announced a new pricing policy soon afterassuming power. The policy comprises two separate components. The firstcomponent, which establishes standard marketing margins, is designed toprevent middlemen from making excessive profits. The second componentinvolves sales of "cheap rice" to low-income consumers. Both componentsincorporate minimum paddy prices. A minimum purchase price of B 2,100 perton of paddy has been established in Bangkok wholesale markets, which cor-responds to a farmgate paddy price of about B 1,800 per ton. This measureshould help to stabilize farmgate prices; the support price has been fixedat a lower level than that announced by the previous Government mainlybecause rice export prices have fallen substantially since the end of 1975.Additionally, under the first part of the program, paddy would be bought toproduce "5 percent rice," which would then be marketed to the public at B4.13 per kilo. An average of 30,000 tons of paddy per month are expectedto be purchased for this purpose. To support the "cheap rice" program, upto 60,000 tons of paddy will, on average, be procured each month and usedto produce "15 percent rice" to be sold at B 3.3 per kilo. In a welcomechange from the past, three-quarters of "cheap rice" sales will take placeoutside Bangkok, where the need is greater, as opposed to the past policywhereby two-thirds of "cheap rice" was sold in Bangkok.

3.35 The above program will be largely carried out by the MOF whichhas been allocated about B 500 million from the Farmers' Aid Fund. TheMOF will purchase paddy, hire private facilities for processing, and distri-bute rice to various outlets. The MOF is a new organization, which lacksphysical infrastructure to support the program and which therefore reliesheavily on facilities rented from the private sector. Such arrangementshave, however, worked reasonably well in the past.

3.36 The relationship between market prices and those set by theGovernment will, of course, determine the workability of the program. TheB 2,100 per ton floor price (Bangkok wholesale price) established by theGovernment was close to the market price and, therefore, has not been anelement in the determination of the market price so far. Similarly, theofficial price of "5 percent rice" of B 4.13 per kilo has also been veryclose to the actual market price. Although "cheap rice" is being sold atthe old price of B 3.3 per kilo, the subsidy element has been effectivelyreduced by providing "15 percent rice" under the program rather than thehigher quality "5 percent rice" as previously. Since the current retailmarket price of "15 percent rice" is in the region of B 3.9 per kilo,the "cheap rice" policy implies a subsidy of B 0.6 per kilo. If, as

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expected, 60,000 tons per month are offered for sale under the program,the annual cost of the subsidy would be about B 375 million, assumingthat the public sector's distribution costs are approximately equal tothose of the private sector.

3.37 Over the long term, if Thailand's low paddy yields are to beimproved and farmers' interests are not to be subordinated to those ofbetter organized and more articulate urban consumers, the primary objec-tive of the pricing policy should be to avoid excessive fluctuations indomestic prices and certainly not to depress them permanently below theworld levels as has mostly been the case in the past. There is no reasonwhy domestic rice prices should be lower than the long-term externalprices. In implementing its policy, the Government must also considercarefully the relationship between domestic paddy prices and the prices ofmajor inputs required for more intensive production. It appears that, atthe present levels of farmgate paddy prices and fertilizer prices, there issufficient incentive for using improved seed/fertilizer technology inirrigated areas with proper water control; however, support prices andexport premiums will need to be reviewed periodically in the light ofchanging external demand and price conditions.

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IV. THE FOURTH PLAN PERIOD WITH SPECIAL REFERENCE TOPUBLIC INVESTMENT AND ITS FINANCING

4.01 The draft Fourth Plan sets out a growth target of 7 percentper annum for the Fourth Plan period 1977-81. This target rate is equalto that for the Third Plan but is somewhat higher than the estimated6.2 percent growth achieved over the Third Plan period, 1972-76. Thetarget reflects the Government's belief that it is both desirable andpossible to accelerate the country's rate of progress. The macroeconomicframework for the Plan period, including balance of payments prospects, isdiscussed in Annex II.

4.02 The principal objectives of the Plan are to: (i) accelerateeconomic recovery and growth of investment opportunities in the context ofeconomic stability; (ii) narrow disparities in the distribution of income,and promote social justice; (iii) reduce population growth, improve thequality of human resources and generate employment opportunities; and(iv) conserve national resources. These objectives are consistent withthose of the Third Plan and the subsequent evolution of policy concernsand strategies.

4.03 The continued emphasis on reducing the rate of growth in populationas an explicit goal of development policy is to be welcomed. Thailand'spopulation in 1975 was estimated to be 41.9 million and the rate of naturalincrease was about 27 per thousand, a relatively high rate compared toother countries. The rapid population growth has been the consequence ofa falling death rate and a continued high fertility rate. This developmenthas resulted in a relatively young population and a high dependency ratio,placing a heavy burden on the budget to provide education and other socialservices. During the Third Plan period, the country's family planningprogram contributed to the reduction in the rate of natural increase (fromaround 30 per thousand in 1971). The Fourth Plan objective of furtherdecreasing the rate of population increase to 21 per thousand by the end ofthe Plan period through a sizeable expansion in the family planning program,if realized, will greatly facilitate the achievement of the country's othermajor objectives./l

4.04 The draft Fourth Plan discusses the country's objectives, themacroeconomic framework, and sectoral issues and strategies in broad terms.A detailed and integrated public sector investment program yet remainsto be completed and the task of preparing such a program, at least for thenext two to three years, should be given high priority. Without a publicsector program that is sufficiently detailed to be amenable to implemen-tation, the Plan will have little operational significance. Substantialprogress has already been made in the formulation of sector programs for anumber of major public sector activities, including education, health,power, telecommunications and tourism.

/1 The subject of population is discussed in detail in Current EconomicPosition and Prospects of Thailand, Report No. 542-TH, October 11, 1974,Vol. 1, pp.4 8-54.

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Public Sector Development Expenditures and Their financing, 1977-81

4.05 The draft Fourth Plan proposes public sector development expendituresof B 252.5 billion ($12.5 billion) for the Plan period as compared to anestimated B 92.5 billion over the Third Plan period /1 (see Table 8). Thislevel implies a doubling of development expenditures in real terms. Theabove increase in development expenditures appears to be desirable in viewof the large needs for public services in areas such as agriculture, educa-tion, health, rural electrification and roads. An assessment of the finan-cing possibilities suggests that it should also be financially feasibleprovided vigorous efforts are made to mobilize the needed domestic andexternal resources.

4.06 The draft Plan calls for a very substantial increase in domesticeffort. It envisages that about B 220 billion ($11 billion) would bemobilized from domestic sources and the remaining amounts would be obtainedfrom external sources. The projected financing pattern implies an increasein the share of domestic resources from 84 percent in the Third Plan periodto 87 percent for the Fourth Plan. Transfers from budgets and self-financingby public enterprises and local authorities are projected to provide anaverage of about B 25 billion per annum as compared to B 8 billion per annumachieved over the Third Plan period, although the latter figure was influencedby the needs of the stabilization policy (see Chapter II). The draft Planprojects external borrowing (gross) and grants at B 29.8 billion ($1.6 bil-lion) and B 2.5 billion ($125 million) respectively. This would resultin a decline in the relative share of external financing, from 16 percentover the Third Plan period to 13 percent, despite a considerable expansionof development expenditures.

4.07 Not only for raising revenues, but also to improve the distribu-tion of incomes and the allocation of resources, far-reaching changes inthe tax structure will be needed. The formulation of a medium-term taxstrategy would facilitate the pursuit of an active tax policy over thePlan period. Such a strategy would make it easier to foresee the adminis-trative implications of anticipated tax changes, thereby helping to reducedelays in implementation. The Government's desire to increase the role ofdirect taxation also emphasizes the need for tax planning because direct taxesentail entail more administrative changes than indirect taxes. An explicittax strategy would also help to focus attention on the timing of tax changes,which acquires special significance in the context of financing targets since

/1 The concept of development expenditures is much broader than capitalexpenditures. Most recurrent expenditures on education, for example,are treated as development expenditures. In the past, capital expendi-tures have amounted to roughly 60 percent of development expenditures.It should also be noted that when the concept of development expendituresis used, "transfers from budgets" are not equivalent to "current accountsurplus."

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Table 8: PUBLIC SECTOR DEVELOPMENT EXPENDITURESAND THEIR FINANCING, 1972-81 /a

(billions of baht)

Third Plan Estimates Fourth Plan Targets1972-76 /b 1977-81

Amount % of Total Amount % of Total

Development Expenditures 92.5 100.0 252.5 100.0

Sources of Finance:

Domestic 78.1 84.4 220.2 87.2Transfers from budgets /c (43.6) (47.1) (126.6) (50.1)Borrowing (gross) /d (34.5) (37.3) (93.6) (37.1)

External 14.4 15.6 32.3 12.8Borrowing (gross) /e (11.7) (12.7) (29.8) (11.8)Grants (2.7) (2.9) (2.5) (1.0)

/a Strictly, since development expenditures do not include loan repay-ments, both domestic and external borrowing totals should be givenin net terms. But to avoid possible confusion, the format used inthe Plan has been retained.

/b Actuals for 1972-74 and estimates for 1975-76.

/c Including self-financing by public enterprises and local authorities.

/d Excluding domestic borrowing by public enterprises, but including netuse of treasury reserves.

/e Excluding borrowing by the BAAC, Industrial Finance Corporation ofThailand and Small Industries Finance Office.

Source: NESDB.

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a tax change made in a particular year not only affects the availability of

resources in that year but also in future years. The chances of raisingsufficient revenues will be greatly improved if some of the major tax pro-

posals are introduced in the first two years of the Plan period. The

broad lines along which tax reform might proceed in Thailand were indicated

in the last Bank economic report./l

4.08 The needed public savings will not be forthcoming unless publicenterprises also pursue pricing policies that would permit the financing

of a large proportion of their investment needs through the generation of

internal surpluses. While the Government policy of encouraging greater self-

reliance by public enterprises is eminently sensible, the policy will not

achieve its main purpose if public enterprises see domestic borrowing as a

substitute for making the necessary changes in their tariffs. Therefore,the public enterprise tariffs should be continuously reviewed to ensure

that realistic pricing policies are being pursued.

4.09 The draft Plan's emphasis on self-reliance is highly commendable.

While the impressive domestic financing target is worth aiming at, itsfull realization over a short period may present difficulties. Further-

more, the mission's analysis of the balance of payments prospects suggests

that the country's external capital requirements are likely to be largerthan projected in the draft Plan. In view of the desirability of ensuring

a steady expansion of development expenditures, it would therefore beprudent to also aim at a higher level of external financing for development

expenditures than assumed in the draft Plan. The planned gross external

borrowing of $1.6 billion implies a net external borrowing of $1.2

billion. When account is taken of the external financing requirements of

the BAAC, the Industrial Finance Corporation of Thailand and the Small

Industries Finance Office, which are not provided for in planned develop-

ment expenditures, the net external public borrowing requirements couldrise to about $1.5 billion. In the mission's judgement, a higher targetof net disbursements, of between $2 and $2.5 billion, is needed.

4.10 To raise the suggested net external resources for financing the

public sector development program, commitments of about $3.5-4 billion

would be required over the Plan period, or an average of $700-800 million

per year. Although these commitments are much larger than the commitments

of official external loans of about $1.4 billion over the Third Plan period,

Thailand would have reasonable prospects of meeting the higher external

capital requirements if planning and implementation procedures can be

strengthened. The country should, however, be prepared to raise about

$500-700 million over the Plan period from international capital markets.If over the course of the Plan period it is found that the mission's

estimates of external financing requirements are on the high side, serious

consideration should be given to expanding the size of the development

program, provided a more ambitious development effort is not constrainedby the country's implementation capacity.

/1 See the 1975 Economic Report, Vol. 1, pp. 66-70 (reproduced in Annex IIIof this report).

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4.11 Over the past year, there has been a noticeable improvementin the management of the external borrowing program. Initiatives takenfollowing the Consultative Group meeting in December 1975 have helped toexpand some of the ongoing aid programs. In addition, as a means ofdiversifying the sources of external financing, the country obtained itsfirst loans from the Eurodollar market and the Kuwait Fund. Projectpreparation has also proceeded well and further progress has been made insecuring commitments for projects in the pipeline. As a result, a fairlyfirm borrowing program for 1977 and 1978 of about $400-500 million foreach year has emerged. Additional projects for these two years withforeign financing totalling $500-600 million are being prepared. Theobject should be to seek commitments of about $600-700 million per yearfor 1977 and 1978, and recourse to private loans or suppliers' creditsshould be seriously considered if without such finance high priorityprojects would have to be postponed. There would be substantial oppor-tunities for combining assistance from the ADB and World Bank with com-mercial financial sources.

4.12 The external borrowing requirements envisaged by the missionshould not place a heavy burden on the country's debt servicing capacity.The suggested public sector external borrowing would raise the public debtservice ratio (debt service payments as a percentage of exports) from 2.6percent in 1975 to 4.7 percent in 1981. The debt service ratio for totaldebt, which amounted to 15.4 percent in 1975, should remain below 17 percentover the Fourth Plan period. While no debt servicing problems are foreseenfor the Plan period, because of the importance of privately-contracted debt,measures to improve the knowledge concerning the terms on which such loansare obtained merit prompt attention.

Private Investment

4.13 Although the public sector's role in the economy is projectedto increase, since the private sector is expected to account for the greaterproportion of capital formation over the Plan period, measures to reviveprivate investment are also needed. While investors' perceptions onthe durability of political stability in Thailand will continue to be amajor influence on investment decisions for some time, early decisions onpolicy issues that have a bearing on the investment climate could do agreat deal to reassure investors by clarifying the nature of the economicmilieu they are likely to face. Greater efforts by the Government toexplain its stance on industrial policy, nationalization, labor relationsand price controls, for instance, could help to restore investor confidence.At this particular juncture, prompt decisions on several large investmentssuch as Thai-Zinc, two pulp projects, rock salt and fertilizer projectscould perhaps do more to improve the investment climate than any othersingle measure.

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Coordination of Economic Policy

4.14 Effective planning and implementation will require alosecooperation between the main economic agencies - Ministry of Finance,Budget Bureau, NESDB and Bank of Thailand. Greater coordination betweenthese four agencies could be achieved either through the establishment of aformal machinery or changes in government organization. Any organizationalchanges will undoubtedly be decided at the political level and will in partbe determined by the personalities and parties involved. Nevertheless, what-ever arrangements are established and however they are modified, the fouragencies will have to create a set of working relationships that can survivechanges in government and will allow the agencies to function efficiently inplanning and implementing public sector development programs.

Link Between Planning and Budgeting

4.15 The link between planning and budgeting is weak in Thailand andneeds strengthening if plans are to have any influence on subsequent deci-sions. The most basic shortcoming is that annual budget decisions onrevenue targets and the size and allocation of expenditure give greaterattention to short-term fiscal policy considerations than to the country'slonger term needs. The absence of a sufficiently detailed long-term publicsector investment program has undoubtedly contributed to the relativeneglect of longer term considerations. In addition, the budget process,per se, suffers from some defects as an instrument of fiscal management thathave become increasingly serious in recent years. The following measuresexplained in more detail in previous studies should be considered to improvethe budgetary process./I

(a) Plan targets for public sector expenditures, theirallocation, and financing should be expressed interms which relate clearly to budgetary concepts.In particular, the concept of capital expendituresis to be preferred to the less widely understoodconcept of development expenditures.

(b) Annual financial programs should cover the expendi-tures, revenues, domestic and external borrowingof the state enterprises and local governments aswell as those of the Central Government. Theinclusion of state enterprises in the annual finan-cial program has become increasingly importantbecause of the large expansion in the last twoyears in their investment programs and domesticand external borrowing.

/1 See A Study of Public Finances in Thailand, Report No. 574-TH, October 31,1974, Vol. 1, pp. 93-101; Current Economic Position and Prospects of Thailand,Report No. 542-TH, October 11, 1974, Vol. 1, pp. 59-64; and the 1975 EconomicReport, Vol. 1, pp. 70-71 and 74-76.

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(c) Expenditures financed from foreign loans and grantsshould be included in the Central Government's budgetto provide an overall view of the size and allocationof available financial resources.

(d) The unity of the Central Government's budget shouldbe restored by consolidating various separate revolvingand earmarked fund accounts with it.

(e) The authority of government departments to obligatefunds against a given fiscal year's budget appropria-tion should be terminated at the end of the year. Thismeasure is necessazy in order to eliminate the presentlarge budget overhang, which makes it impossible to fore-cast spending levels with any degree of accuracy, and topermit more precise control of spending rates in thefuture. The measure will also ensure that the expenditurepriorities set in a given year's budget are not drasticallymodified because of heavy spending against previous years'appropriations.

(f) The supplementary budget should be used explicitly as aninstrument for adjusting the Government's fiscal positionin light of changes in demand conditions since finalizationof the budget.

4.16 Together, these measures would go far to improve the Government'splanning and implementation capacity, and help the country to achieve itsdevelopment objectives.

ANNEX IPage 1 of 4 pages

LOCAL GOVERNMENT FINANCES

1. At present all local authorities possess similar tax sources,except that the Changwat Administrative Organizations (CAOs) do notreceive revenues from the house and land tax, and export duty on rice.However, the relative importance of each tax in different types of localauthorities varies a great deal. Broadly, the taxes can be divided intothree categories, as follows: locally-levied taxes, surcharge taxes andshared taxes. The house and rent tax and land development tax are themain taxes in the first category. The house and rent tax is levied onnonresidential buildings at the rate of 12.5 percent of rental value; theland development tax is imposed on unimproved value of land not subjectto house and rent tax at rates which vary with the value of land per rai.The revenue from surcharge taxes is derived from a 10 percent surcharge oncertain nationally-levied taxes. The surcharge on the Central Governmentbusiness tax constitutes the most important single source of tax revenuefor local authorities. Shared taxes are essentially Central Governmenttaxes earmarked for local authorities; the vehicle registration tax isthe only significant tax in this category.

2. A number of different methods of allocating various surchargeand shared taxes among local authorities are used. The allocation of thebusiness tax is based on the pattern of receipts in 1960, when the taxwas levied locally. Some taxes are allocated on the basis of population,whereas some others are first divided among different types of localauthorities in certain proportions, with the amounts due to local authori-ties of a given type then divided equally among them. In general, theallocative formulae are heavily biased against the CAOs.

3. The following features of their finances bring out the natureof the problem facing local authorities (see Table 1).

(a) The CAOs' tax revenues amount to only one quarter ofBangkok's tax receipts. The allocative formulae forsurcharge and shared taxes appear to be largely res-ponsible for the lopsided division of revenues.

(b) Revenue from sources other than Government grantsamounts to less than 10 percent for CAOs as comparedto almost 85 percent for Bangkok.

(c) Of the total tax revenues, locally-levied taxesaccount for only 30 percent. Even this exaggeratesthe role of truly independent revenues (i.e. sourceswhose tax rates could be varied by a local authorityin line with its needs) because the house and renttax and land development tax are levied at uniformrates nationally.

Table 1: REVENUES OF LOCAL AUTHORITIES, FY74

(millions of baht)

Bangkok Municipalities Sanitary Districts CAOs% of % of % of % of Total % of

Amount Total Amount Total Amount Total Amount Total Revenue Total

Total Tax Revenues: 1,049 80.2 409 49.1 184 76.6 272 6.6 1,914 29.4

Locally Levied Taxes 207 15.8 90 10.8 75 31.3 185 4.5 557 8.5

Land development tax 36 2.8 12 1.4 32 13.3 181 4.4 261 4.0

House and rent tax 140 10.7 57 6.8 33 13.8 1 . . 231 3.5

Signboard tax 26 2.0 10 1.2 3 1.3 1 . . 40 0.6Slaughter tax 5 0.4 11 1.3 7 2.9 2 0.1 25 0.4

Surcharge Taxes 484 37.0 149 17.9 30 12.5 33 0.8 696 10.7

Business tax 474 36.2 131 15.7 29 12.1 24 0.6 658 10.1

Entertainment tax 10 0.8 2 0.2 1 0.4 - - 13 0.2

Liquor and beverage tax - - 16 1.9 - - 9 0.2 25 0.4

Shared Taxes 358 27.4 170 20.4 79 32.9 54 1.3 661 10.1

Vehicle registration 316 24.2 169 20.3 77 32.1 54 1.3 616 9.5Rice export tax 2 0.2 1 0.1 2 0.8 - - 5 0.1

Other 40 3.1 - - - - - - 40 0.6

Other Sources: 259 19.8 424 50.9 56 23.3 3,862 93.4 4,601 70.6

Government grants 74 /a 5.7 251 30.1 13 5.4 3,832 /b 92.7 4,170 64.0Fees and licenses 41 3.1 36 4.3 17 7.1 10 0.2 104 1.6

Revenue from properties 39 3.0 59 7.1 14 5.8 11 0.3 123 1.9Other 105 8.0 78 9.4 12 5.0 9 0.2 204 3.1

Total 1,308 100.0 833 100.0 240 100.0 4,134 100.0 6,515 100.0

/a Estimated.

/b Estimated grants for primary education only.

Source: Department of Economic Research, Bank of Thailand.

OQ z

C,


4. The task of developing significant and income-elastic localrevenues (that is, those that are responsive to changes in GDP) for CAOsis likely to require far-reaching changes in the structure of local govern-ment finances. The replacement of the existing land taxes by a broadly-based property tax will fill a serious gap in local finances but theadditional revenues received by CAOs may not prove sufficient in relationto their needs, particularly if the exemption for agricultural holdings isset at a high level and the Central Government retains a substantial frac-tion of the revenues. Other measures to widen the CAOs' tax base, includinga greater role for surcharge and shared taxes and better allocation of theirproceeds between different types of local authorities, will, therefore, beneeded. One measure that deserves serious consideration is the increase inthe rate of business tax surcharge from 10 to 20 percent and the adoptionof population as the criterion for the allocation of the proceeds.

5. The adoption of more equitable distributive formulae for surchargeand shared taxes would significantly reduce the transfer of tax revenues toBangkok. New revenue sources would, therefore, have to be found for Bangkok.Although the Bangkok Metropolitan Authority (BMA) will be the chief benefi-ciary of the new Property Tax, this will not obviate the need for furtherstrengthening of the revenue base, given the growing need for public ser-vices in the Bangkok-Thonburi area. Some of the social policies beingreviewed by the Government could also place great pressures on Bangkok'sresources. For example, the substantial phasing out of private primarysc-hools, which is being considered by the Government in the light of theEducation Reform Committee's proposals, could significantly affect themetropolitan area since private elementary school enrollments make up50 percent of primary enrollments in Bangkok. A continuous review ofthe revenue possibilities will, therefore, be necessary. Two revenuemeasures are to be recommended strongly in this connection. First, Bangkokas well as other municipalities should be permitted to vary the rates of theproperty tax within a specified range in line with their needs; this wouldhelp to reduce the rigidity of their tax structure. Second, considerationshould be given to the imposition of a surcharge on income tax payable onpersonal (as distinct from corporate) incomes derived from and accruing inBangkok. A 10 percent surcharge could bring in about B 250-300 millionannually and at the same time help to improve the progressiveness of incometax.

6. Specific grants, which have been heavily relied on in Thailand,have often not been appropriately structured. The Central Governmentgrants to CAOs for primary education are a case in point. A valuableGovernment study /1 found wide regional disparities in the availabilityand quality of primary education facilities. One major finding was thatthe provincial distribution of upper primary education (grades 5 to 7)

/1 Equality of Educational Opportunity (National Education Commission,Ministry of Interior, Ministry of Education; October 1974).


was particularly uneven; thus, grade 5 places as a percentage of grade 4places in the preceding year amounted to 35.8 percent in the Ngrtheastas compared to 54.7 percent in the Central Region. The study placedthe main responsibility for these variations on the uneven supply ofupper primary places, ruling out variations in regional demand as a majorexplanation because of, among other things, the prevalence of a muchhigher average pupil/teacher ratio in upper primary schools in the North-east than in other regions. A sample survey also suggested substan-tial regional differences in the quality of education; it was found that,on the average, pupils in Bangkok performed about twice as well as pupilsin the Northeast in both Thai and arithmetic. The study identified short-comings of the system of government grants as a major determinant ofqualitative as well as quantitative differences in the availability' ofeducational facilities.

7. Until local revenues are developed much further or block grantsplay a much greater role than hitherto, specific grants will remain as amajor feature of the financial relationship between the Central and localgovernments in view of the magnitude of resources required for services suchas primary education. Specific grants could play a critical role in theimplementation of the recent Governments' policy of providing a comparablelevel of basic social services throughout the country. The Government'sadoption of five-year targets for primary and secondary schools shouldfacilitate such a role. However, if the system of specific grants is toplay an effective role in securing an equitable distribution of educationalfacilities, detailed provincial targets for the expansion of upper primaryplaces, in particular, must be formulated, and capital grants must beaggressively used to realize these targets.

ANNEX IIPage 1 of 8 pages

MACROECONOMIC FRAMEWORK FOR THE FOURTHPLAN PERIOD

Growth and Production

1. The growth target for the Fourth Plan period has been set at7 percent per annum, as compared to an estimated 6.2 percent per annumachieved over the Third Plan period. The projected improvement in thegrowth performance is predicated on an annual average growth rate of5 percent for agricultural production, 9.4 percent for industrial out-put and 7 percent for the value-added in other sectors. Overall, thesetargets appear to be reasonable in relation to the economy's historicalperformance and present potential.

2. The performance of the agricultural sector will continue to bea key determinant of the country's rate of economic progress. One majorreason for the country's inability to attain the Third Plan growth targetof 7 percent is that the rate of growth of agricultural production of4 percent annually, although impressive, fell short of the planned rateof 5 percent. Because of the limited supply of additional land that canbe diverted to agriculture, the bulk of the increase in agricultural out-put will have to come from improved yields rather than expansion of areaplanted as in the past decade. This is recognized in the Government'sprojections, which assume only a modest increase in the agriculturalacreage (see Table 1). The yield improvements underlying the productionprojections would require the pursuit of proper pricing policies andimproved availability of complementary inputs such as extension andcredit needed to maximize the benefits of appropriate seed/fertilizertechnologies.

3. Although the growth target for the manufacturing output isonly marginally above the estimated 8.6 percent per annum realized overthe Third Plan period, its achievement will present difficulties, giventhe exhaustion of the more obvious possibilities for import substitutionand uncertainties surrounding private investment. Nevertheless, it is arealistic target to aim at, and may well be attainable if conditionsmore conducive to the growth of private investment can be created anda high rate of growth can be maintained for manufacturing exports. Rapidindustrial growth will also require a restructuring of the system ofindustrial incentives in order to ensure that resources are directed intothe right kind of domestic and export industries./l

/1 This matter has been fully discussed in Narongchai Akrasanee, TheStructure of Effective Protection in Thailand: A Study of Industrialand Trade Policies in the Early 1970s (an unpublished memorandumprepared for the Ministry of Finance, NESDB and IBRD).


Table 1: PRODUCTION, AREA PLANTED AND YIELDS OF MAJOR CROPS, 1965-81

Average Average Target Annual Rate of Growth (%)1965-67 1973-75 1981 1966-74 /a 1974-81 /b

Production (million tons)Paddy 10.8 14.5 16.5 3.7 1.8

- Wqet season paddy 10.8 13.4 14.6 2.7 1.2- Dry season paddy - 1.1 1.91 - 8.2

Rubber .218 .369 .466 6.8 3.4Maize 1.15 2.6 3.8 10.5 5.5Cassava roots 1.81 6.5 10.8 17.3 7.5

Sugarcane 4.28 15.44 28.6 17.4 9.2Kenaf .538 .392 .220 -4.1 -7.7

Area Planted (million ha)Paddy 6.882 8.423 8.329 2.6 -0.2

- Wet season paddy 6.882 8.069 7.817 2.3 -0.4

- Dry season paddy - .354 .512 - 5.4

Rubber /c 0.576 .675 n.a. 2.0 n.a.Maize 0.613 1.22 1.4 9.0 2.0Cassava roots 0.124 .467 .672 18.0 5.3Sugarcane 0.138 .295 .404 9.9 4.6Kenaf 0.421 .393 .227 -0.8 -7.5

Total area planted to major crops 8.754 11.827 12.43 3.8 0.7

Yields (tons per ha)Paddy 1.58 1.72 1.98 1.1 2.0

- Wet season paddy 1.58 1.66 1.86 0.6 1.6

- Dry season paddy - 3.05 3.74 - 2.95Rubber /c 0.268 .547 n.a. 9.3 n.a.Maize 1.82 2.13 2.7 2.0 3.45Cassava roots 14.6 13.91 16.1 -0.6 2.1Sugarcane 30.9 52.3 70.9 6.8 4.4Kenaf 1.30 .993 .97 -3.7 -0.2

/a Average annual increase from 1965-67 average to 1973-75 average.

/b Average annual increase from 1973-75 average to 1981 target.

/c Tappable area only.

Sources: Table 7.1; Agricultural Statistics of Thailand for the Crop Year 1974/75,

Division of Agricultural Economics, Ministry of Agriculture; and NESDB.


Investment and Savings

4. The draft Plan puts the gross fixed capital requirements

necessary to support the above output targets at B 246 billion in con-

stant 1962 prices (see Table 2). Although this level of fixed investment

implies only a modest increase in the rate of investment from that

attained in the Third Plan period (from 22 percent to 23 percent of GDP),

it is 40 percent higher in real terms as compared to investment in the

previous Plan period. The mission places the investment requirements

slightly higher, at 24 percent of GDP. Public investment is projected in

the Plan at about 27 percent of total investment as compared to about

24 percent for the Third Plan period. The planned expansion of the public

sector's role is to be welcomed because of the urgent needs for better

public services and because the public sector may have to make up forshortfalls in private investment in the earlier part of the Fourth Planperiod.

