About the CBI

October 2005
 Background Note: Thailand

Flag of Thailand is five horizontal bands of red (top), white, blue (double
width), white, and red.

PROFILE

OFFICIAL NAME:
Kingdom of Thailand

Geography
Area: 513,115 sq. km. (198,114 sq. mi.); equivalent to the size of France, or
slightly smaller than Texas.
Cities: Capital--Bangkok (population 9,668,854); Nakhon Ratchasima (pop.
437,386 for Muang district and 2,565,685 for the whole province), Chiang Mai
(pop. 247,672 for Muang district and 1,595,855 for the whole province).
Terrain: Densely populated central plain; northeastern plateau; mountain
range in the west; southern isthmus joins the land mass with Malaysia.
Climate: Tropical monsoon.

People
Nationality: Noun and adjective--Thai.
Population (2004): 63.4 million. Labor force (2004): 35.8 million.
Annual population growth rate: 0.4%.
Ethnic groups: Thai 89%, other 11%.
Religions: Buddhist 94-95%, Muslim 4-5%, Christian, Hindu, Brahmin, other.
Languages: Thai (official language); English is the second language of the
elite; regional dialects.
Education: Years compulsory--12. Literacy--97.1% male, 93.9% female.
Health (2004): Infant mortality rate--6.5/1,000. Life expectancy--65.2 years
male, 73.4 years female.

Government
Type: Constitutional monarchy.
Constitution: New constitution promulgated October 11, 1997.
Independence: Never colonized; traditional founding date 1238.
Branches: Executive--King (chief of state), Prime Minister (head of
government). Legislative--National Assembly (bicameral). Judicial--composed
of the Constitutional Court, the Courts of Justice, and the Administrative
Courts.
Administrative subdivisions: 76 provinces, including Bangkok municipality,
subdivided into 795 districts, 81 subdistricts, 7,255 tambon administration,
and 69,866 villages.
Political parties: Multi-party system; Communist Party is prohibited.
Suffrage: Universal and compulsory at 18 years of age.

Economy
GDP (2004): $163.2 billion.
Annual growth rate (2004): 6.1%.
Per capita income (2004): $2,578.
Unemployment rate (2004): 2.0% of total labor force.
Natural resources: Tin, rubber, natural gas, tungsten, tantalum, timber,
lead, fish, gypsum, lignite, fluorite.
Agriculture (9.2% of GDP): Products--rice, tapioca, rubber, corn, sugarcane,
coconuts, soybeans.
Industry: Types--tourism, textiles, garments, agricultural processing,
cement, integrated circuits, jewelry, electronics, and auto assembly.
Trade (2004): Merchandise exports--$96.064 billion: textiles and footwear,
fishery products, computers and parts, electronics, electrical appliances,
jewelry, rice, tapioca products, integrated circuits, rubber, automobiles.
Major markets--ASEAN, U.S., EU, Japan, China, and Hong Kong. Merchandise
imports--$94.382 billion: machinery and parts, petroleum, iron and steel,
chemicals, vehicles and parts, jewelry, fish preparations, electrical
appliances, fertilizers and pesticides. Major suppliers--Japan, ASEAN, Middle
East, EU, China, and U.S.

PEOPLE
Thailand's population is relatively homogeneous. More than 85% speak a
dialect of Thai and share a common culture. This core population includes the
central Thai (33.7% of the population, including Bangkok), Northeastern Thai
(34.2%), northern Thai (18.8%), and southern Thai (13.3%).

The language of the central Thai population is the language taught in schools
and used in government. Several other small Thai-speaking groups include the
Shan, Lue, and Phutai.

Up to 12% of Thai are of significant Chinese heritage, but the Sino-Thai
community is the best integrated in Southeast Asia. Malay-speaking Muslims of
the south comprise another significant minority group (2.3%). Other groups
include the Khmer; the Mon, who are substantially assimilated with the Thai;
and the Vietnamese. Smaller mountain-dwelling tribes, such as the Hmong and
Mein, as well as the Karen, number about 788,024.

The population is mostly rural, concentrated in the rice-growing areas of the
central, northeastern, and northern regions. However, as Thailand continues
to industrialize, its urban population--31.6% of total population,
principally in the Bangkok area--is growing.

