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CHAPTER 3

THEORY AND LITERATURE REVIEW

ASEAN, a regional block and Thailand one of the member countries of the same is the

primary focus in this study. As such it has been divided into three broad parts. The first part,

will deal with an overview of the whole concept of Regionalism; the second part will deal

with ASEAN as an emerging regional block and in the third there will be a general overview

of the endurance of Thailand through the ages.

Part 1

1.1. The concept of Regionalism and Regional Trade Blocks

The concept of Regionalism has come from the basic idea of forming Regional groups in

order to promote economic integration among them and it can be dated back to 1960s. In

general, Regions in international politics has been described as

“a limited number of states linked by a geographical relationship and by a degree of mutual

interdependence, and could be differentiated according to the level and scope exchange,

formal organizations and political interdependence”. (Joseph S Nye1968, p. 149)

However, there are certain ambiguities regarding the definition of Regions, because, the issue

of areas which constitute a region is something controversial. Although many regions are

denoted by obvious geographic or cultural boundaries and there is some amount of

arbitrariness present. For instance, the Asia – Pacific region is a classical example. Some

observers consider it as one region, while for some others it consists of two different regions,

yet for a third group, it is an amalgamation of more than three regions. For the formation of a

region “the major criteria remain geographical contiguity, interaction, and a subjective

perception of belonging to a distinctive community and having a collective regional identity”.

(Hass 1958, p.16). However according to Bruce Russett, “the geographical criteria are too

limiting in an increasingly interdependent and globalized world” (Russett 1967, p. 120).

Today, the term Region implies a social system largely based on trans-local relations. It is

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regarded as a dynamic process characterized by economic political as well as different socio-

cultural matters.

“The region as international society is characterized by norms and rules which increase the

level of predictability in the system. Regions can be ordered in the world system hierarchy

and thus three structurally different types of regions can be distinguished: Core Regions,

Peripheral Regions and between them, Intermediate Regions”. (Hettne. Bjorn 2005).

Thus, a useful definition of a Region in the present scenario is-

“Regions are distinguished by first by their relative degree of economic dynamism and

second, by their relative political stability and the dividing separating line may run through

existing states. The borderlines are impermanent. Rather, one could think of the hierarchical

structures as consisting of zones which the region enter or leave depending on their economic

position and political stability, as well as the level of regionness”. (Hettne Bjorn 2005)

Many studies have emphasized on these non-geographic criteria and argued that “besides

proximity members of a region also share cultural, economic, linguistic or political ties”

(Russett. 1967, p 75). On the basis of this, it can be argued that other factors like, common

historical experiences, power and wealth distribution levels, cultural social and ethnic

traditions, and ideological as well as political preferences etc also play its role in the

formation of regions and regional groupings.

In spite of the contradicting ideas regarding Regions, Regionalism as a concept, holds its own

good in the area of International Politics and Economy, and has often been described as the

condition by which group of nation-states, usually in the same geographic region, agree to

cooperate and share responsibility to achieve common goal (Balam. David M & Veseth.

Michael. 2005). Thus, in a way, we can say that Regionalism is the logical solution to

problems faced by nation-states that are too big to be solved alone. Joseph S Nye in his book

International Regionalism (1968) has suggested that-

“the process of regionalism and integration across many areas of the globe were aided by the

growing number of newly independent former colonies, by some degree of relaxation in the

tensed superpower relations, by a growing realization that economic interdependence and an

open multilateral trading regime brought their own pitfalls, and by a successful

rapprochement of key west European countries through economic integration schemes”

(Joseph S Nye 1968, p 124).

Regarding Regionalism, the definition given by Ernst B. Hass is worth noting. According to

Hass – “Regional cooperation is a vague term covering any interstate activity with less than

universal participation designed to meet commonly experienced need”. (Hass. 1958, p 49).

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Based on the definitions provided by these scholars, we can say that, Regionalism is in fact a

state- led project, characterized by a formal and law based inception as a result of the

intergovernmental dialogues and treaties between states in order to solve some common

problems or to achieve common needs.

At this point it is important to note the two concepts of Regionalism and Regionalization.

Regionalization in its simplest refers to the tendency to form regions or we can say the

process of doing so. “Regionalization can be conceived as the growth of societal integration

with a given region, including the undirected processes of social and economic interaction

among units” (Hurrell. 1995, p. 251). As a matter of fact, regionalization is a process that is

characterized by transnational cooperation among the neighbouring states caused solely by

non political forces, whereas, Regionalism is a deliberate attempt to steer the process of

regionalization politically. Thus, the basic difference between these two concepts is that

Regionalization is the tendency to form regions whereas Regionalism is the deliberate and

purposive proneness to create regional institutions and arrangements. However, regionalism

and regionalization as a matter of fact are very important variations of regionalism. These

variations can be explained in accordance with various factors. According to Fiona Butler,

“the level of growth in socio-economic interdependence; the extent to which shared values

and cultural traditions persist; the extent to which formal institutional arrangements are

sought; the extent to which a regional grouping displays a cohesive identity and external

presence” (Butler 1997, p. 410)

The key variables or the key actors of the different regional groupings may differ owing to

the own uniqueness of the region or due to several other factors. Butler explains that,

“they may be governments and states as well as particular economic interests. The main

objectives of the regional groupings may also vary. They may be concerned particularly with

intra-regional trade and investment or with the defence and security, or even with the

protection of social and cultural traditions” (idem).

In general, Regionalism has been divided into two kinds – the Old Regionalism and the New

Regionalism.

“The Old Regionalism, developed in 1930s, is a regionalisation process that engages

countries in the same geographical area which lead to the regional integration as its end goal.

On the other hand the New regionalism, developed in 1990s, is not only engage countries in

the same geographical position and does not aim to create a regional integration” (Hwee. Yeo

Lay 2005, http://revistas.ucm.es/cps/16962206/articulos/UNIS0505230008A.pdf)

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In a way, the old regionalism was mainly focussed around the emergence of the European

regional organizations and was largely characterized by the focus on the internal functioning

of the region and the changing pace and attributes of the intra-regional relations. Thereby this

wave was often believed to be an inward looking process but was also considered to be a ray

of hope for the progressive development that successfully moved from consultation and

coordination among the different nation states with certain common objectives into a new era

of integration. Thus, this can be seen as developing the very base for the next phase of

cooperation and ultimately integration which is often referred to as New Regionalism. In fact,

the growth of this concept of new regionalism as a worldwide phenomenon which though

varies in scale, character and significance from region to region can be dated back to 1980s

through the first half of 1990s. “What is ‘new’ about the regionalism that surfaced in the

1980s and became prominent in the 1990s is its outward-looking focus on external links with

other regions” (World Wide Web Document: Hwee. Yeo Lay 2005, Realism and Reactive

Regionalism: Where is East Asian Regionalism heading,

http://revistas.ucm.es/cps/16962206/articulos/UNIS0505230008A.pdf , accessed on 28th October

2012)

Therefore, this new regionalism which is also called the open regionalism is often regarded as

an outward-looking and market-driven process of integration characterized by increasingly by

avoidance to a high level of protection. Also, it is believed to be a part of the ongoing process

of globalization and internationalization of the world’s political economy. Professor Bjorn

Hettne defines this new regionalism as

“a multidimensional process of regional integration which includes economic, political, social

and cultural aspects... Regional integration is a package rather than a single policy, whether

concerned with economies or foreign policy... It is spontaneous and from below (firm, market

and customer driven), whereas the old type was imposed from above (bureaucratically flat

driven) and was therefore more limited and more prone to failure of the kind that grand

designs invariably suffer” (Hettne Bjorn & Inotai. A 1994, p.13)

3.1.1. Regionalism and Globalization

Globalization, as a concept has gained much attention and importance. It is a new age

phenomena which “describe the breakdown of discrete economic spaces” (Rosamond 1999,

p. 179). Globalization has always been linked to the liberalization of the global finance, the

trans-nationalization of production, integration of the world markets, the growth of the world

trade and a borderless world. In a way, we can say that “globalization refers to the shift

towards a more integrated and interdependent world economy” (Hill & Hernandez-Requejo

2011, p. 33) Today, globalization is not only concentrated along economic lines, but has been

extended to include an emerging global culture. This is supported by the fact that, today the

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world population consumes similar goods and services, the growth of communication and

technology and the use of a common business language, English. Globalization proposes the

openness of the economies of the world and facilitates the movement of factors of production

and labour across the national borders. The growth and recognition of globalization as world

phenomena can be attributed to two basic macro factors:

“The first is the decline in barriers to the free flow of goods, services and capital that has

occurred since the end of World War II. The second factor is technological change,

particularly the dramatic developments in recent years in communication, information

processing, and transportation technology” (Hill & Hernandez-Requejo 2011, p. 37)

A number of global institutions have been created in order to help and facilitate the wave of

globalization, which includes General Agreement on Tariff and Trade (GATT) and its

successors, The World Trade Organization (WTO), The International Monetary Fund (IMF)

and its sister concerns, The World Bank and The United Nations.

However, globalization has often being criticized on several grounds. According to the

renowned political scientist Toshiro Tanaka criticize that the basic problem of globalization is

its selectiveness, “Execution is inherent in the process (of globalization) and the benefits are

evenly balanced by misery, conflict and violence” (Tanaka & Inoguchi 1997, p. 45). As a

matter of fact, the opponents of globalization often refer to globalization as

‘Americanization’ because of the US involvement in the post World War II era as a catalyst

for the whole process of globalization and often regarded as a weakly regulated world system

that favours the few big and tortures the weak many. According to Fiona Butler,

“Our understanding of globalization processes emphasizes rapid trans-nationalization of

capital, trade, information and technology. The world has become smaller. However, human

resources and social customs are less often transnational phenomena. Globalization

dominated by Western corporate identities is often perceived as a threat to local customs and

communities and thus, regionalism and integration may be seen as mechanisms to protect and

enrich ‘local’ identity and values” (Butler Fiona 1997, p. 425)

Thus, we can say regionalism as a phenomena came to the floor to address the shortcomings

of the bigger concept of globalization. It can said to be an undercurrent of globalization,

which also believes in liberalization but on a regional basis first. Therefore, both the

processes have the same basic ideology that is of trade liberalization in the global perspective

and thus can be said to be two approaches of the same principle. Regionalism seems to

address the important aspects of globalization like, interdependence among the world

economies and the trans-nationalization of the nation states.

“globalization is a present time phenomena, which acts as a catalyst of the existing

interdependence between the actors of international society” (Tomuschat 1999, p. 9) and

“globalization trans-nationalizes problems of economic, financial and environmental nature

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as well as those which are related to security and migration flows, which put the capacity of

the state to react in question” (Fatouros. A.A, 1999, p 42)

So we can say, that its regionalism, which is dealing with these aspects through an

institutionalised or in a decentralized way and is surely capable of opening up the individual

economies to the world. The drivers of regional integration can be attributed to both Political

and Economic aspects.

“Linking neighbouring countries and making them increasingly dependent on each other

creates incentives for political cooperation between the neighbouring states and reduces the

potential for violent conflict. In addition, by grouping their economies, the countries can

enhance their political weight in the world........ The economic case for regional integration is

straightforward. Unrestricted free trade will allow countries to specialize in the production of

goods and services that they can produce more efficiently. The result is greater world

production than would be possible with trade restrictions (Hill & Hernandez-Requejo 2011,

p. 307)

Thus, the basic aim behind the process of regional integration is to achieve a peaceful

coexistence and political cooperation among the member nations. And since economy can’t

exist of its own and politics do have its say on economy, so these regional blocs also aims to

achieve the additional gains from the free flow of trade and investment between countries,

because it is easier to establish a free trade and investment regime among a limited number of

adjacent countries than among the world community.

Fiona Butler has defined the different types of regionalism:

Regionalism: a process involving the growth of informal linkages and transactions

derived primarily from economic activity but involving social and political

interconnectedness too.

Regional awareness and identity: where a mixture of historical, cultural and social

traditions lead to a shared perception of belonging to a particular community.

Regional interstate cooperation: States or governments may sponsor agreements and

co-ordination amongst themselves to manage common problems and protect and

enhance the role of the state and the power of the government.

State-promoted regional economic integration: Often the most common form of

regionalism, governments and business interests pursue economic integration (this can

differ in terms of depth or sectoral scope) in order to promote trade liberalization and

economic growth.

Regional cohesion: whereby a combination of these first four processes might lead to

the emergence of a cohesive and consolidated regional unit. Such a highly political

cohesive grouping can have a decisive impact upon both its ‘internal’ environment

and upon global politics (Butler. Fiona 1997, p.410)

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Owing to this basic underlying principle, Regional Trading Blocs were formed after the end

of the World War II. These regional trading blocs are often known to have two important

favourable effects. First, within the regional block the exchange rate volatility is somewhat

less risky and secondly, with the growing level of macroeconomic integration within such

blocks, there is a growing trend towards greater harmonization of standards for products and

industry standards for different aspects like labour, pollution, safety, environment etc. The

supporters of regionalism argue that “Article 24 of GATT permits regional trade agreements

provided there is no increase in barriers to outsider countries” (Kotabe et al. 2011, p 548).