5. The Plan projects the ratio of domestic savings to GDP to

increase from an average of 21 percent over the Third Plan to 24.5percent over the current Plan period. This means that the resource gap

(import surplus required to attain planned targets of consumption andinvestment) would amount to only 1 percent of GDP, as compared to about3 percent of GDP over the Third Plan period. In the mission's judgement,even if the savings rate can be substantially increased, the country will

need to utilize higher amounts of external resources than the Plan assumes

for balance of payments reasons. This matter is further discussed in the

next section. But great care must be exercised to ensure that the substan-

tial transfer of resources from the private sector to the public sector that

will be required over the Plan period does not unduly depress the rate of

private savings.

Balance of Payments

6. Thailand's requirements of external capital over the currentPlan period will be much higher than over the previous Plan period

because the country's terms of trade deteriorated by almost 20 percent

between 1973 and 1975, largely due to oil price increases. This is

recognized in the Fourth Plan. However, the mission's projections of

external capital requirements are higher than the draft Plan estimates,

primarily because: (i) the mission's projections imply a greater growthin import volume, and (ii) the mission's projections assume a continuingdecline in the terms of trade whereas the Fourth Plan expects the termsof trade to stabilize at the 1975 level.

7. In the mission's judgement, the Fourth Plan has substantially

underestimated the increase in import volumes of consumer and inter-mediate goods that would be needed (see Table 3). In particular, the

Table 2: RESOIJRCE AVAILABILITY AND USE, 1972-81

(constant 1962 billion baht)

Third Plan Fourth Plan Mission Percentage Share in GDY

1972-76 1977-81 Projections Third Plan Fourth Plan tlission

Estimates /a Targets 1977-81 Estimates Targets Projections

GDP at market prices 780 1,076 1,076 99.6 100.0 102.7

Terms of Trade Adjustment +3 - -28 0.4 - -2.7

Gross Domestic Income (GDY) 783 1,076 1,048 100.0 100.0 100.0

Imports (CNFS) 176 214 228 22.5 19.9 21.8

Exports (GNFS) -150 -207 -225 -19.2 -19.2 -21.5

Terms of Trade Adjustment -3 - + 28 - 0.4 - + 2.7

Resource gap 23 7 31 2.9 0.7 3.0

Resource Availability 806 1,083 1,079 102.9 100.7 103.0

Resource Use

Consumption 612 812 815 78.2 75.5 77.8

Private (524) (684) (684) (67.0) (63.6) (65.3)

Public (88) (128) (131) (11.2) (11.9) (12.5)

Gross Investment 185 271 271 23.6 25.2 25.9

Fixed investment 173 246 259 22.1 22.9 24.7 m

Private (132) (180) (188) (16.9) (16.8) (17.9) Z x

Public (41) (66) (71) (5.2) (6.1) (6.8)

Inventories 12 25 12 1.5 2.3 1.2

Statistical discrepancy 9 - -7 1.1 - -0.7

Mlemorandum Item

Domestic savings 162 264 240 20.7 24.5 22.9

/a 1972-75 actuals and 1976 IBRD mission estimates.

Sources: NESDB and IBRD mission estimates.


assumed stagnation in consumer goods imports implies a growth and diversifica-tion in industrial production of a magnitude that is unlikely to be realizedin a short period of five years. Mainly because of its assumprions concerningthe above two categories of imports, the Plan arrives at an import elasticityof 0.85, significantly below the mission's estimate of approximately 1.

Table 3: IMPORT REQUIREMENTS

(millions of US dollars)

Fourth Plan MissionActual 1975 Projections 1981 Projections 1981

Volume Value Volume Value Volume ValueIndex $ Million Index $ Million Index $ Million

Consumer goods 100 485 109 659 125 815

Intermediate goods 100 810 137 849 174 2,180

Capital goods 100 1,156 150 3,180 144 2,530

Fuels and lubricants 100 684 149 1,444 140 1,490

Fertilizers 100 100 - /a - /a 275 325

Merchandise imports 100 3,234 141 6,132 152 7,340

Services 100 331 141 627 136 670

Total Imports (GNFS) 100 3,565 141 6,759 150 8,010

/a Included under intermediate goods.

Note: NESDB and the mission's definitions of intermediate and capital goodscategories are not identical. Therefore, individual volume indices andvalue estimates of these categories of imports are not comparable. Thetwo categories combined, however, are roughly comparable.

Sources: Bank of Thailand, NESDB and IBRD mission estimates.

8. The Fourth Plan and mission projections of export quantities aresubstantially similar for all principal commodities except rice and sugar(see Table 4). The mission believes that the country can and must aimat a more ambitious target for rice exports for 1981 than the 1.7 million


Table 4: EXPORT TARGETS


Fourth Plan MissionActual 1975 Projections 1981 Projections 1981

Value Value ValueVolume $ Million Volume $ Million Volume $ Million

Principal commodities 100 /b 1,448 160 /b 3,141 167 /b 3,430

Rice 943 /a 292 1,700 /a 671 2,100 /a 870Rubber 335 Ia 172 450 Ia 382 600 Ia 720Maize 2,145 Ia 285 3,200 Ia 530 3,200 Ia 595Tapioca 2,377 Ia 230 3,800 Ia 459 3,400 Ia 410Sugar 595 Ia 285 1,400 Ia 592 1,000 Ia 370Tin 16 Ia 108 26 Ia 244 26 Ia 255Shrimp 13.5 Ia 48 28 Ia 156 20 Ia 105Tobacco 16.5 /a 28 48 Ia 108 40 /a 105

Manufacturing products 100 /b 494 n.a. 320 /b 2,110} 2,082

Others 100 /b 284 n.a. 165 /b 530

Total Merchandise Exports 100 /b 2,226 178 /b 5,223 210 /b 6,070

Nonfactor services 100 /b 633 126 /b 1,097 145 /b 1,250Tourism 100 /b 224 175 /b 524 218 /b 690Other 100 /b 409 94 /b 572 106 /b 560

Total Exports (GNFS) 100 /b 2,859 163 /b 6,320 195 /b 7,320

/a Thousand metric tons.

/b Index 1975=100.



metric tons presently assumed. As for sugar, the mission has projectedlower exports than the Fourth Plan target because it expects the pricetrend to be less favorable than assumed in the Plan.

9. Because of the importance of foreign trade in the Thai economy,small changes in terms of trade can have a substantial impact on netforeign exchange receipts. The Fourth Plan assumes that between 1975 and1981, both export and import prices will rise by about 35 percent. Incontrast, the Bank price projections of individual commodities imply thatoverall export and import prices will rise by 30 percent and 50 percentrespectively, resulting in an annual average decline in the terms oftrade of 2 percent.

10. The draft Plan forecasts current account deficits for the Planperiod of $3 billion, or an average of $600 million per annum (see Table 5).Total net external capital requirements for the Plan period are projected at$3.3 billion, with the net external capital needs of the public sectorplaced at $1.2 billion. For the reasons already explained, the mission'sanalysis of the balance of payments prospects yields higher capital require-ments.

11. The mission's balance of payments projections for the Planperiod, based on the Plan growth and investment targets, imply an annualaverage current account deficit of $900 million. This, in turn, impliesthat net inflows of private and public capital amounting to $5 billionwould be required over the Plan period to finance these deficits andmaintain reserves at an adequate level. Based on past trends and themission's judgement concerning likely future flows of private capitalto Thailand, direct investment and loans (including suppliers' credits)are each projected at $900 million for the Plan period. Short-termand other private capital could provide an additional $700 million.This leaves about $2.5 billion to be raised through net public capitalinflows.

12. All projections of external capital requirements are to beregarded as rough orders of magnitude. Thailand's external capitalrequirements over the next few years will be very sensitive to trendsin commodity prices. While the draft Plan estimates of external capitalrequirements appear to be on the low side, the mission's projections mayturn out to be on the high side, especially if terms of trade do notdeteriorate further over the Plan period. However, net disbursements ofat least $2 billion are likely to be needed for financing public develop-ment expenditures. Public external borrowing requirements are discussedin the context of planned public sector development expenditures inChapter IV.


Table 5: BALANCE OF PAYMIENTS PROJECTIONS 1977-81

(millions of US dollars) /a

Actual Fourth Plan Projections IBRD Mission Proj.

Total Total Total

1972-74 1975 1977 1981 1977-81 1977 1981 1977-81

ExportsMerchandise, f.o.b. 5,028 2,219 3,250 5,223 20,908 3,150 6,075 22,475

Nonfactor services 1,675 633 661 1,097 4,329 620 1,250 4,515

Total 6,703 2,852 3,911 6,320 25,237 3,770 7,325 26,990

ImportsMerchandise, c.i.f. 6,700 3,226 4,135 6,132 25,396 4,220 7,340 28,400Nonfactor services 606 331 409 627 2,554 410 675 2,690

Total 7,306 3,557 4,544 6,759 27,950 4,630 8,015 31,090

Resource Balance -603 -705 -633 -439 -2,713 -860 -690 -4,100

Net factor income -37 5 -51 -184 -620 -25 -260 -720

Net transfers 451 82 45 65 275 50 90 370

Current Account Balance -189 -618 -639 -558 -3,058 -835 -860 -4,450

Private capitalNet direct investment 260 /b 65 /b 115 202 778 100 /b 230 /b 880 /b

Net loans and suppliers'credits 219 88 78 128 503 150 250 890

Public capitalNet loans 121 103 160 286 1,192 330 545 2,430

Disbursements (247) (149) (209) (375) (1,580) (375) (705) (2,900)

Repayments (-126) (-46) (-49) (-89) (-388) (-45) (-160) (-470)

Other capital /c 171 132 102 129 557 115 70 550

Errors and omissions 37 87 60 60 300 70 15 430

Overall Balance 619 -143 -124 247 292 -70 250 730

/a Exchange Rate: US$1.00 = B 20./b Includes equity capital only./c Includes short-term public and private capital, and portfolio investment.

Sources: Bank of Thailand, NESDB and IBRD mission estimates.

ANNEX IIIPage 1 of 4 pages

MOBILIZATION OF DOMESTIC RESOURCES /1

Taxation Policy

1. Thailand's tax/GDP ratio of 13 percent and a careful examina-

tion of the structure and rates of individual taxes suggests that there

is substantial scope for raising tax revenues over the next few years.

A greater role should be played by direct taxes, which accounted for only

13 percent of total tax revenues (1974), in generating new resources. The

Government's decision to raise the target for income taxes to 23 percent oftax revenue in FY76 and to introduce a property tax are major steps in the

right direction. Improved administration, particularly in taxation of

non-wage incomes and the operation of business tax; broadening the incometax base; and proper integration of various indirect taxes should also

constitute the major objectives of tax reform.

2. Personal Income Tax. The taxpayer is entitled to a personal

allowance of B 5,000, an allowance of B 5,000 for his spouse and of

B 2,000 for each child. In addition, the taxpayer and his spouse can each

deduct 20 percent of earned income, up to a maximum of B 20,000. Interest

received from commercial bank deposits and government bonds is exempt.

Dividends are also partially tax-free: the taxpayer and his spouse areeach entitled to deduct the first B 5,000 of dividends and 20 percent of

the remainder. Dividends received from "listed" companies qualify for

higher relief. Taxable income is arrived at by subtracting deductible

expenses and allowances from gross income. However, where the self-employed

and unincorporated enterprises are concerned, taxable incomes are derived

by applying standard deduction rates to gross receipts. The marginal rates

of tax range from 7 percent on taxable incomes under B 10,000 to a maximum

of 60 percent of incomes above B 1 million.

3. Broadening of the income tax base holds out the greatest pros-pects for raising revenues. The income tax is very narrowly-based at

present: only 1 million persons file returns; the actual number of personspaying is even lower. Consequently, only a limited proportion of GDP is

caught in the tax net. Abolition of, or drastic reductions in, certain

allowances and strengthening of the tax administration would be requiredto widen the tax base. Modest reductions in marginal tax rates should

accompany lower allowances to prevent average tax rates from rising too

steeply and to create an environment where the problem of taxpayer com-pliance can be more effectively tackled. The basic personal allowances,

viz., single, married, child allowances are not too unrealistic in rela-

tion to the country's per capita income although there is some scope for

reductions. On the other hand, there is very little justification for

the retention of the remaining allowances, and it is strongly suggested

that the earned income and dividend allowances should be removed and

interest income be made taxable. The rationale for an earned income

allowance has never been articulated with sufficient cogency. In

Thailand, the inadequate taxation of the self-employed is seen as a

/t Extracted from Thailand: Current Economic Prospects and Selected

Development Issues, Report No. 924-TH, November 14, 1975, pp. 66-70.


justification for the granting of an earned income allowance to thosederiving income from paid employment. More effective taxation of theself-employed and unincorporated businesses through intensive adminis-trative efforts, which the Government plans, is certainly to be preferredto the granting of an earned income allowance. However, if the presentearned income allowance is abolished, a modest allowance with respect to thewife's earned income would be needed so as not to discourage wives fromaccepting paid employment. The treatment of interest income is one of themost inequitable aspects of the tax system because the tax benefit variesdirectly with income, since the share of interest income is likely to risewith income and the marginal tax rate also increases with income. Equallyimportant, the exemption of interest income from taxation appears to havehampered the growth of non-bank financial institutions as discussed below.The arguments against the dividend allowance are similar to those againstthe exemption of interest; clearly, if interest is made taxable, therewould be no justification for retaining tax relief for dividends, apartfrom a modest relief for dividends from "listed" companies.

4. Effective taxation of the self-employed and unincorporated enter-prises would require both improved assessment procedures and greater effortsto combat evasion. Except for the smallest businesses, the objective shouldbe to levy income tax on actual net profits rather than on those arrived atby the use of standard deductions. Some of the recent measures taken by theGovernment to tackle the problem of tax evasion such as the inspection ofbusiness premises to identify tax evaders and the registration of profes-sionals and shops are steps in the right direction. Much more emphasis needsto be given to selective audits and investigations. Such measures have provedvery effective in many countries in improving taxpayer compliance.

5. Corporation Income Tax. It would be desirable to replace thepresent graduated structure, where the tax rates range from 20 percenton net profits of under B 500,000 to 30 percent on net profits of aboveB I million, by a single rate of tax. Neither the view that companies areseparate tax entities nor the view that companies together with their share-holders constitute tax entities requires that companies be taxed throughgraduated rates. A corporation tax rate of 40-50 percent is recommended;such a rate would be comparable to the tax rates in most developing coun-tries. On the assumption that the dividend allowance is eliminated, thedecision on whether the shareholder receiving dividends be allowed a creditfor the taxes paid by the company on its distributed profits should be basedprimarily on administrative grounds. The recent surge in corporate incometax payments as a number of tax holidays have expired indicates both thatthe revenue cost of the corporate tax holiday as an investment incentivehas been high and that the tax could generate substantial additionalrevenues in the future. However, a higher corporate tax rate should beimplemented only when the investment climate is more settled.

6. Indirect Taxation. Import duties, business taxes and excises arethe three major indirect taxes. In general, import duties on raw materialsdo not exceed 10 percent, and those on finished products do not exceed


25 percent; luxury goods are normally subject to a rate of import duty of

50 percent, but some goods bear tax rates of 80-100 percent. The business

tax is essentially a broadly-based single stage sales tax levied primarily

on importers and producers. The tax is applicable to all imports and all

domestic production of goods and services unless specifically excluded.

The tax rates on a number of domestic products have differed from those on

imports. Excises are levied on a limited range of commodities, including

petroleum products, tobacco and beverages. Certain excises apply to both

domestic production and imports while others are confined to domestic

products. Excise tax rates are also not always the same for domestic

goods and imports.

7. There should be continuing opportunities for raising sizeable

revenues from indirect taxes through both higher overall tax rates and

greater differentiation between the rates on luxuries and essentials.

Two closely related considerations will, however, need to be borne in

mind. First, the combined effects of import, business, and excise taxes

should be considered when any one or more of these taxes is changed. This

task could be facilitated by simplifying the structure of some of these

taxes. One possible line of reform would be to impose equal rates of

business and excise taxes on both domestic and imported goods, and to levy

only the excise or the business tax on individual items depending on how

the tax is to be enforced administratively. Second, the protective effects

of changes in indirect taxes will need to be given much greater attention

than in the past. The conclusion of the recent study for the Ministry of

Finance that the existing structure of effective protection favors domestic

industries to industries producing for export has far-reaching implications

in this connection. The changes in the structure of indirect taxation

needed for securing a rational structure of effective protection are also

discussed in that study./l

8. Agricultural Taxation. The long-term objective should be to tax

the agricultural sector through an income tax based on imputed (estimated)

incomes and land taxes, including betterment assessments. Continued use of

export taxes for price stabilization will be necessary. But, given the well-

known defects of export taxes from the points of view of equity and resource

allocation, continued reduction in emphasis on export taxes is desirable.

Hence, the property tax that is under consideration could be a major step

in the right direction.

9. Property Taxation: The impact of tax policy on the distribution

of incomes can be greatly enhanced by making capital taxation an integral

part of the tax system. Introduction of a property tax is to be welcomed,

but much more needs to be done in the sphere of capital gains taxation. In

/1 Narongchai Akrasanee, The Structure of Effective Protection

in Thailand: A Study of Industrial and Trade Policies in the Early

1970s (an unpublished memorandum prepared for the Ministry of Finance,

NESDB and IBRD).


addition, an estate duty might be considered. An estate duty does not makeheavy demands on administrative resources; and, although it would not raisea large amount of revenue, it could significantly increase the equity of thetax system if the problem of gifts inter vivos is properly tackled.

Domestic Borrowing

10. Possibilities of domestic borrowing should also be considerableparticularly if policies for broadening the present rather narrowly basedmarket for Government securities are introduced. The appropriate policiesfor this purpose are the ones that will encourage a balanced growth of thefinancial system. The exemption of interest income from taxation, coupledwith the lack of sufficient tax incentives for other types of savings is animportant factor inhibiting the proper development of the financial system.The removal of tax relief for interest and a thorough examination of theappropriate ways of encouraging more long-term savings is necessary. Whatneeds to be particularly stressed is that unless the tax exemption ofinterest income is rescinded, the cost, in terms of the revenue foregoneencouraging more diversified savings, would be much greater than it need be.While the provisions concerning the tax treatment of saving in Thailand havenot been studied in detail, two general comments are in order. First, therecently instituted tax provisions relating to life insurance premiums anddividends received from "listed" companies are far too generous. Second,the tax provisions concerning provident funds are wholly inadequate: con-tributions by an employee are not deductible, whereas an employer's contri-butions may be deducted only in the "period in which.they are definitelypaid out to employees."

11. National provident or social security schemes have been highlysuccessful in some developing countries in mobilizing domestic resources.Normally, employers and employees are required to contribute, and thesurplus income, after the payment of benefits, is invested in governmentsecurities. For administrative reasons, the membership of such schemesoften has to be confined to those deriving their income from paid employ-ment. Despite this, a large number of developing countries have intro-duced social security schemes because of the capacity of such schemes toprovide substantial local development finance on a continuing basis.Thailand may wish to study the possibility of establishing a NationalProvident Fund suited to local conditions.

STATISTICAL APPENDIX

Table of Contents

TableNumber

Section I. Population and Employment

1.1 Population1.2 Employment Estimates

Section II. National Accounts

2.1 Gross Domestic Product at Current Market Prices by IndustrialOrigin

2.la Percentage Distribution of Gross Domestic Product at CurrentMarket Prices by Industrial Origin

2.2 Gross Domestic Product at Current Factor Cost by IndustrialOrigin

2.2a Percentage Distribution of Gross Domestic Product at CurrentFactor Cost by Industrial Origin

2.3 Gross Domestic Product at Constant 1962 Market Prices byIndustrial Origin

2.3a Percentage Growth of Gross Domestic Product at Constant 1962Market Prices by Industrial Origin

2.4 Implicit Price Deflators for GDP at Market Prices byIndustrial Origin

2.5 Expenditure on Gross Domestic Product at Current Market Prices2.5a Percentage Distribution of Expenditure on Gross Domestic

Product at Current Market Prices2.6 Expenditure on Gross Domestic Product at 1962 Prices2.6a Percentage Growth of Expenditure on Gross Domestic Product at

1962 Prices2.7 Implicit Price Deflators for Expenditure on Gross Domestic

Product at Market Prices

Section III. Balance of Payments

3.1 Summary Balance of Payments3.2 Principal Merchandise-Exports3.3 Other Merchandise Exports3.4 Merchandise Exports by Countries3.5 Principal Merchandise Exports by Countries3.6 Merchandise Imports3.7 Financing of Merchandise Imports3.8 Merchandise Imports by Countries3.9 Services3.10 Investment Income

Statistical AppendixPage 2

3.11 Government, n.i.e.3.12 Transfers3.13 Capital Mfovements

3.14 Medium- and Long-Term Capital Movements by Countries3.15 International Reserves3.16 Trade Indices3.17 Duties on Imports by Economic Classification3.18 Imports and Exports of Crude Oil and Petroleum Products

Section IV. External Debt

4.1 External Debt and Debt Service Obligations4.2 External Public Debt Outstanding as of December 31, 19754.3 Projected Service Payments on External Public Debt as of

December 31, 1975

Section V. Public Finance

5.1 Consolidated Public Sector Expenditures5.1a Percentage Distribution of Public Sector Expenditures5.2 Financing of Consolidated Public Sector Expenditures5.3 Central Government Expenditures5.3a Percentage Distribution of Central Government Expenditures5.3b Central Government Expenditures - Closed Account Basis5.4 Central Government Revenue5.5 Financing of Central Government Expenditures5.6 Gross Fixed Capital Expenditures of State Enterprises5.7 Local Government Accounts

Section VI. Monetary Statistics

6.1 Evolution of Monetary Situation - Fiscal Years6.2 Evolution of Monetary Situation - Calendar Years6.3 Evolution of Monetary Situation - Quarterly6.4 Selected Data on Commercial Banks6.5 Loans and Overdrafts of Commercial Banks Classified by

Purpose

Section VII. Agricultural Statistics

7.1 Area Planted, Yield and Production of Major Crops7.2 Paddy - Balance Sheet of Supply and Disposition7.3 Rice Export Premium, Tariff and Tax Rates7.4 Export and Domestic Wholesale Prices of Rice for

Selected Grades7.5 Average Wholesale Prices (Bangkok) of Selected Agricultural

Commodities

Statistical AppendixPage 3

7.6 Imports of Fertilizer7.7 CIF and Retail Prices of Fertilizer7.8 Estimates of Benefit and Cost Ratios of Using Fertilizer

for Paddy, 19757.9 Replanting of Rubber7.10 Production and Value of Teak and Yang Cut Under License

Section VIII. Other Sectors

8.1 Production and Capacity of Selected Manufacturing Industries8.2 Gross Domestic Product Originating from Manufacturing at

Current Market Prices8.3 Gross Domestic Product Originating from Manufacturing at

1962 Prices8.4 Statistics of Promoted Investment8.5 Mineral Production8.6 Energy Consumption by Source of Energy8.7 Tourism - Basic Data

Section IX. Prices

9.1 Price Indices (Annual)9.2 Consumer Price Index for Whole Kingdom

Table 1.1: POPULATION

(millions)

GrowthMid-Year Rate (Percent)

1960 26.63.1

1970 36.4

Estimates

1971 37.5 3.0

1972 38.6 3.0

1973 39.7 2.9

1974 40.8 2.7

1975 41.9 2.7

Note: The Population and Housing Census taken in April 1970 yielded apopulation estimate of 34.4 million. Since the census is believedto be an underenumeration, the 1970 population estimate wasadjusted upwards to 36.1 million by the Working Group on thePopulation Projection of the Subcommittee on Population Policy.

Source: Population and Manpower Planning Division, NESDB.

Table 1.2: EMPLOYMENT ESTIMATES

Thousands CompositionEmployment /1 of New of Work Force(Thousands) Jobs Added 1970

1960 1970 Annually % Female % Age 11-14

Agriculture 11,332 13,202 187 50 12

Mining and quarrying 30 87 6 27 7

Manufacturing 470 683 21 43 6

Construction 69 182 11 14 3

Electricity, gas, waterand sanitary services 16 25 1 13

Commerce 779 876 10 54 4

Transport, storageand communication 166 268 10 6

Services 654 1,184 53 36 3

Unknown 234 146

Total 13,749 16,652 290 47 10

/1 Economically active population, age 11 years and older, employed in April.

Note: These figures should be used with caution as the 1970 census, which was publishedin mid-1974 apparently underestimated the population, and perhaps also the workforce. The census figures differ significantly from those given in the annual laborforce surveys for 1969 and 1971. In addition sectoral employment reported in 1969and 1971 to 1973 surveys shows improbably large annual fluctuations.

Source: Census Reports, 1960, 1970.

Table 2.1: GROSS DOMESTIC PRODUCT AT CURRENT MARKET PRICES BY INDUSTRIAL ORIGIN

(billions of baht)

/1 /11970 1971 1972 1973 1974- 1975-

Agriculture 38.5 40.8 49.9 73.2 85.0 91.2

Crops 26.8 28.1 36.0 56.4 63.2 67.7

Livestock 4.8 5.5 5.9 6.3 10.3 11.6

Fisheries 4.1 4.5 5.2 7.0 7.5 7.9

Forestry 2.8 2.7 2.9 3.5 4.0 4.0

Mining, quarrying 2.8 3.0 2.9 2.9 4.7 4.3

Manufacturing 21.8 24.9 27.9 35.6 46.4 51.4

Construction 8.3 7.3 7.2 8.3 10.5 11.9Electricity, water supply 1.6 1.9 2.2 2.7 2.8 3.3

Transportation, communications 8.6 9.0 10.5 13.2 16.0 18.0

Trade 25.9 26.3 29.9 41.1 53.5 53.0

Banking, insurance, real estate 5.6 6.3 6.9 8.8 12.2 14.6

Ownership of dwellings 2.9 3.1 3.2 3.6 4.2 4.4

Public administration, defense 6.1 6.7 7.2 8.3 10.5 12.7

Other services 13.9 15.5 16.8 18.9 23.1 27.0

Gross domestic product 136.1 144.6 164.6 216.5 269.0 291.8

Net factor income from abroad +0.4 0.0 -0.3 -0.4 0.0 +0.1

Gross national product 136.4 144.6 164.3 216.1 269.0 291.9

/1 Preliminary.

Note: Totals may not add because of rounding.

Source: NESDB.

Table 2.la: PERCENTAGE DISTRIBUTION OF GROSS DOMESTIC PRODUCT AT CURRENT MARKET PRICESBY INDUSTRIAL ORIGIN

1970 1971 1972 1973 1974/1 1975-

Agriculture 28.3 28.2 30.3 33.8 31.6 31.2Crops 19.7 19.4 21.8 26.1 23.5 23.2Livestock 3.6 3.8 3.6 2.9 3.8 3.9Fisheries 3.0 3.1 3.2 3.2 2.8 2.7Forestry 2.0 1.9 1.7 1.6 1.5 1.4

Mining, quarrying 2.0 2.1 1.8 1.3 1.8 1.5Manufacturing 16.0 17.2 16.9 16.5 17.2 17.6Construction 6.1 5.1 4.4 3.9 3.9 4.1Electricity, water supply 1.2 1.3 1.4 1.2 1.0 1.1Transportation, communications 6.3 6.2 6.4 6.1 5.9 6.2Trade 19.1 18.2 18.1 19.0 19.9 18.2Banking, insurance, real estate 4.1 4.3 4.2 4.1 4.6 5.0Ownership of dwellings 2.2 2.1 1.9 1.6 1.6 1.5Public administration, defense 4.5 4.6 4.4 3.8 3.9 4.4Other services 10.2 10.7 10.2 8.7 8.6 9.2Gross domestic product 100.0 100.0 100.0 100.0 100.0 100.0

/1 Preliminary.

Source: NESDB.

Table 2.2: GROSS DOMESTIC PRODUCT AT CURRENT FACTOR COST BY INDUSTRIAL ORIGIN

(billions of baht)

1970 1971 1972 1973 1974 /1 1975 /1


Mining, quarrying 2.4 2.6 2.5 2.4 3.9 3.6Manufacturing 16.7 19.2 21.4 27.9 34.0 38.0Construction 8.1 7.2 7.0 8.1 10.2 11.6Electricity, water supply 1.6 1.9 2.2 2.7 3.0 3.3Transportation, communications 8.3 8.7 10.1 12.8 15.5 17.4Trade 17.5 18.3 21.5 29.3 37.4 39.2Banking, insurance, real estate 5.3 5.9 6.5 8.2 11.4 13.8Ownership of dwellings 2.7 2.8 2.9 3.2 3.8 4.0Public administration, defense 6.1 6.7 7.2 8.3 10.5 12.7Other services 13.2 14.7 16.0 17.9 22.1 25.6Gross domestic product at

factor cost 120.3 128.4 146.8 193.8 236.5 259.9Plus indirect taxes 15.8 16.2 17.8 22.7 32.6 31.9Less subsidies - - - - 0.2 -Gross domestic product at

market prices 136.1 144.6 164.6 216.5 268.9 291.8

/1 Preliminary.


Source: NESDB

Table 2.2a: PERCENTAGE DISTRIBUTION GROSS DOMESTIC PRODUCT AT CURRENT FACTOR COSTBY INDUSTRIAL ORIGIN

1970 1971 1972 1973 1974/1 1975-


Mining, quarrying 2.0 2.0 1.7 1.2 1.7 1.4Manufacturing 13.9 14.9 14.6 14.4 14.4 14.6Construction 6.7 5.6 4.8 4.3 4.3 4.5Electricity, water supply 1.3 1.5 1.5 1.4 1.3 1.3Transportation, communications 6.9 6.8 6.9 6.6 6.6 6.7Trade 14.6 14.3 14.6 15.1 15.8 15.1Banking, insurance, real estate 4.4 4.6 4.4 4.2 4.8 5.3Ownership of dwellings 2.3 2.1 1.9 1.7 1.6 1.5Public administration, defense 5.1 5.2 4.9 4.3 4.4 4.9Other services 10.9 11.5 10.9 9.2 9.3 9.8Gross domestic product 100.0 100.0 100.0 100.0 100.0 100.0

/1 Preliminary.