Thailand's highly successful government-sponsored family planning program has
resulted in a dramatic decline in population growth from 3.1% in 1960 to less
than 1% today. Life expectancy also has risen, a positive reflection of
Thailand's efforts at public health education. However, the AIDS epidemic has
had a major impact on the Thai population. Today, over 600,000 Thais live
with HIV or AIDS--approximately 1.5% of the adult population. Each year until
at least 2006, 30-50,000 Thais will die from AIDS-related causes. Ninety
percent of them will be aged 20-49, the most productive sector of the
workforce. The situation could have been worse; an aggressive public
education campaign in the early 1990s reduced the number of new HIV
infections from over 100,000 annually.

The constitution mandates 12 years of free education, however, this is not
provided universally. Education accounts for 19% of total government
expenditures.

Theravada Buddhism is the official religion of Thailand and is the religion
of about 95% of its people. The government permits religious diversity, and
other major religions are represented. Spirit worship and animism are widely
practiced.

HISTORY
Southeast Asia has been inhabited for more than half a million years. Recent
archaeological studies suggest that by 4000 BC, communities in what is now
Thailand had emerged as centers of early bronze metallurgy. This development,
along with the cultivation of wet rice, provided the impetus for social and
political organization. Research suggests that these innovations may actually
have been transmitted from there to the rest of Asia, including to China.

The Thai are related linguistically to Tai groups originating in southern
China. Migrations from southern China to Southeast Asia may have occurred in
the 6th and 7th centuries. Malay, Mon, and Khmer civilizations flourished in
the region prior to the arrival of the ethnic Tai.

Thais date the founding of their nation to the 13th century. According to
tradition, in 1238, Thai chieftains overthrew their Khmer overlords at
Sukhothai and established a Thai kingdom. After its decline, a new Thai
kingdom emerged in 1350 on the Chao Praya River. At the same time, there was
an equally important Tai kingdom of Lanna, centered in Chiang Mai, which
rivaled Sukothai and Ayutthaya for centuries, and which defines northern Thai
identity to this day.

The first ruler of the Kingdom of Ayutthaya, King Rama Thibodi, made two
important contributions to Thai history: the establishment and promotion of
Theravada Buddhism as the official religion--to differentiate his kingdom
from the neighboring Hindu kingdom of Angkor--and the compilation of the
Dharmashastra, a legal code based on Hindu sources and traditional Thai
custom. The Dharmashastra remained a tool of Thai law until late in the 19th
century. Beginning with the Portuguese in the 16th century, Ayutthaya had
some contact with the West, but until the 1800s, its relations with
neighboring kingdoms and principalities, as well as with China, were of
primary importance.

After more than 400 years of power, in 1767, the Kingdom of Ayutthaya was
brought down by invading Burmese armies and its capital burned. After a
single-reign capital established at Thonburi by Taksin, a new capital city
was founded in 1782, across the Chao Phraya at the site of present-day
Bangkok, by the founder of the Chakri dynasty. The first Chakri king was
crowned Rama I. Rama's heirs became increasingly concerned with the threat of
European colonialism after British victories in neighboring Burma in 1826.

The first Thai recognition of Western power in the region was the Treaty of
Amity and Commerce with the United Kingdom in 1826. In 1833, the United
States began diplomatic exchanges with Siam, as Thailand was called until
1938. However, it was during the later reigns of Rama IV (or King Mongkut,
1851-68), and his son Rama V (King Chulalongkorn (1868-1910), that Thailand
established firm rapprochement with Western powers. The Thais believe that
the diplomatic skills of these monarchs, combined with the modernizing
reforms of the Thai Government, made Siam the only country in South and
Southeast Asia to avoid European colonization.

In 1932, a bloodless coup transformed the Government of Thailand from an
absolute to a constitutional monarchy. King Prajadhipok (Rama VII) initially
accepted this change but later surrendered the kingship to his 10-year-old
nephew. Upon his abdication, King Prajadhipok said that the obligation of a
ruler was to reign for the good of the whole people, not for a select few.
Although nominally a constitutional monarchy since 1932, Thailand was ruled
by a series of military governments interspersed with brief periods of
democracy. Since the 1992 elections, Thailand has been a functioning
democracy with constitutional changes of government. On February 6, 2005,
Prime Minister Thaksin Shinawatra's Thai Rak Thai (TRT) party won 377 of 500
seats in the Lower House of Parliament, and on March 9, 2005, Prime Minister
Thaksin was chosen to serve a second term.

As with the rest of Southeast Asia, Thailand was occupied by the Japanese
during the Second World War. Since Japan's defeat in 1945, Thailand has had
very close relations with the United States. Threatened by communist
revolutions in neighboring countries such as Vietnam, Cambodia, and Laos,
Thailand actively sought U.S. assistance to contain communist expansion in
the region. Recently, Thailand also has been an active member in multilateral
organizations like the Association of South East Asian Nations (ASEAN) and
the Asia-Pacific Economic Cooperation (APEC) forum.