They are also of the view that regionalism is actually a positive step toward globalization as it

produces economies of scale and political and economic bases essential for developing

countries that may not be possible on a global scale. However, in a way, the ultimate aim

behind the formation of the regional trading block is trade liberalization but the scope and

purpose is different from that of globalization

3.1.2. Regional Trade Block

The regional trading block has evolved as a new trend in the international economic activity

which is often characterized by the formation of multinational trading blocs. The Trade

liberalization in the global perspective is often known to have originated from two

approaches.

“The first is a reciprocal reduction of trade barriers on a non-discriminatory basis. Under the

general Agreement on Tariff and Trade (GATT) and its successor the World Trade

Organization (WTO), member nations acknowledged that tariff reductions agreed on by any

two other nations would be extended to all other members............. The second approach to

trade liberalization occurs when a small group of nations, typically on a regional basis, form a

regional trading arrangement. Under this system, member nations agree to impose lower

barriers to trade within the group than to trade with non-member nations. Each member

nation continues to determine its domestic policies, but the trade policy of each includes

preferential treatment for group members” (Robert J Carbaugh 2011, p. 271).

The growth and development of this particular trend of forming regional trade blocks is often

said to be due to three main reasons-

Firs reason being, the failure of the very principle of GATT and WTO to implement on a real

basis, the process of the multilateral trade liberalizations. It is because when these

organizations were formed i.e. after the Second World War, most off the Asian, African and

Middle Eastern countries were still colonies. Moreover, these institutions were the brain child

of the American and European counterparts and also these newly developed countries found

the underlying premise that the international trade would be conducted on the basis of market

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forces. It is because; these developing countries were characterized by a large amount of

government involvement in the economic affairs.

Secondly, during 1970s and 80s the economic growth of the developed countries have slowed

down. This provided an impetus to the intra- industry trade in the developing counterparts.

Thus, “regional trade organizations appeared to provide the means to capitalize on trade’s

ability to act as an engine of growth” (Yeng, Perdikis & Kerr, 1999, p. 5)

The third reason was the growing realization among the developing nations that the

prevailing protectionist attitude for import substitution is not serving their purpose and thus

they were looking for opening their economies. And in that scenario, the regional trade

organizations provided the much needed change because, by means of regional trade, the

pace of change would be under governmental control of the individual member states and

moreover, there is a less economic difference than with the developed counterparts. (Yeng,

Perdikis & Kerr, 1999)

The very first instance of it was European Coal and Steel Community in 1951 which then

evolved into European Economic Community in 1958 and finally lead to the establishment of

the present European Union under its current name in 1993 with 27 member countries.

Picture 5: EU Member Countries

(Source: Google Images, http://www.standupamericaus.org/economy/a-failed-union-

members-may-want-to-leave-the-eurozone, accessed on 27th Oct 2012)

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It has been argued that the general advantages of these regional trade blocks are threefold.

First regionalism allows the member countries more economical and political bargaining

power in international negotiations. Secondly, it expands and creates market opportunities for

the member countries. Third, it helps in developing intra-firm and intra-governmental trade

movements (Kotabe et al. 2011). Thus owing to these advantages, the reality is that, most

member countries of WTO are members to some regional trade groupings. Apart from

Europe, this undercurrent of regionalism have had its affect in the other parts of the world as

well resulting in the formation of NAFTA (The North American Free Trade Agreement) in

North America in 1994, MERCOSUR (Mercado Comun del Cono Sur) in South America in

1991 and In Asia, the emergent regionalism in the form of ASEAN (The Association of the

South East Asian Nations) which came into existence in 1967 by Five members and now

grown to be a full fledged organization with ten members and the growing integration among

them as well as with other regional trade blocks in the form of ADEAN-EEC Cooperation

Agreement with EU, ASEAN+3 and ASEAN+6 framework etc.

Picture 6: NAFTA Member Countries

(Source: Google Images, http://www.bigstockphoto.com/image-6774624/stock-photo-nafta-

countries-map, accessed on 27th Oct 2012)

Picture 7: MERCOSUR Member Countries

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(Source: Google Images, http://www.argentour.com/en/argentina_economy/mercosur.php,

accessed on 27th Oct 2012)

Picture 8: ASEAN Member Countries

(Source: Google Images: http://yourviet.blogspot.com/2012/08/asean-asean-economic-

community-in-2015.html, accessed on 27th Oct 2012)

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Part II

1.2. The Association of South East Asian Nations (ASEAN)

With the signing of the “Bangkok Declaration” on 8th

August 1967 in Bangkok Thailand, the

new era of regional integration in Asia was formally laid down. It was signed by the

Founding Fathers of ASEAN namely, Indonesia, Malaysia, Philippines, Singapore and

Thailand. This was in fact the very first successful attempt at regional integration in Asia,

though it represents only a part of the bigger Asian framework. It is because, describing

regionalism in Asia as a whole is not easy.

“After repeated unsuccessful attempts in the past, this event was a unique achievement,

ending the separation and aloofness of the countries of this region that had resulted from

colonial times when they were forced by the colonial masters to live in cloisons etanches,

shunning contact with the neighbouring countries” (Khoman 1992, p. xviii)

This lack of regionalism in the greater Asian context in the early decades immediately

following the 2nd

World War can be attributed to several factors like the vastness and the

diversity of the region as a whole, the different historical backgrounds, the existence of strong

extra regional ties, the different threat perceptions as well as political fragility and transition.

“It arose out of desire for member countries to express a sense of solidarity with one another,

and the United States, at a time of a strong anticommunist sentiment and an increasing US

involvement in the Vietnam War. The initial aim of the group was regional peace and

security, along with the possibility of receiving US aid” (Kotabe et all. 2011, pg 549).

This describes the very purpose of the inception of ASEAN, which was essentially external

unlike Europe, where the basic reason behind the integration was “generated by the wish to

overcome lasting contention among the founding members” (Gramegna 1997). But in the

ASEAN context, the very inception of ASEAN was driven by political motives of its

founding members. “The underlying motivation for the creation of ASEAN was driven by

external factors of a political and security nature” (idem). In fact, the growing communist fear

from China, the potential Vietnam aggression and insurgency movements etc. were the

guiding factors behind the formation of ASEAN.

“In 1967, when their respective political stability was believed to be at risk Indonesia,

Malaysia, Philippines, Singapore and Thailand formed The Association of Southeast Asian

Nations (ASEAN) in response to a perceived military threat from Vietnam. This fear was

heightened in the mid 1970s due to the power void created by the USA departure from

Vietnam” (Angresano James 1996, p 114)

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Thus, ASEAN was primarily a political integration, in a level of intra – national collaboration

and the strengthening of the cooperation among the governments of the member states. As

suggested by Thanat khoman, the then Foreign Minister of Thailand when ASEAN was

founded in Bangkok – “the decolonization and cold war rivalry for client states were

instrumental in facilitating the emergence of common interest in order to be heard and to be

effective”(Khoman 1992, p. xviii). On the same line, S. Rajaratnam, the then Foreign

Minister of Singapore, and one of the Founder fathers of ASEAN has said that, “ASEAN was

born out of fear rather than idealistic convictions about regionalism” (World Wide Web

Document: Rajaratnam. S, 1992, ASEAN: The Way Ahead,

http://www.aseansec.org/13991.htm , accessed on 29th

October 2012)

Thus, in a way, the improvement of the external cohesion and increased bargaining power

were the factors that were instrumental in the formation and development of ASEAN.

According to Thanat Khoman, there were several reasons behind the need for an organization

for regional cooperation by this region:

1. The most important of them was the fact that, with the withdrawal of the colonial

powers, there would have been a power vacuum which could have attracted outsiders

to step in for political gains. As the colonial masters had discouraged any form of

intra-regional contact, the idea of neighbours working together in a joint effort was

thus to be encouraged.

2. Secondly, as many of us knew from experience, especially with the Southeast Asia

Treaty Organization or SEATO, co-operation among disparate members located in

distant lands could be ineffective. We had therefore to strive to build co-operation

among those who lived close to one another and shared common interests.

3. Thirdly, the need to join forces became imperative for the Southeast Asian countries

in order to be heard and to be effective. This was the truth that we sadly had to learn.

The motivation for our efforts to band together was thus to strengthen our position

and protect ourselves against Big Power rivalry.

4. Finally, it was common knowledge that co-operation and ultimately integration serve

the interests of all- something that individual efforts can never achieve.

(World Wide Web Document: Khoman. Thanat, ASEAN Conception and Evolution,

http://www.aseansec.org/thanat.htm , accessed on 29th

October 2012)

Thus on 8th

August 1967, the five foreign ministers, Adam Malik of Indonesia, Narciso R.

Ramos of Philippines, Tun Abdul Razak of Malaysia, S. Rajaratnam of Singapore and Thanat

Khoman of Thailand – signed the Bangkok Declaration in the main hall of the Department of

Foreign Affairs building in Bangkok, Thailand and thereby, The Association of Southeast

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Asian Nations (ASEAN) was born. And the document that they signed is what is known

today as Bangkok Declaration or ASEAN Declaration.

“It was a short, simply worded document containing just five articles. It declared the

establishment of an Association for Regional Cooperation among the countries of Southeast

Asia to be known as the Association of Southeast Asian nations (ASEAN) and spelled out the

aims and purposes of that Association. These aims and purposes were about cooperation in

the economic, social, cultural, technical, educational and other fields and in the promotion of

regional peace and stability through abiding respect for justice and the rule of law and the

adherence to the principle of the United Nations Charter. It stipulated that the Association

would be open for participation by all states in the Southeast Asian region subscribing to its

aims, principles and purposes. It proclaimed ASEAN as representing the collective will of the

nations of Southeast Asia to bind themselves together in friendship and cooperation and

through joint efforts and sacrifices, source for their peoples and for posterity the blessings of

peace, freedom and prosperity”

On the very first speech after the formal inception of ASEAN, Narciso Ramos, the then

Secretary of Foreign Affairs of Philippine said,

“The fragmented economies of Southeast Asia, each country pursuing its own limited

objectives and dissipating its meagre resources in the overlapping for even conflicting

endeavours of sister states carry the seeds of weakness in their incapacity for growth and their

self-perpetuating dependence on the advanced, industrial nations. ASEAN, therefore, could

marshal the still untapped potentials of this rich region through more substantial united

action”

Adam Malik, the then Presidium Minister for Political Affairs and Minister for Foreign

affairs of Indonesia described the Indonesian vision of a Southeast Asia through ASEAN,

“A region which can stand on its own feet, strong enough to defend itself against any

negative influence from outside the region. Such a vision was not wishful thinking, if the

countries of the region effectively cooperate with each other, considering their combined

natural resources and manpower”

Tun Abdul Razak, the Deputy Prime Minister of Malaysia who was also the then concurrent

Minister of Defence and Minister of National Development said:

“We the nations and people of Southeast Asia, must get together and form by ourselves a new

perspective and a new framework for our region. It is important that individually and jointly

we should create a deep awareness that we can’t survive for long as independent but isolated

peoples unless we also think and act together and unless we prove by deeds that we belong to

a family of Southeast Asian nations bound together by the ties of friendship and goodwill and

imbued with our own ideals and aspirations and determined to shape our own destiny and

with the establishment of ASEAN, we have taken a bold step on that road”

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S. Rajaratnam, the Foreign Minister of Singapore has noted that the two decades of

nationalist fervor had not fulfilled the expectations of the people of Southeast Asia for their

better living. He stressed on the importance of national as well as regional thinking.

“We must now think at two levels. We must think not only for of our national interests but

posit them against regional interests: that is a new way of thinking about our problems. And

these are two different things and thinking in our respective countries. We must make these

painful and difficult adjustments. If we are not going to do this, then regionalism remains a

utopia”.

Finally Thanat Khiman the Foreign Minister of Thailand, the host country stressed on the

point that “the goal of ASEAN is to create and not to destroy”. He was of the belief that the

countries of Southeast Asia had no choice but to adjust to the exigencies at hand and “to

move toward a more cooperation and even integration”. He spoke,

“Building a new society that will be responsive to the needs of our time and efficiently

equipped to bring about, for the enjoyment and the material as well as the spiritual

advancement of our peoples, conditions of stability and progress. Particularly what millions

of men and women in our part of the world want is to erase the old and obsolete concept of

domination and subjection of the past and replace it with the new spirit of give and take, of

equality and partnership. More than anything else, they want to be master of their own house

and to enjoy the inherent right to decide their own destiny.”