Source: NESDB.

Table 2.3: GROSS DOMESTIC PRODUCT AT CONSTANT 1962 MARKET PRICES BY INDUSTRIAL ORIGIN

(billions of baht)

1970 1971 1972 1973 1974/1 1975/


Mining, quarrying 1.8 1.9 1.8 1.8 2.2 1.9Manufacturing 20.1 23.6 26.1 29.7 31.0 33.1Construction 7.0 6.2 5.8 5.8 5.9 6.4Electricity, water supply 1.9 2.9 3.6 4.2 4.5 5.1Transportation, communications 8.0 8.0 8.9 9.5 10.2 10.9Trade 20.9 22.8 23.6 26.3 27.4 27.6Banking, insurance, real estate 4.8 5.3 5.6 6.2 6.9 7.8Ownership of dwellings 2.3 2.4 2.5 2.6 2.7 2.8Public administration, defense 5.2 5.6 5.8 6.2 6.4 7.0Other services 11.8 12.7 13.7 15.0 16.1 17.4Gross domestic product 119.9 129.6 135.2 149.1 156.0 164.6Net factor income from abroad 0.3 0.0 -0.3 -0.4 0.0 0.1Gross national product 120.2 129.6 134.9 148.7 156.0 164.7

/1 Preliminary.


Source: NESDB.

Table 2.3a: PERCENTAGE GROWTH OF GROSS DOMESTIC PRODUCT AT CONSTANT 1962 MARKET PRICESBY INDUSTRIAL ORIGIN

/1 /1970 1971 1972 1973 1974/- 1975 -

Agriculture 2.6 5.4 -0.8 10.6 2.1 4.5Crops 2.7 4.3 -3.0 15.4 2.0 3.9Livestock 0.8 12.5 6.0 7.9 8.1 L1.1Fisheries 8.2 6.2 8.5 -6.0 -8.3 3.8Forestry -3.9 4.3 -5.7 1.0 10.5 -0.9

Mining, quarrying -1.0 4.9 -2.4 -4.1 23.5 -14.3Manufacturing 6.8 17.3 10.8 13.8 4.2 6.9Construction -0.4 -11.5 -6.8 0.7 1.7 7.3Electricity, water supply 19.9 57.3 21.3 17.8 8.3 11.8Transportation, communications 9.2 0.3 11.4 6.5 7.5 7.1Trade 11.2 9.4 3.3 11.4 4.4 0.7Banking, insurance, real estate 16.5 10.8 5.6 10.0 11.9 13.7Ownership of dwellings 5.4 3.4 3.1 3.6 3.9 3.6Public administration, defense 9.7 8.0 2.7 7.1 2.3 9.7Other services 7.4 8.4 7.4 9.9 7.0 8.1Gross domestic product 6.5 8.1 4.3 10.3 4.6 5.5

/1 Preliminary.

Source: NESDB.

Table 2.4: IMPLICIT PRICE DEFLATORS FOR GDP AT MARKET PRICES BY INDUSTRIAL ORIGIN

(1962 = 100)

/1 /11970 1971 1972 1973 1974/- 1975/-


Mining, quarrying 154.0 157.7 157.4 162.4 216.7 231.1Manufacturing 108.5 105.7 106.7 119.8 149.7 155.1Construction 117.7 118.0 123.8 143.0 177.7 187.2Electricity, water supply 87.1 64.9 63.2 64.0 62.0 64.7Transportation, communications 107.9 112.2 118.2 139.8 157.2 165.0Trade 124.2 115.1 126.7 156.5 195.1 191.9Banking, insurance, real estate 117.7 118.0 123.8 143.0 177.7 187.2Ownership of dwellings 126.5 129.2 129.4 138.7 157.0 160.7Public administration, defense 117.5 118.0 123.8 133.5 165.8 182.7Other services 118.4 121.5 123.1 125.4 143.4 154.9Gross domestic product at

market prices 113.5 111.6 121.8 145.3 172.4 177.3

/1 Preliminary.

Source: NESDB.

Table 2.5: EXPENDITURE ON GROSS DOMESTIC PRODUCT AT CURRENT MARKET PRICES

(billions of baht)

/1 /11970 1971 1972 1973 1974- 1975Y-

Consumption 108.0 116.0 128.1 159.3 201.9 227.7

Private 92.4 99.1 110.3 138.0 176.1 196.4Durable goods 4.4 4.1 4.6 6.5 8.1 9.2Nondurable goods 69.8 75.1 84.2 105.8 136.1 150.0Services 18.2 19.8 21.5 25.8 31.9 37.2

General government 15.6 17.0 17.9 21.2 25.8 31.3

Gross investment 35.6 34.9 33.7 51.7 66.2 78.2/2

Private fixed capital- 22.2 22.3 23.2 33.5 49.2 53.6Public fixed capital 10.5 10.4 11.4 10.7 10.2 14.3Change in stocks 2.9 2.1 -0.9 7.5 6.8 10.4

Exports of goods and services 22.7 25.2 31.9 42.5 61.7 57.2

Goods 14.3 16.7 21.8 31.2 49.0 44.5Nonfactor services 8.4 8.5 10.1 11.3 12.7 12.7

Imports of goods and services 29.3 29.7 33.8 46.1 68.4 71.3


Expenditure on gross domestic product 137.1 146.4 159.8 207.4 261.5 291.8

Statistical discrepancy -1.0 -1.8 4.8 9.1 7.5 0.0


/1 Preliminary./2 Excludes private on-farm investment other than purchases of agricultural machinery.


Source: NESDB.

Table 2.5a: PERCENTAGE DISTRIBUTION OF EXPENDITURE ON GROSS DOMESTIC PRODUCTAT CURRENT MARKET PRICES

1970 1971 1972 1973 1974- 1975-

Consumption 78.8 79.3 80.2 76.7 77.3 78.0

Private 67.4 67.7 69.0 66.5 67.4 67.3General government 11.4 11.6 11.2 10.2 9.9 10.7

Gross investment 26.0 23.8 21.1 25.0 25.3 26.9

Private fixed capital 16.2 15.3 14.5 16.2 18.8 18.4Public fixed capital 7.7 7.1 7.2 5.2 3.9 4.9Change in stocks 2.1 1.4 -0.6 3.6 2.6 3.6

Exports of goods and services 16.6 17.2 19.9 20.5 23.6 19.6


Imports of goods and services 21.4 20.3 21.2 22.2 26.2 24.5



Statistical discrepancy -0.7 -1.2 3.0 4.4 2.9 0.0


/1 Preliminary.

Source: NESDB.

Table 2.6: EXPENDITURE ON GROSS DOMESTIC PRODUCT AT 1962 PRICES

(billions of baht)

1970 1971 1972 1973 1974-/ 1975-

Consumption 94.4 100.9 107.1 115.9 120.6 129.9


Gross investment 32.3 31.9 27.6 35.2 37.1 41.5/2

Private fixed capital- 20.1 20.4 20.0 23.8 28.0 29.2Public fixed capital 9.5 9.5 9.8 7.5 5.5 7.5Change in stocks 2.8 2.0 -2.2 3.9 3.6 4.9

Exports of goods and services/ 20.8 24.3 29.0 29.3 30.7 28.8

Goods /4 13.4 16.8 20.4 20.9 23.0 21.5Services-/ 7.4 7.5 8.6 8.4 7.7 7.3

Imports of goods and services/ 30.0 28.9 30.9 36.9 35.9 34.8

Goods /6 27.1 25.9 27.9 33.7 33.3 31.6Services/7 2.9 3.0 2.9 3.2 2.7 3.2

Expenditure on gross domestic product/ 117.5 128.2 132.9 143.4 152.5 165.4

Statistical discrepancy 2.3 1.4 2.3 5.6 3.5 -0.8


/1 Preliminary.

/2 Excludes private on-farm investment other than purchases of agricultural machinery.

/3 IBRD mission estimates.

Table 2.6Page 2

/4 The ten principal export commodities (rice, rubber, tin, maize,tapioca and tapioca products, jute and kenaf, shrimp, sugar, tobacco,and teak) have been deflated by a Paasche Index constructed fromexport unit value statistics. Exports of other agricultural goods havebeen deflated by the implicit price deflator for value added in agri-culture; other mining products by the implicit price deflator for valueadded in mining; and manufactured and other goods by the implicit pricedeflator for value added in manufacturing.

/5 Total receipts have been deflated by the implicit deflators for privateconsumption on expenditure hotels, restaurants, and cafes (weight = 3/4)and for purchased transportation (weight = 1/4). Other nonfactor servicereceipts have been deflated by the implicit price deflator for value addedin nonagriculture.

/6 SITC import price indexes have been used as follows to deflate commodityimports in current prices classified by economic end use:

(a) Food Index (SITC 1) - for dairy products, fish and preparations,coffee, tea and spices, others.

(b) Beverages and Tobacco Index (SITC 2) - for beverages, tobaccomanufactures, tobacco unmanufactures.

(c) Crude Materials Index (SITC 3) - for animal and vegetable crudematerials, wood, lumber, cork, pulp, waste paper, textile fibers,crude minerals, and, in part, other base metals.

(d) Mineral Fuels and Lubricant Index (SITC 4) - for fuel andlubricants.

(e) Animal and Vegetable Oils and Fats Index (SITC 5) - for animaland vegetable oil.

(f) Chemicals Index (SITC 6) - for toilet and cleaning articles,medicinal and pharmaceutical products, wood and cork manufactures,leather and leather manufactures, chemicals, fertilizers, andpesticides.

(g) Manufactured Goods Index (SITC 7) - for clothing and footwear,textile yarn and thread, paper and paperboard, in part, otherbase metals, cement construction materials, tubes and pipes,glass and other mineral manufactures, rubber manufactures, metalmanufactures, and tires.

(h) Machinery Index (SITC 8) - for electrical appliances; cycles,motorcycles, carts, etc.; nonelectrical machinery and parts;electrical machinery and parts; aircraft; ships; locomotivesand rolling stock; and passenger cars, buses, trucks, chassis,and bodies.

(i) Miscellaneous Manufactured Foods Index (SITC 9) - for householdgoods, furniture, jewelry including silver bars, small arms,scientific and optical instruments.

(j) Miscellaneous Index - for miscellaneous items.

/7 Deflated by the overall import price index computed as explained in notefour above.


Source: NESDB and IBRD mission estimates.

Table 2.6a: PERCENTAGE GROWTH OF EXPENDITURE ON GROSS DOMESTIC PRODUCT AT 1962 PRICES

1970 1971 1972 1973 1974 /1 1975 /1

Consumption 7.6 6.9 6.2 8.2 4.1 7.7

Private 7.2 6.4 6.9 7.9 4.8 6.9General government 9.6 9.4 1.8 9.9 -0.2 12.7

Gross investment -2.4 -1.3 -13.5 27.6 5.2 12.1

Private fixed capital -0.7 1.7 -1.9 19.0 17.4 4.3Public fixed capital 2.7 -0.4 3.6 -23.3 -26.4 35.0Change in stocks -24.5 -25.7 -207.6 -276.3 -8.4 37.9

Exports of goods and services 5.6 17.0 19.4 0.8 5.1 -6.3

Goods 5.6 25.6 21.5 2.5 10.2 -6.8Services 5.6 1.5 14.7 -3.1 -7.7 -4.9

Imports of goods and services -4.6 -3.6 6.8 19.7 -2.6 -3.1

Goods -5.7 -4.6 7.9 20.7 -1.3 -5.1Services 7.3 5.2 -3.0 10.0 -16.7 20.5



/1 Preliminary.

Note: Growth rates have been computed from unrounded figures.


Table 2.7: IMPLICIT PRICE DEFLATORS FOR EXPENDITURE ON GROSS DOMESTIC PRODUCT AT MARKET PRICES

(1962 = 100)

/1 /1970 1971 1972 1973 1974-/ 1975-

Consumption 114.4 115.0 119.6 137.4 167.4 175.3


Gross investment 110.2 109.3 122.0 146.8 178.6 188.3

Private fixed capital 110.9 109.4 115.8 140.8 176.0 183.8Public fixed capital 110.3 110.5 116.7 142.6 183.7 190.8Change in stocks 104.3 103.1 42.0 191.9 190.7 211.1

Exports of goods and services-/ 109.4 103.6 109.8 145.4 200.7 198.5

Goods 106.8 99.5 106.7 149.5 212.7 207.2Services 114.1 112.7 117.3 135.0 164.9 172.8

Imports of goods and services-/ 97.8 102.9 109.7 124.8 190.3 204.8

Goods 97.8 102.9 109.7 124.8 190.3 204.8Services 97.8 102.9 109.7 124.8 190.3 204.8

Expenditure on gross domestic product/ 116.6 114.2 120.3 144.6 171.5 176.4


/1 Preliminary.

/2 IBRD mission estimates.


Table 3.1: SUMMARY BALANCE OF PAYMENTS

(millions of baht)

1970 1971 1972 1973 1974 1975

Merchandise exports, f.o.b. 14,269.7 16,692.1 21,750.2 31,252.5 49,002.4 44,382.4Merchandise imports, c.i.f. 26,406.7 26,606.4 30,634.8 42,054.9 63,304.6 64,527.0Nonmonetary gold imports /1 107.8 26.6 - - - -

Trade balance -12,244.8 -9,940.9 -8,884.6 -10,802.4 -14,302.2 -20,144.6

Service receipts 10,094.8 9,899.6 11,322.7 12,723.1 15,634.2 16,551,6Service payments 4,058.6 4,495.5 4,739.7 5,886.7 8,033.5 10,390.8

Net service 6,036.2 5,404.1 6,583.0 6,836.4 7,600.7 6,160.8

Transfers (net) 1,011.7 904.1 1,238.8 2,968.8 4,916.9 1,632.1Private (57.4) (131.1) (630.7) (2,398.9) (4,375.6) (1,134.5)Government (954.3) (773.0) (608.1) (569.9) (541.3) (497.6)

Capital inflow (net) 2,478.8 1,733.1 3,643.2 2,937.6 9,054.7 7,754.7

Private sector 2,326.0 1,463.1 3,406.6 1,910.1 7,801.0 5,696.3Direct investment (890.5) (808.4) (1,427.1) (1,604.9) (3,836.3) (1,744.8)Medium- and long-term loans and credits (1,007.7) (397.0) (1,392.5) (-1,199.0) (2,637.1) (1,316.7)Other (427.8) (257.7) (587.0) (1,504.2) (1,327.6) (2,634.8)

Public sector 152.8 270.0 236.6 1,027.5 1,253.7 2,058.4Loans to the Central Government (445.1) (306.3) (214.7) (387.2) (126.4) (-105.0)Loans and credits to state enterprises (90.7) (60.2) (338.3) (372.7) (1,173.9) (2,203.0)Other Central and Local Government (-383.0) (-96.5) (-316.4) (267.6) (-46.6) (-39.6)

Errors and omissions 66.1 1,266.2 1,090.3 -1,076.2 741.9 1,739.0

Change in reserves (increase -) 2,652.0 633.4 /1 -3,670.7 /1 -864.2 /1 -8,012.0 /2 2,858.0 /2

/1 Including timing adjustments and official gold imports for the minting of commemorative coins.

/2 Excluding SDR allocations of $14.3 million (B 298.2 million) in 1971 and $15.4 million (B 320.7 million) in1972, and reserve valuation adjustments.

Source: Bank of Thailand.

Table 3.2: PRINCIPAL MERCHANDISE EXPORTS

1970 1971 1972 1973 1974 1975

1. Rice

Value (millions of baht) 2,517 2,909 4,437 3,594 9,778 5,851Volume (thousands of tons) 1,064 1,576 2,112 849 1,029 953Unit value (baht per ton) 2,366 1,846 2,101 4,235 9,500 6,141

2. Rubber

Value (millions of baht) 2,232 1,905 1,862 4,573 5,035 3,463Volume (thousands of tons) 276 308 318 391 363 337Unit value (baht per ton) 8,098 6,188 5,861 11,710 13,887 10,273

3. Maize /1

Value (millions of baht) 1,969 2,286 2,085 2,969 6,078 5,703Volume (thousands of tons) 1,448 1,873 1,844 1,386 2,302 2,154Unit value (baht per ton) 1,360 1,220 1,131 2,142 2,641 2,648

4. Tin (metal)

Value (millions of baht) 1,618 1,569 1,664 2,035 3,096 2,247Volume (thousands of tons) 22.2 21.9 21.8 22.7 20.8 16.7Unit value (baht per ton) 72,732 71,738 76,190 89,762 149,083 134,842

5. Tapioca Products

Value (millions of baht) 1,223 1,240 1,547 2,537 3,836 4,600Volume (thousands of tons) 1,327 1,123 1,311 1,836 2,396 2,387Unit value (baht per ton) 922 1,104 1,180 1,381 1,601 1,927

6. Kenaf and Jute

Value (millions of baht) 719 935 1,087 1,054 845 642Volume (thousands of tons) 258 272 255 264 247 157Unit value (baht per ton) 2,790 3,442 4,261 3,991 3,421 4,076

7. Sugar

Value (millions of baht) 94 382 1,264 1,161 3,757 5,696Volume (thousands of tons) 56 175 408 275 444 595Unit value (baht per ton) 1,671 2,188 3,102 4,216 8,462 9,566

8. Shrimp

Value (millions of baht) 224 247 340 804 602 888Volume (thousands of tons) 6.4 5.6 6.7 14.9 10.3 13.5Unit value (baht per ton) 34,886 44,162 50,558 54,050 58,726 65,564

9. Teak

Value (millions of baht) 156 183 208 422 402 445Volume (thousands ofcubic meters) 29 38 40 52 35 44

Unit value (baht per ton) 5,424 4,868 5,161 8,168 11,434 10,001

10. Tobacco Leaves

Value (millions of baht) 197 236 284 309 445 568Volume (thousands of tons) 11 13 18 16 15 17Unit value (baht per ton) 18,266 17,936 15,689 18,761 30,454 30,392

Value of principal exports 10,949 11,892 14,778 19,458 33,874 30,103

Other exports 3,823 5,383 7,713 12,768 15,925 14,924

Total merchandise exports 14,772 17,275 22,491 32,226 49,799 45,027

Adjustments for B/P -502 -583 -741 -974 -797 -645

Merchandise exports, f.o.b. 14,270 16,692 21,750 31,252 49,002 44,382

/1 Including maize groat and meal.


Table 3.3: OTHER MERCHANDISE EXPORTS

(millions of baht)

1970 1971 1972 1973 1974 1975

Agricultural Products 1,114 1,301 1,522 2,178 2,542 2,323

Mungbeans and block matpe beans 255 255 277 374 454 464Soybeans 16 17 23 76 47 133Sorghum 103 157 138 241 426 482Kapok fibre 134 141 149 179 195 169Castor seeds 93 124 97 272 215 103Seedlae & stick lae 36 60 107 191 287 95Hides and skins 52 47 102 98 70 34Cattle 73 91 115 139 120 111Other agricultural products 352 409 514 608 728 732

Fishery Products 143 249 430 779 786 957

Cuttle fish, fresh I38 1) 96 141 273 340 505

Cuttle fish, salted in brine l 9 68 56 83 102Other fishery products 105 153 221 450 363 350

Forestry Products 63 83 108 260 214 223

Mineral Products 440 795 673 737 1,174 791

Fluorite 222 311 222 224 289 204Tungsten 83 329 322 260 467 376Iron ores and concentrates 8 1 - - - -

Other mineral products 127 154 129 253 418 211

Manufacturing Products 808 1,344 2,618 5,509 6,906 6,423

Pineapple, canned 55 44 51 75 280 346Garments 18 67 258 660 795 987Molasses 45 86 91 312 500 479Cement 83 90 218 314 650 506Petroleum products 36 132 248 379 303 230Spinning 5 27 112 159 166 141Silk, fabrics 34 30 29 39 34 26Textiles 23 62 271 1,027 787 803Jute yarn & jute fabrics, twine

cordage rope, cable of jute 16 63 81 198 485 314Hemp yarn and thread 19 5 - - - -Gunny bags 63 178 170 312 330 283Iron & steel products 41 46 118 174 335 165Household utensils of wood 18 33 72 135 166 205Precious stones and jewelry 137 232 383 641 763 768Other manufacturing products 215 249 516 1,084 1,312 1,170

Temporary exports 366 625 916 989 801 858

Re-Exports 522 598 875 1,080 1,161 935

Diplomatic Shipments 63 82 92 165 135 27

Personal Household Effects 32 53 55 66 74 83

Others 272 253 424 1,005 2,132 2,304

Total 3,823 5,383 7,713 12,768 15,925 14,924


Table 3.4: MERCHANDISE EXPORTS BY COUNTRIES

1970 1971 1972 1973 1974 1975

… ---------------- millions of baht----------------

Japan 3,770 4,274 4,660 8,410 12,853 12,420United States 1,985 2,261 2,834 3,261 3,945 4,968Netherlands 1,276 1,386 1,794 2,927 4,328 4,547Singapore 1,018 1,225 1,955 2,661 4,142 4,068Hong Kong 1,113 1,152 1,674 2,362 3,171 2,736Malaysia 830 731 1,120 1,952 2,433 2,099Germany, Fed. Rep. 533 640 556 770 1,115 1,116Taiwan 720 498 830 1,308 3,316 1,070United Kingdom 305 435 368 622 664 529Other 3,222 4,673 6,700 7,953 13,832 11,474

Total Merchandise Exports 14,772 17,275 22,491 32,226 49,799 45,027

-----------------percentage of total --------------

Japan 25.5 24.7 20.7 26.1 25.8 27.6United States 13.4 13.1 12.6 10.1 7.9 11.0Netherlands 8.6 8.0 8.0 9.1 8.7 10.1Singapore 6.9 7.1 8.7 8.3 8.3 9.0Hong Kong 7.5 6.7 7.4 7.3 6.4 6.1Malaysia 5.6 4.2 5.0 6.0 4.9 4.6Germany, Fed. Rep. 3.6 3.7 2.5 2.4 2.2 2.5Taiwan 4.9 2.9 3.7 4.1 6.7 2.4United Kingdom 2.1 2.5 1.6 1.9 1.3 1.2Other 21.9 27.1 29.8 24.7 27.8 25.5


Table 3.5: PRINCIPAL MERCHANDISE EXPORTS BY COUNTRIES

1970 1971 1972 1973 1974 1975

…--------------- millions of baht --------------

Rice 2,517 2,909 4,437 3,594 9,778 5,851Hong Kong 552 482 627 526 1,153 900

Singapore 392 432 839 438 867 716

Malaysia 300 210 274 172 748 121

Indonesia 277 175 371 797 1,168 74

Saudi Arabia 296 171 61 324 601 317

India 54 138 184 - - 679

Philippines - 328 519 91 383 405Sri Lanka 50 89 - - - 615

Japan 66 45 30 78 224 45

Other 530 839 1,532 1,168 4,634 1,979

Rubber 2,232 1,905 1,862 4,573 5,035 3,463Japan 1,153 996 1,091 2,464 2,354 1,921

United States 210 216 162 250 342 312

Singapore 134 138 235 707 1,031 435

Malaysia 140 127 190 650 508 296

Italy 207 124 32 96 118 17

Other 388 304 152 406 682 482

Maize 1,969 2,286 2,085 2,969 6,078 5,703Japan 878 1,109 899 996 2,653 2,252

Taiwan 599 398 570 691 1,339 355

Singapore 152 204 278 366 722 1,337

Hong Kong 160 178 155 318 384 355

Malaysia 130 116 132 248 377 430

Other 50 281 51 350 603 974

Tin (metal) 1,618 1,569 1,664 2,035 3,096 2,247

United States 1,104 1,119 1,003 650 775 1,044

Netherlands 445 405 380 681 1,217 330

Japan 69 45 281 492 774 780Other - - - 212 330 93

Tapioca Products 1,223 1,240 1,547 2,537 3,836 4,600

Netherlands 723 827 1,190 1,753 2,483 3,667

Germany, Fed. Rep. 267 126 81 145 167 181

United States 113 114 89 102 142 115

Japan 78 93 77 183 538 256

Other 42 80 110 354 506 381

Kenaf & Jute 719 935 1,087 1,054 845 642

Japan 207 188 163 116 103 25

Belgium 71 126 90 71 58 34

France 56 72 70 56 65 50

United Kingdom 54 68 64 25 37 9

Germany, Fed. Rep. 23 58 40 21 22 13

United States 21 23 19 42 37 32

Italy 36 40 10 16 21 8

Portugal 21 28 32 21 6 6

Spain 42 7 51 53 4 2

Poland 20 24 25 22 18 33

Other 168 301 523 611 474 430

Sugar 94 382 1,264 1,161 3,757 5,696Malaysia - 11 240 481 131 633

Viet-Nam - 111 178 247 - -

Japan 62 69 85 - 2,120 3,098

United States 32 59 93 60 156 1,041

Sri Lanka - 56 175 97 66 -Pakistan - - 145 - -Saudi Arabia - - 50 - -Hong Kong - - 43 - 9 1

Other - 76 255 276 1,275 923

Table 3.5Page 2

1970 1971 1972 1973 1974 1975

----------------- thousands of metric tons ---------

Rice 1,063.6 1,576.1 2,112.1 848.7 1,029.3 952.8Hong Kong 195.6 210.3 245.2 97.5 113.9 121.8Singapore 139.4 202.4 342.2 84.6 86.5 103.7Malaysia 127.9 117.5 113.0 38.3 74.3 19.0Indonesia 144.0 104.8 164.4 266.9 129.1 11.5Saudi Arabia 120.6 95.1 27.3 48.8 73.8 56.5India 33.5 78.4 106.6 - - 141.4

Philippines 0.1 213.1 310.0 14.0 47.2 74.8Sri Lanka 22.8 49.2 - - - 103.7

Japan 31.6 30.4 15.6 18.9 23.7 8.9Other 248.1 474.9 787.8 279.7 480.8 311.5

Rubber 275.6 307.9 317.7 390.5 362.6 335.1Japan 142.8 161.7 189.5 216.1 178.2 190.3United States 25.9 34.3 27.4 22.6 23.0 27.7Singapore 16.7 22.7 37.8 58.4 72.5 43.3Malaysia 17.9 21.7 31.8 53.4 36.0 29.8Italy 24.3 19.2 5.7 6.9 7.2 1.7Other 48.0 48.3 25.5 33.1 45.7 44.3

Maize 1,448.0 1,873.5 1,843.6 1,386.4 2,301.6 2,153.8Japan 649.9 925.3 842.2 468.6 978.4 825.9Taiwan 447.3 322.1 502.8 311.2 468.0 119.8Singapore 109.7 169.5 226.0 172.8 351.3 516.2Hong Kong 112.1 143.8 120.0 142.6 144.4 180.8Malaysia 92.8 92.8 108.0 121.9 143.3 160.2Other 36.2 220.0 44.6 169.3 216.2 350.9

Tin (metal) 22.2 21.9 21.8 22.7 20.8 16.7United States 15.3 15.6 13.2 7.4 5.3 7.8Netherlands 6.0 5.6 4.9 7.7 8.0 2.4Japan 0.9 0.7 3.7 5.4 5.1 5.8Other - - - 2.2 2.4 0.7

Tapioca Products 1,326.9 1,123.2 1,311.0 1,836.5 2,395.7 2,387.4Netherlands 845.9 816.0 1,068.9 1,360.4 1,732.2 1,970.3Germany, fed. Rep. 308.8 125.4 75.8 114.9 116.3 101.3United States 76.7 68.9 49.2 48.2 52.8 35.5Japan 57.0 59.0 42.6 82.0 187.2 100.5Other 38.5 53.8 74.5 231.0 307.2 179.8

Kenaf & Jute 257.7 271.7 255.1 264.1 247.0 157.5Japan 77.6 52.7 39.6 27.3 32.3 5.8Belgium 25.6 37.8 23.6 18.5 17.0 8.3France 17.3 21.2 15.6 12.8 16.5 12.3United Kingdom ]8.2 17.4 14.0 6.7 10.4 3.2Germany, Fed. Rep. 9.4 19.9 11.6 6.3 7.4 3.6United States 11.6 8.5 6.0 15.8 16.2 12.4Italy 12.4 12.1 2.5 3.9 6.7 2.2Portugal 7.9 7.4 7.2 5.1 1.7 1.5Spain 13.4 1.9 11.5 12.0 1.1 0.4Poland 6.6 6.4 5.4 5.3 5.0 7.8Other 57.7 86.4 118.1 150.4 132.7 100.0

Sugar 56.2 174.5 407.5 275.4 443.8 595.4Malaysia - 5.1 78.8 112.5 26.2 69.6Viet-Nam - 55.3 48.7 54.2 - -Japan 38.0 32.9 37.4 - 244.5 318.4United States 18.2 21.0 30.2 17.8 23.7 118.6Sri Lanka - 25.6 57.2 24.4 13.2 -Pakistan - - 37.7 - - _

Saudi Arabia - - 15.0 - - -Hong Kong - - 16.3 - 2.7 0.5Other - 34.6 86.2 66.6 133.5 88.3

Source: Department of Customs.

