International Business : THE THAILAND ECONOMY

Thailand has one of Asia’s fastest-growing economies. Its gross domestic product increased, in real terms, by an annual average of 7.9% between 1980 and 1991. But burgeoning business has also brought problems, stemming from an inadequate infrastructure, lopsided income distribution and a shortage of skilled technicians. To meet the crisis, Thailand plans to make major investments in public education over the next few years and to spend more than $60 billion on transportation and telecommunications projects.

Agriculture

Rice is Thailand’s most important crop, with more than half the country’s citizens depending on its cultivation for their livelihoods. Other major commodities are fish, tapioca, rubber, corn and sugar. The export of processed foods such as frozen shrimp and canned tuna and pineapple has increased dramatically. Timber was a major source of export revenue until a ban on uncontrolled logging was imposed in 1989 because of severe flooding caused by deforestation.

Manufacturing

Although Thailand has traditionally had an agrarian-based economy, its manufacturing sector has grown tremendously in recent years. Having recovered from political turmoil in 1991 and ‘92, the country is once again attractive to foreign investors, particularly Japanese and Taiwanese manufacturers. Textiles, clothing and electrical goods, mainly semiconductors, are Thailand’s largest exports. And a wide range of factories and assembly plants produce electronic appliances, building supplies and cars for the Thai market.

Mining and Minerals

Thailand is a partner with Los Angeles-based Unocal Corp. and Total, the French energy giant, in the creation of a controversial $1-billion natural gas pipeline across neighboring Myanmar. But Thailand does rely heavily on imported petroleum. Gemstones, primarily diamonds, are the country’s principal mineral export. Tin, lead, manganese, copper and zinc are also mined.

Tourism

Tourism is Thailand’s largest source of foreign exchange. An estimated 5.4 million tourists visited the country in 1991. Tourism fell off after the military coup that year but is now on the rise. Several new luxury hotels in Bangkok and beach resorts in Pattaya and Phuket have opened to attract a growing number of visitors from Japan, Europe, the United States and Taiwan.

Trade

Rapid economic growth in recent years has led to greatly increased trade with other countries. Between 1987 and 1991, for example, exports more than doubled and imports increased almost 200%. Thailand’s main trading partners are Japan, Europe and the United States. Its principal imports, machinery and parts, reflect the large-scale investments being made by foreign manufacturers. As a result, Thailand has been running a trade deficit overall.

Sources: Bank of America, World Information Services

--Compiled by LAURA B. BENKO

When Doing Business There...

As one of the fastest-growing economies on the Pacific Rim, Thailand is attracting Western visitors by the tens of thousands. But while the nation’s business community is becoming accustomed to Western ways, the Thai culture remains distinctive. Visitors will encounter differences not only to the United States, but to other Far East nations as well.

DO

* Dress in appropriate, conservative business attire. Neatness, personal appearance, politeness and social behavior are crucial to how you will be judged. Short sleeves for men are acceptable for social occasions.

* Take off your shoes when entering temples or homes, even if the host says you don’t have to.

* Wait to see how a Thai greets you upon introduction. In Bangkok, many Thai business people prefer to shake hands with foreigners instead of using the traditional Thai greeting, the wai , which is reserved for other Thais or tourists. In the wai , palms are placed together in front of the chest in prayer-like fashion, with head bowed slightly.

* When meeting people, note where they fit in the overall hierarchy of Thai society. Status is important.

* Bring a small gift when invited to a Thai home or when you wish to show appreciation for a favor. However, no knives or scissors should be presented. They are associated with sharp words and feeling or with cutting off relationships.

DON’T

* Don’t schedule meetings after 3 p.m. Thai business people tend to get an early start on the evening rush-hour commute.

* Don’t display your temper or openly express anger. Thais value a cool head and frown on loud, boisterous behavior.

* Don’t expect someone else to help with the bill if you do the inviting. The bill is never split. If it is not clear who extended the invitation, the most senior person picks up the tab. If you are the only foreigner present, you should offer.

* Don’t expect management to seek input from the lower ranks. Thais manage from the top down and senior executives make the decisions.

* Don’t ask for chopsticks in an attempt to go native. Thais eat with a fork and spoon unless they are eating noodles or rice Chinese-style.

Sources: Worldview Systems, John Irvine & Associates

--Compiled by LIESL GUINTO / Los Angeles Times