(World Wide Web Document: Flores. Jamil Maidan and Abad. Jun, The Founding of

ASEAN, http://www.asean.org/asean/about-asean/history , accessed on 1st November 2012)

Thus, these statements by the Founding fathers of ASEAN proves that, at the beginning it

was basically a formal political cooperation among these five member states “held together

by political fear” (Krause 1999, p 5) rather than by a desire to benefit from economic

integration. It was a formal state lead process rather than a market driven one. On ASEAN

and its aim, S. Rajaratnam expressed his fear about the possibility of ASEAN being

misunderstood. He said,

“We are not against anything, not against anybody. We want to ensure a stable Southeast

Asia and not a balkanized Southeast Asia. And those countries, who are interested, genuinely

interested, in the stability of Southeast Asia, the prosperity of Southeast Asia, and better

social and economic conditions, will welcome small countries getting together to pool their

collective resources and their collective wisdom to contribute to the peace of the world”

(idem)

Thus, owing to its openness towards being joined by other Southeast Asian countries,

keeping with the statement in the ASEAN declaration that “the association is open for

participation to all states in the Southeast Asian region subscribing to its aims, principles and

purposes”, Brunei Darussalam joined on 7th

January 1984, six days after its independence,

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Vietnam on 28th

July 1995, Laos and Myanmar on 23rd

July 1997 and Cambodia on 30th

April

1999 3 and thus making the biggest association of its kind in Asia.

The two-page Bangkok Declaration, being the first formal draft of the association contains

not only the rationale for the establishment of ASEAN, but also its modus-operandi and its

specific objectives as well. The ASEAN Declaration laid down seven “aims and purposes”

for the association which illustrate the determination of the founding states to prevent

disputes between them from erupting into conflict and settle any such dispute by peaceful

means and also to help hand in hand in order to improve the lives of the people.

As set out in the ASEAN Declaration (Bangkok Declaration) the seven general Aims and

Purposes of ASEAN includes:

1. To accelerate the economic growth, social progress and cultural development in the

region through joint endeavours in the spirit of equality and partnership in order to

strengthen the foundation of a prosperous and peaceful community of Southeast Asian

Nations;

2. To promote regional peace and stability through abiding respect for justice and the rule

of law in the relationship among countries of the region and adherence to the principles

of the United Nations;

3. To promote active collaboration and mutual assistance on matters of common interest in

the economic, social, cultural, technical, scientific and administrative fields;

4. To provide assistance to each other in the form of training and research facilities in the

educational, professional, technical and administrative spheres;

5. To collaborate more effectively for the greater utilization of their agriculture and

industries, the expansion of their trade, the improvement of their transportation and

communication facilities and the raising of the living standard of their peoples;

6. To promote Southeast Asian studies; and

7. To maintain close and beneficial cooperation with existing international and regional

organizations with similar aims and purposes, and explore all avenues for even closer

cooperation among themselves.

16

Picture 9: ASEAN Logo (Emblem)

(Source: World Wide Web Document: http://www.asean.org/asean/about-asean/asean-

emblem , accessed on 1st

November 2012)

This present logo of ASEAN has been adopted on the 30th

Anniversary of ASEAN and the

sheaves on the logo has been increased to ten from the earlier five sheaves, to represent all

the ten member countries of Southeast Asia and reflecting the colours of the flags of all of

them. Whereas, “the original ASEAN logo presented five brown sheaves of rice stalks, one

for each founding members. Beneath the sheaves is the legend “ASEAN” in blue. These are

set on a field of yellow enriched by blue border. Brown stands for strength and stability,

yellow for prosperity and blue for the spirit of cordiality in which ASEAN affairs are

conducted” (idem). The description of the ASEAN logo (emblem) as provided by the

ASEAN secretariat is:

1. The ASEAN Emblem shall be the official emblem of ASEAN.

2. The ASEAN emblem represents a stable, peaceful, united and dynamic ASEAN. The

colours of the flag – blue, red, white and yellow- represent the main colours of the

state crests of all the ASEAN Member states.

3. The blue represents peace and stability. Red depicts courage and dynamism. White

shows purity and yellow symbolises prosperity.

4. The ten stalks of padi in the centre of the Emblem represent the dream of ASEAN’s

founding Fathers for an ASEAN comprising all the countries in Southeast Asia,

bounded together in friendship and solidarity.

5. The circle represents the unity of ASEAN.

6. The ASEAN emblem is the reserved copyright of ASEAN.

17

Picture 10: ASEAN Flag

(Source: World Wide Web Document: http://www.asean.org/asean/about-asean/asean-flag ,

accessed on 1st

November 2012)

The ASEAN Secretariat has provided a similar description of the ASEAN flag:

1. The ASEAN flag is a symbol of member states’ unity and support for the principles

and endeavour of ASEAN and is a means to promote greater ASEAN awareness and

solidarity.

2. The ASEAN flag represents a stable, peaceful, united and dynamic ASEAN. The

colours of the flag – blue, red, white and yellow- represent the main colours of the

flags of all the ASEAN member states

3. The blue represents peace and stability. Red depicts courage and dynamism. White

shows purity and yellow symbolises prosperity.

4. The ten stalks of padi in the centre of the Emblem represent the dream of ASEAN’s

founding Fathers for an ASEAN comprising all the countries in Southeast Asia,

bounded together in friendship and solidarity.

5. The circle represents the unity of ASEAN.

3.2.1. ASEAN Charter

A Charter is a legal written document, upon which any institution is created. As a matter of

fact, in the four decades of ASEAN’s existence it has operated without a formal charter and

18

was mainly based on “informal arrangements, implicit understandings and personal

relationships in moving towards its political solidarity, its economic integration and

cooperation in many areas”(KNOW Your ASEAN 2007, p.48). It was only in the December

2005 in the 11th

ASEAN Summit in Kuala Lumpur that the leaders decided to adopt a formal

Charter, which will give ASEAN a “legal personality and would determine the functions and

develop areas of competence of key ASEAN bodies and their relationship with one another”

(idem). According to them, the ASEAN Charter will be,

“Embodying the fundamental principles, goals, objectives and structure of ASEAN

Cooperation capable of meeting the needs of the ASEAN Community. The Charter would

serve as a legal and institutional framework of ASEAN and will codify all ASEAN norms,

rules, and values” (idem)

Thus, the leaders appointed an Eminent Persons Group (EPG), one from each members-state

to draw the contents of the proposed ASEAN Charter and accordingly in January 2007, in the

12th

ASEAN Summit in Cebu, Philippines, the EPG submitted it report to the leaders who

endorsed it and thereby the drafting of the ASEAN Charter was started by a High Level Task

Force of senior officials. Finally, on 15th

December 2008, the ASEAN Foreign Ministers

gathered together in the ASEAN Secretariat in Jakarta to mark the historic day of the formal

adoption of the ASEAN Charter, thus giving the institution a legal character. The ASEAN

Charter as perceived by the ASRAN members is:

“The ASEAN Charter serves as a firm foundation in achieving the ASEAN Community by

providing legal status and institutional framework for ASEAN. It also codifies ASEAN

norms, rules and values; sets clear targets for ASEAN; and presents accountability and

compliance”. The importance of the ASEAN Charter can be seen in the following context:

New political commitment at the top level

New and enhanced commitments

New legal framework, legal personality

New ASEAN bodies

Two new openly recruited DSGs

More ASEAN meetings

More roles of ASEAN Foreign Ministers

New and enhanced role of the Secretary- General of ASEAN

Other new initiatives and changes”

(World Wide Web Document: Charter of the Association of Southeast Asian Nations,

http://www.asean.org/asean/asean-charter/asean-charter , accessed on 2nd

November 2012)

19

3.2.2. ASEAN Structure

The present structure of ASEAN includes six main wings and the communities that are

working abroad. The six main wings include:

1. ASEAN Summit: It is practically the highest decision making body of ASEAN

which meets at least once a year. It is attended by the Foreign Ministers of the ten

member nations annually, usually in the middle of the year and manages the affairs of

the association. “They also discuss and if warranted, adopt common positions on

current international and regional issues, particularly those involving peace and

security” (Know Your ASEAN 2007 p. 40). In fact, these annual meets are the

occasions when ASEAN members meet the other powers and also the Post-

Ministerial conferences and the ASEAN Regional forum. The first ASEAN summit

was held in Bali, Indonesia from on 23-24 February 1976. It was in this first summit

that the ASEAN founding members signed the Treaty of Amity and Cooperation

(TAC), a non aggression pact aimed at promoting regional stability. The fundamental

principles of this treaty which laid down the basic principles of inter-state relations in

the region are:

I. Mutual respect for the interdependence, sovereignty, equality, territorial

integrity, and national identity of all nations;

II. The right of every state to lead its national existence free from external

interference, subversion and coercion;

III. Non- interference in the internal affairs of one another;

IV. Settlement of differences or disputes by peaceful manner;

V. Renunciation of the threat or use of force; and

VI. Effective cooperation among themselves.

2. ASEAN Coordinating Council (ACC): The ASEAN Coordinating Council actually

comprises the Foreign Ministers of the member states. It was established after the

signing of the ASEAN Charter on 20th

November 2007. The first meeting of ACC

was held on 15th

December 2008 at the ASEAN Secretariat Jakarta. As prescribed in

the Article 8 of the ASEAN Charter, one of the key roles of ACC is approving the

appointment of the Deputy Secretaries-General of ASEAN upon the recommendation

of the Secretary General. The ACC meets twice a year and presently is composed of

the following Ministers as on 24th

August 2011:

20

I. Mohammad Bolkiah, Minister of Foreign Affairs and Trade, Brunei

Darussalam.

II. Hor Namhong, Deputy Prime Minister and Minister of Foreign Affairs and

International Cooperation, Kingdom of Cambodia.

III. Dr. R.M. Marty M. Natalegawa, Minister of Foreign Affairs, Republic of

Indonesia.

IV. Dr. Thongloun Sisoulith, Deputy Prime Minister and Minister of Foreign

Affairs, Lao people’s Democratic Republic.

V. Datuk Sri Anifah Bin Haji Aman, Minister of Foreign Affairs, Malaysia.

VI. U Wunna Maung Lwin, Minister of Foreign Affairs, Republic of the Union of

Myanmar.

VII. Albert F. Del Rosario, Secretary of Foreign Affairs, Republic of Philippines.

VIII. K. Shanmugam, Minister of Foreign Affairs and Minister of Law, Singapore.

IX. Dr. Surapong Tovichakchaikul, minister of Foreign Affairs, Kingdom of

Thailand and

X. Pham Binh Minh, Minister of Foreign Affairs, Socialist Republic of Vietnam.

3. ASEAN Community Councils: It was in 2003 that all the ASEAN Leaders resolved

that an ASEAN Community should be established by 2020. And finally in the 13th

ASEAN Summit in 2007, they affirmed their strong collaborative commitment to

establish an ASEAN Community by 2015, comprising the three pillars of ASEAN,

i.e. The ASEAN Political-Security Council, The ASEAN Economic Community

Council and ASEAN Socio-Cultural Community Council.

4. ASEAN Sectoral Ministerial Bodies: Each ASEAN Sectoral Ministerial Body may

have under its purview the relevant senior officials and subsidiary bodies to undertake

its functions.

5. Committee of Permanent Representatives: According to Article 12 of the ASEAN

Charter, each ASEAN Member State shall appoint a Permanent Representative to

ASEAN, with the rank of Ambassador based in Jakarta. These Representatives

collectively form the Committee of Permanent Representatives (CPR) which shall:

I. Support the work of the ASEAN Community Councils and ASEAN Sectoral

Ministerial Bodies;

II. Coordinate with ASEAN National Secretariats and other ASEAN Sectoral

Ministerial Bodies;

III. Liaise with the Secretary-General of ASEAN and the ASEAN Secretariat on

all subjects relevant to its work;

IV. Facilitate ASEAN cooperation with external partners; and

V. Perform such other functions as may be determined by the ASEAN

Coordinating Council.

6. National Secretariats: The ASEAN National Secretariats consists of all the offices

of the ASEAN leaders of the member states.