GOVERNMENT AND POLITICAL CONDITIONS
The King has little direct power under the constitution but is a symbol of
national identity and unity. King Bhumibol--who has been on the throne since
1946--commands enormous popular respect and moral authority, which he has
used on occasion to resolve political crises that have threatened national
stability.

Thailand's legal system blends principles of traditional Thai and Western
laws. The Constitutional Court is the highest court of appeals, though its
jurisdiction is limited to clearly defined constitutional issues. Its members
are nominated by the Senate and appointed by the King. The Courts of Justice
have jurisdiction over criminal and civil cases and are organized in three
tiers: Courts of First Instance, the Court of Appeals, and the Supreme Court
of Justice. Administrative courts have jurisdiction over suits between
private parties and the government, and cases in which one government entity
is suing another. In Thailand's southern border provinces, where Muslims
constitute the majority of the population, Provincial Islamic Committees have
limited jurisdiction over probate, family, marriage, and divorce cases.

The National Assembly consists of two chambers--the Senate and the House of
Representatives. The Senate is a non-partisan body with limited legislative
powers, composed of 200 directly elected members from constituent districts,
with every province having at least one Senator. The House of Representatives
has 500 members, 400 of whom are directly elected from constituent districts,
and the remainder drawn proportionally from party lists.

Thailand's 76 provinces include the metropolis of greater Bangkok. Bangkok's
governor is popularly elected, but those of the remaining provinces are
career civil servants appointed by the Ministry of Interior. Following the
1932 revolution which imposed constitutional limits on the monarchy, Thai
politics was dominated for a half century by a military and bureaucratic
elite. Changes of government were effected primarily by means of a long
series of mostly bloodless coups.

Beginning with a brief experiment in democracy during the mid-1970s, civilian
democratic political institutions slowly gained greater authority,
culminating in 1988 when Chatichai Choonavan--leader of the Thai Nation
Party--assumed office as the country's first democratically elected Prime
Minister in more than a decade. Three years later, yet another bloodless coup
ended his term.

Shortly afterward, the military appointed Anand Panyarachun, a businessman
and former diplomat, to head a largely civilian interim government and
promised to hold elections in the near future. However, following
inconclusive elections, former army commander Suchinda Kraprayoon was
appointed Prime Minister. Thais reacted to the appointment by demanding an
end to military influence in government. Demonstrations were violently
suppressed by the military; in May 1992, soldiers killed at least 50
protesters.

Domestic and international reaction to the violence forced Suchinda to
resign, and the nation once again turned to Anand Panyarachun, who was named
interim Prime Minister until new elections in September 1992. In those
elections, the political parties that had opposed the military in May 1992
won by a narrow majority, and Chuan Leekpai, a leader of the Democratic
Party, became Prime Minister. Chuan dissolved Parliament in May 1995, and the
Thai Nation Party won the largest number of parliamentary seats in subsequent
elections. Party leader Banharn Silpa-Archa became Prime Minister but held
the office only little more than a year. Following elections held in November
1996, Chavalit Youngchaiyudh formed a coalition government and became Prime
Minister. The onset of the Asian financial crisis caused a loss of confidence
in the Chavalit government and forced him to hand over power to Chuan Leekpai
in November 1997. Chuan formed a coalition government based on the themes of
prudent economic management and institution of political reforms mandated by
Thailand's 1997 constitution.

In January 2001, telecommunications multimillionaire Thaksin Shinawatra and
his Thai Rak Thai (TRT) party won a decisive victory on a populist platform
of economic growth and development. In the February 2005 elections, Thaksin
was re-elected by an even greater majority, sweeping 377 out of 500
parliamentary seats. Thaksin's second administration took office March 9,
2005.

Principal Government Officials
Chief of State--King Bhumibol Adulyadej
Prime Minister--Thaksin Shinawatra
Minister of Foreign Affairs--Kantathi Suphamongkhon
Ambassador to the U.S.--vacant (Charge d'Affaires is Chirachai Punkrasin)
Ambassador to the UN--Laxanachantorn Laohaphan

Thailand maintains an embassy in the United States at 1024 Wisconsin Ave. NW,
Washington DC 20007 (tel. 202-944-3600). Consulates are located in New York
City, Chicago, and Los Angeles.