Table 3.6: MERCHANDISE IMPORTS

(millions of baht)

1970 1971 1972 1973 1974 1975

Capital Goods 9,371 8,628 9,783 12,826 19,808 22,335

Machinery and parts 6,142 5,770 6,420 8,215 13,458 14,687Nonelectrical (4,723) (4,558) (5,087) (6,386) (10,978) (11,969)Electrical (1,419) (1,212) (1,333) (1,829) (2,480) (2,718)

Metal manufactures 1,047 860 1,003 1,019 1,398 1,538Fertilizers and pesticides 582 503 877 1,142 1,710 2,015Scientific and optical

instruments 415 421 465 541 694 740Construction material /1 185 109 91 105 223 146Other 1,000 965 927 1,804 2,325 3,209

Intermediate Products and RawMaterials 6,725 7,764 9,131 13,621 18,370 16,046

Chiefly for consumer goods 4,139 4,996 5,880 8,538 11,345 10,280Chemicals (1,962) (2,293) (2,713) (4,136) (5,893) (5,502)Textile fibres (602) (849) (1,046) (1,749) (1,878) (1,897)Paper and paperboard (509) (558) (504) (781) (970) (929)Tobacco (279) (507) (588) (382) (628) (693)Textile yarn and thread (435) (406) (503) (725) (696) (390)Other (352) (383) (526) (765) (1,280) (869)

Chiefly for capital goods 2,586 2,768 3,251 5,083 7,025 5,766Iron and steel (1,647) (1,704) (2,046) (3,037) (4,322) (3,226)Other base metals (813) (854) (1,043) (1,838) (2,400) (2,123)Other (126) (210) (162) (208) (303) (417)

Consumer Goods 5,378 4,755 5,725 7,055 8,380 8,829

Nondurable goods 3,486 2,859 3,291 4,066 5,167 5,133Food and beverages (1,114) (1,044) (1,224) (1,403) (1,851) (2,001)Clothing and footwear (1,427) (909) (966) (1,345) (1,695) (1,579)Medicinal and pharmaceutical

products (741) (715) (859) (977) (1,208) (1,195)Other (204) (191) (242) (341) (413) (358)

Durable goods 1,892 1,896 2,434 2,989 3,213 3,696Household goods (655) (899) (1,402) (1,466) (1,287) (1,365)Electric appliances (637) (503) (581) (874) (994) (1,052)Cycles, motorcycles, carts (305) (237) (246) (405) (591) (808)Other (295) (257) (205) (244) (341) (471)

Other Imports 5,535 5,647 6,236 8,682 17,486 19,625

Fuels and lubricants 2,329 2,721 3,115 4,661 12,571 14,234Vehicles and parts 2,204 2,191 2,213 3,399 4,182 4,522Other /2 1,002 735 908 622 733 869

Total Imports 27,009 26,794 30,875 42,184 64,044 66,835

Adjustment for B/P /3 -494 -554 -559 -492 -739 -2,308Gold imports -108 -26 - - - -Thai military imports /4 - 392 126 363 - -

Other imports /4 - - 193 - - -Merchandise imports, c.i.f. 26,407 26,606 30,635 42,055 63,305 64,527

/1 Including cement.

/2 Including gold imports.

/3 Diplomatic shipments, personal effects, temporary imports, etc.

/4 Not included in customs return.


Table 3.7: FINANCING OF MERCHANDISE IMPORTS


1970 1971 1972 1973 1974 1975

Imports under grants 33.3 25.9 21.1 19.0 17.6 17.7

US grants 17.9 14.5 12.5 9.1 6.8 4.7

UN and other specializedagencies 11.8 6.8 6.1 5.6 8.7 9.3

Colombo Plan 3.6 4.6 2.5 4.3 2.1 3.7

Imports under project loans 42.4 35.1 55.3 68.9 145.8 147.3

Official 42.1 34.5 47.6 59.6 88.0 130.7Private 0.3 0.6 7.7 9.3 57.8 16.6

Imports under suppliers'credits 175.0 139.2 103.2 67.9 129.3 110.3

Official /1 16.4 7.4 0.7 0.7 - -

Private: 158.6 131.8 102.5 67.2 129.3 110.3

Machinery and parts 88.8 55.0 51.8 53.0 110.1 88.3(of which weavingmachinery) (50.9) (38.9) (37.8) (25.1) (61.0) (57.4)

Cars, buses and trucks 48.9 31.9 29.8 7.4 8.2 9.3

Tractors, rollers,graders 6.0 5.0 5.0 3.1 5.2 7.8

Other 14.9 39.9 15.9 3.7 5.8 4.9

Imports under foreigninvestment 0.5 0.5 0.1 - 0.1 -

Imports induced by USmilitary expenditures 106.5 96.3 112.8 109.7 90.3 70.3

Direct 20.0 18.1 21.2 20.6 17.0 13.2

Indirect 86.5 78.2 91.6 89.1 73.3 57.1

Imports not subjected toforeign exchange payments 23.8 26.6 26.9 24.3 37.0 115.4

Subtotal 381.5 323.6 319.4 289.8 420.1 461.0

Imports financed by ownresources 917.0 964.6 1,165.0 1,784.0 2,782.1 2,880.8

Total Imports 1,298.5 1,288.2 1,484.4 2,073.8 3,202.2 3,341.8

/1 Including local governments.


Table 3.8: MERCHANDISE IMPORTS BY COUNTRIES

1970 1971 1972 1973 1974 1975

-------------------millions of baht ---------------

Japan 10,107 10,093 11,401 15,078 20,102 21,085United States 4,011 3,807 4,838 5,915 8,642 9,566Germany, Fed. Rep. 2,288 2,075 2,279 3,211 4,676 3,482United Kingdom 2,014 2,054 1,620 2,715 2,970 3,032Australia 852 864 981 1,392 1,904 1,536Saudi Arabia 536 752 967 982 3,062 6,012Taiwan 603 747 1,058 1,383 1,541 1,608Italy 488 428 475 601 1,105 1,226Netherlands 368 316 349 508 743 681Hong Kong 374 314 417 589 867 640Other 5,368 5,344 6,490 9,810 18,432 17,967

Total Merchandise Imports 27,009 26,794 30,875 42,184 64,044 66,835

---------------- percentage of total ---------------

Japan 37.4 37.7 36.9 35.8 31.4 31.6United States 14.8 14.2 15.7 14.0 13.5 14.3Germany, Fed. Rep. 8.5 7.7 7.4 7.6 7.3 5.2United Kingdom 7.5 7.7 5.3 6.4 4.6 4.5Australia 3.2 3.2 3.2 3.3 3.0 2.3Saudi Arabia 2.0 2.8 3.1 2.3 4.8 9.0Taiwan 2.2 2.8 3.4 3.3 2.4 2.4Italy 1.8 1.6 1.5 1.4 1.7 1.8Netherlands 1.4 1.2 1.1 1.2 1.2 1.0Hong Kong 1.4 1.2 1.4 1.4 1.3 1.0Other 19.8 19.9 21.0 23.3 28.8 26.9


Table 3.9: SERVICES

(millions of baht)

1970 1971 1972 1973 1974 1975

Receipts 10,094.8 9,899.6 11,322.7 12,723.1 15,634.2 16,551.6

Freight and insurance onmerchandise 313.4 494.2 639.0 925.5 1,453.7 1,229.3

Other transportation 298.6 330.8 455.9 513.7 1,200.1 1,269.0Travel 2,170.0 2,208.9 2,718.0 3,393.8 3,805.1 4,482.2R & R /1 (389.8) (239.7) (62.8) (13.3) (10-9) (-)Other /2 (1,780.2) (1,969.2) (2,655.2) (3,380.5) (3,794.2) (4,482.2)

Investment income 1,636.6 1,423.4 1,206.7 1,448.1 2,919.6 3,887.0Government, n.i.e. 4,839.8 4,514.2 5,262.5 5,034.3 4,238.3 3,519.8Other 836.4 928.1 1,040.6 1,407.7 2,017.4 2,164.3

Payments 4,058.6 4,495.5 4,739.7 5,886.7 8,033.5 10,390.8

Freight and insurance onmerchandise 202.9 338.7 431.9 504.1 1,005.0 822.0

Other transportation 186.4 202.8 204.5 386.7 749.0 643.5Travel 1,267.4 1,294.5 1,286.8 1,449.4 1,634.0 2,735.3Investment income 1,257.3 1,393.8 1,534.0 1,872.4 2,933.9 3,775.9Government, n.i.e. 395.3 399.0 336.8 444.8 318.5 303.7Other 749.3 866.7 945.7 1,229.3 1,393.1 2,110.4

Net Services 6,036.2 5,404.1 6,583.0 6,836.4 7,600.7 6,160.8

Freight and insurance onmerchandise 110.5 155.5 207.1 421.4 448.7 407.3

Other transportation 112.2 128.0 251.4 127.0 451.1 625.5Travel 902.6 914.4 1,431.2 1,944.4 2,171.1 1,746.9Investment income 379.3 29.6 -327.3 -424.3 -14.3 111.1Government, n.i.e. 4,444.5 4,115.2 4,925.7 4,589.5 3,919.8 3,216.1Other 87.1 61.4 94.9 178.4 624.3 53.9

/1 Estimated expenditures of US soldiers on rest and recreation leave.

/2 Estimated expenditures of other tourists made by the Tourist Organizationof Thailand.


Table 3.10: INVESTMENT INCOME

(millions of baht)

1970 1971 1972 1973 1974 1975

Receipts 1,636.6 1,423.4 1,206.7 1,448.1 2,919.6 3,887.0

Private sector 104.2 125.5 126.3 198.1 508.5 468.8

Interest 63.1 64.1 50.2 87.4 285.6 285.5Profits of branches 38.9 59.1 69.6 108.8 222.2 181.6Other 2.2 2.3 6.5 1.9 0.7 1.7

Public sector 1,532.4 1,297.9 1,080.4 1,250.0 2,411.1 3,418.2

Interest 1,532.4 1,297.9 1,080.4 1,250.0 2,411.1 3,418.2

Payment 1,257.3 1,393.8 1,534.0 1,872.4 2,933.9 3,775.9

Private sector 962.8 1,086.3 1,114.9 1,349.9 2,350.2 3,045.2

Interest /1 378.2 477.6 510.1 663.7 1,391.6 1,587.1Profits of branches 404.9 383.7 355.5 330.5 428.8 690.3Dividends 170.9 200.9 210.0 315.0 474.0 719.9Other 8.8 24.1 39.3 40.7 55.8 47.9

Public sector 294.5 307.5 419.1 522.5 583.7 730.7

Interest /1 294.5 307.5 419.1 522.5 583.7 730.7Central Government (244.5) (238.4) (352.9) (426.2) (478.4) (481.0)State enterprises (50.0) (65.1) (59.6) (91.8) (102.1) (247.8)Local Governments (-) (4.0) (6.6) (4.5) (3.2) (1.9)

Net Investment Income 379.3 29.6 -327.3 -424.3 -14.3 111.1

Private sector -858.6 -960.8 -988.6 -1,151.8 -1,841.7 -2,576.4Public sector 1,237.9 990.4 661.3 727.5 1,827.4 2,687.5

/1 Excludes interest on suppliers' credits information on which is not available.


Table 3.11: GOVERNMENT, n.i.e.

(millions of baht)

1970 1971 1972 1973 1974 1975

Receipts 4,839.8 4,514.2 5,262.5 5,034.3 4,238.3 3,519.8

Military 4,192.1 3,788.7 4,413.2 4,210.3 3,393.4 2,643.7

US military personneland agencies (4,159.4) (3,755.1) (4,398.2) (4,130.5) (3,373.5) (2,601.7)

US contractors formilitary projects (4.6) (11.0) (12.7) (74.2) (19.6) (40.8)

Other military (28.1) (22.6) (2.3) (5.6) (0.3) (1.2)

Non-military 647.7 725.5 849.3 824.0 844.9 876.1

Payments 395.3 399.0 336.8 444.8 318.5 303.7

Military 14.9 24.8 2.0 4.0 3.2 0.2

Non-military 380.4 374.2 334.8 440.8 315.3 303.5

Services under aidprograms (193.0) (162.7) (106.2) (113.3) (43.4) (25.3)

Other (187.4) (211.5) (228.6) (327.5) (271.9) (278.2)

Net Government, n.i.e. 4,444.5 4,115.2 4,925.7 4,589.5 3,919.8 3,216.1

Military 4,177.2 3,763.9 4,411.2 4,206.3 3,390.2 2,643.5

Non-military 267.3 351.3 514.5 383.2 529.6 572.6


Table 3.12: TRANSFERS

(millions of baht)

1970 1971 1972 1973 1974 1975

Private transfers 57.4 131.1 630.7 2,398.9 4,375.6 1,134.5

Inflow 203.7 280.1 761.1 2,528.7 4,527.5 1,323.2Outflow 146.3 149.0 130.4 129.8 151.9 188.7

Government transfers 954.3 773.0 608.1 569.9 541.3 497.6

US grants 613.0 519.0 417.9 356.3 228.9 166.3Other grants /1 320.2 238.3 179.9 201.3 215.8 258.7Other (net) 21.1 15.7 10.3 12.3 96.6 72.6

Total transfers (net) 1,011.7 904.1 1,238.8 2,968.8 4,916.9 1,632.1

/1 Breakdown by countries not available.


Table 3.13: CAPITAL MOVEMENTS

(millions of baht)

1970 1971 1972

Credit Debit Net Credit Debit Net Credit Debit Net

A. Private Medium- and Long-term 5,329.1 3,186.5 2,142.6 5,041.4 3,733.1 1,308.3 6,640.5 3,543.0 3,097.5

1. Direct investment 1,014.1 123.6 890.5 1,027.8 219.4 808.4 1,553.9 126.8 1,427.1

1.1 Equity capital (685.3) (23.7) (661.6) (793.1) (101.1) (692.0) (1,165.7) (11.0) (1,154.7)

1.2 Loans (328.8) (99.9) (228.9) (234.7) (118.3) (116.4) (388.2) (115.8) (272.4)

2. Loans to private enterprises 736.6 515.6 221.0 1,100.3 1,036.7 63.6 2,622.7 1,142.0 1,480.7

3. Suppliers' credits to

private enterprises 3,298.9 2,512.2 786.7 2,742.4 2,409.0 333.4 2,132.6 2,220.8 -88.2

4 Portfolio investment 272.1 35.1 237.0 168.5 68.0 100.5 330.7 53.4 277.3

5. Other 7.4 - 7.4 2.4 - 2.4 0.6 - o.6

B. Public Medium- and Long-term 1,314.2 1,156.4 157.8 1,356.2 970.5 385.7 1,287.3 1,120.5 166.8

1. Loans to state enterprises 138.2 249.1 -110.9 218.0 238.0 -20.0 661.0 261.4 399.6

2. Suppliers' credits to state

enterprises 289.1 87.5 201.6 153.7 73.5 80.2 13.9 75.2 -61.3

3. Loans to the Central Government 833.8 388.7 IL 445.1 579.5 273.2 /L 306.3 437.8 /2 223.1 /3 214.7

4. Other Central Government - 431.1 -431.1 341.4 373.1 -31.7 174.6 535.4 -360.8

4.1 Import credits (-) (35.4) (-35.4) (-) (-) (-) (-) (-) (-)

4.2 Export credits (-) (-) (-) (-) (259.4) (-259.4) (-) (-) (-)

5. Suppliers' credits to LocalGovernments 53.1 - 53.1 63.6 12.7 50.9 - 25.4 -25.4

C. Total Medium- and Long-term 6,643.3 4,342.9 2,300.4 6,397.6 4,703.6 1,694.0 7,927.8 4,663.5 3,264.3

D. Short-term /4 607.0 428.6 178.4 605.9 566.8 39.1 634.7 255.8 378.9

1. Private 586.2 402.8 183.4 483.1 328.3 154.8 544.8 235.7 309.1

1.1 Trade credits (586.2) (402.8) (183.4) (483.1) (328.3) (154.8) (544.8) (235.7) (309.1)

2. Public 20.8 25.8 .-5.0 122.8 238.5 -115.7 89.9 20.1 69.8

E. Total Capital Movements 7,250.3 4,771.5 2,478.8 7,003.5 5,270.4 1,733.1 8,562.5 4,919.3 3,643.2

/1 Including Bank of Thailand participation in IBRD Loans (Sirikit Dam and Third Highway Projects) of B 357.3

million in 1969, B 236.4 million in 1970 and B 98.6 million in 1971.

/2 Including refund from Bank of Thailand participations in IBRD Loans (Third Highway Projects of B 1.4 million in 1972, B 18.9 in 1973

and B 30.9 million in 1974.

/3 Including Bank of Thailand participations in IBRD Loans (Sirikit Dam and Third Highway Projects) of B 47.3 million in 1972.

/4 Less than one year.

Table 3.13Page 2

1973 1974 1975Credit Debit Net Credit Debit Net Credit Debit Net

A. Private Medium- and Long-term 5,322.5 4,704.8 617.7 11,593.1 4,923.4 6,669.7 9,567.0 6,471.0 3,096.0

1. Direct investment 2,172.0 567.1 1,604.9 4,683.3 847.0 3,836.3 3,391.4 1,646.6 1,744.8

1.1 Equity capital (1,408.8) (33.0) (1,375.8) (3,026.2) (289.0) (2,737.2) (1,654.1) (358.0) (1,296.1)

1.2 Loans (763.2) (534.1) (229.1) (1,657.1) (558.0) (1,099.1) (1,737.3) (1,288.6) (448.7)

2. Loans to private enterprises 1,516.4 2,030.4 -514.0 4,073.3 2,012.2 2,061.1 3,907.0 2,726.3 1,180.7

3. Suppliers' credits toprivate enterprises 1,370.0 2,055.0 -685.0 2,586.9 2,010.9 576.0 2,205.6 2,069.6 136.0

4 Portfolio investment 263.0 52.0 211.0 248.5 53.3 195.2 55.9 28.5 27.4

5. Other 1.1 0.3 0.8 1.1 - 1.1 7.1 - 7.1

B. Public Medium- and Long-term 1,750.8 723.3 1,027.5 1,986.0 732.3 1,253.7 2,986.1 927.7 2,058.4

1. Loans to state enterprises 763.8 319.5 444.3 1,586.8 314.4 1,272.4 2,739.1 451.0 2,288.1

2. Suppliers' credits to stateenterprises 13.5 85.1 -71.6 0.2 98.7 -98.5 - 85.1 -85.1

3. Loans to the Central Government 610.1 /L 222.9 387.2 399.0 /1 272.6 126.4 213.2 /2 318.2 -105.0

4. Other Central Government 363.4 70.3 293.1 _ 22.5 -22.5 33.8 50.4 -16.6

4.1 Import credits (-) (-) (-) (-) (-) (-) (3) (-) (3)4.2 Export credits () () -)-) -) _)(32.2) () (32.2)

5. Suppliers' credits to LocalGovernments - 25.5 -25.5 - 24.1 -24.1 - 23.0 -23.0

C. Total Medium- and Long-term 7,073.3 5,428.1 1,645.2 13,579.1 5,655.7 7,923.4 12,553.1 7,398.7 5,154.4

D. Short-term /3 4,285.6 2,993.2 1,292.4 9,835.8 8,704.5 1,131.3 12,893.0 10,292.7 2,600.3

1. Private 4,285.6 2,993.2 1,292.4 9,835.8 8,704.5 1,131.3 12,893.0 10,292.7 2,600.3

1.1 Trade credits (4,285.6) (2,993.2) (1,292.4) (9,835.8) (8,704.5) (1,131.3) (12,694.2)(10,292.7) (2,401.5)

2. Public - - - - - - - - -

E. Total Capital Movements 11,358.9 8,421.3 2,937.6 23,414.9 14,360.2 9,054.7 25,446.1 17,691.4 7,754.7

/1 Including refund from Bank of Thailand participations in IBRD Loans (Third Highway Projects) of B 1.4 million in 1972, B 18.9

in 1973 and B 30.9 million in 1974.

/2 Including refund from Bank of Thailand participations in IBRD Loans (Third Highway Projects) of B 47.1 million in 1975

and B 40.6 million in 1976.

/3 Less than one year.


Table 3.14: MEDIUM- AND LONG-TERM CAPITAL MOVEMENTS BY COUNTRIES

(millions of baht)

Private Sector Public SectorTotal Total State Enterprises Central LocalPrivate Direct Investment Suppliers' Public Suppliers' Government Govern- TotalSector Equity Loans Loans Credits Other Sector Loans Credits Loans Other ments Capital

…-----------------------------------------------------1970 CREDIT----------------------------------------------------------

1. OECD Countries /1 5,006.5 614.8 266.0 706.3 3,195.1 224.3 707.8 56.3 285.6 312.8 - 53.1 5,714.3USA 1,027.1 230.5 180.8 432.9 140.1 42.8 18.8 - - 18.8 - - 1,045.9Japan 2,709.8 296.6 51.4 153.8 2,136.0 72.0 483.4 - 193.5 289.9 - - 3,193.2United Kingdom 418.2 38.0 8.4 96.0 274.7 1.1 54.5 - 1.4 - - 53.1 472.7West Germany 410.3 12.3 - 13.2 380.5 4.3 57.4 56.3 - 1.1 - - 467.7France 25.4 4.5 - 0.1 20.8 - - - - - - - 25.4Other /2 415.7 32.8 25.4 10.3 243.0 104.1 93.7 - 90.7 3.0 - - 509.4

2. Socialist Countries 19.7 0.3 - - 19.4 - - - - - - - 19.7

3. Other Countries 302.9 70.2 62.8 30.3 84.4 55.2 3.5 - 3.5 _ _ _ 306.4Hong Kong 129.1 51.0 18.3 6.3 16.4 37.1 - - - - - - 129.1

4. International Institutions - - - - - - 602.9 81.9 - 521.0 - - 602.9ADB - - - - - - 37.2 37.2 - - _ _ 37.2IBRD & IDA - - - - - - 565.7 44.7 - 521.0 - - 565.7

Total Credit 5,329.1 685.3 328.8 736.6 3,298.9 279.5 1,314.2 138.2 289.1 833.8 53.1 6,643.3

…-----------------------------------------------------…1970 DEBIT-----------------------------------------------------------

1. OECD Countries /1 3,078.6 16.2 91.7 497.4 2,438.6 34.7 670.2 120.5 87.5 80.1 382.1 - 3,748.8USA 425.0 4.5 54.9 248.8 113.9 2.9 195.4 67.6 2.1 35.4 90.3 - 620.4Japan 1,748.0 1.8 24.1 39.0 1,652.7 30.4 52.4 - 17.0 - 35.4 - 1,800.4United Kingdom 198.4 1.2 4.5 6.6 186.0 0.1 261.0 - 4.6 - 256.4 - 459.4West Germany 289.0 - 1.7 10.9 275.8 0.6 90.0 45.3 - 44.7 - - 379.0France 136.8 0.1 - 123.8 12.9 - - - - - - - 136.8Other /2 281.4 8.6 6.5 68.3 197.3 0.7 71.4 7.6 63.8 - - - 352.8

2. Socialist Countries 20.8 - - - 20.8 - - - - - - 20.8

3. Other Countries 87.1 7.5 8.2 18.2 52.8 0.4 7.4 - - - 7.4 - 94.5Hong Kong 23.6 - 0.3 1.8 21.5 - - - - - - - 23.6

4. International Institutions - - - - - - 478.8 128.6 - 308.6 41.6 - 478.8ADB - - - - - - 44.8 3.2 - - 41.6 - 44.8IBRD & IDA - - - - - - 434.0 125.4 - 308.6 - - 434.0

Total Debit 3,186,5 23.7 99.9 515.6 2,512.2 35.1 1,156.4 249.1 87.5 388.7 431.1 - 4,342.9

/1 Including USA and Canada.

/2 Including Canada.

Table 3.14page 2


…---------------_______-----------------------------1971 CREDIT----------------------------------------------------------

1. OECD Countries /1 4,580.4 684.9 196.9 913.6 2,637.5 147.5 852.9 20.4 146.5 281.0 341.4 63.6 5,433.3USA 1,103.8 369.9 122.9 429.5 81.3 100.2 136.1 - - 56.5 79.6 - 1,239.9Japan 2,477.5 229.1 51.9 68.0 2,097.5 31.0 345.8 - 122.7 223.1 - - 2,823.3United Kingdom 406.5 19.6 4.0 276.9 104.7 1.3 326.2 - 0.8 - 261.8 63.6 732.7West Germany 184.9 4.0 4.1 5.7 163.8 7.3 14.1 14.1 - - - - 199.0France 12.6 2.1 0.4 - 10.1 - - - - - - - 12.6Other /2 395.1 60.2 13.6 133.5 180.1 7.7 30.7 16.3 23.0 1.4 - - 425.8


3. Other Countries 431.1 107.6 37.8 186.7 75.6 23.4 7.2 - 7.2 - - - 438.3Hong Kong 179.5 33.2 14.9 99.2 19.7 12.5 - - - - - - 179.5

4. International Institutions - - - - - - 496.1 197.6 - 298.5 - - 496.1ADB - - - - - - 60.4 60.4 - - - - 60.4IBRD & IDA - - - - - - 435.7 137.2 - 298.5 - - 435.7

Total Credit 5,041.4 793.1 234.7 1,100.3 2,742.4 170.9 1,356.2 218.0 153.7 579.5 341.4 63.6 6,397.6

…----------------------------------------------------…1971 DEBIT-----------------------------------------------------------

1. OECD Countries /1 3,374.0 94.7 83.5 804.3 2,328.6 62.9 412.9 127.1 73.1 86.2 113.8 12.7 3,786.9USA 770.6 88.4 63.3 509.3 105.9 3.7 166.0 68.6 20.8 37.1 39.5 - 936.6Japan 1,690.0 5.1 12.3 41.1 1,573.6 57.9 24.0 - 24.0 - - - 1,714.0United Kingdom 207.1 - 4.4 35.2 167.3 0.2 96.4 - 9.4 - 74.3 12.7 303.5West Germany 317.0 0.7 0.7 34.7 280.2 0.7 100.1 51.0 - 49.1 - - 417.1France 162.1 0.1 - 149.2 12.7 0.1 - - - - - - 162.1Other /2 227.2 0.4 2.8 34.8 188.9 0.3 26.4 7.5 18.9 - - - 253.6

2. Socialist Countries 17.4 - - - 17.4 - - - - - - - 17.4

3. Other Countries 341.7 6.4 34.8 232.4 63.0 5.1 259.7 - 0.4 - 259.3 - 601.4Hong Kong 106.7 - 1.3 76.1 24.2 5.1 - - - - - _ 106.7


Total Debit 3,733.1 101.1 118.3 1,036.7 2,409.0 68.0 970.5 238.0 73.5 273.2 373.1 12.7 4,703.6



Table 3.14

page 3

Private Sector Public SectorTotal Total State Enterprises Central Local

Private Direct Investment Suppliers' Public Suppliers' Government Govern- Total

Sector Equity Loans Loans Credits Other Sector Loans Credits Loans Other ments Capital

--------------------------------------------------------- 1972 CREDIT…---------------------------------------------------------

1. OECD Countries /1 5,901.1 ~1,030.5 329.4 2,266.2 2,033.0 242.0 570.5 137.5 4.1 254.3 174.6 _ 6,471.6USA 2,019.1 533.4 145.6 1,051.8 200.0 88.3 6.5 - - 6.5 - _ 2,025.6Japan 1,953.3 264.3 100.8 387.3 1,085.6 115.3 248.2 - 4.1 244.1 - - 2,201.5United Kingdom 936.8 113.4 20.3 625.8 172.0 5.3 174.6 - - - 174.6 - 1,111.4

West Germany 312.3 17.6 4.2 11.1 275.1 4.3 35.8 35.7 - 0.1 - - 348.1

France 186.2 13.0 - - 164.3 8.9 - - - _ - - 186.2

Other /2 493.4 88.8 58.5 190.2 136.0 19.9 105.4 101.8 - 3.6 - - 598.8


3. Other Countries 728.5 135.2 58.8 356.5 88.7 89.3 9 8 - 9.8 - - - 738.3

Hong Kong 310.7 63.8 25.3 102.4 47.2 72.0 - - - - - - 310.7

4. International Institutions - - - - - - 707.0 523.5 - 183.5 - - 707.0

ADB - - - - - - 51.3 51.3 - - - - 51.3IBRD & IDA - - - - - - 655.7 472.2 - 183.5 - - 655.7

Total Credit 6,640.5 1,165.7 388.2 2,622.7 2,132.6 331.3 1,287.3 661.0 13.9 437.8 174.6 7,927.8

-------------------------------------------------------- 1972 DEBIT-----------------------------------------------------------

1. OECD Countries /1 3,407.9 10.6 111.6 1,100.1 2.135.8 49.8 570.2 141.9 74.1 93.8 235.0 25.4 3,978,1USA 658.4 7.3 52.1 457.2 122.9 18.9 108.3 70.3 - 38.0 - - 766.7

Japan 1,487.7 - 24.3 137.7 1,320.7 5.0 43.6 - 43.6 - - - 1,531.3

United Kingdom 329.2 2.9 - 159.5 166.7 0.1 270.7 - 10.3 - 235.0 25.4 599.9West Germany 411.1 0.3 3.5 112.5 294.5 0.3 119.0 63.2 - 55.8 - - 530.1

France 145.0 0.1 - 111.8 33.1 - - - - - - - 145.0

Other /2 376.5 - 31.7 121.4 197.9 25.5 28.6 8.4 20.2 - - - 405.1


3. Other Countries 120.3 0.4 4.2 41.9 70.2 3.6 301.5 - 1.1 - 300.4 - 421.8

Hong Kong 46.6 - 1.5 16.3 25.3 3.5 - - - - - - 46.6


Total Debit 3,543.0 11.0 115.8 1,142.0 2,220.8 53.4 1,120.5 261.4 75.2 223.1 535.4 25.4 4,663.5



Table 3.14

page 4

Private Sector Public SectorTotal Total State Enterprises Central Local



-------------------------------------------------------- 1973 CREDIT----------------------------------------------------------