21

Other Committees Abroad: These ASEAN Committees are scattered all over the world in

order to promote ASEAN and the inter- regional cooperation with the various other parts of

the world. There are total 32 such communities including places as follows:

1. ASEAN Community – Abuja (Nigeria)

2. ASEAN Community – Ankara (Turkey)

3. ASEAN Community – Amman (Jordania)

4. ASEAN Community – Abu Dhabi (UAE)

5. ASEAN Community – Beijing (China)

6. ASEAN Community – Berlin (Germany)

7. ASEAN Community – Brussels (Belgium)

8. ASEAN Community – Cairo (Egypt)

9. ASEAN Community – Canberra (Australia)

10. ASEAN Community – Caracas (Venezuela)

11. ASEAN Community – Doha (Qatar)

12. ASEAN Community – Geneva (Switzerland)

13. ASEAN Community – Helsinki (Finland)

14. ASEAN Community – Islamabad (Pakistan)

15. ASEAN Community – Kuwait (Arab)

16. ASEAN Community – Lima (Peru)

17. ASEAN Community – London (UK)

18. ASEAN Community – Moscow (Russia)

19. ASEAN Community – New Delhi (India)

20. ASEAN Community – New York (USA)

21. ASEAN Community – Ottawa (Canada)

22. ASEAN Community – Paris (France)

23. ASEAN Community – Pretoria (South Africa)

24. ASEAN Community – Pyongyang (North Korea)

25. ASEAN Community – Riyadh (Saudi Arabia)

26. ASEAN Community – Rome (Italy)

27. ASEAN Community – Seoul (South Korea)

28. ASEAN Community – Tokyo (Japan)

29. ASEAN Community – UNESCO

30. ASEAN Community – Vienna (Austria)

31. ASEAN Community – Washington (USA)

32. ASEAN Community – Wellington (New Zealand)

22

3.2.3. ASEAN Secretariat:

ASEAN established a Secretariat with the signing of the Agreement on the Establishment of

the ASEAN Secretariat on 24th

February 1976. The ASEAN Secretariat finally acquired a

permanent location on May 9th

1981, in Jakarta, capital of Indonesia. The prima facie of the

ASEAN secretariat is to facilitate for greater efficiency in the coordination of ASEAN organs

and for more effective implementation of all the projects and activities as undertaken by

ASEAN.

The Vision of ASEAN Secretariat by 2015 is:

“It will be the nerve centre of a strong and confident ASEAN Community that is globally

respected for acting in full compliance with its Charter and in the best interest of its people”

The Mission of the ASEAN Secretariat is

“To initiate, facilitate and coordinate ASEAN Stakeholder collaboration in realising the

purpose and principles of ASEAN as reflected in the ASEAN Charter”

(World Wide Web Document: Official homepage of ASEAN, ASEAN Secretariat,

http://www.asean.org/asean/asean-secretariat , accessed on 2nd November 2012).

3.2.4 ASEAN Chair

Article 31 of the ASEAN Charter pronounces that “the chairmanship of ASEAN shall rotate

annually based on the alphabetical order of the English names of Member States. A Member

State assuming the Chairmanship shall chair the ASEAN Summit and related summits, the

ASEAN Coordinating Council, The three ASEAN Community Councils, relevant ASEAN

Sectoral Ministerial Bodies and Senior Officials and the community of Permanent

Representatives” (World Wide Web Document: ASEAN Official Website,

http://www.asean.org/asean/asean-chair , accessed on 3rd

November 2012)

Owing to this very norm the present Chair of ASEAN is being incubated by the Kingdom of

Cambodia with their vision: “ASEAN: One Community, One Destiny”. Therefore the 20th

ASEAN Summit was held in Phnom Penh, Cambodia on 03-04 April 2012.

23

3.2.5 ASEAN: in the present scenario

Today, ASEAN with its motto of “One Vision, One Identity and One Community” is viewed

as “the ten member association, comprising some 600 million people, and representing a

significant portion of Asia and is viewed by many as a successful experiment in regional

conflict regulation and cooperation” (Acharya, Amitabh 2002, p. 5). ASEAN is largely seen

as a rising star from the larger Asian region and in the world scenario. According to Surin

Pitsuwan the present Secretary-General of ASEAN,

“ASEAN has entered the place to play a central role in the evolving regional architecture by

virtue of not only being the hub in economic integration initiatives in the region but also by

being able to provide the platform for political and economic dialogue and engagement

among major global players” (World Wide Web Document: Surin Pitsuwan, Speech made at

16th

ASEAN Economic Ministers meeting, Putrajaya Malaysiaa,

http://www.asean.org/news/item/chairman-s-statement-of-the-16th-asean-summit-towards-

the-asean-community-from-vision-to-action , accessed on 2nd November 2012)

In fact, ASEAN in the present scenario is engaged in a three-fold endeavour, first to bring

into reality the ASEAN Community in 2015 and secondly, to make the ASEAN+3 Forum a

reality, and thirdly, to steer the Asia-Pacific region towards a dynamic east Asian community

through the promising East Asia Summit.

3.2.5.1. ASEAN Economic Community 2015 (AEC)

The ASEAN vision for 2015, through ASEAN Economic Community is in itself a larger than

life endeavour for the budding member states, which aims at turning ASEAN into a single

market and production base, with free flow of goods and services, skilled labour and

investment capital among the ASEAN member countries. The AEC blueprint was adopted by

the member nations at the 13th

ASEAN Summit on 20th

November 2007 in Singapore.

“The ASEAN Economic Community (AEC) shall be the goal of regional economic

integration by 2015. AEC envisages the following key characteristics:

a) A single market and production base

b) A highly competitive economical region

c) A region of equitable economical development and

d) A region fully integrated into the global economy.

The AEC areas of cooperation include human resource development and capacity building;

recognition of professional qualifications; closer consultation on macroeconomic and

financial policies; trade financing measures; enhanced infrastructure and communications

connectivity; development of electronic transactions through e-ASEAN; integrating

industries across the region to promote regional sourcing; and enhanced private sector

24

involvement for the building of AEC” (World Wide Web Document, ASEAN homepage,

http://www.asean.org/communities/asean-economic-community , accessed on 4th

November

2012)

3.2.5.2. ASEAN+3

ASEAN+3 is largely known to be the most important forum that coordinates the cooperation

between the Southeast Asian nations represented by ASEAN and the three big world powers

houses of East Asia namely China, Japan and South Korea.

“Following the unsatisfactory progress of the Uruguay Round Ministerial meeting in

December 1990, Malaysian Prime Minister Mohammad Mahathir proposed the formation of

a regional trade grouping – comprised of ASEAN countries, Japan, China, Korea and Hong

Kong. This group of economies was called the ‘East Asian Economic Group (EAEG)’. The

objective behind the proposal were to establish a regional trade arrangement for the group in

response to the emergence of preferential regional trade arrangements elsewhere, including in

North America and to exercise a global impact on trade issues, like the Cairns Group. In

October 1991, ASEAN Economic Ministers considered Mahathir’s proposal as useful and

renamed the grouping as the ‘East Asian Economic Caucus (EAEC)’ which would facilitate

the discussion on regional economic issues” (Kawai, Masahiro 2005, p. 31).

This proposal by the Malaysian Prime minister was in fact the ground preparation for the

integration of ASEAN and the East Asian nations. However, USA showed its opposition on

the EAEG/EAEC proposal on the ground that “it could divide the Asia-Pacific, by excluding

the United States, and reduce the effectiveness of the trade/investment liberalization process

with APEC” (idem). Thus, following US opposition all the East Asian countries followed a

cautious approach towards the same. But the Asian Financial Crisis changed the entire

scenario and their views towards this integration. In fact, in the words of Hwee, “The Asian

Financial crisis of 1997 has served as a kind of catalyst for the formation of the ASEAn+3

process” (Hwee 2009, p. 7). Thus, in December 1997, in the midst of the Asian Financial

Crisis, the leaders of Japan, China and Korea were invited to the informal ASEAN Leaders’

meeting and thus, the “de facto ASEAN+3 process began” (Kawai, Masahiro, 2005, p. 32).

As a matter of fact, the ASEAN+3 forum started on a financial base, in order to have a more

stable financial situation in the region. A milestone achieved in this process of integration

was the Chiang Mai Initiative (CMI), the hallmark liquidity support facility in East Asia,

which was designed to reduce the risk of liquidity crisis in the region and to manage the

regional currency attacks. The CMI is composed of two elements – first to strengthen the

existing ASEAN Swap Arrangement among the ASEAN member countries and secondly to

create a new network of bilateral swap arrangements (BSAs) among ASEAN+3. One

important aspect of the ASEAN+3 forum is the proposed Asian Currency Unit, the weighted

index of currencies for ASEAN+3 in line with the European Currency Unit now Euro. The

25

proposed ACU is basically a currency basket and not a real currency, a weighted index of the

East Asian Currencies that will function as a benchmark for the regional currency

movements. Presently, it is under process under the purview of the Asian Development Bank,

who is considering the various technical aspect of the ACU calculation, including the nature

of the basket, the choice of fixed weights vs. fixed units, the selection of currencies to be

included, the criteria for periodical revision etc.

Picture 11: ASEAN+3 Member Countries

(Source: Google Images, http://globalautonomy.ca/global1/glossary_entry.jsp?id=OR.0026 ,

accessed on 4th

November 2012)

ASEAN+3, which began mainly on the basis of financial cooperation and integration, now

has been broadened and deepened to include other aspects as well:

“It includes cooperation in the areas of food and energy security, financial cooperation, trade

facilitation, disaster management, people- to- people contacts, narrowing the development

gap, rural development and poverty alleviation, social welfare, human trafficking, labour,

communicable diseases, environment and sustainable development and transnational crime,

including counter terrorism” (World Wide Web Document: Overview: ASEAN Plus Three

Cooperation, http://www.asean.org/news/item/asean-plus-three-cooperation , accessed on 4th

November 2012).

3.2.5.3. East Asia Summit

The last two decades have seen considerable development in bringing about a regional

integration in East Asia as a whole. In fact the East Asian economies have substantially

26

liberalized their foreign trade and FDI regimes within the framework of GATT/WTO and

APEC. Since early 1990s, they have also started their financial system and capital accounts,

which has also exposed these economies to the financial vulnerabilities and thus, the

culmination point was the Asian Financial Crisis of 1997-98.

“Following the crisis, the East Asian economies have embarked on various initiatives for

economic regionalism in the areas of trade/investment and money/finance. The crisis

prompted the regional economies which were increasingly interdependent t realise the

importance of economic cooperation among themselves and to make efforts to institutionalise

such interdependence. Economic regionalism, through various types of policy coordination

can resolve the collective action problem by internalizing externalities and spill-over effects

that arise from inter-dependence” (Kawai, Masahiro 2005, p. 19-20)

This regional integration of the greater East Asia as a whole can be attributed to three

reasons:

1. As a defensive response to the proliferation of regional trade arrangements (RTAs)

elsewhere – particularly in Europe and the Western Hemisphere – and due to their

dissatisfaction with slow progress on trade/investment liberalization at the global and

trams-regional levels;

2. Due to their willingness to enhance productivity and international competitiveness

through exploitation of scale economies and dynamic efficiency; and

3. For promotion of deeper integration and institution building at the regional level

(idem).

Thus, owing to this basic principle and belief, the regional leaders’ of East Asia, formed the

East Asia Summit (EAS), a strategic dialogue and cooperation forum in order to collectively

face the key challenges to the region. Formed on 14th

December 2005 in Kuala Lumpur on

the inaugural meeting, “The East Asia Summit is a significant regional grouping with an

important role to in advancing closer regional integration and cooperation at a time of

particular dynamism in East Asia” (World Wide Web Document: The East Asia Summit,

http://www.dfat.gov.au/asean/eas/index.html , accessed on 4th

November 2012). Formed with

16 founding members which includes, the ASEAN countries, India, China, Japan, Republic

of Korea, Australia and New Zealand. Later on it also included USA and Russia to make the

present day East Asian Summit of 18 member countries. Collectively, the 18 members EAS

today represents “55 per cent of the world’s population, account for almost 55 percent of

global GDP” (idem). The EAS hold a Leaders’ Summit annually, usually back to back with

the annual ASEAN Summit. The last EAS, held at Bali, Indonesia on November 19th

20111,

was a significant step towards strengthening this regional integration. It provided,

“valuable opportunities for the leaders to engage on key strategic, political and economic

issues of common concern, with the aim of promoting stability and economic prosperity in

the region. For the first time, the EAS was attended by both the United States, represented by

President Barak Obama, and Russia, represented by Foreign Minister Sergey Lavrov. EAS

leaders discussed a range of issues at the summit, including economic and financial

27

integration, disaster management, and energy, environmental and educational cooperation.

They also discussed security challenges in the region, including maritime security and the

peaceful denuclearization of the Korean Peninsula. Leaders expressed support of efforts to

strengthen the foundations of regional and global economic growth” (idem).