ECONOMY
The Thai economy is export-dependent, with exports accounting for 60% of GDP.
Thailand's recovery from the 1997-98 Asian financial crisis relied largely on
external demand from the United States and other foreign markets. The Thaksin
government took office in February 2001 with the intention of stimulating
domestic demand and reducing Thailand's reliance on foreign trade and
investment. Since then, the Thaksin administration has refined its economic
message, embracing a "dual track" economic policy that combines domestic
stimulus with Thailand's traditional promotion of open markets and foreign
investment. Weak export demand held 2001 GDP growth to 2.1%. Beginning in
2002, however, domestic stimulus and export revival fueled a better
performance, with real GDP growth at 6.9% in 2003 and 6.1% in 2004.

Before the financial crisis, the Thai economy had years of manufacturing-led
economic growth--averaging 9.4% for the decade up to 1996. Relatively
abundant and inexpensive labor and natural resources, fiscal conservatism,
open foreign investment policies, and encouragement of the private sector
underlay the economic success in the years up to 1997. The economy is
essentially a free-enterprise system. Certain services, such as power
generation, transportation, and communications, are state-owned and operated,
but the government is considering privatizing them in the wake of the
financial crisis.

The Royal Thai Government welcomes foreign investment, and investors who are
willing to meet certain requirements can apply for special investment
privileges through the Board of Investment. To attract additional foreign
investment, the government has modified its investment regulations.

The organized labor movement remains weak and divided in Thailand; less than
2% of the work force is unionized. In 2000, the State Enterprise Labor
Relations Act (SELRA) was passed, giving public sector employees similar
rights to those of private sector workers, including the right to unionize.

Roughly 60% of Thailand's labor force is employed in agriculture. Rice is the
country's most important crop; Thailand is a major exporter in the world rice
market. Other agricultural commodities produced in significant amounts
include fish and fishery products, tapioca, rubber, corn, and sugar. Exports
of processed foods such as canned tuna, pineapples, and frozen shrimp are on
the rise.

Thailand's increasingly diversified manufacturing sector made the largest
contribution to growth during the economic boom. Industries registering rapid
increases in production included computers and electronics, garments and
footwear, furniture, wood products, canned food, toys, plastic products,
gems, and jewelry. High-technology products such as integrated circuits and
parts, electrical appliances, and vehicles are now leading Thailand's strong
growth in exports.

The United States is Thailand's largest export market and second-largest
supplier after Japan. While Thailand's traditional major markets have been
North America, Japan, and Europe, economic recovery among Thailand's regional
trading partners has helped Thai export growth (23% in 2004). Further
recovery from the financial crisis depends heavily on increased exports to
the rest of Asia and the United States.

Machinery and parts, vehicles, electronic integrated circuits, chemicals,
crude oil and fuels, and iron and steel are among Thailand's principal
imports. The recent increase in import levels (27% in 2004) reflects the need
to fuel the production of high-technology items and vehicles.

Thailand is a member of the World Trade Organization (WTO) and the Cairns
Group of agricultural exporters. Tourism contributes significantly to the
Thai economy (about 4%), and the industry has benefited from the Thai baht's
depreciation and Thailand's stability. Tourist arrivals in 2004 were 11.8
million.

Bangkok and its environs are the most prosperous part of Thailand, and the
infertile northeast is the poorest. An overriding concern of successive Thai
Governments, and a particularly strong focus of the current government, has
been to reduce these regional income differentials, which have been
exacerbated by rapid economic growth in and around Bangkok and the financial
crisis. The government is trying to stimulate provincial economic growth with
programs such as the Eastern Seaboard project and the development of an
alternate deep-sea port on Thailand's southern peninsula. It also is
conducting discussions with Malaysia to focus on economic development along
the Thai-Malaysian border.

Although the economy has demonstrated moderate positive growth since 1999,
future performance depends on continued reform of the financial sector,
corporate debt restructuring, attracting foreign investment, and increasing
exports. Telecommunications, roadways, electricity generation, and ports
showed increasing strain during the period of sustained economic growth and
may pose a future challenge. Thailand's growing shortage of engineers and
skilled technical personnel may limit its future technological creativity and
productivity.

FOREIGN RELATIONS
Thailand's foreign policy includes support for ASEAN in the interest of
regional stability and emphasis on a close and longstanding security
relationship with the United States.

Thailand participates fully in international and regional organizations. It
has developed increasingly close ties with other ASEAN members--Indonesia,
Malaysia, the Philippines, Singapore, Brunei, Laos, Cambodia, Burma, and
Vietnam--whose foreign and economic ministers hold annual meetings. Regional
cooperation is progressing in economic, trade, banking, political, and
cultural matters.