1. OECD Countries /1 4,261.9 1,100.0 646.3 1,119.1 1,211.4 185.1 831.3 112.1 - 355.8 363.4 _ 5,093.2USA 1,674.3 327.3 281.7 546.1 362.7 156.5 120.5 - - 120.5 - - 1,794.8

Japan 1,106.1 524.8 233.0 224.0 113.6 10.7 250.7 21.8 - 228.9 - - 1,356.8

United Kingdom 492.6 54.7 31.4 218.7 179.9 7.9 363.4 - - - 363.4 - 856.0

West Germany 224.3 24.0 - 13.7 186.1 0.5 5.0 5.0 - - - 229.3

France 161.7 86.9 1.8 0.1 71.5 1.4 64.2 64.2 - - - - 225.9

Other /2 602.9 82.3 98.4 116.5 297.6 8.1 27.5 21.1 - 6.4 - - 630.4

2. Socialist Countries 39.5 - - - 39.5 - - - - - - - 39-5

3. Other Countries 1,021.1 308.8 116.9 397.3 119.1 79.0 13.5 - 13.5 - - - 1,034.6

Hong Kong 578.3 237.7 17.5 232.7 24.0 66.4 - - - - - - 578.3


ADB - - - - - - 125.4 125.4 - - - - 125.4IBRD & IDA - - - - - - 780.6 526.3 - 254.3 - - 780.6

Total Credit 5,322.5 1,408.8 763.2 1,516.4 1,370.0 264.1 1,750.8 763.8 13.5 610.1 363.4 7,073.3

…-----------___--------------------------------------1973 DEBIT-----------------------------------------------------------

1. OECD Countries /1 3,893.4 21.5 364.4 1,504.2 1,952.5 50.8 473.7 178.4 82.7 118.9 68.2 25.5 4,367.1USA 1,197.9 7.4 293.9 687.2 187.6 21.8 119.4 68.7 - 50.7 - - 1,317.3

Japan 1,250.4 0.5 49.6 143.1 1,028.7 28.5 52.0 - 52.0 - - - 1,302.4

United Kingdom 569.7 9.9 0.2 406.0 153.6 - 103.2 - 9.5 - 68.2 25.5 672.9

West Germany 308.4 2.0 1.1 15.4 289.9 - 158.9 90.7 - 68.2 - - 467.3

France 170.0 - 6.7 121.1 41.9 0.3 - - - - - - 170.0

Other /2 397.0 1.7 12.9 131.4 250.8 0.2 40.2 19.0 21.2 - - - 437.2


3. Other Countries 786.6 11.5 169.7 526.2 77.7 1.5 4.5 - 2.4 - 2.1 - 791.1Hong Kong 171.2 0.9 5.6 139.2 25.1 0.4 - - - - - - 171.2


ADB - - - - - - 38.7 38.7 - - - - 38.7

IBRD & IDA - - - - - - 206.4 102.4 - 104.0 - - 206.4

Total Debit 4,704.8 33.0 534.1 2,030.4 2,055.0 52.3 723.3 319.5 85.1 222.9 70.3 25.5 5,428.1



Table 3.14

page 5

Private Sector Public Sector

Total Total State Enterprises Central Local



…----------------------------------------------------…1974 CREDIT…---------------…--_______________________________________

1. OECD Countries /1 7,690.2 2,429.6 853.5 2,131.9 2,139.4 135.8 924.0 706.4 - 217.6 - - 8,614.2

USA 3,415.4 1,670.3 244.4 974.3 438.6 87.8 327.4 - - 133.0 - - 3,742.8

Japan 1,766.6 571.1 305.2 219.3 655.9 15.1 263.7 194.1 - 69.6 - - 2,030.3

United Kingdom 1,461.9 79.0 163.3 862.6 326.9 30.1 - - - - - - 1,461.9

West Germany 212.9 25.5 4.8 7.7 174.9 - 11.3 11.3 - - - - 224.2

France 79.9 7.0 42.1 - 30.7 0.1 306.6 306.6 -- - - 386.5

Other /2 753.5 76.7 93.7 68.0 512.4 2.7 15.0 - - 15.0 - - 768.5


3. Other Countries 3,809.6 596.6 803.6 1,941.4 354.2 113.8 0.2 - 0.2 - - - 3,809.8

Hong Kong 1,631.8 298.5 311.9 735.3 183.5 102.6 - - - - - - 1,631.8

4. International Institutions - - - - - - 1,061.8 880.4 - 181.4 - - 1,061.8

ADB - - - - - - 333.5 333.5 - - 333.5

IBRD & IDA - - - - - - 728.3 546.9 _ 181.4 - - 728.3

Total Credit 11,593.1 3,026.2 1,657.1 4,073.3 2,586.9 249.6 1,986.0 1,586.8 0.2 399.0 _ 13,579.1

…------------------------------------------------------…1974 DEBIT-----------------------------------------------------------

1. OECD Countries /1 4,004.5 201.5 249.1 1,682.3 1,840.6 31.0 413.0 164.8 81.5 139.4 3.2 24.1 4,417.5

USA 1,637.2 94.5 145.2 1,109.2 285.8 2.5 102.6 47.4 - 55.2 - - 1,739.8

Japan 1,002.7 34.3 92.4 69.8 800.7 5.5 65.9 - 51.0 14.9 - - 1,068.6

United Kingdom 516.8 45.7 0.6 273.4 178.0 19.1 36.3 - 9.0 - 3.2 24.1 553.1West Germany 300.0 14.3 2.6 44.2 238.8 0.1 155.4 86.1 - 69.3 - - 455.4

France 178.7 7.7 - 130.4 40.6 - 3.1 3.1 - - - - 181.8

Other /2 369.1 5.0 8.3 55.3 296.7 3.8 49.7 28.2 21.5 - - - 418.8

2. Socialist Countries 35.9 6.0 - - 29.9 - - - - - - 35.9

3. Other Countries 883.0 81.5 308.9 329.9 104.4 22.3 17.2 - 17.2 - - - 900.2

Hong Kong 309.6 32.4 88.1 93.3 74.0 21.8 - - - - - - 309.6

4. International Institutions - - - - - - 302.1 149.6 - 133.2 19.3 - 302.1

ADB 58.4 39.1 - - 19.3 - 58.4

IBRD & IDA - - - - - - 243.7 110.5 - 133.2 - - 243.7

Total Debit 4,923.4 289.0 558.0 2,012.2 2,010.9 53.3 732.3 314.4 98.7 272.6 22.5 24.1 5,655.7



Table 3.14page 6


…---------------------------------------------------…1975 CREDIT----------------------------------------------------------

1. OECD Countries /1 6,178.3 1,281.6 1,219.7 1,681.1 1,966.2 29.7 1,368.9 134.3 - 26.0 1.6 - 4,547.2USA 2,492.1 723.3 654.0 900.6 192.8 21.4 361.6 360.0 - - 1.6 - 2,493.7Japan 1,332.9 341.5 191.5 122.5 675.2 2.2 679.8 675.7 - 4.1 - - 2,012.7United Kingdom 950.3 66.3 90.4 458.1 335.3 0.2 - - - - - - 950.3West Germany 292.2 35.1 2.8 26.5 222.8 5.0 79.8 79.8 - - - - 372.0France 165.8 9.2 103.5 - 53.0 0.1 225.8 225.8 - - - - 391.6Other /2 945.0 106.2 177.5 173.4 487.1 0.8 21.9 - - 21.9 - - 966.9


3. Other Countries 3,136.7 372.2 517.6 2,103.8 109.8 33.3 32.2 - - - 32.2 - 3,168.9Hong Kong 1.801.1 181.8 135.8 1,384.0 84.2 15.3 - - - - - - 1,801.1

4. International Institutions 122.1 - - 122.1 - - 1,585.0 1,397.8 - 187.2 - - 1,707.1ADB - - - - - - 666.3 660.7 - 5.6 - - 666.3IBRD & IDA - - - - - - 918.7 737.1 - 181.6 - - 918.7

Total Credit 9,567.0 1,654.1 1,737.3 3,907.0 2,205.6 63.0 2,986.1 2,739.1 213.2 33.8 12,553.1

-------------------------------------------------------- 1975 DEBIT-----------------------------------------------------------

1. OECD Countries /1 4,928.6 151.1 734.5 2,144.9 1,877.3 20.8 483.0 191.2 81.0 178.1 9.7 23.0 5,411.6USA 2,239.0 37.3 520.9 1,428.8 236.9 15.1 87.7 44.4 - 43.3 - - 2,326.7Japan 1,031.5 26.1 83.3 143.3 778.7 0.1 115.8 - 50.9 64.9 - - 1,147.3United Kingdom 627.9 44.3 2.7 333.1 247.8 - 41.3 - 8.6 - 9.7 23.0 669.2West Germany 246.9 19.3 5.7 0.4 216.1 5.4 158.5 88.6 - 69.9 - - 405.4France 187.9 0.1 - 136.1 51.7 - 28.7 28.7 - - - - 216.6Other /2 595.4 24.0 121.9 103.2 346.1 0.2 51.0 29.5 21.5 - - - 646.4

2. Socialist Countries 66.6 6.8 9.5 0.4 49.9 - - - - - - - 66.6

3. Other Countries 1,475.8 200.1 544.6 581.0 142.4 7.7 57.7 53.5 4.1 - 0.1 - 1,533.5Hong Kong 553.2 57.0 200.8 216.6 72.8 6.0 - - - - - _ 553.2

4. International Institutions - - - - - - 387.0 206.3 - 140.1 40.6 - 387.0ADB - - - - - - 69.7 50.0 - - 19.7 - 69.7IBRD & IDA - - - - - - 317.3 156.3 - 140.1 20.9 - 317.3

Total Debit 6,471.0 358.0 1,288.6 2,726.3 2,069.6 28.5 927.7 451.0 85.1 318.2 50.4 23.0 7,398.7




Table 3.15: INTERNATIONAL RESERVES


Monetary Authorities Commercial BanksIMF GoldTranche Foreign Liabl- Total

End of Period Gold SDRs Position Exchange Total Assets lities /1 Net lTet Change

1960 104.3 - 11.3 256.0 371.6 35.4 53.0 - ]7.6 354.0 + 44.91961 104.2 - 11.3 338.9 454.4 45.5 67.3 - 21.6 432.6 + 78.6

1962 104.2 - 11.3 407.9 523.4 43.9 72.4 - 28.5 494.9 + 62.3

1963 104.2 - 11.3 460.6 576.1 57.4 93.0 - 35.6 540.5 + 45.6

1964 104.2 - 11.3 544 .8 660.3 66.3 117.0 - 50 .7 609.6 + 69.1

1965 96 .4 - 19.0 62 3. 9 7 39. 3 82.9 117.2 - 34.3 705.0 + 95.41966 91.7 - 23.8 808.1 923.6 95.0 154.7 - 59.7 663.9 +158.9

1967 91.7 - 23.8 893.0 1,008.5 76.7 168.8 - 92.1 916.4 4-52.5

1968 91.7 - 23.8 905.5 1,021.0 108.0 191.0 - 83.0 938.0 +21.6

1969 91.7 - 23.8 869.4 984.9 129.1 220.0 -. 90.9 894.0 -44.0

1970 82.0 - 33.5 790. 3 905.8 126.0 265.3 -139.3 766 .5 -127.51971 /2 81.9 14.3 36.4 736.1 877.0 181.8 281.8 -100.0 765.6 4- 10.5

1972 88.9 31.0 36.4 896.2- 1,052 .5 213.2 301.9 - 83 .7 968.8 +191.8

1973 98.8 34.4 40.4 1,121.6 1,295.2 274.9 488.1 -213.2 1,082.e +11:3.2

1974 100.3 36.2 41.0 1,680.9 1,858.4 279.7 573.9 -294.2 1,564.2 +482.2

1975 95.9 34.6 39.2 1,605.4 1,775.1 257.9 664.2 -406.3 1,368.8 -195.4

1969March 91.7 - 23.8 926.8 1,042.3 93.8 179.1 - 85.3 957.0 + 19.0

June 911.7 - 23.8 907.9 1,023.4 98.6 189.1 - 90.5 932.9 -- 24.1

September 91.7 - 23.8 883.3 998.8 105.4 191.8 - 86.4 912.4 - 20.5

December 91.7 - 23.8 869.4 984.9 129.1 220.0 - 90.9 894.0 - 18.4

1970March 91.7 - 23.8 897.6 1,013.1 105 .2 21 7. 4 -112.2 900.9 4- 6.9June 91.7 - 23.8 862.1 977.6 109.5 225.9 ~-116.4 861.2 - 39.7

September 91.7 - 23.8 827.1 942.6 109.6 236.1 -126.5 816.1 - 45,1

December 82.0 - 33.5 790.3 905.8 126.0 265.3 -139.3 766.5 - 49.6

1971March 82.0 14.3 33.5 811.3 941.1 141.0 274.7 -133.7 807.4 + 40.9

June 81.4 14.3 33.5 805.1 934 .3 134.0 270.1 --36. 1 798. 2 - 9.2

September 81.9 14.3 33.5 747.7 877.4 142.1 260.5 .118.4 759.0 - 39.2

December /2 88.9 14.3 36.4 736.1 877.0 181.8 281.8 -100.0 777.0 + 18.0

1972March 88.9 31.0 34.0 837.8 991.7 175.0 293.4 -118.4 873.3 + 96.3

June 88.9 31.0 34.0 912.7 1,066.6 163.4 309.0 -145.6 921.0 + 47.7

September 88.9 31.0 34.0 873.7 1,027.6 168.2 301.6 -133.4 894.2 - 26.8

December 88.9 31.0 36.4 896.2 1,052.5 218.2 301.9 - 83.7 968.8 + 74.6

1 97 3March /3 98.8 34.4 40.4 i,107.4 1,281.0 219.8 363.1 -143.3 1,137.7 +168.9

June 98.8 34.4 40.4 1,108.5 1,282.1 259.0 339.0 - 80.0 1,202.1 + 64.4

September 98.8 34.4 40.4 1,0 79 .6 1, 253 .2 215. 5 343. 9 -128.4 1,124.8 - 7 7 .3

December 98.8 34.4 40.4 1,121.6 1,295.2 2 74 .9 488.1 -213.2 1,082.0 /4 - 42.8

1 974March 98.8 34.4 40.4 1,511.2 1,684.8 359.1 605.6 -246.5 1,438.3 ,356.3

June 98.8 34.4 40.4 1,640.2 1,813.8 297.2 592.9 -295.7 1,c,18.1 + 79.8

September /5 97.2 33.9 39.8 1,598.9 1,769.8 249.8 571.0 -32i.2 I.L48.6 - 69.5

December 100.3 36.2 41.0 1,680.9 1,858.4 279.7 573.9 -294.2 1,564.2 +115.6

1 975March 102.2 36.8 41.8 2,041.5 2,222.3 230.7 664.3 -433.6 1,788.7 +224.5

June 101.3 36.5 41.4 1,945.8 2,125.0 208.7 582.4 -373.7 1,751.3 - 37.4

September 95.4 34.4 39.0 1,722.9 1,891.7 223.9 630.6 -406.7 1,485.0 -266.3

December 95.9 34.6 39.2 1,605.4 1,775.1 257.9 664.2 -406.3 1,368.8 -116.2

1976March 94.7 34.2 38.7 1,741.6 1,909.2 277.0 735.8 -458.8 1,450.4 + 81.6

June 93.9 33.9 38.4 1,730.2 1,896.4 263.1 726.3 -463.2 1,433.2 - 17.2

/1 Starting with 1965, figures for commercial banks liabilities exclude capital funds of branches of foreign banks.

12 Beginning December 1971, gold, SDRs and IMF gold tranche position are valued at US$38 per fine ounce and foreign currencies

are converted to dollars at realigned rates.

/3 From February 1973, gold, SDIRs and IMF gold tranche position are valued at US$42.22 per fine ounce and foreign currencies

are converted to dollars at newly realigned rates.

A4 Of total net increase of US$113.2 million in 1973, US$76 million was due to revaluation of reserve assets after exchange

rate changes.

/5 Beginning July 1974, gold, SDRs and IMF gold tranche position are valued at the respective US$/SDR transactions value,

as measured by the "basket' valuation of the SDR. Foreign currencies are valued at end-of-month market rates.


Table 3.16: TRADE INDICES

(1958 = 100)

Exports ImportsYear Volume Unit Value Value Volume Unit Value Value Terms of Trade

1969 206.6 110.5 228.3 366.1 86.1 315.2 128.31970 218.8 104.7 229.1 352.2 93.1 327.9 112.51971 267.8 100.1 268.1 332.3 97.9 325.3 102.21972 332.3 105.0 348.9 362.5 103.4 374.8 101.51973 303.3 164.8 499.9 424.3 120.7 512.1 136.51974 320.0 244.0 772.4 398.0 195.0 777.5 124.81975 /_ 324.5 215.2 698.4 381.4 212.7 811.4 101.2

Quarterly Data

1970 I 222.9 108.3 241.4 360.0 91.2 328.3 118.8II 213.4 102.2 218.1 364.3 92.7 337.7 110.4

III 199.2 101.7 202.6 333.5 94.8 316.2 107.3IV 243.6 104.7 255.1 349.3 95.2 332.5 110.0

1971 I 281.6 102.3 288.1 341.4 95.5 326.0 107.1II 221.1 101.3 224.0 320.3 96.4 308.8 105.1

III 246.8 96.5 238.2 310.8 100.0 310.3 96.5IV 343.4 94.5 324.5 358.9 100.8 361.8 93.8

1972 1 379.4 101.6 385.5 356.2 100.3 357.3 101.3II 294.1 105.6 310.6 348.3 102.0 355.3 103.5

III 297.7 106.8 317.9 389.4 102.1 397.6 104.6IV 341.4 112.0 382.4 383.2 101.4 388.6 110.5

1973 I 352.3 137.7 482.0 397.2 104.8 417.9 131.7II 321.1 151.7 488.6 414.8 114.7 476.2 132.3

III 262.7 158.6 414.5 392.9 130.7 513.2 121.2IV 311.3 197.3 614.4 443.0 144.5 641.2 136.7

1974 I 410.2 227.3 932.5 395.1 183.1 723.4 124.1II 301.2 262.8 791.5 391.9 208.3 816.3 126.2

III 303.5 231.3 702.1 369.8 218.4 807.7 105.9IV 318.8 218.4 696.2 345.8 220.5 762.5 99.1

/1 Preliminary.


Table 3.17: DUTIES ON IMPORTS BY ECONOMIC CLASSIFICATION L

1970 1971 1972 1973 1974 1975 /2 1970 1971 1972 1973 1974 1975/2

----------- Receipts in millions of baht ---------- -------- Receipts as percentage of imports----------

1. Consumer Goods

Nondurable 1,188 932 968 1,007 1,026 972 34.1 32.6 29.4 24.8 19.9 22.3

Durable 476 429 469 597 799 759 25.2 22.6 19.3 20.0 24.9 25.7

Subtotal 1,664 1,361 1,437 1,604 1,825 1,731 30.9 28.6 25.1 22.7 21.3 23.7

2. Intermediate Products andRaw Materials

Chiefly for consumer goods 967 1,272 1,330 1,607 1,867 1,473 23.4 25.5 22.6 18.8 16.5 16.8

Chiefly for capital goods 258 275 269 381 391 252 10.0 9.9 8.3 7.5 5.6 5.4

Subtotal 1,225 1,547 1.599 1,988 2,258 1,725 18.2 19.9 17.5 14.6 12.3 12.8

3. Capital Goods 1,175 1,165 1,327 1,550 2,129 1,777 12.5 13.5 13.6 12.1 10.7 9.3

4. Other imports

Vehicles and parts 724 787 830 1,298 1,561 1,404 32.8 35.9 37.5 38.2 37.3 35.2

of which: Passenger cars (302) (215) (205) (364) (381) (200) (59.1) (66.4) (65.7) (66.9) (68.0) (72.5)

Buses & trucks (234) (368) (396) (656) (780) (848) (22.8) (30.6) (38.5) (38.7) (40.9) (40.5)

Chassis & bodies (148) (175) (206) (254) (366) (336) (25.8) (29.0) (25.0) (23.0) (22.5) (21.8)

Tires (40) (29) (23) (24) (34) (20) (42.6) (47.5) (46.9) (41.4) (40.0) (27.8)

Fuels and lubricants 524 257 239 301 451 290 46.3 33.0 35.0 27.6 20.6 16.6

Miscellaneous 33 30 72 28 55 32 3.7 4.2 7.9 4.5 7.5 4.7

Subtotal 1,281 1,074 1,141 1,627 2,067 1,726 30.3 29.2 30.0 31.8 29.1 26.9

Total 5,345 5,147 5,504 6,769 8,279 6,959 20.8 20.7 19.4 17.5 15.4 15.0

/1 Figures are on calendar year basis.

/2 January-October 1975.

Table 3.18: IMPORTS AND EXPORTS OF CRUDE OIL AND PETROLEUM PRODUCTS

1970-1975

1970 1971 1972 1973 1974 1975

Imports c.i.f.

Crude oilVolume (mn barrels) 27.8 39.6 47.9 56.0 50.2 52.6Average price (US$/barrel) 2.05 2.33 2.41 3.15 10.33 11.48Value (mn US$) 57.1 92.4 115.8 175.0 518.6 603.8

Petroleum productsVolume 10.5 7.4 5.4 8.0 6.9 5.5Average price (US$/barrel) 5.16 5.24 6.15 6.75 11.6 14.89Value (mn US$) 54.2 38.8 33.2 54.0 79.5 81.9

Exports f.o.b.

Petroleum productsVolume (mn barrels) 0.3 1.3 3.2 4.1 0.9 0.7Average price (US$/barrel) 5.67 4.85 3.69 4.46 15.0 15.9Value (mn US$) 1.7 6.3 11.8 18.3 13.4 11.1

Net Imports

Petroleum productsVolume (mn barrels) 10.2 6.1 2.2 3.9 6.0 4.8Value (mn US$) 52.5 32.5 21.4 35.7 66.1 70.8


Table 4.1: EXTERNAL DEBT AND DEBT SERVICE OBLIGATIONS /1

('000 US$)

1970 1971 1972 1973 1974 1975

A. Private Sector

1. LoansDisbursements 51,221 64,183 144,755 111,483 286,520 282,209Repayments 29,591 55,529 60,471 12b,366 128,513 200,746Interest payments 18,173 22,962 24,524 32,667 69,580 79,355Amount disbursed and outstanding 177,336 185,990 270,274 255,391 413,398 494,861

2. Suippliers' CreditsDisbursements /2 131,116 111,886 8 7, 1 9C9 55,666 109,901 92,328Repayments /2 /3 90,544 95,847 91,443 85,894 81,102 85,52.Amount disbursed and outstanding 224,159 240,198 235,954 205,726 234,525 241,329

3. Loans and Suppliers' CreditsDisbursements 182,337 176,069 231,954 167,149 396,421 374,, 37Debt service payments 138,308 174,338 176,438 244,927 279,195 365,625Amount disbursed and outstanding 401,495 426,188 506,228 461,117 647,923 3 .,,19C

B. Public Sector

1. Central Government /5 /6Disbursements 28,723 23,120 18,709 28,960 18,407 8,306

Repayable in foreign currencies (28,723) (23,120) (18,709) (28,960) (18,407) (8,306)Repayable in baht (-) (-) (-) (-) (-) (-)

Repayments 9,022 8,396 8,384 10,017 12,08b 13,557In foreign currencies (8,916) (8,271) (8,241) (9,854) (11,903) (13,3,41In baht (106) (125) (143) (163) (183) (20)

Interest payment 7,796 9,368 10,603 12,955 13,727 14,448In foreign currencies (7,566) (9,142) (10,381) (12,738) (13,516) (15,244)In baht (230) (226) (222) (217) (211) (204)

Amount disbursed and outstanding 176,505 191,229 210,060 /4 238,563 243,819 235,660Repayable in foreign currencies (170,007) (184,856) (203,831) /4 (232,497) (237,936) (.!29,980)Repayable in baht (6,498) (6,373) (6,229) (6,066) (5,883) (5,680)

2. State Enterprises /5Disbursements 20,545 17,871 32,446 37,934 79,348 136,954

Repayable in foreign currencies (20,545) (17,871) (32,446) (37,934) (79,348) (136,954)Repayable in baht (-) (-) (-) (-) (-) (-)

Repayments 16,183 14,976 16,216 19,848 20,655 26,804In foreign currencies (14,931) (13,677) (14,837) (18,393) (19,120) (25,184)In baht (1,252) (1,299) (1,379) (1,455) (1,535) (1,620)

Interest payments 9,497 9,996 10,617 12,833 15,534 22,136In foreign currencies (8,619) (9,190) (9,885) (12,177) (14,956) (21,545)In baht (878) (806) (732) (656) (576) (491)

Amount disbursed and outstanding 167,849 170,733 /4 191,803 /4 217,018 282,125 381,635Repayable in foreign currencies (152,833) (157,016) /4 (179,465) /4 (206,135) (272,777) (378,907)Repayable in baht (15,016) (13,717) (12,338) (10,883) (9,348) (7,728)

3. Local Government /7Disbursements 2,552 3,060 - - - -Repayments - 611 1,327 1,249 1,204 1,15GInterest payments - 160 315 220 162 93Amount disbursed and outstanding 3,662 6,111 5,308 /4 3,549 2,390 1,031

4. Total Public Sector /5Disbursements 51,820 44,051 51,155 66,894 97,755 14-,260

Repayable in foreign currencies (51,820) (44,051) (51,155) (66,894) (97,755) (145,260)Repayable in baht () (") (-) (-) (-) (-)

Repayments 25,205 23,983 25,927 31,114 33,945 41,511In foreign currencies (23,847) (22,559) (24,405) (29,496) (32,227) (39,688)In baht (1,358) (1,424) (1,522) (1,618) (1,718) (1,623)

Interest payments 17,293 19,524 21,535 26,008 29,423 36,b77In foreign currencies (16,185) (18,492) (20,581) (25,135) (28,636) (35,982)In baht (1,108) (1,032) (954) (873) (787) (695)

Amount disbursed and outstanding 348,016 368,073 /4 407,171 /4 459,130 528,334 623,326Repayable in foreign currencies (326,502) (347,983) /4 (388,605) /4 (442,181) (513,103) (609,918)Repayable in baht (21,514) (20,090) (18,566) (16,949) (15,231) (13,408)

C. Total External Debt and Debt Service /8Amount disbursed and outstanding 727,997 774,171 894,833 903,298 1,161,026 1,346.108Debt service payments 178,340 215,389 221,424 299,558 340,058 441,295

Private sector (138,308) (174,338) (176,438) (244,927) (279,195) (365,625)Public sector (40,032) (41,051) (44,986) (54,631) (60,863) (75,670)

Debt service payments as percentageof exports /9 16.4 17.8 14.4 14.3 11.0 15.4

Private sector (12.7) (14.4) (11.5) (11.7) (9.0) (12.8)Public sector (3.7) (3.4) (2.9) (2.6) (2.0) (2.6)

/I Debt with a maturity of over one year./2 Net of downpayments and prepayments./3 Including interest payments.74 Reflects revaluation of lenders' currency./5 Loans and suppliers' credits./6 Net of Bank of Thailand participation in IBRD loans./7 Suppliers' credit./8 Repayable in foreign currencies./9 Goods and nonfactor services.


Table Ji.2: EXTERNAL PUBLIC DEBT OUTSTANWDING AS OF DECPMBT-E 31, 1975

Debt -epayable in foreign currency with a maturityof over one year.

In thousands of U.S. dollars

Type of Creditor Debt outstanding December 31 1975.Creditor Country Disbursed Undisbursed Total

Suppliers

Belgium 2,085 2,085India 1,068 - 1,o68Italy 2v136 - 2,136Japan 13,942 - 13,942United Kingdom 2,784 _ 2,784

Total 22,015 - 22,015

Private Banks

Austria 6,495 6,495France 14,794 174 14,968United States 24,351 - 24,351

Total 45,640 174 45,814

Loans from International Organizations

Asian Development Bank 63,495 162,736 226,231IBRD 269,753 280,644 550,397IDA 4,122 27,878 32,GC0

Total 337,370 471,258 808,628

Loans from Governments

Canada 984 - 984Denmark 2,283 1,764 4,047France 13,376 - 13,376Germany (Fed. Rep. of) 51,691 16,656 68,347Japan 100,342 178,462 278,8()4United States 41,464 9,400 50,864

Total 210,14G 206,282 416,422

Total External Public Debt 615 165 677,714 1,292,879

Source: Economic and Social Data DivisionEconomic Analysis and Projections Department.

Table 4.3: PROJECTED SERVICE PAMEIlTS ON EXRBNAL PUBLIC DEBT AS OF DECEMBER 31, 1975.