3.2.6. ASEAN and the rest of the International Community

“ASEAN as an association is not only open to the world; it also maintains active links with

countries and regions that are strategically and economically important to it and to its

members” (Know Your ASEAN 2007, p. 43). This explains the relation that ASEAN and its

member countries aim to have with the rest of the world. In fact it is the common policy of all

the ASEAN members to be open to the rest of the world politically, economically, culturally

and intellectually. ASEAN does it by means of the system of Dialogue Partnerships and the

ASEAN Regional Forum for the political and security consultations, dialogues and

cooperation. The member countries also take active part in the international organizations

like the UN and its agencies, the international financial organizations like IMF and World

Bank; in inter regional interactions like the Asian European Meeting and the regional groups

like APEC and Asian Development Bank. In fact ASEAN’s most active and by far the most

extensive external linkages include the ASEAN + 3 Forum and the East Asian Summit. Also,

the AEAN system of dialogue partnership serves as an important channel for ASEAN as a

whole to build and develop strong cooperative relationship with the major powers of the

world as well as with the trading partners.

“It started in 1973 with the European Economic Community, now the European Union.

Starting out as a platform for ASEAN to pray open markets for its products and to obtain

development aid for its members, the dialogue system has developed into a forum for the

consideration of security, as well as economic issues” (idem)

ASEAN, in today’s world is seen as a forward looking platform, which can be said to be a

geo-political and economic organization covering near about 3 percent of the total area of

earth and has a population of approximately 600 million, which is near about 8.8 per cent of

the total world population. The basic indicators of ASEAN in the present world scenario have

been provided in the following table which indicates the very strength of the organization.

However, the Journey of ASEAN was not smooth. The Asian Financial Crisis of 1997-98,

which originated in Thailand, affected all other ASEAN member countries. Other matters

like, the Myanmar issue, where ASEAN has been urging Myanmar to step up the pace of the

peace process of national reconciliation and dialogue among all the concerned parties and

thereby to bring the country on democratic lines, the issue of South China Sea, in which four

of the ASEAN member countries and China have conflicting claims over the jurisdiction of

varying kinds over all or parts of the South China Sea. However, ASEAN has been successful

till now in promoting peace and stability in the region, creating job opportunities, regional

stability and thus in making the Southeast Asian region recognized in the global scenario.

28

Part 3

1.3. PEST Analysis of Thailand

Thailand, which literally means the “land of the Free”, is particularly attractive to the

international community partly due to the aesthetic excellence, like- the beauty of the

countries natural and constructed environments. It is known for the “beautiful orchids,

temples, textiles, the civility and grace of its peoples; the appreciation of the present moment,

and the ease with which the ugly and painful is slipped out of sight” (Esterik, Penny V 2000,

p. 1). The other reason is Theravada Buddhism for Thailand being one of the major countries

of the world adhering to Buddhism and its teachings. As a matter of fact, 95% of the

population of Thailand are Buddhist and it is the official religion of the country and the Head

of the State, his majesty the King himself as the believer, the upholder and the guardian of the

faith.

“Saffron-robed monks, slender dancers, monumental ruins, gilded Buddha images, exquisite

handicraft- here are some of the stereotypical images of Thailand featured in travel

guidebooks. Such clichés of exoticism made the country one of the most popular tourist

destinations over the last two decades. This international popularity generated wealth but also

fears of an erosion of the distinctive Thai identity, leading academics and bureaucrats to rally

behind the cri du caeur, ‘we love Thai culture!’Concurrently, the national agency for

promotion of tourism reassured prospective visitors about the country’s enduring traditions in

the face of rapid modernization with the slogan: ‘Thailand remembers its gracious past and

anticipates its dynamic future’ (Maurizio Peleggi 2007, p.7)

Today, Thailand is seen as a mellow harmony of tradition and modernization, a synthesis of

the old and the new. This as a matter of fact this enables the country to preserve a strong

sense of the national identity while making a significant progress in its efforts to modernize

the country and to improve the wellbeing of the people. Interestingly, Thailand is one of

those countries which remained free from the colonial rule whereas most of its contemporary

societies were the colonies of one or the other western powers. Like any other regions in

South East Asia, Thailand’s culture and society is also got influenced by the culture and

religions of India. Other cultures that have their own imprints in making the greater Thai

culture are – Chinese, Islamic and to some extent the European culture. Today, Thailand is a

medley of the ethnic, linguistic, religious and cultural nuances of all these cultures which has

been finely blended together for centuries to be evolved into its present form.

Thailand- officially known as The Kingdom of Thailand is politically structures as a

Constitutional Monarchy with the King as the Head of the State. It is located at the centre of

29

Indochina Peninsula, bordered in the west by Myanmar and the Andaman Sea, towards its

east is the Kingdom of Cambodia and towards north is Laos, in the south it is bordered by

Malaysia and the Gulf of Thailand. The total land mass of Thailand is consists of 513,120

square kilometres and the total water mass consists of 2,230 square kilometres making it the

51st largest country in the world by means of area. Thailand according to 2011 data consists

of 69.5 million people, thereby making it the 20th

most populous country of the world.

Inhabited mainly by the indigenous Thai people, which consists of the 75 % of the total

population it also has a significant amount of Chinese people consisting of 14 % of the total

population. The other ethnic groups consist of 11 % of the total population of Thailand. By

means of purchasing Power Parity (PPP) Thailand stands 24th

in the world. (World Wide

Web, CIA World Fact book, https://www.cia.gov/library/publications/the-world-

factbook/rankorder/2119rank.html, accessed on 4th

November 2012)

Picture 12: Map of Thailand

(Source: Google Images, http://www.thailand-map.net/ , accessed on 5th

November 2012)

Capital : Bangkok

Language : Thai

30

Total Area : 514,000 square kilometres (198,000 sq mi)

Land: 511,770 square kilometres (197,600 sq mi)

Water: 2,230 cubic kilometres (540 cu mi)

Total Land Boundaries : 4,863 km

Border Countries : Myanmar 1,800 km, Cambodia 803 km, Laos 1,754 km, Malaysia 506

km

Currency : Baht

(World Wide Web doc: Official website,

http://www.thailandoutlook.com/contents.php?Id=12 accessed on 04 Nov 2012.)

3.3.1 Thailand: Political

Thailand is the only regional state in Southeast Asia that has escaped the direct colonial rule,

whereas its contemporary states were under one or the other foreign powers. Often

represented by means of an absolute monarchy in the past, which was replaced some six

decades ago by a constitutional version, but the role of the incumbent with over 50 years of

tenure is a dominant symbol of the Thai national identity.

“On the paradigmatic level, the main characteristics of the modern Thai politics could be

briefly listed as follows- authority is patrimonial and absolute, political behaviour is affected

by the interplay of royal, military and bureaucratic power relations, the traditional political

structure is hierarchical and segmented, the rigidity of the political structure persists in the

face of rapid social change, which cause tension and eventual political instability”

(Chaloemtiarana 2007, p. 1)

Thailand had been under the rule of various dynasties and thereby the various kings as the

head of the state for more than seven centuries. Thailand witnessed some sort of reforms

during the Chakkri reformation of Rama IV, and particularly later in Rama V’s reign.

However, these were perceived as inadequate by the young generation of intellects and

students studying abroad, who criticized the crown’s government as backward, corrupt and

ineffective. Thus, on June 1932, the infamous 1932 Revolution took place in Thailand and

thereby Thailand, then Siam assumed the characteristics of a Constitutional Monarchy from

the earlier system of Absolute Monarchy with the formation of the very first political party

the Peoples’ Party (Khana Ratsadon). However, since then, political instability has essentially

been the norm in Thailand.

31

The tension between monarchy and the leadership of the People’s Party continued throughout

the period from 1932 to 1957. In particular, Marshal Phibunsongkhram, who took over the

real control of national leadership from the mid 1930s, tried first to ignore and undermine the

thorn’s precarious position as the traditional legitimize roof political power by imposing upon

the Thai society modern concepts of the state and the leadership. This tension between the

King and the minister was not satisfactorily removed until the coming of age of Marshal Sarit

Thanarat, who staged a coup against Phibun in 1957 and subsequently took power in 1958.

This was followed by this even or the other. In 1973, the student-led uprising, aiming at

liberating the country from military government formed a new civilian government in the

midst of the fear of the communist victory in the Indochinese countries in 1975. However, in

1976 again Admiral Sa-ngad Chaloryu, staged a massacre and coup that bought hardliner

anticommunists to power. This, along with the end of the Indochina war bought in

considerable foreign investment to Thailand and there was some sort of alleviation of

infrastructure and social problems. The 1992, Black May uprising lead to some more reforms

propagating the adoption of the 1997 Constitution, thus known as the ‘The People’s

Constitution’- aiming at creating checks and balance of power between strengthened

government, separately elected senators and anti-corruption institutions.

However, the most recent period of unrest began in 2006 with the coup d’e/tat (the 18

th in 70

years) that saw the Prime Minister Thaksin Shinawatra, who was forcibly removed from

office and sent to exile and again Thailand came under the military rule. This was followed

by an another set of political instability in the form of People’s Power Party (PPP) gaining

majority in 2007 elections and Samak Sundaravej, an alleged Thaksin proxy coming into

power. However, after six months, the middle- class Bangkok-based People’s Alliance for

Democracy had boldly taken over Government House and demanded Samak’s resignation.

And finally in June 2008, after several weeks of PAD demonstration, samak was found guilty

of accepting money to host a cooking programme and was forced to stand down and was

replaced by Somchai Wongsawat, Thaksin’s brother-in-law. However, as the situation

intensified and the confrontations between the PAD and police and the pro-government

supporters became increasingly violent, a new coalition government was formed in December

2008, led by the Oxford-educated Abhisit Vejjajiva, the leader of the Democrat Party and

Thailand’s fifth Prime Minister in 2008. (Williams, China 2009)

“Abhisit’s appointment ushered a brief period of relative stability, but violent protests in early

2009 by red-shirted Thaksin supporters in Bangkok and Pattaya showed that although still in

exile, the former Prime Minister remains the single most influential and polarising figure in

Thai politics”(Williams, China 2009, p. 17).

The violent protests by the Thaksin supporters during the time, which lead to bloodshed and

even casualty, ended with the 2011 general elections, which marked the victory of the red

shirt and the Pheu Thai Party, the successor of the former People’s Power Party formed the

government under the Prime Minister ship of Yingluck Shinawatra, the first ever women

Prime Minister of Thailand and by default the sister of Thaksin Shinawatra.

32

1.3.1.1. A timeline view of Thailand and its politics (From 1939-2012)

1939 - Siam changes its name to Thailand ("Land of the Free").

1941 - Japanese forces land. After negotiations Thailand allows Japanese to advance towards

British-controlled Malay Peninsula, Singapore and Burma.

1942 - Thailand declares war on Britain and US, but Thai ambassador in Washington refuses

to deliver declaration to US government.

Post-war uncertainty

1945 - End of World War II. Thailand compelled to return territory it had seized from Laos,

Cambodia and Malaya. Exiled King Ananda returns.

1946 - King Ananda assassinated.

1947 - Military coup by the wartime, pro-Japanese leader Phibun Songkhram. The military

retain power until 1973.

1965 onwards - Thailand permits US to use bases there during the Vietnam War. Thai troops

fight in South Vietnam.

Short-lived civilian rule

1973 - Student riots in Bangkok bring about the fall of the military government. Free

elections are held but the resulting governments lack stability.

1976 - Military takes over again.

1978 - New constitution promulgated.

1980 - General Prem Tinsulanonda assumes power.

1983 - Prem gives up his military position and heads a civilian government. He is re-elected

in 1986.

1988 - General Chatichai Choonhaven replaces Prem after elections.

1991 - Military coup, the 17th since 1932. A civilian, Anand Panyarachun, is installed as

prime minister.

1992 - New elections in March replace Anand with General Suchinda Kraprayoon. There are

demonstrations against him, forcing him to resign. Anand is re-instated temporarily. Elections

in September see Chuan Leekpai, leader of the Democratic Party, chosen as prime minister.

1995 - Government collapses. Banharn Silpa-archa, of the Thai Nation party, elected prime

minister.

33

1996 - Banharn's government resigns, accused of corruption. Chavalit Yongchaiyudh of the

New Aspiration party wins elections.

Financial turmoil

1997 - Asian financial crisis: The baht falls sharply against the dollar, leading to bankruptcies

and unemployment. The IMF steps in. Chuan Leekpai becomes prime minister.

1998 - Tens of thousands of migrant workers are sent back to their countries of origin. Chuan

involves the opposition in his government in order to push through economic reforms.

1999 - Economy begins to pick up again. Thai media highlight high cost of drug treatments

for Aids and HIV. Thailand begins to pressurise drugs companies to find ways to make the

drugs cheaper.

2001 - New Thai Love Thai party wins elections after partial re-run of poll. Leader Thaksin

Shinawatra forms coalition government. Burma-Thailand border crossing which was closed

after clashes between respective troops in February re-opens after Thaksin pays visit to

Burma.

