The land of smiles and permanent revolution

Once a strong and determined economy, recent years have seen Thailand struggle for political and social stability


A country rich in natural resources, Thailand is unique in its region due to having never been ruled by a foreign power. Despite recent news that the new military government is changing investment laws that would make it harder for foreigners to control Thai companies, it insists it is simply closing a loophole in existing policy, and that foreign manufacturers, exporters or companies with investment privileges would be unaffected.

Although experiencing continued political turbulence, Thailand’s fiscal situation remains strong and, with a focus on attracting private investment, a strengthened financial sector, and a trade balance surplus in the first quarter of 2009, the country stands in good stead to withstand the global economic crisis.

  • 1932 saw a westernised military elite stage a coup d’état and forced the king to accept the role of constitutional monarch.
  • In 1939, Phiban came to power, a nationalistic ruler, changing the country’s name from Siam to Thailand.
  •  The 1990s witnessed increasing private participation in the telecommunications sector, as state monopolies began to grant concessions to private operators. In fixed line services, concessions were granted to two private operators, True and TOT.
  •  Between 2002-2004, due to a highly developed infrastructure, free enterprise economics, and genuinely pro-investment policies, it became one of East Asia’s best performers with an average six percent annual real GDP growth.
  •  In 2005, the Telecommunications Business Law was amended which effectively raised the limit of allowable foreign ownership from 25 percent to 49 percent.
  • In 2006 Shin Corporation was purchased by Temasek Holdings in a controversial deal which saw Thaksin Shinawatra with a 49.6 percent stake. The biggest deal in Thai stock-market history was shrouded in secrecy and controversy.
  • September 2006 saw a military coup which ousted PM Shinawatra. Elections were held in December 2007, with Shinawatra’s People’s Power Party (PPP) emerging positively.
  •  In May 2008 anti-Shinawatra People’s Alliance for Democracy (PAD) began street demonstrations, occupying the prime minister’s office in August.
  •  In December 2008, Abhisit Vejjajiva was elected leader of the Democratic Party, according to results of a parliamentary vote. The new leader implements free market economics to encourage private investment.

Molotov cocktails were launched during New Year celebrations, as deadly riots broke out in support of Shinawatra. According to the NSDB the riots sparked losses of 220 million baht ($6.61m) in damage to public property and loss of state income, whilst Prime Minister Abhisit Vejjajiva announced that tourism was likely to fall by more than 102 billion baht ($2.97bn).