IN THOUSANDS OF U.S. DOLLARS

YEAR : 'DEBT CUTSTANDING AT : T ; A N S A C. T S O h S D U P 1 tN G p F R I a ('THiEf CLtNGrS: ECIN.NITG OF PEPIOC :

DISBURSED : !CLUDING : CCMMIT- : nIS6UPS[f- S F '4 V I C E P A Y y E N T S CANCEL- : AOJLST-ONLY ;UNOISBUPSEO: IJENTS MENTS :- - --.: --- ----- :.-------: LATICNS : MENT

: PRINCIPAL : INTERLST : TOTAL: 1)} (2) : (3) (4' : (5) (ol (7) : S) (9)

1971 321*E33 482,644 61,935 1- 1. 21t847 1sI231 40,470 3,229 15,5651972 35,5 E7 5359C3e 141,435 5d.434 23,725 1 9, W4 43,619 2,050 3,314

1973 388,p6C4 653,212 87,069 69,005 29P818 25,074 54,892 5,392 16,148

19 7 4 442,671 721,219 436,324 S5,086 32, 331 27,939 60,270 4,493 1,203

1975 512,672 1,121,922 243,13S 148S,997 38,705 34,728 73,433 2,09;8 -12,360

1976 615,ies 1,2928178

* * *t * 4 ThE FOLLCWTNG FIGUFES APe Pk3<JECTEC * * * * * *

1976 Obs,165 1,292,E7e - 175.256 42, L01 38,816 80,917 - 4

197 7 74ia,323 1,250,781 - 1 5,528 45,034 4e,,s54 91,968 - -61 9 78 E6 1 ,810 1,205,741 - 1251 o4 45,96? 53,316 9Q,279 - 6

1979 941,015 1,159,7E4 - 95,903 5 ,604 57,311 1 7, 915 - -6

19a0 S86,306 1i,13,974 - 57,976 54,259 55 ,937 113,246 - -

1981 9O, 024 1,054,915 - Z5,441 57,892 58,427 lIlC319 - 5

1982 957,57s 997, C28 - 11,105 63,150 56,373 119,223 - -2

1983 9c5,532 933^,876 - 24,192 59,160 53,107 112,Z67 - 5

19b4 870,5f9 874,721 - 4,COO 60,652 51,431 112,083 - -2

1985 813, 15 814,007 - 10 60,458 48,15o 106.614 - 21986 753,569 753,611 - 42 6J,345 44,572 104,911 - 3

1987 6S3,209 633.265 - - 62,S45 40,659 1G3 384 - 1198S 630,325 630,325 - - 63,653 36,961 100,634 - -11189 565,671 566,671 - - 65,041 33, J4 98,045 - -31990 501,627 501,627 - - 61,664 28,933 90,594 - 2

1991 439,965 434 ,965 - - 53,815 25,214 79,029 - -

1992 366,150 386,150 - - 53,339 21,8 8 75,219 - -1

1993 332,810 332,810 - - 46,373 18,640 65,013 - -

1994 286,437 266,437 - - 41,909 15,925 57,834 - I1995 244,529 244,529 - - 36,257 13,533 49,790 - 2

* THIS COL UMN SHOWS THE AMOUNT CF ARITH'E TIC IMBALANCE Ih THE AMlOUNT ()UTSTANOING INCLlJ9ING UNDIS OPSEC FROM ONE

YEAR TO THE ISEXT. THE MOST CC-MCf' CAUSES CF IMObALhCES ARE CHANGES IN EXCHANGE PATES ANU TP4NSFER C " E:TS

FROM ONE CATEGCRY TC ANOTFER IN THE TAeLE.

Source: Economic and Social Data Division,Economic Analysis and Projections Department.

Table 5.1: CONSOLIDATED PUBLIC SECTOR EXPENDITURES /L

(millions of baht)

FY70 FY71 FY72 FY73 FY74 FY75 FY76Actual Actual Actual Actual Actual Actual Estimate

Revised Revised

Current Expenditures 17,590 19,629 21,972 24,784 29,122 35,735 40,450

Defense, administration, etc. 8,836 10,041 10,444 12,513 13,739 16,159 17,524

General administration /2 1,755 2,128 2,090 2,047 2,464 2,955 2,812

Defense and police 5,241 6,369 6,930 7,340 8,840 10,102 11,706Pensions 860 580 747 764 908 1,143 1,310Miscellaneous 980 964 677 2,362 1,527 1,959 1,696

Economic services 1,968 2,063 2,031 2,275 2,770 3,332 3,880

Agriculture /3 1,012 1,046 1,003 1,103 1,399 1.671 1,990of which: Irrigation (398) (402) (392) (409) (538) (572) (688)

Industry and mining 74 76 85 92 129 182 196

Power 9 17 9 13 18 22 46Transportation and communications 727 781 799 920 1,052 1,262 1,589

of which: Highways (609) (667) (684) (817) (905) (1,078) (1,170)Other economic services 146 143 135 147 172 195 59

Social services 4,117 4,388 5,730 5,737 7,489 9,278 10,602Education 2,968 3,102 4,359 4,379 5,786 7,033 8,047Health 638 720 735 825 1,065 1,228 2,061

Other social services 511 566 636 533 638 1,017 494

Local Government /4 970 988 993 1,048 1,407 3,065 3,827TA Trust Fund /4 /5 92 72 67 54 41 28 25Non-US external grants /4 /6 235 287 287 305 332 372 283

Interest payments 1,372 1,790 2,420 2,852 3,344 3,501 4,309Internal debt 1,193 1,589 2,183 2,596 3,072 3,217 4,032External debt 179 200 237 256 272 284 277

Capital Expenditures 9,525 11,122 11,783 11,546 11,699 14,596 22,433

Agriculture /3 1,656 1,925 1,441 1,221 1,125 1,388 2,755of which: Irrigation (1,368) (1,656) (1,201) (989) (883) (1,128) (2,188)

Industry and mining 127 86 101 136 200 244 501Power 1,283 1,476 1,955 2,390 1,992 2,434 3,200

Transportation and communications 3,561 3,566 3,620 3,236 3,442 4,145 6,076of which: Highways (2,273) (2,349) (2,845) (2,336) (2,092) (2,551) (3,924)

Education 950 1,793 1,352 1,557 1,802 1,599 2,635Health 95 170 224 163 165 160 233

Water supply and sewerage 283 430 504 555 353 289 1,389

Miscellaneous 890 956 1,461 1,200 1,407 1,508 2,239of which: Land settlement (25) (21) (19) (25) (33) (33) (42)

Admin. buildings (765) (817) (883) (1,174) (1,374) (1,475) (2,197)

Local Governments /4 417 486 941 910 1,005 2,596 3,155Non-US external grants /4 /7 263 234 185 178 208 233 250

Transfers 433 313 486 430 -1 504 655

Central Government transfersto state enterprises tofinance operating deficits 433 313 486 430 -1 504 655

Other _ - - - - - -

Adjustments for double counting, etc. -13 -16 -8 -15 - - -

Total Expenditures 27,535 31,048 34,233 36,745 40,820 50,835 63,538

/1 Consolidated expenditures of the Central and Local Governments plus gross fixed capital expendituresof state enterprises, including those financed out of external loans and grants. Figures are fordisbursements during Thai fiscal years running from October I to September 30. Expendituresfinanced out of external loans and US grants are entered under the functional line headings.Local Government expenditures and expenditures financed out of non-US external grants are enteredas separate items because no functional breakdown is available.

/2 Including Justice.

/3 Including Forestry, Fishing, and Hunting.

/4 Functional breakdown not available.

/5 Expenditure financed out of the technical assistance counterpart fund account.

/6 Expenditure on services of experts and technicians, fellowships, foreign voluntary services, andother costs of a current nature.

/7 Expenditure on equipment imported into Thailand.

Note: Details do not add to total due to rounding.


Table 5.1a: PERCENTAGE DISTRIBUTION OF PUBLIC SECTOR EXPENDITURES /1


Revised Revised

Current Expenditures 63.9 63.2 64.2 67.4 71.3 70.3 S3.7

Defense, administration, etc. 32.1 32.3 30.5 34.1 33.7 31.8 27.6General administration /2 6.4 6.8 6.1 5.6 6.0 5.8 4.4Defense and police 19.5 20.5 20.2 20.0 21.7 19.9 18.4Petusions 3.1 1.9 2.2 2.1 2.2 2.2 2.1Miscellaneous 3.6 3.1 2.0 6.4 3.8 3.9 2.8

Economic services 7.1 6.6 5.9 6.2 6.8 6.6 6.1Agriculture /3 3.7 3.4 2.9 3.0 3.4 3.3 3.1

of which: lrrigation (1.4) (1.3) (1.1) (1.1) (1.3) (1.1) (1.1)Industry and mining 0.3 0.2 0.2 0.3 0.3 0.4 0.3Power - 0.1 - - 0.1 - 0.1

Transportation and communications 2.6 2.5 2.4 2.5 2.6 2.5 2.5of which: Highways (2.2) (2.1) (2.0) (2.2) (2.2) (2.l) (1.8)

Other economic services 0.5 0.4 0.4 0.4 0.4 0.4 C..

Social services 15.0 14.1 16.8 15.6 18.3 18.2 16.7Education 10.8 10.0 12.7 11.9 14.2 13.8 12.7Health 2.3 2.3 2.2 2.2 2.6 2.4 3.2Other social services 1.9 1.8 1.9 1.5 1.5 2.0 0.8

Local Governments /4 3.5 3.3 2.9 2.9 3.4 6.o 6.0

TA Trust Fund /4 /5 0.3 0.2 0.2 0.1 0.1 0.1

Non-US external grants /4 /6 0.9 0.9 0.8 0.8 0.8 0.7 0.5

Interest payments 5.0 5.8 7.1 7.7 8.2 6.9 6.8Internal debt 4.3 5.2 6.4 7.0 7.5 6.3 6.3External debt 0.7 0.6 0.7 0.7 0.7 0.6 0.4

Capital Expenditures 34.6 35.8 34.4 31.4 28.7 28.7 35.3Agriculture /3 6.0 6.2 4.2 3.3 2.8 2.7 4.3

of which: Irrigation (5.0) (5.3) (3.5) (2.7) (2.2) (2.2) (3.4)Industry and mining 0.5 0.3 0.3 0.4 0.5 0.5 0.8Power 4.7 4.6 5.7 6.5 4.9 4.8 5.0Transportation and communications 12.9 11.5 10.6 8.+ 8.4 8.2 9.6

of which: Highways (8.2) (7.6) (8.3) (6.4) (5.1) (5.0) (6.2)Education 3.5 5.8 3.9 4.2 4.4 3.1 4.1

Health 0.3 0.5 0.7 0.4 0.4 0.3 0.4Water supply and sewerage 1.0 1.4 1.5 1.5 0.9 0.6 2.2Miscellaneous 3.2 3.1 4.3 3.3 3.4 3.0 3.5

of which: Land settlement (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1)Admin. buildings, etc. (2.8) (2.6) (2.6) (3.2) (3.4) (2.9) (3.5)

Local Government /4 1.5 1.6 2.7 2.5 2.5 5.1 5.0Non-US external grants /4 /7 1.0 0.8 0.5 0.5 0.5 0.4 0.4

Transfers 1.6 1.0 1.4 1.0 - 1.0 1.0

Central Government transfers to

state enterprises to finance

operating deficits 1.6 1.0 1.4 1.0 - 1.0 1.0Other - - - - - - -

Total Expenditures 100.0 100.0 100.0 100.0 100.0 100.0 100.0

/1 Consolidated expenditures of the Central and Local Governments plus gross fixed capital expenditures

of state enterprises, including those financed out of external loans and grants. Figures are fordisbursements during Thai fiscal years running from October 1 to September 30. Expendituresfinanced out of external loans and US grants are entered under the functional line headings.Local Government expenditures and expenditures financed out of non-US external grants are entered

as separate items because no functional breakdown is available.

/2 Including Justice.

/3 Including Forestry, Fishing, and Hunting.

/4 Functional breakdown not available.

/5 Expenditure financed out of the technical assistance counterpart fund account.

/6 Expenditure on services of experts and technicians, fellowships, foreign voluntary services, andother costs of a current nature.

/7 Expenditure on equipment imported into Thailand.

Note: Details do not add to total due to rounding.


Table 5.2: FINANCING OF CONSOLIDATED PUBLIC SECTOR EXPENDITURES /1

(millions of baht)


Revised Revised Revised

Total Expenditure 27,535 31,048 34,233 36,745 40,820 50,835 63,538

Revenues

Central Government 19,744 20,263 22,036 26,192 38,688 39,034 43,622

Tax revenue 16,969 17,274 19,059 22,721 35,240 34,410 38,608Nontax revenue 1,753 1,824 2,085 2,626 2,685 3,837 4,238Foreign grants 1,022 1,165 892 845 763 787 776

Local government revenue 1,159 1,339 1,191 1,459 2,258 2,911 2,866

Extra budgetary receipts 773 1,559 654 1,225 1,583 1,532 -1,024

State enterprise self-financing 1,994 1,849 2,028 1,972 2,141 1,778 1,086

Total Revenues 23,670 25,010 25,909 30,848 44,670 45,255 46,550

Cash Deficit -3,865 -6,038 -8,324 -5,899 +3,850 -5,580 -16,988

Financing by:

External borrowing

Drawings 623 657 975 1,494 1,574 2,037 5,288Repayments -634 -469 -461 -507 -529 -678 -961Net external borrowing -11 188 514 987 1,045 1,359 4,327

Domestic financing (net)

Borrowing from public 81 -8 138 668 108 408 287

Borrowing from banking system 591 2,886 6,638 4,794 2,224 3,563 5,837Government savings bank 435 766 1,454 2,212 1,919 512 1,918

Commercial banks 156 2,120 5,184 2,582 295 3,051 3,919

Monetary authorities and currency

issue 3,204 2,956 1,034 -550 -7,227 250 6,537Bank of Thailand 3,405 2,167 174 1,525 -838 639 3,607Exchange Equalization Fund 15 191 244 -370 -119 137 n.a.

Counterpart Fund -120 51 -94 -17 27 28 16Coin issue 55 138 17 121 149 100 54Net use of cash balances 170 1,101 641 -1,598 -5,366 431 3,750Other -321 -692 52 -211 -1,080 -1,085 -890

/t Figures are for receipts and disbursements during Thai fiscal years running from October 1 to

September 30.


Table 5.3: CENTRAL GOVERNMENT EXPENDITURES /1

(millions of baht)

FY70 FY71 FY72 FY73 FY74 FY75 FY76Actual Actulal Actual Actual Actual Actual Estimate

Revised Revised

Total Expenditure 24,791 28,449 30,325 32,177 35,658 44,320 54.155

Current Expenditure 16,620 18,641 20,979 23,735 27,715 32,670 36,623

Defense, administration, etc. 8,836 10,041 10,445 12,512 13,739 16,159 17,524Defense and police 5,530 6,369 6,931 7,340 8,840 10,102 11,706General administration /2 1,755 2,128 2,090 2,047 2,464 2,955 2,812Pensions 571 580 747 764 908 1,143 1,310Miscellaneous 980 984 677 2,361 1,527 1,959 1,696

Economic services 1,968 2,064 2,030 2,276 2,770 3,332 3,880Agriculture /5 1,012 1,046 1,003 1.104 1,395 1,671 1,990

of which: Irrigation (398) (402) (392) (409) (538) (572) (688)Industry and mining 74 76 85 92 129 182 196Power 9 17 9 13 18 22 46Communications and transportation 727 780 798 920 1,052 1,262 1,589

of which: Highways (609) (667) (684) (817) (905) (1,078) (1,170)Other economic services 146 144 135 147 172 195 59

Social services 4,117 4,387 5,731 5,737 7,489 9,277 10,602Education 2,968 3,102 4,359 4,379 5,786 7,033 8,047Health 638 720 736 825 1,065 1,227 2,061Other social services 511 565 636 533 638 1,017 494

TA Trust Fund (Counterpart Fund Account) 92 72 67 53 41 29 25

Expenditures financed by non-USexternal grants /3 235 287 287 305 332 372 283

Interest payments /6 1,372 1,790 2,419 2,852 3,344 3,501 4,309Internal debt 1,193 1,590 2,182 2,596 3,072 3,217 4,032External debt 179 200 237 256 272 284 277

Capital Expenditures 6,464 7,906 7,871 6,893 6,923 7,521 11,918

Agriculture /5 1,623 1,888 1,425 1,201 1,103 1,347 2,716of which: Irrigation (1,368) (1,656) (1,201) (989) (883) (1,128) (2,077)

Industry and mining 24 15 16 18 22 28 108Power 125 83 57 55 8 7 4Communications and transportation 2,444 2,606 2,987 2,464 2,224 2,750 4,129

of which: Highways (2,274) (2,439) (2,845) (2,335) (2,092) (2,551) (3,924)Education 950 1,793 1,353 1,557 1,802 1,599 2,635Health 95 170 224 163 165 160 233Water supply and sewerage 207 302 277 197 175 160 454Miscellaneous 733 815 1,347 1,060 1,216 1,237 1,389

of which: Land resettlement (25) (21) (19) (25) (33) (33) (42)Admin. buildings, etc. (609) (674) (770) (1,034) (1,183) (1,204) (1,347)

Expenditures financed by non-USexternal grants /4 264 234 185 178 208 233 250

Transfers 1,720 1,918 1,483 1,564 1.020 4129 5,614

To Local Governments 593 839 545 661 588 3,110 4,809To state enterprises 1,127 1,079 938 903 432 1,019 805others - - - -

Adjustments for double counting -13 -16 -8 -5

/I This table presents the accounts of the Central Government inclusive of expenditure financed out ofexternal loans and grants. Expenditures financed out of external loans and US grants are includedunder the respective headings. The breakdown of expenditures financed out of non-US grants is notavailable. Figures are for disbursements made during Thai fiscal years ending September 30.

/2 Includes Justice.

/3 Expenditure on hiring services of experts and technicians, fellowships, foreign voluntary servicesand other costs of current nature.

/4 Expenditures on equipment imported to Thailand.

/5 Includes Forestry, Fishing and Hunting.

/6 Figures do not include principal repayments of the following amounts:

FY70 FY71 FY72 FY73 FY74 FY75 FY76

Principal RepaymentInternal Debt 40 516 860 701 1,657 2,384 2,991External Debt 266 181 172 180 232 262 274


Table 5.3a: PERCENTAGE DISTRIBUTION OF CENTRAL GOVERNMENT EXPENDITURES /1

FY70 FY71 FY72 FY73 FY74 FY75 FY76Actual Actual Actual Actual Actual Acttual Estimate

Revised

Total Expenditure 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Current Expenditure 67.1 65.4 69.1 73.7 77.7 73.7 67.6

Defense, administration, etc. 35.6 35.2 34.4 38.8 38.5 36.5 32.3Defense and police 22.3 22.4 22.8 22.8 24.8 22.8 21.6

General administration /2 7.1 7.4 6.9 6.3 6.9 6.7 5.2Pension 2.3 2.0 2.5 2.4 2.5 2.6 2.4Miscellaneous 3.9 3.4 2.2 7 3 4.3 4.4 3.1

Economic services 7.9 7.3 6.7 7.0 7.8 7.5 7.2Agriculture /5 4.0 3.7 3.3 3.4 3.9 3.8 3.7

of which: Irrigation (1.6) (1.4) (1.3) (1.3) (1.5) (1.3) (1.3)Industry and mining 0.3 0-3 0.3 0.3 0.4 0.4 0.4Power - 0.1 - - - - 0.1Communications and transportation 3.0 2.7 2.6 2.9 3.0 2.9 2.9

of which: Highways (2.4) (2.4) (2.3) (2.5) (2.5) (2.4) (2.1)Other economic services o.6 0.5 0.5 0.4 0.5 0.4 0.1

Social services 16.7 15.4 18.9 17.8 21.0 20.9 19.6Education 12.0 10.9 14.4 13.6 16.2 15.9 14.911ealth 2.6 2.5 2.4 2.6 3.0 2.7 3.8Other social services 2.1 2.0 2.1 1.6 1.8 2.3 0.9

TA Trust Fund (CounterpartFund Account) 0.4 0.2 0.2 0.2 0.1 0.1 -

Espenditures financed by non-USexternal grants /3 0.9 1.0 0.9 1.0 0.9 0.8 0.5

Interest payments /6 5.6 6.3 8.0 8.9 9.4 7.9 8.0Internal debt 4.8 5.6 7.2 8.1 8.6 7.3 7.5External debt 0.8 0.7 0.8 0.8 0.8 0.6 0.5

Capital Expenditures 26.0 27.8 26.0 21.4 19.4 17.0 22.0

Agriculture /5 6.5 6.6 4.7 3.7 3.1 3.0 5.0of which: Irrigation (5.5) (5.8) (4.0) (3.1) (2.5) (2.5) (3.8)

Industry and mining 0.1 0.1 0.1 0.1 0.1 0.1 0.2Power 0.5 0.3 0.2 0.2 - - -

Communications and transportation 9.9 9.1 9.9 7.7 6.2 6.2 7.6of which: Highways (9.1) (8.6) (9.4) (7.3) (5.9) (5.8) (7.2)

Education 3.8 6.3 4.5 4.8 5.0 3.6 4.9

Health 0.4 0.6 0.7 0.5 0.5 0.4 0.4

Water supply and sewerage 0.8 1.1 0.9 0.6 0.5 0.4 0.8Miscellaneous 2.9 2.9 4.4 3.3 3.4 2.8 2.6

of which: Land resettlement (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1)Admin. buildings, etc.(2.4) (2.4) (2.5) (3.2) (3.3) (2.7) (2.5)

ExpendiLures financed by non-USexternal grants /4 1.1 0.8 0.6 (.5 0.6 0.5 0.5

Transfers 6.9 6.8 4.9 4.9 2.9 9.3 10.4

To Local Governments 2.4 3.0 1.8 2.1 1.7 7.0 8.9To State enterprises 4.5 3.8 3.1 2.8 1.2 2.3 1.5Others - - - - - - -

/1 This table presents the accounts of the Central Government inclusive of expendituresfinanced out of external loans and grants. Expenditures financed out of externalloans and US grants are included under the respective headings. The breakdown of

expenditures financed out of non-US grants is not available. Figures are for dis-

bursements made during Thai fiscal years ending September 30.

/2 Includes Justice.

/3 Expenditure on hiring services of experts and technicians, fellowships, foreign

voluntary services and other costs of current nature.

/4 Expenditures on equipment imported to Thailand.

/5 Includes Forestry, Fishing and Hunting.

/6 Figures do not include principal repayments of the following amounts:


Principal RepaymentInternal Debt 40 516 860 701 1,657 2,384 2,991

External Debt 266 181 172 180 232 262 274


Table 5.3b: CENTRAL GOVERNMENT EXPENDITURES - CLOSED ACCOUNT BASIS /1

(millions of baht)

FY70 FY71 FY72 FY73 FY74 /2 FY75 /3 FY76 FY77Actual Actual Actual Actual Actual Actual Bud. Est. Bud. Est.

Preliminary

By Function

Economic services 7,634 7,259 6,408 6,541 6,433 6,061 11,981 14,427Education 4,509 5,022 5,342 6,003 7,032 7,797 12,892 14,731Defense 4,545 5,345 5,522 6,437 6,955 6,091 10,570 13,095Health & community services 3,272 3,245 3,337 3,784 2,916 3,188 5,046 8,013Administration 1,079 1,136 1,195 1,142 2,442 2,492 3,440 3,913Internal security 1,726 1,796 1,952 2,207 2,549 2,504 3,382 3,958Debt services, incl. repayment 1,006 2,901 3,330 3,811 5,233 6,147 7,619 6,417Others 1,987 1,213 1,293 1,040 3,076 5,482 7,721 4,237

Total Expenditures 25,748 27,917 28,379 30,965 36,636 39,762 62,650 68,790

Major Categories

Personal Services 7,317 8,028 8,738 9,588 12,734 14,957 14,224 16,247Salaries 5,710 6,300 6,890 7,682 10,475 12,262 11,040 12,611Wages, permanent 599 738 804 910 1,287 1,531 1,529 1,879Wages, temporary 551 470 450 458 492 572 727 652Remuneration 457 520 594 538 480 592 928 1,105

Other Goods and Services 14,942 15,370 14,374 14,821 15,130 14,817 40,986 46,728Services other than personal 1,415 1,632 1,795 2,013 2,495 2,446 1,865 2,467Materials and supplies 1,956 2,164 2,208 2,421 2,548 2,083 2,755 3,188Equipment 1,326 1,292 1,318 1,902 1,371 510 1,634 2,017Land and buildings 6,817 6,557 5,533 5,946 5,673 3,380 11,957 12,912Subsidies /4 1,128 1,423 1,309 1,360 1,335 3,949 6,879 3,999Other expenditures 2,300 2,302 2,211 1,179 1,708 2,449 15,896 /5 22,146 /6

Central Appropriation 3,489 4,519 5,627 6,556 8,772 9,988 7,440 5,815

Debt repayment 179 697 1,033 881 1,888 2,646 3,265 1,426Other central appropriations 3,310 3,822 4,234 5,675 6,884 7,342 4,175 4,389

Total Expenditures 25,748 27,917 28,379 30,965 36,636 39,762 62,650 68,790

/1 Thai fiscal years run from October 1 to September 30. Government agencies are allowed to expend fundsappropriated at any time under a given fiscal year's budget from the start of the fiscal year until sixmonths after the fiscal year ends. Hence, disbursements in the first six months of a fiscal year may bemade against either that year's or the previous year's appropriations. Closed account figures show thetotal amount appropriated for or charged to the budget for a given fiscal year, not the amount actually

disbursed in that fiscal year. Hence, the closed account figures are not comparable to the disbursementfigures given elsewhere in the public finance tables.

/2 Actual figures of 12 months plus carry-over up to September 30, 1975.

/3 Actual figures of 12 months only.

/4 Including transfers to tambon councils of B 2.4 billion in FY75 and B 3.5 billion in FY76, and to changwatsof B 1.2 billion in FY77.

/5 Including expenditure on defense of B 9,823 million.

/6 Including expenditure on defense of B 12,335 million.


Table 5.4: CENTRAL GOVERNMENT REVENUE /1


Revised Revised

Total Revenue 18,721 19,097 21,144 25,346 37,925 38,248 43,366

Tax Revenue 16,968 17,274 18,872 22,721 35,240 34,410 38,608Taxes on income 2,169 2,363 2,550 3,168 4,729 6,102 7,500

Personal 1,272 1,407 1,556 1,700 2,045 2,593 3,500Corporate 897 956 994 1,468 2,684 3,509 4,000

Taxes on consumption 6,357 7,217 7,839 9,570 13,593 14,761 16,800Business taxes 3,577 3,927 4,307 5,097 7,288 7,770 8,800Excise taxes 2,686 3,192 3,413 4,341 6,162 6,810 7,750

Beverages (647) (716) (74) (1,455) (1,767) (2,262) (2,669)Petroleum products (1,066) (1,399) (1,382) (1,625) (2,496) (2,258) (2,207)Tobacco and snuff (896) (1,003) (1,082) (1,180) (1,813) (2,200) (2,779)Other (77) (74) (75) (81) (86) (90) (95)

Entertainment tax 94 98 119 132 143 181 250

Profits of fiscal monopolies 672 748 864 993 1,020 1,370 1,719Tobacco monopoly 500 579 650 771 795 735 931State lottery 170 168 211 220 222 628 779Other 2 1 3 2 3 7 9

Taxes on international trade 6,440 5,616 6,026 7,187 12,936 10,375 10,665Import dtuties 5,393 5,185 5,617 6,366 8,563 8,270 9,600

Petroleum products 544 275 286 280 529 374 n.a.Foodstuffs 380 399 352 390 358 394 n.a.Machinery, equipment and vehicles 1,614 1,618 1,830 2,356 3,390 3,488 n.a.

of which: Passenger Cars (326) (204) (221) (279) (441) (259) (n.a.)Textiles, yarn, thread 634 454 394 381 506 443 n.a.Other 2,221 2,439 2,755 2,959 3,780 3,571 9,600

Export taxes 1,047 431 409 821 4,373 2,105 1,065Rice premium 654 262 163 276 2,752 795 55Rice dtuty 135 117 192 151 583 514 n.a.Rubber 195 22 15 320 2 4 n.a.Other 63 30 39 74 1,036 792 1,010

Other taxes 1,330 1,330 1,593 1,803 2,962 1,802 1,924Taxes on properties and property transfers 564 557 744 890 582 617 670

Automobile registration /2 (239) (262) (416) (468) (6) (-) (-)

Transfer to immovable properties (201) (172) (188) (271) (407) (433) (470)Stamp duty (124) (122) (140) (151) (169) (184) (200)Other ()(1) (-(-() ()()

Royalties 398 411 433 445 798 740 746Other 368 362 416 468 1,582 445 508

Non-Tax Revenue 1,753 1,823 2,272 2,625 2,685 3,838 4.758Contribution of Bank of Thailand 300 450 435 450 523 997 1,230Contribution of State enterprises /3 313 338 387 442 439 839 889Other nontax revenue 1,140 1,035 1,450 1,733 1,723 2,oo2 2,639

of which: Extraordinary revenue (12) (9) (5) (3) (5) (19) (-524)

/1 Collections during the fiscal years ending September 30.

/2 Prior to FY74 these taxes were collected by the Central Government, with part of the proceeds earmarked for transfe:to local governments. In FY74 these taxes became a Local Government tax.

/3 Excludes the negative net contribution of public utilities. (Government expenditures on social services have beenincreased correspondingly.)


Table 5.5: FINANCING OF CENTRAL GOVERNMENT EXPENDITURES

(millions of baht)


Actual Actual Actual Actual Actual Actual Estimate

Revised Revised

Total Expenditure 24,791 28,449 30,325 32,177 35,658 44,320 54,155

Total Revenues 20,561 21,883 22,544 27,367 39,624 39,841 42,402

Tax revenue 16,969 17,274 19,059 22,721 35,240 34,410 38,608

Nontax revenue 1,753 1,824 2,085 2,626 2,685 3,837 4,238

Extra budgetary receipts 817 1,570 508 1,175 936 807 -1,220

Foreign grants 1,022 1,165 892 845 763 787 776

Cash Deficit -4,320 -6,616 -7,781 -4,810 +3,966 -4,479 -11,753

Financed by:External borrowingDrawings 300 272 195 433 311 161 714

Repayment -266 -181 -172 -193 -201 -214 454

Net external borrowing 34 91 23 240 110 -53 260

Domestic financing (net):

Borrowing from public 80 -10 138 365 69 386 175

Borrowing from banking system 591 2,886 6,638 4,545 2,001 2,811 3,891

Government savings bank 435 766 1,454 2,073 1,929 446 1,700

Commercial banks 156 2,120 5,184 2,472 72 2,365 2,191

Monetary authorities and currency issues 3,525 3,649 982 -340 -6,146 1,335 7,427

Bank of Thailand 3,405 2,167 174 1,525 -837 639 3,607

Exchange equalization fund 15 191 244 -370 -119 -137 n.a.