2002 - Burma closes border with Thailand again after Thai army fires shells into Burma

during battle between Burmese army and ethnic Shan rebels. Border reopens in October.

Temple row

2003 - Serious diplomatic spat with Cambodia over Angkor Wat temple complex.

Controversial crackdown on drugs starts; more than 2,000 suspects are killed. The

government blames many killings on criminal gangs; rights groups say extra-judicial killings

were encouraged by the authorities.

2004 - Martial law imposed in largely-Muslim south after more than 100 killed in a wave of

attacks blamed on Islamic militants. More than 100 Islamic militants die in coordinated

attacks on police bases in the south. An inquiry finds that the deaths of 85 Muslim protesters

in army custody not deliberate. Thousands killed as a tsunami, triggered by a powerful

undersea earthquake, devastate communities on the south-west coast, including the resort of

Phuket.

2005 - Thaksin begins a second term as PM after his party wins February's elections by a

landslide. He is given new powers to fight continuing violence in south. By November, death

toll stands at more than 1,000. Country also battling outbreaks of bird flu.

Coup

2006 - Snap election, called by Thaksin amid mass rallies against him, is boycotted by the

opposition and is subsequently annulled, leaving a political vacuum. The PM takes a seven-

week break from politics. Military leaders stage a bloodless coup while Thaksin is at the UN

General Assembly. Retired General Surayud Chulanont is appointed as interim prime

minister in October.

34

2007 - First draft of new constitution approved by committee appointed by the military

administration. Ousted PM Thaksin Shinawatra's Thai Rak Thai party is banned. Voters in a

referendum approve a new, military-drafted constitution. December general elections mark

the first major step towards a return to civilian rule. The People Power Party (PPP), seen as

the reincarnation of Thaksin's Thai Rak Thai (Thais Love Thais) party, wins the most votes.

2008 - An elected parliament convenes for the first time since 2006. Samak Sundaravej is

sworn in as prime minister. Ousted premier Thaksin Shinawatra returns from exile, but flees

to Britain after failing to appear in court to face corruption charges. Cambodia and Thailand

move troops to disputed land near ancient Preah Vihear temple after decision to list it as UN

World Heritage Site fans nationalist sentiments on both sides.

Unrest

2008 - State of emergency in Bangkok after thousands of pro- and anti-government

demonstrators clash following a week of mass protests calling for the resignation of the

premier. PM Samak Sundaravej is dismissed for breach of a conflict of interest law. Somchai

Wongsawat becomes PM, but anti-government protests continue. Thaksin Shinawatra is

found guilty of corruption in absentia. PM Somchai Wongsawat is forced from office after a

court finds the governing People Power Party guilty of electoral fraud and bars its leaders

from politics for five years. Opposition leader Abhisit Vejjajiva becomes third new leader in

three months.

Hmong expulsion

2009 - Continuing unrest forces the cancellation of an Asean summit after anti-government

protesters storm the venue. Thousands of pro- and anti-Thaksin protestors hold regular rallies

in Bangkok and elsewhere. Row with Cambodia grows over the appointment of Thaksin as

an economic adviser to Phnom Penh. Up to 20,000 Thaksin supporters rally in Bangkok to

demand fresh elections. Thailand deports about 4,000 ethnic Hmong back to communist-

ruled Laos, despite concerns raised by the UN refugee agency.

2010 - Tens of thousands of pro-Thaksin protesters - in trademark red shirts - paralyse parts

of central Bangkok for two months to demand PM Abhisit's resignation and early elections;

after negotiations fail, troops storm the protesters' barricades and end the demonstrations.

Death toll from Thailand's worst political violence in modern history put at 91. Thailand

resumes diplomatic ties with Cambodia after Phnom Penh announces Thaksin's resignation.

2011 Tensions rise as Cambodia charges two Thai citizens with spying after they were

arrested for crossing the disputed border. After exchange of fire across the border, the two

countries agree to allow Indonesian monitors access to the area to prevent further clashes.

Sister of fugitive former leader Thaksin Shinawatra, Yingluck, is elected Thailand's first

female prime minister. Cambodia and Thailand agree to withdraw troops from disputed

border area. Worst floods in 50 years kill hundreds, engulf outskirts of Bangkok.

2012 February - Bomb blasts in Bangkok thought to target Israeli diplomats.

2012 June - Anti-government yellow-shirts blockade parliament to prevent debate on

proposed reconciliation bill aimed at ending six-year-old political tensions. Group fears that a

proposed amnesty would enable the return of ousted PM Thaksin Shinawatra.

35

2012 August - Human Rights Watch accuses Thai army chief of obstructing Thai justice

ministry inquiry into deaths during 2010 political protests.

(World Wide Web Document: Official Homepage of BBC News Asia:

http://www.bbc.co.uk/news/world-asia-15641745, accessed on 5th

November 2012)

1.3.1.2. Important aspects of Thai Politics

When we say Thailand’s political scenario, the two most important aspects that is to be noted

is the Monarchy under the role of the King and the second is the two strong dominant groups,

namely the Red Shirts and the Yellow Shirts. As a matter of fact, Monarchy in Thailand is

unique in its own way. The King of Thailand is the Head of the State and is a very important

aspect of the Thai national Identity. The power of the king is limited to a symbolic

figurehead, who reigns but does not rule. However, the love and reverence of the Thai people

for their King dictate a large part of the moral authority. Today, His Majesty King Bhumibol

Adulyadej (Rama IX), the ninth king of the Chakri Dynasty is the world’s longest reigning

monarch, who ascended the throne in 1946. The King in his Oath of Accession has pledged to

“reign with righteousness for the benefit and the happiness of the Siamese people” and has

thereby dedicated his life and his resources for the same. Thus, today, though symbolic when

comes to power, the King of Thailand is the moral binding force of the modern Thai

community.

The other aspect of the Thai politics is the two dominant groups often referred to as the Red

Shirts and the Yellow Shirts. The Yellow Shirts which allies itself with the People’s Alliance

for Democracy (PAD) was formed in 2006 to protest against Thaksin Shinawatra, the then

Prime Minister of Thailand which lead to the overthrew of Thaksin after the 2006 military

coup. Although after Thaksin’s removal from power the Yellow Shirt coalition was dissolved

after announcing that their aim has been achieved. However, they again came into action after

People’s Power Party lead by Samak Sundaravej, who was known to be the proxy of Thaksin

came to power. They began violent protests against the Samak’s coalition government and

even seized Government House to pressurise Samak to resign. In November 208, they

blocked the Parliament prior to a crucial legislative session, took control of the government’s

provisional offices at Don Muang Airport and also seized Suvarnabhumi International

Airport. However their protest ended with the formation of government by Abhisit Vejjajiva

of the Democrat Party as the Prime Minister.

The Red Shirts is the political pressure group known as the United Front for Democracy

against Dictatorship (UDD) which allies itself with the Pheu Thai Party which is presently in

power. They are against the other political party called the People’s Alliance for Democracy

and also the Thai Military Coup. It was formed in 2006 to protest against the military coup

which overthrew the Thaksin government and lead to a military government. But the rallies

of the Red Shirts became more aggressive during the Prime Minister ship of Abhisit Vejjajiva

in 2008. In 2009, they also expanded their protest to Pattaya, the site for the Fourth East Asia

Summit, which became violent and ultimately called for the Summit to be cancelled and

36

declaration of a state of emergency by the Prime Minister Abhisit Vejjajiva. These rallies and

opposition to the Abhisit’s gpvernment continues in spite of the strong actons taken against

them by the government and deployment of strong security forces in the capital city. This

lead to violence and even bloodshed. Finally, these protests stopped after the 2011 general

elections in Thailand which lead to the victory of the Pheu Thai Party and Yingluck

Shinawatra, the sister of Thaksin Shinawatra becoming the Prime Minister.

3.3.1.3. Present Political condition of Thailand

The general election of 3rd

July 2011, which marked the victory of the Pheu Thai Party lead

by Yingluck Shinawatra was a decisive event in Thailand’s political scenario. It ended the

two years long protests by the Red Shirts against the government of the Democratic Party

lead by Abhisit vejjajiva and thus giving some relief to the very unstable nature of the Thai

political environment. Moreover, it gave Thailand its first ever women Prime Minister, who

is the present incumbent of the chair. After Yingluck Shinawatra became the Prime Minister

on 10th

August 2011 she introduced some reforms to assist Thai people for a better life and

for a better society.

On 23rd

August 2011, prime Minister Yingluck Shinawatra delivered her government

policy statement emphasizing the Government’s ‘determination to foster harmony

and pursue reconciliation for the sake of the country’s economic, social and political

development and for the benefit of all Thai’.

The Government formed a committee called Truth for Reconciliation Commission of

Thailand (TRCT) in accordance with the Regulation of the Office of the Prime

Minister on the ‘verification and seeking of Truth for reconciliation B.E. 2553 (2010)

published in the Royal gazette on 16th

July 2010, which aimed at creating a common

understanding among Thais, providing restoration and preventing a reoccurrence of

violence and damage from civil unrest whether through political protest or the

violation of human rights’.

Several rounds of meetings were held to coordinate and follow-up on actions taken to

implement the recommendations of the TRCT under the Chairmanship of Deputy

Prime Minister Yongyoot Wichaidit.

The cabinet approved the measures for the reparation and rehabilitation of those Thai

people who were affected by the earlier political violence. The cabinet also approved

guidelines and procedures for the payment of monetary compensation to the affected.

The Government has emphasized its objectives to ensure a strong Thai economic

structure and to bring about reconciliation and to prepare Thailand for the

establishment of the ASEAN Community in 2015.

The Government has announced its policies which have been classified into two

phases- the short term or the urgent policies that are to be implemented in the very

first year and the long term policies that are to be implemented over the tenure of the

government. The urgent policies includes prevention and fight against corruption,

restore relation and promote cooperation with the neighbouring countries, raising the

37

standard of living of the people by means of wage increases and tax reliefs, prevent

and define solutions to drug problems etc. Whereas, the long term policies of the

present Government includes, the promotion of unity and cooperation among the

ASEAN Member States, Promotion of the countries constructive role and interest in

the international organizations, to promote technical cooperation with the other

developing countries etc. The long term economic policies includes, enhancing the

competitiveness as well as expansion of the market access for business, developing

basic transportation and public utility infrastructure, promoting trade and investment

by means of improves laws and regulations and investment promotion measures and

intensifying its international economic linkage in the areas of trade and investment

through cooperation frameworks and free trade agreements.

3.3.2. Thailand: Economical

“The performance of the Thai Economy in recent decades has nothing sort of stunning. In

1950, following an entire century of economic stagnation, Thailand was one of the world’s

poorest countries. Since then, its economy has experienced rapid growth, declining poverty

and macroeconomic stability. What is particularly impressive about this achievement is that it

occurred in a volatile economic and political environment” (Warr and Nidhiprabha 1996, p.

1)

The above paragraph from the book, Thailand’s Macroeconomic Miracle: Stable Adjustment

and Sustained Growth by Peter G. Warr and Bhanupong Nidhiprabha aptly describe the

general course of the Thai economy. Today, the Thailand Economy is recognized as one of

the fastest growing economies of the world in general and in the Southeast Asian region in

particular. However, the economic journey of Thailand was not smooth. Like most of the

developing countries of the world, Thailand had its own share of both political and

economical upheavals both in the form of internal as well as external shocks. Politically,

Thailand suffered political turmoil throughout the post world war period, altering between

authoritarian military governments with democratic and semi democratic regimes for short

periods. External shocks such as the perceived military threat from Vietnam during 1960s,

certain side effects of the Vietnam War, the boom in the international primary commodity

prices of 1972-73, the two petroleum crisis of 1973-74 and again in 1979-80s, the high

interest rates in 1980s, the World recession in the first half of the 1980s and the foreign

investment boom of the late 1980s. The areas of trade also suffered a long term decline from

an index number of 100 in 1970s to about 60 in 1990. “Nevertheless, whereas many

developing countries including some of Thailand’s Southeast Asian neighbours, were badly

destabilized by these and even lesser shocks, Thailand showed surprising resilience” (idem).

38

3.3.2.1. Background of Thai Economy

If we look at the history of Thai economy, we can see that between the periods of 1965 to

1990, the real gross national product (GNP) per capita in Thailand grew at an annual rate of

4.2 percent as compared to the other contemporary low and middle class countries which

averaged at 2.5 percent. As a matter of fact, Thailand actually experienced a period of

accelerated economic integration into the world economy.