In recent years, Thailand has taken an increasingly active role on the
international stage. When East Timor gained independence from Indonesia,
Thailand, for the first time in its history, contributed troops to the
international peacekeeping effort. As part of its effort to increase
international ties, Thailand has reached out to such regional organizations
as the Organization of American States (OAS) and the Organization for
Security and Cooperation in Europe (OSCE). Thailand has contributed troops to
reconstruction efforts in Afghanistan and Iraq.

U.S.-THAI RELATIONS
Since World War II, the United States and Thailand have developed close
relations, as reflected in several bilateral treaties and by both countries'
participation in UN multilateral activities and agreements. The principal
bilateral arrangement is the 1966 Treaty of Amity and Economic Relations,
which facilitates U.S. and Thai companies' economic access to one another's
markets. Other important agreements address civil uses of atomic energy,
sales of agricultural commodities, investment guarantees, and military and
economic assistance. In June 2004 the United States and Thailand initiated
negotiations on a free trade agreement which, when concluded, will reduce and
eliminate barriers to trade and investment between the two countries.

The United States and Thailand are among the signatories of the 1954 Manila
pact of the former Southeast Asia Treaty Organization (SEATO). Article IV(1)
of this treaty provides that, in the event of armed attack in the treaty area
(which includes Thailand), each member would "act to meet the common danger
in accordance with its constitutional processes." Despite the dissolution of
the SEATO in 1977, the Manila pact remains in force and, together with the
Thanat-Rusk communique of 1962, constitutes the basis of U.S. security
commitments to Thailand. Thailand continues to be a key security ally in
Asia, along with Australia, Japan, the Philippines, and South Korea. In
December 2003, Thailand was designated a Major Non-NATO Ally.

Thailand's stability and independence are important to the maintenance of
peace in the region. Economic assistance has been extended in various fields,
including rural development, health, family planning, education, and science
and technology. The formal USAID program ended in 1995. However, there are a
number of targeted assistance programs which continue in areas of mutually
defined importance, including: health and HIV/AIDS programming; refugee
assistance; and trafficking in persons. The U.S. Peace Corps in Thailand has
approximately 128 volunteers, focused on primary education, with an
integrated program involving teacher training, health education, and
environmental education.

Thailand has received U.S. military equipment, essential supplies, training,
and assistance in the construction and improvement of facilities and
installations since 1950. In recent years, U.S. security assistance has
included military training programs carried out in the United States and
elsewhere. A small U.S. military advisory group in Thailand oversees the
delivery of equipment to the Thai Armed Forces and the training of Thai
military personnel in its use and maintenance. As part of their mutual
defense cooperation over the last decade, Thailand and the United States have
developed a vigorous joint military exercise program, which engages all the
services of each nation and now averages 40 joint exercises per year.

Thailand is a route for Golden Triangle--the intersection of Burma, Laos, and
Thailand--heroin trafficking to international markets. While Thailand is no
longer a significant opium producer, money laundering, police and military
corruption, and a continuing narcotics flow out of Burma have hindered
efforts to limit its role as a transfer point. The United States and Thailand
work closely together and with the United Nations on a broad range of
programs to halt the flow of narcotics. A memorandum of understanding was
signed in 1971 affirming U.S.-Thai cooperation, resulting in a strengthened
Thai enforcement program. The U.S. has extended financial support for the
International Law Enforcement Academy (ILEA) in Bangkok, which provides
counternarcotics and anti-crime training to participants from regional
countries. With U.S. support, Thailand has a good record in crop control, law
enforcement, and demand reduction.

Trade and Investment
The United States is Thailand's second largest trading partner after Japan;
in 2004 merchandise imports from Thailand totaled $17.6 billion, and
merchandise exports totaled $6.4 billion. The U.S., Japan, Singapore, and the
European Union are among Thailand's largest foreign investors. American
investment, concentrated in the petroleum and chemicals, finance, consumer
products, and automobile production sectors, is estimated at $21 billion.

Principal U.S. Embassy Officials
Ambassador--Ralph L. Boyce
Deputy Chief of Mission--Alexander A. Arvizu
Political Affairs Counselor--Susan Sutton
Economic Affairs Counselor--Michael J. Delaney
Public Affairs Counselor--Mark Larsen
Consul General--Edward J. Wehrli

The U.S. Embassy in Thailand is located at 120/22 Wireless Road, Bangkok
(tel. 66-2-205-4000). There is a Consulate General in Chiang Mai, 387
Wichayanond Road (tel. 66-53-252-629).