Counterpart fund -120 51 -94 -18 27 28 16

Coin issue 55 138 17 121 149 100 54

Net use of cash balances 170 1,102 641 -1,598 -5,366 431 3,750

Total Domestic Financing (net) 4,196 6,525 7,758 4,570 -4,076 4,532 11,753


Table 5.7: LOCAL GOVERNMENT ACCOUNTS

(millions of baht)

FY70 FY71 FY72 FY73 FY74 FY75 FY76Actual Actual Actual Actual Actual Preli- Estimate

minary

Taxes and other revenue 1,159 1,338 1,191 1,459 2,259 2,911 2,866

Current expenditure 970 988 993 1,048 1,407 1,854 2,077

Current surplus 189 350 198 411 850 1,057 789

Capital expenditure 417 486 941 910 1,006 1,399 1,405

Deficit 228 -136 -743 -499 -154 -342 -616

Financed by:

Transfers from Central Government 549 827 691 711 1,234 1,428 1,505

Grants and loans /2 (-) (554) (524) (532) (592) (642) (710)Automobile registration fee /3 (226) (274) (167) (179) (642) (786) (795)

Loans and reserve funds /4 122 91 344 106 140 114 32

Cash balances -443 -783 -292 -318 -1,220 -1,200 -921

/1 Thai fiscal years ending September 30.

/2 Grants and Loans for financing fixed capital expenditure prior to FY74.

/3 Automobile registration fees were collected by the Central Government and

part of the proceeds were earmarked for transfer to Local Governments. InFY74 the entire fees were transferred to Local Governments.

/4 Reserve funds held at Ministry of Interior against which Local Governments mayborrow to finance approved projects.

Sources: Department of Local Administration (Ministry of Interior)

and Bank of Thailand.

Table 6.1: EVOLUTION OF MONETARY SITUATION - FISCAL YEARS /1

(millions of baht)

1970 1971 1972 1973 1974 1975

Monetary Position at Year's End

AssetsNet claims on Central Government 10,594 16,725 23,957 28,167 23,285 27,473Claims on private sector 26,580 29,865 32,661 43,875 62,607 75,835

Domestic credit 37,174 46,617 56,618 72,042 85,892 103,308

Net foreign assets /2 16,956 15,759 18,362 22,950 28,741 30,976

LiabilitiesMoney and quasi-money 43,952 50,691 61,223 77,113 93,004 108,873Capital accounts 10,470 12,151 13,693 16,773 20,550 25,758

of which: Bank of Thailand (7,050) (8,043) (9,026) (10,992) (12,634) (16,176)Counterpart funds 329 265 333 354 337 310

Savings Bonds and Premium Bonds /3 1,217 1,286 1,381 1,552 1,540 1,526Other (net) /4 -1,838 -2,017 -1,650 -800 -798 -2,183

Changes During Year

AssetsNet claims on Central Government 3,976 6,158 7,205 4,210 -4,882 4,188Claims on private sector 4,217 3,285 2,796 11,214 18,732 13,228Domestic credit 8,193 9,443 10,001 15,424 13,850 17,416

Net foreign assets /2 -2,003 -1,197 2,603 4,588 5,791 2,235

LiabilitiesMoney and quasi-money 4,692 6,739 10,532 15,890 15,891 15,869Capital accounts 1,658 1,681 1,542 3,086 3,777 5,208

of which: Bank of Thailand (1,068) (993) (983) (1,966) (1,642) (3,542)Other items (net) -160 -174 530 1,042 -27 -1,426

/1 Figures are for Thai fiscal years ending September 30. The term Central Government as usedhere includes the deposits and liabilities of some State enterprises (primarily publicutilities and quasi-government agencies) at the Bank of Thailand. Deposits and liabilitiesof these enterprises at commercial banks are treated as part of the private sector, as areall the deposits and liabilities (i.e. both those at the Bank of Thailand and at the com-mercial banks) of the other State enterprises. Because of this method of classification,the statistics given here differ somewhat from those given for Central Government and publicsector borrowing in Tables 5.5 and 5.2.

/2 Beginning in 1971 Special Drawing Rights are included.

/3 These bonds are held by private individuals and are therefore liabilities of the GovernmentSavings Bank to the private (nonbank) sector.

/4 Includes fixed assets and immovable properties of commerical banks, miscellaneous nonmonetaryassets and liabilities of commercial banks, and adjustments for differences between exchangecontrol and bank reporting figures.


Table 6.2: EVOLUTION OF MONETARY SITUATION - CALENDAR YEARS /1

(millions of baht)

1970 1971 1972 1973 1974 1975

Monetary Position at Year's End

Claims on Central Government 21,206 26,423 35,768 40,187 30,238 41,285Less: Deposits of Central Government 8,183 6,767 8,764 10,627 13,584 10,490Net claims on Central Government 13,003 19,656 27,004 29,561 25,654 30,795

Claims on private sector 27,842 30,816 34,578 49,406 66,211 81,448Domestic credit 40,865 50,472 61,582 78,967 91,865 112,243Net foreign assets /2 15,916 15,581 19,950 21,644 29,788 28,400

Money 19,477 21,446 24,831 29,936 33,208 34,983Quasi-money 26,723 32,249 41,755 51,976 65,404 78,634Monetary resources 46,170 53,695 66,586 81,912 98,612 113,617Capital accounts 10,955 12,539 14,273 17,113 21,651 27,245

of which: Bank of Thailand (7,359) (8,261) (9,417) (11,088) (13,325) (17,028)Counterpart funds 295 216 345 384 340 298Savings Bonds and Premium Bonds /3 1,231 1,308 1,406 1,551 1,530 1,515Other (net) /4 -1,871 -1,706 -1,078 -349 -480 -2,032

Changes During Year

Net claims on Central Government +4,550 +6,633 + 7,348 + 2,557 - 3,907 + 5,141Claims on private sector +4,920 +2,974 + 3,762 +14,828 +16,805 +15,207Domestic credit +9,470 +9,607 +11,110 +17,385 +12,898 +20,378Net foreign assets /2 -2,660 - 335 + 4,369 + 1,694 + 8,144 - 1,388

Money +1,459 +1,998 + 3,385 + 5,106 + 3,272 + 1,775Quasi-money +3,837 +5,526 + 9,506 +10,220 +13,428 +13,230Monetary resources +5,295 +7,525 +12,891 +15,326 +16,700 +15,005Capital accounts +1,817 +1,584 + 1,734 + 2,840 + 4,538 + 5,594

of which: Bank of Thailand (+1,248) (+ 901) (+ 1,156) (+ 1,671) (+ 2,237) (+ 3,703)Other items (net) /2 - 302 + 163 + 854 + 914 - 196 - 1,609

/1 Figures are for Thai fiscal years ending September 30. The term Central Government as usedhere includes the deposits and liabilities of some State enterprise (primarily publicutilities and quasi-government agencies) at the Bank of Thailand. Deposits and liabilitiesof these enterprises at commercial banks are treated as part of the private sector, as areall the deposits and liabilities (i.e. both those at the Bank of Thailand and at the com-mercial banks) of the other State enterprises. Because of this method of classification,the statistics given here differ somewhat from those given for Central Government and publicsector borrowing in Tables 5.5 and 5.2.


/3 These bonds are held by private individuals and are therefore liabilities of the GovernmentSavings Bank to the private (nonbank) sector.

4 Includes fixed assets and immovable properties of commerical banks, miscellaneous nonmonetaryassets and liabilities of commercial banks, and adjustments for differences between exchangecontrol and bank reporting figures.


Table 6.3: EVOLUTION OF MONETARY SIIUATIOS - QUARTERLY /1

(millions of baht)

1973 1974 1975 1976Mar. June Sept. Dec. Mar. Jane Sept. Dec. Miar. Jane Sept. Dec. Mar. Jsmoo

Monetary Position at End of Quarter

Claims on Central Government 36,431 37,719 39,346 40,188 40,599 39,522 40,235 39,238 40,733 40,967 44,184 41,285 42,176 44,003Less: Deposit, of Cencral Government 9,919 11,259 11,180 IU,627 14,435 17,561 16,95o 13,584 16,076 16,895 16,711 10,490 11,332 11,326Net claims on Central Gover-nent 26,512 26,460 28,166 29,561 26,164 21,961 23,285 25,654 24,657 24,072 27,473 30,795 30,844 32,677

Claims on private sector 37,532 39,678 43,875 49,406 52,104 56,344 62,607 66,211 68,098 71,223 75,835 81,448 87,136 88,526Domestic credit 64,044 66,138 72,041 78,967 78,268 78,305 95,892 91,865 92,755 95,295 103,308 112,243 117,980 1ZI,2U3Net foreign assets /2 22,289 23,948 22,950 21,644 28,858 30,449 28,741 29,788 35,285 34,592 30,976 28,400 28,960 28,725

Money 26,229 26,298 26,789 29,937 32,442 29,911 30,075 33,208 34,441 32,492 32,902 34,983 37,895 35,834Quass-money 44,547 47,783 50,324 51,976 55,397 59,101 62,929 65,405 69,158 72,335 75,872 78,634 82,273 87,068Monetary resources 70,846 74,081 77,113 81,912 87,839 89,012 93,004 98,613 103,599 104,827 108,874 113,617 120,168 122,902Capital accounts 15,327 15,687 16,773 17,113 18,151 19,621 20,550 21,651 24,277 25,157 25,758 27,245 27,900 28,723

of which: Bank of Thailand (9,837) (10,132) (10,992) (11,088) (11,751) (12,383) (12,634) (13,325)(15,548) (16,337) (16,176) (17,028)(17,283)(17,879)Counterpart funds 289 337 354 384 401 374 337 340 336 301 310 298 295 287Savings Bonds and Premium Bonds 1,456 1,506 1,552 1,551 1,563 1,556 1,540 1,530 1,543 1,533 1,526 1,515 1,526 1,521Other (set) -1,585 -1,537 - 800 - 349 - 828 -1,809 - 798 - 481 -1,715 -1,931 -2,184 -2,032 -2,949 -3,505

Changes During Quarter

Claims on Central Covernment + 663 +1,288 +1,627 + 841 + 411 -1,078 + 713 - 997 +1,495 + 234 +3,217 -2,899 + 891 +1,827Less: Deposits of Central Government +1,155 +1,340 - 79 - 553 +3,808 +3,125 - 611 -3,366 +2,492 + 819 - 184 -6,221 + 842 - 6Net claims on Central Government - 492 - 52 +1,707 +1,394 -3,397 -4,203 +1,324 +2,369 - 997 - 585 +3,401 +3,322 + 49 +1,833

Clama on private nectar +2,955 +2,146 +4,197 +5,531 t2,698 +4,240 +6,263 +3,604 +1,887 +3,125 +4,612 +5,613 +5,688 +1,390Domestic credit +2,463 +2,094 +5,904 +6,925 - 699 + 37 +7,587 +5,973 + 890 +2,540 +8,013 +8,935 +5,737 +3,223Net foreign assets /2 +2,399 +1,658 - 997 -1,306 +7,214 +1,592 -1,708 +1,047 +5,497 - 693 -3,616 -2,576 + 560 - 235

Money +1,468 - I + 491 +3,148 +2,505 -2,531 + 164 +3,133 +1,233 -1,949 + 410 +2,081 +2,912 -2,061Quasi-money +2,792 +3,23b +2,541 +1,652 +3,421 +3,704 +3,828 +2,476 +3,753 +3,177 +3,637 +2,662 +3,639 +4,795Monetary reso urca +4,260 +3,235 +3,031 +4,799 +5,927 +1,173 +3,992 +5,609 +4,986 +1,228 +4,047 +4,743 +6,551 +2,734Capital accounts +1,054 + 361 +1,086 + 339 +1,039 +1,470 + 929 +1,101 +2,626 + 880 + 601 +1,487 + 655 + 823

of which. Bank of Thailand (+ 421) (+ 295) (+ 860) (+ 95) (+ 664) (+ 632) (+ 251) (+ 691) (+2,223) (+ 789) (- 161) (+ 852) (+ 255) (+ 596)Other items (net) - 512 + 156 + 789 + 480 - 451 -1,014 + 958 + 310 -1,225 - 261 - 251 + 129 - 909 - 569

/I Fnguren are for Thai fiscal years ending September 30. The term Central Govermnent as used here includes the deposits and liabilities of so-r St.ateenterprises (primarily public utilities and quasi-governaent agencies) at the Bank of Thailand. Deposits and liabilities of these enterprises atcommercial banks are treated as part of the private sector, as are all the deposits and liabilities (i.e. both those at the Bank of Th-aland and atthe com-ercial banks) of the other State enterprises. Because of this method of classification, the statistics given here differ soAewhat iron thosegives for CentraL Goverment and public sector borrowing in Tables 5.5 and 5.2.



Table 6.4: SELECTED DATA ON COMMERCIAL BANKS

(millions of baht)

1970 1971 1972 1973 1974 1975 1976December December December December March June September December March June September December March June

Total assets - total liabilities 41,187 48,824 60,069 78,363 83,817 86,553 92,330 98,752 102,653 105,437 109,395 117,878 123,918 127,090Total deposits /1 31,885 37,759 47,746 58,372 61,653 65,119 68,728 73,484 77,721 80,385 83,422 86,559 91,112 95,443

Time deposits 20,931 25,771 33,293 40,740 43,257 46,677 49,890 52,063 55.840 48,516 61,757 63,893 66,894 70,746As percent of total deposits 65.6 62.3 69.7 69.8 86.4 71.7 72.6 70.8 71.8 72.8 74.0 73.8 73.4 74.1

Borrowing from BOT 787 1,296 1,263 2,882 2,483 2,308 3,177 3,985 2,623 3,922 3,714 7,297 6,837 6,108As percent of total liabilities 1.9 2.7 2.1 3.7 3.0 2.7 3.4 4.0 2.6 3.7 3.4 6.2 5.5 4.8

Borrowing from abroad 3,053 3,284 3,486 6,899 8,519 7,231 7,104 7,574 8,551 7,265 7,245 8,052 9,160 9,107As percent of total liabilities 7.4 6.7 5.8 8.8 10.2 8.4 7.7 7.7 8.3 6.9 6.6 6.8 7.4 7.2

Cash and balances with BOT 2,466 2,896 3,456 3,682 4,354 4,227 4,369 5,314 6,776 5,879 5,204 6,553 5,607 6,425As percent of total deposits 7.7 7.7 7.2 6.3 7.1 6.5 6.4 7.2 8.7 7.3 6.2 7.6 6.2 6.7

Government securities 5,897 8,271 13,792 14,897 15,530 15,139 15,409 15,772 17,517 17,826 17,779 17,581 18,049 18,805As percent of total deposits 18.5 21.9 28.9 25.5 25.1 23.2 22.4 21.5 22.5 22.2 21.3 20.3 19.8 19.7

Liquid assets /2 7,732 11,228 17,819 17,880 18,196 17,883 15,996 18,028 20,163 20.572 20,236 21,445 22,613 24,383As percent of total deposits 24.2 29.7 37.3 30.6 29.5 27.5 23.3 24.5 25.9 25.6 24.3 24.8 24.8 26.0

Loans, overdrafts and discounts 28,039 31,564 35,653 51,184 55,065 57,657 63,348 67,679 69,664 71,549 75,846 81,302 86,965 87,147As percent of total deposits 87.9 83.6 74.7 87.7 89.3 88.5 92.2 92.0 89.6 89.0 90.9 93.9 95.5 91.3

Capital accounts 3,065 3,602 4,082 5,096 5,481 6,318 6,990 7,195 7,568 6,672 8.430 8,917 9.293 9,524As percent of risk assets 10.5 11.0 11.5 10.0 10.4 11.1 11.1 10.9 11.2 11,1 11.3 11.3 11.1 11.3

/1 Excludes imterbank deposits.

/2 Comprises cash in hand, balance at BOT, balances at other noncommercial banks in Thailand, balances at banks abroad, gold and government securitiesother than those pledged or deposited as guarantee with the Bank of Thailand.


Table 6.5: LOANS AND OVERDRAFTS OF COSIMERCIAL BANKS CLASSIFIED BY PURPOSE /1

(millions of baht)

1970 1971 1972 1973 1974 1975 1976December December December December March June September December March June September December March June

Agriculture 596 689 713 889 980 1,053 1,026 1,147 1,183 1,469 1,842 2,271 2,291 2,584

Mining 290 400 380 375 243 334 601 499 421 381 476 534 542 523

Manufacturing 3,560 4,320 4,245 6,336 7,268 8,360 9,289 10,062 10,682 11,791 12,340 12,289 12.583 13,078

Construction 1,528 1,658 1,949 2,322 2,487 2,751 2,791 2,933 2,991 3,129 3,321 3,412 3,616 3,882

Real estate business 1,699 1,613 1,841 2,386 2,479 2,548 2,644 3,042 2,817 2,946 3,407 3,165 3,043 2,769

Imports 3,711 3,458 2,822 3,046 3,247 3,785 4,615 4,617 4,065 4,189 4,538 4,692 4,223 4,397

Exports 1,493 1,522 1,611 2,443 2,464 2,273 2,799 3,548 3,386 3,362 3,334 5,055 5,234 5,059

Wholesale and retail trade 4,471 4,993 5,866 8,460 9,082 9,129 9,924 10,316 11,433 11,984 12,464 12,769 15,668 15,316

Public utilftites 312 456 375 586 572 684 671 709 700 717 693 826 877 1,041

Banking and other financialbaseness 441 488 1,124 1,260 1,042 1,239 1,223 1,504 1,188 1,343 1,551 1,897 1,670 2,428

Services 1,446 1,882 2,025 2,220 2,362 2,565 2,819 2,840 2,779 3,052 3,170 3,349 3,366 3,481

Personal consumption 2,032 2,183 2,850 4,133 4,212 4,478 5,083 4,759 5,466 5,626 5,859 6,558 7,242 7,228

Others 9 23 10 31 28 20 29 11 65 11 99 48 83 -

Total 21,588 23,685 25,811 34,487 36,466 39,219 43,514 45,987 47,176 50,000 53,094 56,865 60,438 61,787

|I Including interbank transa.ctios.


Table 7.1: AREA PLANTED, YIELD AND PRODUCTION OF MAJOR CROPS

Crop Years 1969-7D 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76

Area Planted ('000 ha)

Paddy: wet 7,493 7,040 7,449 7,109 8,037 7,651 8,519dry 91 90 78 40 326 331 377

Rubber /1 852 862 870 878 892 909 918Maize 680 829 1,009 997 1,147 1,240 1,282Sorghum 35 /2 5D /2 55 53 85 120 130Kenaf 377 421 463 472 434 404 342Cassava 191 224 221 223 /5 428 434 /5 502 /5Sugar cane 187 206 140 181 259 310 315Tobacco (Virginia) 20 23 29 27 34 46 42Coconut 297 316 329 347 366 382 405Cotton 93 31 46 61 29 52 33Groundnuts 103 104 114 119 124 130 121Soybeans 48 59 57 80 123 132 118Mung beans 208 239 148 205 232 260 164Castor beans 37 46 44 48 41 32 40Sesame 26 30 32 29 35 26 30

Total 10,738 10,934 11,084 11,181 12,980 12,836 13,942

Yield (kg/ha) /3

Paddy: wet 1,800 1,840 1,860 1, 77 6 1,800 1,740 1,7 59dry 3,100 3,211 3,220 3, 143 3, 140 3,0 22 3, 252

Rubber 438 440 479 505 536 538 481Maize 2,500 2,338 /4 2, 279 /4 1,319 /4 2,039 /4 2,016 /4 2,340 /4Sorghum 2,000 2,600 2, 731 1,869 1,882 1,880 1,538Kenaf 1,044 975 906 /4 906 /4 1,081 /4 950 /4 947Cassava (roots) /4 16,120 15,316 14,000 14,782 14,991 14,977 7/5 13,749Sugar cane 43,125 31,970 A4 42,328 /4 52,558 /4 51,502 /4 47,070 /4 58,413 A4Tobacco (Virginia) 456 425 344 350 554 388 315Coconut (fruit per tree) 23 23 24 21 22 19 19Cotton 540 970 980 920 1,067 1,129 909Oronudnuts 1,331 1,325 1,300 1, 350 1,185 1,238 1,182Soybeans 1,025 875 1,006 900 /4 84 6 /4 833 /4 966 /4Hung beans 83 7 66 3 94 6 /493 2 74 82 8/74 90 8 74 732 T4Castor beans 1.044 969 988 9 25 987 99 6 97 5Sesame 738 763 763 795 686 1,192 867

Production ('000 metric tons)

Paddy: wet 13,140 13,290 13,494 11,670 13,886 12,447 14,092dry 270 280 250 743 1,012 939 1,208

Rubber /5 282 287 316 337 382 379 349Maize 1,700 1,938 2,300 1,315 2,339 2,500 3,000Sorghum /5 70 135 165 120 160 180 200Kenal (wa-shed) 373 331 419 428 469 384 324 /6Cassava (roots) 3,079 3,431 3,114 5,300 /5 6,416 6,500 /5 6,900 7-5Sugar cane 5,102 6,586 5,926 9,513 13,339 14,592 -18,400

Tobacco (Virginia) 9.4 9.7 9.9 9.4 18.2 17.8 15Tobacco (all varieties) /5 93 96 101 100 108 116 119Coconut (million fruits)7/7 577 586 643 562 533 514 532 /6Cotton (with seeds) 44 27 41 49 28 56 30Groundnuts (unshelled) 124 125 134 153 147 161 143 /6Soybeans 48 50 54 7 2 104 110 114Hung beans 170 149 140 191 192 236 120 /8Castor beans 37 43 41 41 40 32 39 /6Sesame 19 20 21 21 24 31 26 /6

/1 Includes tappable and nontappable.

/2 PAO, Production Yearbook, 1972.

/3 On an area harvested basis.

/4 On an area planted basis.

/5 Bank of Thailand, Monthly Bulletin.

/6 Estimated by DAE.

/7 These figures differ from those used by the National Income Accounts Division, NESDB. Fornational income statistics and the Third Plan, the figures iBSsued by the Ministry ofAgriculture are multiplied by 0.41 (from 1960-65) and 0.37 (since 1967) for comparabilitywith census data.

/8 Estimated by Department of Extension.

Sources: For 1960-74, Agricultural Ststistics of Thailand 1973/74 (Preliminary copy),Division of Agricultural Economics, Ministry of Agriculture.

For 1975, Estimates by Division of Agricultural Economics and Department ofExtension.

Table 7.2: PADDY - BALANCE SHEET OF SUPPLY AND DISPOSITION

('000 tons)

Per Capita Paddy Per Capita Rice

Supply by Beginning Consump- Seed, Waste Ending Population Consumption Consumption

Production /1 Stock /2 tion /3 Export /4 & Other Use /5 Stock /2 (Million) /6 (Kg) (Kg) /7

1967 11,947 680 8,459 2,280 988 900 33.00 256 166

1968 9,625 900 6,822 1,643 1,060 1,000 34.03 200 130

1969 10,348 1,000 7,050 1,574 1,364 1,360 35.11 201 131

1970 13,410 1,360 9,895 1,636 1,385 1,890 36.37 271 176

1971 13,570 1,890 10,182 2,425 1,403 1,450 37.48 272 177

1972 13,744 1,450 9,693 3,249 1,192 1,060 38.59 251 163

1973 12,413 1,060 10,494 1,306 1,420 253 39.69 265 172

1974 /8 14,898 253 10,874 1,583 1,490 1,204 40.78 267 173

1975 /8 13,386 1,204 10,246 1,466 1,428 1,450 41.87 245 159

/1 Main rice production of previous year plus second rice crop of current year (Division of Agricultural Economics).

/2 NSO.

/3 Estimated as residual./4 Bank of Thailand, Monthly Bulletin, July 1976./5 Assumed 10 percent of production (NSO).

/6 From Table 1.1 (Population projection for Thailand 1960-2000, NESDB).

/7 Conversion factor: 0.65.

/8 Mission estimates.

Table 7.3: RICE EXPORT PREMIUM, TARIFF AND TAX RATES

(baht per metric ton)

Export Premium Rates Export Tariff Export Surcharge

Mar 22, 1974 June 26, 1974 Oct 30, 1974 Dec 25, 1974 June 3, 1975 Dec 4, 1975 Jan 22, 1976 July 1, 1976 July 1, 1976to to to to to to to to to

June 25, 1974 Oct 29, 1974 Dec 22, 1974 June 2, 1975 Dec 3, 1975 Jan 21, 1976 Date Date Date

White rice 100% 5,100 4.500 3.750 2,100 1,700 1,000 700 230 5White rice 5% 5,100 4,500 3,750 2,100 1,700 800 700 230 5White rice 10% 4,600 4,000 3,250 1,700 1,300 700 500 200 5White rice 15% 4,600 4,000 3,250 1,700 1,300 700 500 230 5White rice 20% 4,600 4,000 2,250 1,700 1,300 700 500 200 5White rice, lower than 20% 4.100 3,500 2,750 1,300 900 500 400 190 5White broken rice, Al

super special 3,400 2,800 2,050 900 500 500 400 185 5White broken rice, Al super

and special 2,350 2,000 1,250 600 200 200 200 185 5White broken rice, Al

ordinary 2,350 2,000 1,250 600 200 200 200 130 5White broken rice, Cl

super, special & ordinary 2,o50 1,700 1,000 500 100 100 100 130 5White broken rice, C3 2,050 1,700 1,000 500 100 100 100 130 5White broken rice, others - - - - - - - 130 5Glutinous rice, long grain 10% 4,100 3,500 3,000 1,600 1,200 700 400 - -Glutinous rice, long grain 15% - - - - - - - -Glutinous rice, short grain 10% 4,100 3,500 3,000 1,600 1,200 700 400 - -Broken glutinous rice,Al special 2,550 2,200 1,700 750 350 200 200 -

Broken glutinous rice,C1 special 2,550 2,200 1,700 750 350 200 200 - -

Cargo rice, 100% 4,100 3,500 2,750 1,300 900 700 450 218.5 5Cargo rice, 5% 4,100 3,500 2,750 1,300 900 700 450 218.5 5Cargo rice, 10%, 15% and 25% 3,800 3,200 2,450 1,100 250 500 400 218.5 5Cargo rice, lower than 20% - - - - - - - 218.5 5

Broken cargo rice of all grades 2,050 1,700 1,000 500 100 100 100 120 5Parboiled rice, 100X & 5X 3,600 3,000 2,250 1,050 450 400 400 210 5Parboiled rice, 10% & 15% 3,400 2,800 2,050 1,050 450 200 200 210 5Parboiled rice, 25% 3,400 2,800 2,050 1,050 450 200 200 210 5Parboiled rice, lower than 25% - - - - - - - 210 5Broken parboiled rice of all

grades 2,050 1,700 1,000 500 100 100 100 147 5White rice flour 1,150 800 600 500 100 100 100 - -Glutinous rice flour:

Fine 1,150 800 600 500 100 100 100Ordinary 1,150 800 600 500 100 100 100

Vermicelli made fron rice 600 400 300 200 - - -

Notes: 1. Since January 22, 1976 the prmium on exports of glutinous rice to Laos has been exempted.

2. Exporters were required to reserve rice for aele to the Government (mainly for domestic consumption) at a fixed price.

(a) From December 25, 1974 to November 6, 1975 reserve 100% at B 2,750 per ton for white rice 5% and B 2,650 for white rice 10%.

(b) From November 7, 1975 to December 3, 1975 reserve 50% at B 2,750 per ton for white rice 5% and B 2,650 for white rice 10%.

(c) From Decmber 4, 1975 to January 1, 1976 reserve 50% at B 3,150 per ton for white rice 5% and B 3,050 for white rice 10%.

(d) Since January 22, 1976 thb reserve requirements have been abolished.

Table 7.4: EXPORT AND DOMESTIC WHOLESALE PRICES OFRICE FOR SELECTED GRADES


Price DifferenceWhite Rice 5% White Rice 25% 5-25%

Year FOB Wholesale FOB Wholesale FOB Wholesale

1969 3,860 2,205 3,324 1,724 536 4811970 2,989 1,905 2,591 1,580 398 3251971 2,706 1,578 1,959 1,398 747 1801972 3,092 1,974 2,163 1,697 929 2771973 3,884 2,865 2,914 2,371 970 4941974 10,976 3,773 10,001 3,646 1,196 1271975 7,370 3,723 6,340 3,558 1,098 165

Sources: Board of Trade of Thailand (FOB Prices).Department of Internal Trade (Wholesale Prices).

Table 7.5: AVERAGE WHOLESALE PRICES (BANGKOK) OF SELECTED AGRICULTURAL COMMODITIES


1969 1970 1971 1972 1973 1974 1975

Crop

Non-glutinous, paddy, No. 2 /1 1,093 1,011 848 1,101 1,538 2,248 2,310Non-glutinous, rice (5%) /1 2,205 1,905 1,578 1,974 2,865 3,773 3,723Non-glutinous rice (20%) /1 1,747 1,614 1,429 1,718 2,408 3,680 3,520Al Broken (super) /1 1,186 1,197 1,022 1,513 1,962 2,808 2,982Glutinous, rice (10%) /1 1,730 1,172 1,136 1,762 3,055 3,440 3,540Maize /1 1,105 1,230 1,189 1,160 1,785 2,543 2,482Sorghum, good /2 1,006 1,120 1,000 910 1,520 2,140 1,960Mungbean, large /2 2,520 2,650 4,050 4,050 4,860 5,480 7,240Cassava (tapioca flour), high grade /1 1,757 1,813 2,140 2,236 2,717 3,747 3,506Castor bean, good /2 2,600 2,350 2,540 3,950 8,530 5,510 4,080Sesame (black), good /2 4,990 4,940 4,896 6,034 8,060 7,760 10,450Groundnuts (shelled), good /2 4,200 4,010 4,290 5,470 6,510 8,930 9,130Soybeans, Chiengmai, good /2 2,410 2,350 2,540 2,940 5,400 5,160 5,160Cottoa, large /2 4,090 4,020 4,910 5,550 7,230 10,080 7,340Kapok (ginned), good /2 7,642 7,770 8,330 8,320 7,820 10,230 10,490K,!naf, high grade /2 3,040 2,967 3,650 4,861 3,765 3,630 3,981Sugar cane /1 136.22 144.90 150.45 179.72 199.64 298.66 300.00Rubber No. 1 /1 8,139 6,740 5,495 5,500 9,880 9,753 8,510Rubber No. 3 /1 7,995 6,580 5,295 5,300 9,680 9,553 8,310

Sources: /1 Bank of Thailand, Monthly Bulletin, various issues.