“Between 1986 and 1991, Thailand became one of the fastest growing economies of the

world. The Kingdom’s economic performance during these years has been described as

virtually unparalleled with the value of manufacturing exports growing at 26.6 per cent a

year, total exports at 18.1 per cent and GDP at 9.6 percent. This growth was accompanied by

a surge in foreign direct investment, particularly from Japan and the Asian newly independent

economies” (Dixon Chris 1999, p. 7)

This, growth of the Thai economy is largely seen as a result of the correct governmental

policies particularly in the direction of the liberalization of the economy. The period from

1950 to 1980 laid down the “basis for the rapid expansion of export oriented manufacturing

and the international conditions” (idem).

However, after 1991, growth slowed, but GDP still grew at an average of 6.8 per cent

between 1992 and 1996. But during the period of 1993, the foreign investment has declined

considerably leading to an increased overseas debt. In fact during 1996, the rate of growth of

export earnings contracted sharply, leading to a current account deficit of -7.887 percent of

the country’s GDP. The shortage of capital in the country was an another problem. Owing to

these difficult situation, the Thai Government in 1993, granted the infamous Bangkok

International Banking Facilities to the Thai banks which allowed them to take a loan from a

foreign financial institution with a low interest rate and then loaning it to the Thai Businesses

on a higher rate but still at a rate lower than the domestic financial institutions. This actually

prepared the ground for one of the biggest financial crisis of the world, the Asian Financial

Crisis of 1997-98.

3.3.2.2. The 1997-98 Financial Crisis

The trade liberalization and the free flow of capital across countries were the dominant

pictures during this period along with the unprecedented economic growth. During 1990 –

95, the gross domestic investment of Thailand grew by 15.3 percent, leading to an investment

boom. This has considerably soared the value of the commercial as well as residential

properties, industrial assets as well as infrastructure; however this boom was mainly based on

the borrowed money especially in US dollar. But at the same time, the financial system of

Thailand was not strong enough to handle the effects of the liberalization of the financial

markets. “This booming economy with a fixed and stable nominal exchange rate inevitably

brought about an appreciation of the real exchange rate, this in turn resulted in a market

39

slowdown in export growth in Thailand” (Eun, Resnick and Sabherwal 2012, p. 78). By mid

1997, the Thai financial institutions that have been borrowing dollars from international

banks at lower interest rates and lending Thai baht to the local property developers at a higher

interest rate were at the verge of default. It is because, due to speculative over building, these

developers could not sell their commercial and residential property, thus, forcing them to

default on their debt obligations. This, in turn lead to a situation of default by the Thai

financial institutions on their dollar denominated debt obligations. Owing to this situation, the

foreign investors fled the Thai stock market selling their position and converting them into

US dollar. The Thai baht which has been pegged with US dollar for the past 13 years at an

exchange rate of $1 = Bt 25, but the prevailing situation of increased demand for dollar and

thus the increased supply of Thai baht pushed down the dollar/baht exchange rate. Initially

the Thai government tried to defend the peg by injecting money, but that proved to be a futile

effort which ended up with the depletion of the government’s foreign exchange reserve. After

this attempt, the baht was allowed to float freely against dollar which brought the exchange

rate down to $1 = Bt 55 by January 1998.

“The 55 percent decline in the value of the baht against the dollar doubled the amount of baht

required to serve the dollar denominated debt commitments taken on by the Thai financial

institutions and businesses. This increased the probability of corporate bankruptcies and

further pushed down the battered Thai stock market. The Thailand Stock market index

ultimately declined from 787 in January 1997 to a low of 337 in December 1997, on top of a

45 percent decline in 1996” (Hill & Hernandez- Requejo 2011, p. 392)

Finally the Thai government had to seek the help of the IMF to stabilize the financial turmoil.

The IMF agreed to provide the Thai government with $17.2 billion bailout loan but the

conditions for the same were restrictive. These included- increased taxation, cutting down of

public spending, privatization of several state owned institutions, raising interest rates and

also closing down of liquid financial institutions. Adhering to these conditions imposed by

IMF, the Thai government shut 56 financial institutions laying off 16,000 people.

The crisis had a ripple effect and the wave of the same soon hit the other Asian countries.

One after the other, in a matter of a week, the Malaysian ringgit, Indonesian rupiah and

Singaporean dollar were all marked sharply lower leading to a foreign exchange reserve

down to $28 billion. This lead to the third major currency crisis of the 1990s after the crises

of European Monetary System (EMS) of 1992 and Mexican peso in 1994-95. “The Asian

crisis however turned out to be far more serious than its two predecessors in terms of the

extent of contagion and the severity of resultant economic and social costs” (Eun, Resnick &

Sabherwal 2012, p. 77) In fact the crisis led to a unprecedentedly deep, widespread and a

long lasting recession in the East Asian region which has enjoyed rapid economic growth in

the previous decades.

40

3.3.2.3. Recovery from the Crisis

To everyone’s surprise, the Thai economy recovered quickly from the 1997-98 Asian

Financial Crisis, and the economy took off again with growth averaging about 5% per year in

the period between 2002-2007. Poverty, which had reached its peak of 21% owing to the

financial crisis, has been reduced to 8% in 2009. This can be attributed to the sensible

economic policies of the government. However in 2009- 2010, Thailand’s economic growth

slowed down owing to the global economic downturn and its own political instability which

stalled infrastructure mega projects, eroded investors as well as consumer confidence.

Thailand’s economy is basically an export oriented economy with export accounting for more

than two thirds of the economy. After the crisis, Thailand Balance of Trade recorded an all

time high of US $ 3537.0 million in February 2009 owing to the growth of export sector.

Graph 1: Thailand’s GDP growth rate from 2009 – 2011

(Source: World Wide Web Document, Official homepage of Trading Economics,

http://www.tradingeconomics.com/thailand/gdp-growth , accessed on 6th

Nov 2012)

Graph 2: Annual GDP Growth rate of Thailand from 1998 to 2011

41

(Source: World Wide Web Document, Official homepage of Trading Economics,

http://www.tradingeconomics.com/thailand/gdp-growth-annual , accessed on 6th

November

2012)

3.3.2.4. Present Scenario of Thai Economy

“The World Bank has upgraded Thailand’s income categorization from a lower-middle

income economy to an upper-middle income economy in July 2011. This is due to Thailand’s

progress in social and economic development despite facing a number of financial/economic

and political challenges” (World Wide Web Document: Official homepage: The World Bank,

Thailand Overview, http://www.worldbank.org/en/country/thailand/overview , accessed on

7th

Nov 2012)

This statement by World Bank aptly explains the growth and recognition of Thailand and its

economy in the global scenario. Today, Thailand is Southeast Asia’s second largest economy

with a GDP of US $ 345.649 billion in 2011. The characteristic features of the Thai economy

are:

Thailand is being characterized as a free-market economy with a strong domestic

market and a growing middle class with the private sector being the main engine of

growth.

The Kingdom of Thailand is an emerging economy which is heavily export-

dependent, with exports accounting for more than two third of the GDP (more than

70%).

42

The other two dominant sectors of Thai economy are the industrial sector which

accounts for 40% of the total GDP and the growing service sector which accounts for

50% of the total GDP.

Traditionally an agrarian society and historically one of the Worlds few net food

exporters, especially rice which started in the 14th

century itself with the rise of the

Ayutthaya Kingdom, today the agricultural sector of Thailand accounts for

approximately 9% of the country’s GDP.

Thailand is the world’s largest exporter of cassava, 2nd

largest exporter of gypsum, a

leading exporter of rice and a major exporter of shrimp. In addition to this, industrial

and high end technology products such as; integrated circuits and parts, electrical

appliances and vehicles are also leading Thailand’s strong growth in exports.

Thailand’s export partners include ASEAN, European Union, US, Japan and China.

In the Southeast Asian region Thailand has been a leader in terms of trade

liberalization and facilitation with the rest of the economies of the world, starting with

its Asian neighbours. Being the founding member of ASEAN, Thailand is a key

player of the association, enjoying a strategic location that provides easy access to the

large market of nearly 600 million people and which is expected to gain even more

strength with the ASEAN vision of One Community through the ASEAN Economic

Community (AEC) that is to be materialized by 2015 making it a single community of

connectivity, a single market and production base.

Owing to its strategic location both by sea and road and of course air providing the

ease of access to the two most important and biggest economies of the world, India

and China and as well as East Asian giants like Japan and Korea takes the huge

consumer market into bigger proportions.

The friendly relation of Thailand with foreign countries and the various Free Trade

Agreements (FTAs) as a member of the ASEAN, further opens up its trade access to

markets both inside and outside the region.

Thailand is known for its open, free and business friendly market economy with

sensible macro-economic policies. Of late the country has been streamlining its laws

and regulations, improving its infrastructure, enlarging its pool of the quality

workforce and promoting research and development.

Thailand is one of the favourite destinations of the foreign investors looking for

business opportunities and is being able to attract on an average US $ 10 billion of

FDI every year.

3.3.2.5. Thai Economy at a glance (2011- 2012 data)

Table 1: Economic Indicators of Thailand

43

Sl No Economic Indicators Amount

(In US $ and %)

Data as on

1. GDP 345.649 billion 2011

2. GDP Growth Rate 1.5 % 2011

3. Export 228.835 billion 2011

4. Import 228.490 billion 2011

5. Inflation 3.8 % 2011

6. Unemployment 0.7 % 2011

7. Balance of Trade 1153 million Sep 2012

8. Current Account (deficit) 1516 million April 2012

9. Foreign Exchange Reserve 178 billion Aug 2012

(Source: world Wide Web Document: official website of Trading Economics, Thailand,

http://www.tradingeconomics.com/thailand/indicators , accessed on 6th

Nov 2012)

3.3.3. Thailand: Social

“Thailand’s historical narrative could locate the nation’s origin in the thirteenth century by

virtue of the secular continuity of the two institutions – the monarchy and the Buddhist

monastic order- upon which the third pillar of the state’s symbolic trinity- the nation itself is

predicted” (Peleggi Maurizio 2007, p. 8)

The above lines describe the two main pillars of the Thai society – the Monarchy and

Buddhism. Both are known as the binding and the most valued aspect of Thai society and the

Thai identity. Monarchy in Thailand though symbolic in nature when it comes to power, but

the command and the respect that it holds among the Thai people is nothing less than a

phenomena in itself. Today, it serves as a guiding light and unifying force for the country at

large and a focal point that brings together Thai people from all backgrounds and shades of

life and political thought and provides them with an intense awareness of being Thai. The

second aspect is Buddhism, more particularly the Theravada School of Buddhism, for which

Thailand is known for. As a matter of fact, about 95% of the Thai population are Buddhist

and the country is known for being one of the Buddhist strong holds. A country known for

being a Buddhist country by heart and by soul, where the King, the Head of the state is still

constitutionally stipulated to be a follower of Buddhism and a guardian of the faith, a country

where Buddhism still exists as a living force.

3.3.3.1. Background of the Thai society

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The ancient Thai society actually dates back to some 40,000 years, when first permanent

settlement in Thailand began. “It was the Chao Phraya River valley in Western Thailand that

became the nourishing ground of Thai civilization and history” (Mishra, Patit Paban 2010,

p.1). The first kingdoms that arose in Thailand were strongly influenced by Buddhism and

Hinduism. The first Thai kingdom was the Mon Kingdom of Dvaravati, which dates back to

the sixth century C.E. In fact Thailand was under several Kingdoms like the Funan, the

Chenla and Sri Vijaya Kingdoms. Moreover the neighbouring Khmers also established its

authority in central Thailand.

It was in 1238, that the Thais declared themselves as independent after challenging the

Khmer suzerainty and the first Thai state was set up under Sri Indraditya which they call the

Sukhothai. In the middle of the fourteenth century, the Thai political power shifted from the

Chao Phraya Basin to further South to Ayutthaya with the establishment of the new kingdom

in central Thailand. Thus the Ayutthaya Kingdom under King Ramathibodi I was formed

here. It was after more than 400 years later in 1776, that the Kingdom of Ayutthaya was

brought down by the Burmese invasion. However, General Taksin managed to reunite the

battered Thai Kingdom with Thonburi as its capital and declared himself as the King under

the name of King Taksin the Great. But soon, he pronounced himself as a monk and ventured

into the forest and was never seen again. After this incident, his General Chakri, succeeded

him and become the King with the name Rama I and thus, the predecessors of the modern

Thai Monarchy was established in 1782. By far the Chakri Kingdom is known to be the most

successful Kingdom of Thailand with Bangkok as its capital and the present King of

Thailand, His Majesty King Bhumibol Adulyadej is the ninth King of the Chakri dynasty.

Though in 1932, absolute Monarchy was abolished and Thailand was made a Constitutional

Monarchy in the line of the West, and the King is symbolocally the Head of the State, who

discharge his duties in accordance with the country’s constitution and remains above the

partisan politics, still commands a large part of the moral authority among the Thai people by

means of his contribution to the development and well-being of the Kingdom and its people.