/2 Division of Agricultural l.conomics, Ministry of Agriculture and Cooperatives.

Table 7.6: IMPORTS OF FERTII.IZER

Country 19770 Country 1971 Co-ntry 1972 Country 1973 Country 1974 Couintry 1975of Volume Value of Volume Value of Volume Value of Volume Value of VoluIme Value of Volume Value

Origin (toes) ('000 baht) Origin (tons) ('000 haht) Origin (tons) ('000 bahtl) Origin (tons) ('000 baht) Origin (tons) ('000 baht) Origin (tons) ('000 baht)

Natregeno.us fertilizer Japan 5,362 Japan 49,587 Japan 36,642 Japan 34,110 Japan 39,041 Japan 40,353Nether- Others 3,831 Others 2,608 Others 3,545 W. W.lands 1,000 Germany 4,975 Germany 23,049Others 5,250 Others 7,334 Nether-

lands 1,900Others 21,067

Total 11,612 20,075 53,418 79,295 39,250 61,465 37,655 63,966 51,350 156,776 86,369 219,445

Phospatic fertilizer Japan 2,451 Nether- Nether- Malaysia 3,049 Christmas lJapan 700Greece 1,250 lands 2,28(1 lands 2,200 Nether- Is. 2,913 Others 200Tunisia 1,000 Malaysia 813 Malaysia 1,267 lands 1,550 USA 1,310Others 1,651 Iceland 560 Others 1,480 Taiwan 1.000 Nether-

Others 1,360 Others 1,951 lands 350Others 1,606

Total 6,352 8,726 5,013 6,463 4,947 7,005 7,550 15,174 6,179 17,813 900 3,205

Potas5ic fertilizer France 1,400 W. W. W. W. USA 15,295W. Germany 1,950 Germany 2,500 Germany 2,505 Germany 2,923 Japan 2,350

Germany 1,000 France 1,650 France 1,900 Israel 192 France 2,000 W.Others 1,360 Others 306 Others 46(1 Belgian 700 Belgium 1,599 Germany 2,857

Others 2,312 Others 2,736 Others 5,478

IDtal 3,760 5,351 3,906 5,795 4,860 8,08b 5,709 11,632 8,258 26,690 25,980 61,808

Compl-n 6 mined Japan 110.403 Japan 71,030 .Japan 176,651 Japaa 109,616 USA 130,969 Japan 90,717fertilizer W. W. W. USA 61,282 Japan 46,420 USA 170,030Germany 43,535 Cermany 25,760 Germany 45,781 W. W. W.USA 16,649 Malaysia 22,656 Nether- Germany 55,607 Germany 41,562 Germany 29,384Others 57,104 Nether- lands 23,678 Austria 32,082 Nether- M,alaysia 10,013

lands 10,358 [Others 9 3 ,2l05 Nether- lands 12,988 others 2 3 ,359Francc 10,045 lands 19,044 Belgium 12,100Other,. 41,265 Others 66,420 O(thers 13,736

I tal 227,691 360,713 171,069 280,380 338,315 574,429 344,101 736,68hi 257,773 1,112,865 363,503 1,373,953

Grand ttal 249,415 394,865 233,404 371,933 387,372 650,9K5 395,1 5 827,462 323,560 1,314,144 436,752 1,658,411

Sourc. Depart.enit of Clstens.

Table 7.7: CIF AND RETAIL PRICES OF FERTILIZER

(baht per ton)

Ammonium Sulphate Urea Ammonium Nitrate Triple Super Phosphate Composit (16-20) Composit (20-20)CIF Retail CIF Retail CIF Retail CIF Retail CIF Retail CIF Retail

1969 1,200 1,872 1,513 3,040 1,225 2,009 1,898 2,923 1,437 2,297 1,483 2,3591970 1,200 1,872 1,710 3,040 1,218 1,751 1,887 2,909 1,495 2,376 1,385 2,2261971 1,166 1,848 1,808 3,040 1,250 2,042 1,803 2,795 1,401 2,248 1,435 2,2941972 1,166 1,848 1,906 3,040 1,456 2,333 2,113 3,216 1,529 2,422 1,555 2,4581973 1,624 2,551 2,586 3,773 1,884 2.905 2,727 4,054 2,228 3,372 2,297 3,4671974 3,020 3,450 4,790 6,520 4,100 - - 7,710 - 4,930 - 5,0101975 2,070 2,778 6,000 6,487 - - 3,510 8,571 - 4,465 - 5,336

Source: Division of Agricultural Economics, Ministry of Agriculture and Cooperatives.

Table 7.8: ESTIMATES OF BENEFIT AND COST RATIOS OF USING FERTILIZER FOR PADDY, 1975-

TotalBasal Dressing Top Dressing Yield Total 2/ Benefit Benefit Benefit 4

Fertilizer Amsount Price Cost Fertilizer Amount Price Cost Cost Increase Benefit- Cost Ratio Cost Ratios Cost Ratio-kg/ha B/ton B/ha kg/ha B/ton B/kg B/ha kg/ha B C-1.00 C=1.00 C=1.00

(1975) (1974) (1973)Local Variet.es

1. CentralGeneral 5 16-20-0 100 4465 446 21-0-0 76 2778 211 657 550 1237 1.88 1.55 2.06N.P. Sil-/ 13-13-21 150 5336 800 21-0-0 100 2778 278 1078 890 2002 1.86 1.73 2.28

2. Northeast 13-13-21 200 5336 1067 21-0-0 115 2778 320 1387 730 1328 .96 1.05 1.31

3. North 13-13-21 150 5336 800 21-0-0 100 2778 278 1078 645 1258 1.16 1.14 1.51

4. South 13-13-21 140 5336 747 21-0-0 100 2778 278 1025 558 1227 1.20 1.17 1.35

High Yieldinp Varieties

1. CentralL.P. 1230- 16-20-0 50 4465 320 21-0-0 70 2778 195 515 465 1046 2.03 1.63 2.1221-0-0 35 2778

RDI (General) 21-0-0 175 2778 486 21-0-0 175 2778 486 972 980 2205 2.26 1.73 2.19RDI (South) 16-20-0 100 4465 724 21-0-0 190 2778 528 1252 1065 2396 1.91 1.52 1.9712-0-0 100 2778

RDI (BangKhen) 16-20-0 100 4465 696 21-0-0 170 2778 472 1168 750 1687 1.39 1.15 1.4921-0-0 90 2778

2. Northeast-7/

NSPT 13-13-21 120 5336 640 21-0-0 75 2778 208 848 475 864 1.02 1.11 1.38

3. North

NSPT-/ 13-13-21 100 5336 501 21-0-0 60 2778 167 668 680 1326 1.99 1.86 2.52RD2 21-0-0 115 2778 320 21-0-0 115 2778 320 640 530 1033 1.61 1.29 1.65

1/ Based on UNDP/FAO recoummendations.2/ Using the 1975 regional farmgate prices of B 2.25/kg in Central, B 1.82/kg in the Northeast, B 1.95/kg in the North, and B 2.2/kg in the South.3/ Using the 1974 regional farmgate prices of B 2.13/kg in Central, B 2.01/kg in the Northeast, B 1.94/kg in the North, and B 2.20/kg in the Soutl-,and retail pricesof fertilizer in that year (see Table 7.7).4/ Using the 1973 regional farmgate prices of B 1.99/kg in Central, B 1.77/kg in the Northeast, B 1.82/kg in the North, and B 1.81/kg in the South, and

retail prices of fertilizer in that year (see Table 7.7).5/ Nakkon Pathom Soil.6/ Leuang Phratew 1237/ RD2 was not recotmmended because of higher fertilizer cost.8/ Nio San Pa Tong.

Sources: Table 7.7 and the NESDB.

Table 7.9: REPLANTING OF RUBBER

Total Replanting Rubber Other CropsNo. of No. of No. of

Year of Approval holdings Area (ha) holdings Area (ha) holdings Area (ha)

1961 1,311 3,910 1,219 3,822 92 881962 /1 7,420 15,252 7,146 15,034 274 2181963 1,782 3,574 1,640 3,445 142 1291964 3,886 6,004 3,658 5,829 228 1751965 3,377 4,937 3,060 4,681 317 256

1966 2,773 3,869 2,493 3,655 280 2141967 4,393 6,071 3,920 5,691 '473 3801968 7,511 10,959 6,629 10,242 882 7171969 8,787 12,340 7,962 11,535 825 8051970 9,187 12,904 8,685 12,373 502 531

1971 13,799 19,143 12,877 18,092 922 1,0511972 18,759 24,834 17,555 23,560 1,204 1,2741973 18,978 23,033 17,861 22.020 1,117 1,0131974 /2 13,286 16,616 12,778 16,123 508 493

Total 115,249 163,446 107,483 156,102 7,766 7,344

/1 1962 replanting includes 5,412 holdings damaged by windstorm and given priority assistance.

/2 1974 replanting is up to December 31,1975.

Source: Office of the Rubber Replanting Aid Fund.

Table 7.10: PRODUCTION AND VALUE OF TEAK AND YANG CUT UNDER LICENSE

Teak (Tectona grandis) Yang (Dipterocarpus alatus)Year Timber Cut Wholesale Price Market Value Timber 3Cut Wholesale Pr ice Market Value

m baht per m '000 baht m baht per m '000 baht

1969 296,407 2,600 770,658 470,643 450 211,7891970 233,942 2,800 655,038 447,453 470 210,3031971 298,869 2,000 597,738 598,425 470 281,2601972 177,934 2,800 498,215 738,869 575 424,8501973 188,441 4,150 782,030 747,276 825 616,5031974 254,273 4,150 1,055,233 737,562 825 608,4891975 /L 152,403 4,300 655,333 921,971 850 783,675

/1 Preliminary estimate by Department of Forestry.

Source: Division of Agricultural Economics, Ministry of Agriculture and Cooperatives.

Table 8.1: PRODUCTION AND CAPACITY OF SELECTED MANUFACTURING INDUSTRIES

Production Production Capacity

1965 1969 1970 1971 19 72 1 97)3 1 974 1975 1972 1 9 73 1 974

Sugar (1,000 metric tons) 320.0 318.1 406.6 580.0 585.6 725.0 968.0 1,105.8 675.0 988.0 1,666.0

Beer (million litres) 14.4 39.2 36.3 32.1 33.9 43.2 44.5 61.3 100.0 100.0 100.0

Tobacco (1,000 metric tons) 10.1 14.4 15.3 16.1 16.8 19.4 20.2 22.6 22.4 n.a n.a.

Man-made fabrics (million sq. yds.) 2.7 51.5 77.4 145.4 208.5 287.0 278.0 300.0 n.a. n.a. n a.

Cotton fabrics (million sq. yds.) 227.9 344.0 365.5 450.2 481.3 566.9 511.4 540.0 610.0 645.0 710.0

Cotton yarn (1,000 metric tons) 21.7 34.4 42.4 50.4 56.5 70.2 58.8 67.0 72.1 n.a. n.a.

Gunny bags (million units) 40.4 44.9 52.7 63.7 81.6 91.2 110.1 107.4 84.0 150.0 150.0

Knitting (million sq. yds.) /1 - 43.8 53.0 70.4 110.5 168.7 203.7 25o.0 n.a. n.a. n.a.

Plywood (million sheets) n.a. 2.7 3.0 3.2 3.5 3.6 3.1 3.0 10.8 10.8 10.8

Paper (100 metric tons) n.a. 30.2 31.7 37.7 42.4 39.7 33.8 25.1 43.3 45.0 45.0

Cement (million metric tons) 1.2 2.4 2.6 2.8 3.4 3.7 3.9 4.0 4.2 4.2 4.2

Glass sheets (1,000 metric tons) n.a. 29.7 31.0 24.1 44.2 46.2 45.0 38.7 59.4 62.0 62.0

Galvanized iron sheets (1,000 metric tons) 65.5 94.6 85.5 97.3 103.8 86.1 72.1 83.1 192.0 192.0 192.0

Detergents (1,000 metric tons) n.a. 27.2 27.1 32.2 40.0 46.6 37.2 44.6 54.3 54.3 54.3

Chemical fertilizers (1,000 metric tons) n.a. 17.0 39.8 38.0 31.1 23.2 30.6 153.3 88.2 n.a. n.a.

Acetylene (metric tons) n.a. 112.0 79.0 143.0 131.0 110.0 55.0 80.0 380.0 n_a. n.a.

Sulphuric acid (1,000 metric tons) n.a. 17.7 15.0 14.3 47.3 47.1 46.9 45.2 48.0 n.a. n.a.

Carbon dioxide (million kg.) n.a. 3.8 3.4 3.6 4.6 4.3 2.2 n.a. 12.4 12.4 12.4

Petroleum products (billion litres) n.a. 3.6 3.9 5.4 6.6 7.8 6.8 7.6 7.9 8.7 d.7

Motor vehicle assembly (1,000 units) 10.1 12.1 10.6 15.0 19.4 17.4 27.1 31.8 53.0 53.0 53.0

Motor cycle assembly (units) - - - - 34.4 56.6 66.8 83.9 68.0 68.0 68.0

n.a. = not available.

/I Total man-made and cotton fabrics.

Sources: Ministry of Industry and Bank of Thailand.

Table 8.2: GROSS DOMESTIC PRODUCT ORIGINATING FROM MANUFACTURING AT CURRENT MARKET PRICES

(billions of baht)

1970 1971 1972 1973 1974 1975

Food 5.0 5.3 5.0 6.6 9.4 11.2Beverages 2.2 2.2 2.5 3.1 3.9 4.0Tobacco and snuff 2.0 2.4 2.6 2.9 2.8 3.9Textiles 1.7 2.3 3.4 4.1 4.6 4.6Wearing apparel and made-up textile goods 1.1 1.6 1.8 2.4 3.1 3.6Wood and cork 0.6 0.6 0.7 1.0 1.6 1.8Furniture and fixtures 0.3 0.3 0.3 0.4 0.5 0.6Paper and paper products 0.2 0.2 0.2 0.2 0.3 0.2Printing, publishing and allied industries 0.6 0.6 0.7 1.0 1.4 2.0Leather and leather products (excl. footwear) 0.1 0.2 0.2 0.3 0.2 0.2Rubber and rubber products 0.4 0.5 0.5 0.6 0.8 0.9Cheniicals and chemical products 1.5 1.6 1.8 2.0 2.5 2.7Petroleum refining and coal 1.6 2.1 2.4 3.0 4.2 4.9Non-metallic mineral products 1.4 1.5 1.6 2.0 2.5 2.6Basic metal industries 0.3 0.3 0.4 0.8 0.8 0.7Metal products (excl. machinery and transport

equipment) 0.5 0.6 0.7 1.1 1.4 1.2Repairing of non-electrical machinery 0.4 0.5 0.6 0.7 0.9 0.9Electrical machinery and supplies 0.3 0.3 0.4 0.5 0.6 0.7Transport equipment 1.1 1.1 1.4 2.3 3.0 3.6Mi,cellaneous, n.e.s. 0.5 0.6 0.6 0.7 0.8 0.9

Total Value Added 21.8 24.9 27.9 35.6 46.4 51.4

/1 Preliminary.


Source: NESDB.

Table 8.3: GROSS DOMESTIC PRODUCT ORIGINATING FROM MANUFACTURING AT 1962 PRICES

(billions of baht)

1970 1971 1972 1973 1974 1975

Food 4.9 5.2 5.3 5.5 6.2 6.5Beverages 2.0 2.0 2.3 2.8 3.1 3.1Tobacco and snuff 1.6 1.7 1.8 2.0 2.1 2.4Textiles 1.6 2.4 3.0 3.8 3.7 4.2Wearing apparel and made-up textile goods 0.9 1.5 1.6 1.8 1.9 2.1Wood and cork 0.5 0.6 0.5 0.6 0.6 0.7Furniture and fixtures 0.3 0.3 0.3 0.3 0.4 0.4Paper and paper products 0.1 0.1 0.2 0.1 0.1 0.1Printing, publishing and allied industries 0.5 0.5 0.6 0.7 0.8 1.1Leather and leather products (excl. footwear) 0.1 0.1 0.1 0.2 0.2 0.2Rubber and rubber products 0.5 0.7 0.8 0.8 0.9 1.0Chemicals and chemical products 1.3 1.3 1.4 1.4 1.5 1.6Petroleum refining and coal 1.6 2.7 3.1 3.9 3.8 3.9Non-metallic mineral products 1.4 1.5 1.8 2.0 2.1 2.1Basic metal industries 0.3 0.3 0.4 0.5 0.3 0.3Metal products (excl. machinery and transport

equipment) 0.7 0.7 0.8 0.9 0.8 0.8Repairing of non-electrical machinery 0.4 0.4 0.4 0.5 0.5 0.5Electrical machinery and supplies 0.2 0.3 0.3 0.3 0.3 0.4Transport equipment 0.7 0.7 0.9 1.0 1.1 1.2Miscellaneous, n.e.s. 0.4 0.4 0.5 0.6 0.5 0.6

Total Value Added 20.1 23.6 26.1 29.7 31.0 33.1

/1 Preliminary.


Source: NESDB.

Table 8.4: STATISTICS OF PROMOTE1) INVESTMENT /1

Number of Registered Capital of Promoted Firms Number of Number ofNumber of Number of Promotion (million baht) Projects New FirmsApplications Applications Certificates Investment /4 Thai Foreign Starting StartingReceived Approved /2 Issued /3 (million baht) Owned Owned Total Operations Operations

October 1960 -

December 1967 n.a. n.a. 340 12,466.0 2,626.8 1,144.9 3,771.7 n.a. n.a.1968 252 149 105 2,561.8 336.4 278.8 615.2 82 731969 242 121 86 4,157.2 801.2 444.5 1,245.7 89 80

1970 117 94 91 2,604.7 589.5 262.6 852.1 67 561971 103 52 76 1,496.4 409.6 178.3 587.9 59 431972 180 116 70 4,078.7 772.3 235.6 1,007.9 47 361973 552 325 116 7,772.8 988.4 295.6 1,284.0 58 401974 228 176 251 18,020.9 2,804.1 935.6 3,739.7 108 841975 111 83 86 4,637.7 906.7 310.6 1,217.3 69 52

Jan.-July1976 66 32 28 1,019.5 484.2 133.6 617.8 55 53

n.a. = not available.

/1 Includes hotels and service industries such as cold storage, and, in recent years, mineral exploration. Over the past ten years, suchnonmanufacturing investments have accounted for 8.7 percent of total investment in promoted industries.

/2 When an application for investment promotion has been approved, the applicant is notified in writing of the privileges and conditionsunder which promotion is granted. The letter of notification will usually specify a six month time limit for the applicant to satisfy

the qualifying conditions (incorporation of the company, commercial registration, etc.). Two months are generally required, after

submission of application, to be notified of the Board's decision.

/3 The Promotion Certificate, which is in effect, the contract for investment promotion between the investor and the Royal Thai Government,

is issued to the investor once he has complied with all the terms and conditions specified in the notification of approval. A two-yearperiod is usually allowed to start operations. If operations do not start during this period, the certificate may be withdrawn.

/4 Refers to projects approved and granted a promotion certificate; figures for investment projects actually implemented are not available.

Source: Board of Investment.

Table 8.5: MINERAL PRODUCTION

(thousands of metric tons)

1967 1968 1969 1970 1971 1972 1973 1974 1975

Tin concentrates 31.2 32.8 28.8 29.7 29.6 30.1 28.6 27.8 22.4

Wolfram ore (tungsten) 0.8 1.0 1.3 1.4 4.9 6.5 5.0 4.3 3.5

Iron ore 549.2 499.5 477.4 22.5 39.5 27.8 36.3 36.3 32.5

Lead ore 8.2 6.5 4.2 3.0 5.5 4.3 8.7 3.6 3.6

Antimony 2.4 0.8 1.7 5.7 5.4 11.3 8.2 10.3 7.7

Manganese ore 79.1 41.0 29.9 23.9 14.0 19.8 36.3 30.2 25.2

Gypsum 61.7 128.1 92.0 144.2 167.9 87.8 236.3 311.8 254.8

Lignite 335.3 305.3 347.8 399.9 445.1 345.5 361.0 484.7 462.3

Fluorite ore 133.2 245.1 297.6 317.8 426.5 395.0 398.0 420.2 286.2


Table 8.6: ENERGY CONSUMPTION BY SOURCE OF ENERGY

(kilo calories x 1012)

Petroleum Hydro-Year Products Electric Coal Fuel Wood Charcoal Paddy Husk Bagasse Total

1967 29.8 4.5 1.2 0.7 0.7 0.5 1.0 38.4

1968 39.4 4.1 1.3 0.7 0.6 0.4 1.9 48.3

1969 42.6 3.1 1.4 0.4 0.5 0.3 2.2 50.6

1970 46.5 5.3 1.5 0.5 0.6 0.4 2.7 57.5

1971 58.4 6.1 1.7 0.6 0.6 0.4 2.6 70.4

1972 68.3 5.6 1.4 o.5 0.4 0.3 3.1 79.6

1973 77.8 6.1 1.4 0.5 0.4 0.4 4.2 90.8

1974 73.4 7.7 2.1 0.4 0.3 0.4 5.6 89.9

1975 /1 83.3 9.2 2.3 0.4 0.3 0.4 6.3 102.2

/1 Estimate.

Source: National Energy Authority.

Table 8.7: TOURISM - BASIC DATA

1965 1969 1970 1971 1972 1973 1974 1975

Foreign visitors (in thousands) 225.0 469.8 628.7 638.7 820.8 1,037.7 1,107.4 1,180.1

Nationality:

United States 73.8 133.3 159.2 147.0 151.6 161.4 156.8 116.2

of which: R & R (15.0) (70.7) (44.3) (26.6) (7.7) (4.4) (3.5) -

Japan 17.3 42.9 47.0 55.8 93.5 151.9 132.7 147.0

Malaysia 18.4 59.6 105.0 128.9 162.6 190.8 197.5 227.8

Germany 7.4 20.2 28.0 35.8 52.7 62.7 69.4 78.1

UK 20.3 31.3 37.0 37.7 46.9 58.3 65.4 76.4

France 6.7 12.7 21.1 17.9 31.7 45.0 42.6 46.9

Australia 10.1 22.2 28.2 26.4 31.9 48.2 75.8 78.9

Other 66.5 147.5 203.2 188.6 250.0 319.4 367.2 408.8

Average length of stay (days) 4.8 4.9 4.8 4.9 4.9 4.7 4.8 5.1

Hotel capacity in Bangkok(rooms) 2,469 7,984 8,763 9,127 9,028 9,746 9,861 10,331

Foreign exchange earnings(millions of Baht) 506 1,770 2,175 2,214 2,718 3,457 3,852 4,538

of which: R & R of US troops (50) (459) (390) (240) (63) (13) (11) -

Source: Tourist Organization of Thailand.

Table 9.1: PRICE INDICES (ANNIIAI,)

1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976Jan. -July

Wholesale Price Index for Thailand /1 ........ Old Index (1958=101)) ......... ................ New Index (1968=100).

Agricultural products 79 84 101 103 98 104.5 100.5 98.4 109.4 134.6 170.4 190.0 200.4Foodstuffs 96 98 114 130 122 98.9 93.7 95.1 106.8 134.4 180.1 184.4 190.2Beverages 99.8 105.4 111.0 113.4 117.2 131.8 142.5 148.0Textiles and textile products /2 107 112 112 111 114 104.6 106.8 107.6 110.9 129.3 160.6 140.9 142.8Construction materials 111 111 ill 1ll ill 103.2 105.7 102.6 106.7 143.3 196.4 199.9 200.8Chemicals and chemical products /3 104 96 83 96 97 108.8 116.1 120.0 127.8 158.0 211.1 217.9 202.8Petroleum prodtucts 99.8 99.1 103.7 104.9 116.7 214.4 219.4 219.2Paper and paper products 1o3.8 104.1 105.7 10(8.0 137.9 181.3 188.7 182.2Hide and leather products /4 90 102 128 123 120 102.1 99.5 98.3 114.5 152.4 160.5 155.5 156 .1Rubber and rubber products 119.2 103.4 88.6 89.3 143.8 147.8 133.0 161.9Transportation equipment 100.3 108.9 120.0 132.2 155.9 189.7 209.2 216.2Machinery and equipment 100.4 104.2 106.8 110.2 129.9 158.3 162.2 175.1)Miscellaneous 107.7 117.1 112.1 117.2 134.2 176.5 159.3 166.1

Special groupsDomestic commodities 103.3 99.3 98.4 107.8 133.6 175.4 182.6 190.2Imported commodities 103.3 110.8 113.4 118.9 143.9 177.8 182.4 186.3Exported commoditoes 112.5 107.8 103.9 111.7 154.9 195.0 19O.4 199.6

All Items 94 96 110 118 113 103.3 1o2.8 103.1 111.2 136.6 176.1 182.6 189.1

Consumer Price Index fur Bangkok Metropolis /5 .1962=100.

Food 104.2 104.8 111.6 119.6 123.7 128.6 128.9 129.7 138.0 157.9 202.9 211.1 219.5Rice and grain 94.4 95.0 105.9 123.7 117.0 120.8 124.6 115.7 117.6 133.4 179.4 180.9 190.8leat, poultry and fish 100.2 101.1 101.1 112.8 124.6 129.8 124.5 118.3 128.1 147.9 208.9 209.4 212.6Vegetables and fruots 106.1 104.9 113.4 118.2 122.7 142.9 144.4 140.0 155.2 171.4 199.3 237.4 249.3

Clothing 97.9 96.9 97.4 97.4 97.7 97.5 99.4 100.2 101.2 115.6 136.3 143.1 145.7Personal and medical care 601.0 102.2 106. 1 110.1 110.1 0lo.1 110.3 113.1 116.2 120.5 138.4 146.3 147.4Hoosing 105.6 107.5 109.2 109.3 110.1 111.3 114.1 117.9 119.1 128.6 139.7 145.6 152.2

House rents 106.8 114.0 117.9 119.0 124.0 129.7 137.3 141.2 142.4 143.4 150.2 156.0 166.3Transportation 100.6 102.1 101.7 100.8 104.7 100.9 101.9 114.4 115.1 131.3 182.8 189.2 207.4Recreation and educatlon 101.1 101.8 103.2 103.5 103.6 103.6 103.4 107.9 109.2 116.7 137.6 139.4 140.0Tobacco and alcoholic beverages 100.0 100.0 99.9 99.9 99.9 99.9 100.4 101.2 101.2 103.7 116.7 120.1 119.9

All Itens 1o2.9 103.8 107.7 112.0 114.4 116.8 117.7 120.1 124.8 139.5 172.0 179.0 185.9

/I The new wholesale price index with base year 1968 has been reported by the Departnent of Business Economics since January 1971. This indexIncludes the prices of 256 representative commodities, which are collected from markets in Bangkok-Thoubori and 9 maJor provinces. Thenew series are not available for the years before 1968. The old index with base year 1958 includes the prices of 55 items, of which 21are agricultural products and foodstuffs. These prices were collected in the Bangkok-Thonhuri area.

/2 leading for oId onde- os "Cloth."

/3 Ileading for old index is "Chemical ProdUcts."

/4 Heading for old index is "Leather."

/5 Weights and selected items are derived from a family expenditure survey conducted in 1962-1965 among families of two or more personsin all occupational groups (except those whose main source of income is from agriculture) with annual income ranging from 3,000 balitto 60,000 haht.

Source: Bank of Thailand and Department of Business Economics, Ministry of Commerce.

Table 9.2: CONSUMER PRICE INDEX FOR WHOLE KINGDOM

(October 1964 - September 1965 = 100)

Weights /1 1969 1970 1971 1972 1973 1974 1975 1976Jan.-July

All Items 100.0 113.6 113.5 114.0 119.6 138.1 171.7 180.8 186.9

Food 49.5 123.6 121.6 119.3 127.8 153.7 198.8 209.1 216.5

Clothing 12.1 101.6 103.1 106.2 108.7 125.9 149.7 158.0 162.0

Housing 15.5 106.2 108.2 110.5 112.9 125.8 146.0 151.4 154.8

Personal & medical care 7.0 105.2 105.6 109.8 114.4 118.7 134.1 144.8 145.7

Transportation 4.9 99.4 100.1 104.3 106.1 115.0 159.0 169.2 184.9

Recreation, reading & education 6.1 103.0 103.9 109.4 112.5 121.2 138.4 148.3 154.2

Tobacco & alcoholic beverages 4.9 100.6 100.9 102.0 102.4 105.4 121.8 126.8 129.0

/1 Weights and selected items are derived from a family expenditure survey conducted in 1962 among familiesof two or more persons in all occupational groups - except those whose main source of income is fromagriculture - with annual income ranging from 3,000 baht to 60,000 baht.

Source: Department of Business Economics, Ministry of Commerce.

economic memorandum on the current economic situation and prospects of thailand · 2016-07-12 ·...

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