3.3.3.2. Present day Thai society

Today, the modern Thai society is a reminiscent of its glorious past and the fine balance of

modernity and tradition. “Thai culture took form out of the unique blend of Indian customs

and indigenous elements involving cultural interaction with India rather than transplantation

of Indian culture” (idem). In fact Buddhism, which is the most dominant factor of Thai

culture, society and religion came from India and flourished here. Ethnically Thailand is not a

purely homogeneous country. The Thai society consists of different ethnic groups. Among

them the Thai ethnic group consists about 80% of the total population of Thailand, which can

be further sub divided into Khon Thai, consisting 33%, the Isan Lao or the Northern Thai

consisting of 34% and the Southern Thai which consists of 14% of the total Thai ethnic

group. After the Thais comes the Chinese, which is the largest minority group consisting of

45

14% of the total population of Thailand. The rest of the population belongs to different other

ethnic groups like the Malays, Burmese, Indians and also refugees from Indochinese

countries. Buddhism is the dominant religion consisting of the 95% of the total population.

Followers of Islam is the second largest religious group which accounts for 4%, the rest 1%

consists of the followers of Hinduism, Christianity and other faiths.

Today’s Thai society is an amalgamation of all these ethnic groups living in harmony, either

social or religious with each other. An interesting aspect of the Thai society at large is while

not giving up their culture and language, a sizeable number of minorities have adopted Thai

names and speak the Thai language, making it even far more difficult to determine the ethnic

characteristic of the individuals from their names alone. The Thai society which was

traditionally and essentially based on agriculture with 80% of its population living in the

villages growing rice and other crops, today is advancing towards a society where

modernization and globalization is accepted and in fact has considerable effects in changing

the lives of the traditional people of Thailand. An important factor about Thai society is that

it has never been de cultured by the imposition of foreign values. It is because; Thailand has

never been formally colonized by any western power even during the height and might of the

European colonialism of Asia.

“The Thai people have been quite successful in preserving and protecting their culture,

religion, traditions and other values of their national heritage. This then is the foundation of

their pride and the source of unique aspects of Thai nationalism, which is more culturally

than ethnically based. And whatever foreign element has crept into the Thai society were

consciously introduced by its modernizing monarchs over the decades and then accepted by

its people. In view of this, it is difficult to overlook the emotional ties that the Thais have

with the Europeans, Americans and Australians, and during the last decade with Japanese and

others, perceiving them as no threat to their cultural identity” (Kapur, Alexandra R. 1998, p.

45)

The Thai society is very conscious of their position within a hierarchy, be it family, place of

work or business. Another aspect of the Thai society is, they strongly believe in the concept

of saving face. That is to say, they generally avoid confrontation and try not to embarrass

either themselves or the others. The concept of ‘S`a-n`uk’ which literally means ‘fun’ is often

regarded as a necessary element of everything worth doing. Thais believe that everything,

whether it be work or study, should have an element of S`a-n`uk, otherwise everything

becomes mundane. However, keeping its traditional values intact, today’s Thai society is

continuously progressing towards a mother, wealthy society owing to the increasing contact

with the outside world. The Thai people are well known for being friendly, generous and

tolerant. The Thai society is open to learning and doesn’t believe in discrimination of any

kind.

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“Underpinned by eight centuries of chronicled history that is rich in tradition going back

beyond that, Thai cultural heritage is a blend of customs, from the Siamese royal court and

historical tributary principalities to distinctive regional folklore. Thai culture and society has

also been influenced by religious tenets, largely inspired by Theravada Buddhism, but also

incorporating a great deal of Indian, Chinese, Khmer and other traditions from the rest of the

Southeast Asia and beyond” (World Wide Web Document: Official Homepage of Experience

Thailand, Thailand Culture and Society, http://www.thailandtoday.org/culture-and-

society/overview , accessed on 7th

Nov 2012)

The Thai society has been largely open to the outside world and thus has adopted everything

that it has perceived as beneficial for its growth and development through ages and the Thai

society is trying to make a fine balance between its glorious past and the rapid pace of

modernization in all aspects. Today, Thailand is a medley of the ethnic, linguistic, religious

and cultural nuances of all these cultures which has been finely blended together for centuries

to be evolved into its form.

3.3.4. Thailand: Technological

Thailand can be rightfully referred to as ‘phoenix’ because the country recovered and made

continuous developments in spite of all the political, economical as well as the natural shocks

that it has received. The political crisis which was ever present since 1932, when the country

became a Constitutional Monarchy, the economic and financial crisis of 1997-98 which is

regarded as one of the major crisis of the world having a ripple effect in almost all the Asian

countries and outside, and also the plight of the nature in the form of Tsunami in 2004 –

Thailand has witnessed everything but is still standing strong in spite of all these it has

continuously made progress toward a modern wealthy society. Thailand continued to make

improvements in its infrastructure with ambitious plans to expand both, the metro and the sky

train, the long-awaited airport link, the road links to even the distant parts of the country has

also improved, and there is an abundance of cheap domestic flights for one and all. Even the

continuous political crisis have also done little to alter what makes the country arguably the

most diverse and rewarding tourist destination of Southeast Asia.

3.3.4.1. Background

If we look at the history, we will find that the zest for technology has long been present in

Thai culture and society and this is evident from the architectural excellence of the temples

and residences of Thailand. The most stinking feature of Thailand’s architectural heritage and

evidence of the technological excellence are the Buddhist temples, called ‘Wat’, which dazzle

in the tropical sun with an array of colours and soaring rooflines. Even the traditional

residential architecture of the Thais reflects a harmonious blend of function and style with

47

adaptation to the weather, the family and the artistic sensibility. In fact the Thai traditional

culture has a vast reservoir of knowledge and technological knowhow. It can be dated back to

the pre-historic Ban Chiang people who achieved one of the world’s earliest bronze

civilizations some six thousand years ago. In fact the skills in the indigenous technologies

that they used is reflected today in the arts and crafts, the houses, the objects of daily use, the

impressive know-how in the construction of temples, the Buddha images and other religious

objects.

“In contrast to indigenous science derived from religious teachings, technology was

accumulated by the Thai by practical experience, refined and passed on in areas like

traditional medicine, horticulture and food preservation. In these stocks of knowledge lie the

potential for drugs of use to man today and new fermentative microorganisms yet to be

exploited by modern science” (World Wide Web Document: The Kingdom in Modern Light:

http://www.nectec.or.th/users/htk/SciAm/03NSTDA.html , accessed on 8th

Nov 2012)

Along with the traditional knowledge, the Thais embraced the modern Western science

enthusiastically when it arrived. This transformation can be dated back to the reign of King

Rama IV, who is known to be the Father of Thai Science, who correctly predicted the time of

the total solar eclipse in the south of Thailand.

3.3.4.2. Thailand today

The present day technological excellence of Thailand can be seen in the advancement in the

fields of infrastructure, information and telecommunication, science and technology and the

energy. Today’s Thailand is facing a series of infrastructural challenges and transformation

owing to the ardent need to catch up with the economic development. Most of the

infrastructure development of Thailand has been in accordance with the demand. Availability

and accessibility appears no longer a challenge.

Highlights:

The total road network coverage has reached 98.5% with a total of 61,586 km of

roadways. The electricity has reached 99% of the population. Bangkok the capital city

is beaming with skylines constructed with the use of high end technology.

The total coverage of railways is 4,071 km.

Waterways consist of 4000 km.

Thailand has total 6 ports and harbours in Bangkok, laem Chabang, Map Ta Phut

Port, Songkhla, Phuket, Sriracha and Siam Sea Port.

It has a total of 65 airports in all over the country and 3 heliports.

In the telecommunication sector, the mobile phone penetration in Thailand according

to the recent data of 2012 data is 113%, with 79 million subscribers over a population

of over 66 million a steady increase from the earlier 82% in early 2008.

The demand for internet and internet related services has also increased considerably

which is evident from the expanding volume of international bandwidth.

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The broadband internet market in Thailand also showed a strong growth trend with an

annual rate of around 25% in 2011. However, the fixed broadband penetration is still

low with 6% in the early 2012.

Also, the fixed-line market is not showing any sign of revival, which is showing a

negative growth in 2011.

There was an increasing demand for Smartphone in 2011 and 2012 owing to the

change in the user behaviour, especially with the increasing use of mobile data

service.

(World Wide Web Documents: Infrastructure Development in Thailand,

http://www.eria.org/publications/research_project_reports/images/pdf/PDF%20No.2/No.2-

part2-9.Thailand.pdf , accessed on 8th

Nov 2012 and Thailand: Telecom, Mobile and

Broadband Forecast, http://www.budde.com.au/Research/Thailand-Telecoms-Mobile-

Broadband-and-Forecasts.html , accessed on 8th

Nov 2012)

In fact the 10th

National Development Plan has given special emphasis to infrastructure

development. The three areas that have been particularly identified are:

1. Development of infrastructure and logistics services to support production

structural adjustment. This aims to support the competitiveness and enhance

efficiency of the private sector both in production and service sectors. It includes:

a) Development of up-to-date and efficient transport, logistics services and

telecommunication systems with the development of both domestic and

international logistics networks. Development of urban mass transit

network and telecommunication networks, development of support

transport modes and transport management which are energy efficient;

particularly development of rail, waterways and delivery of energy

through pipe lines.

b) Transport efficient management of infrastructure under stakeholder’s

participation. This includes, creation of stakeholder participation in

infrastructure project development, emphasizing careful project studies on

feasibility, environmental impacts, social impacts etc, to support public-

private partnership in infrastructure investment, and to support demand

management initiatives which aims to create awareness in efficient

resource utilization.

2. Improved energy efficiency and expedition of alternative energy initiatives. The

basic aim behind this is to reduce the energy importing costs. This includes:

a) Find new energy sources, both domestic and international.

b) Increase energy efficiency in transport, manufacturing and household

sectors through incentives and law enforcements.

c) Campaign for energy conservation and for alternative energy usage in

every sector.

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d) Research on alternative and renewable energy including new fuel and

electricity generating technology.

3. A framework for fair distribution of benefits of infrastructure development. This

gives particular emphasis to the rural areas in order to enhance access, to ensure

sufficient provision and to be responsive to the demand for infrastructure.

(Source: World Wide Web Document: Overview of Thailand’s Infrastructure Development.

Past and present: http://siteresources.worldbank.org/INTTHAILAND/Resources/333200-

1177475763598/3714275-1234408023295/5826366-1234408105311/chapter1-overview-of-

thailand-infrastructure-development.pdf , accessed on 8th

Nov 2012)

Thai government is particularly conscious about technological aspect of the country and the

Ministry of Science and Technology of the Government of Thailand is particularly devoted to

this. The Thai government has included Science and Technology in its five-year Economic

and Social Development plans since the beginning of the 1980s. In fact the government

wishes to strengthen its S&T base and believes that it will lead to economic value. Thailand’s

policy measures include support of the interaction between scientific institutions and the

private sector, the establishment of intermediary institutions and the private sector, the

establishment of intermediary institutions such as incubators, the provision of better S&T

networks and services, and the transfer and diffusion of technology. Presently the R&D

budget of Thailand is contributed by both government and the private sector which is total 25

billion THB (0.25% of the GDP). This is a quite low as compared to other Southeast Asian

neighbours. However during 1996 to 2007, Thailand has been able to double its gross

expenditure on R&D as a percentage of its GDP. But Thailand is optimistic to further

increase it R&D expenditure by the end of the 11th

National Economic and Social

Development Plan in 2016, to make it 100 billion THB, which is equal to 1% of its GDP.

The present Science and Technology Action Plan of Thailand (2004-13) mainly focuses on

the development of a national innovation system and industrial clusters. The objective of this

plan is to enhance Thailand’s capabilities in response to the rapid changes in the age of

globalization and to increase the country’s long term competitiveness under the vision that

‘the Thai economy will be strong; the Thai knowledge-based society will be able to compete

internationally; the Thai nation will be secure and Thai people will have a good quality of

life’. Thus to ensure this, the present strategies of Thailand are:

1. The strength of human resources in science, technology and innovation.

2. The awareness raising on science, technology and innovation among youth and

public and the development of a science knowledge society in Thailand.

3. The research and development of new innovations to enhance Science and

Technology competitiveness and the strength of national innovation system.

4. The technology transfer and knowledge sharing to increase productivity

commercially and for social services.

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5. The capacity building of basic infrastructure in science, research funding system

as well as the development of science policies and S&T management to be

effective and up-to-date.

Along with these the Government has also introduced a broad range of new incentives such

as the development of centres of excellence of international standards, the founding of

science parks in the country as well as income tax deductions for R&D expenditure.

The main wing of the Government which is responsible and accountable for all this is the

National Science and Technology Development Agency (NSTDA), which was established in

1991 and officially began operating in 1992. NSTDA is the amalgamation of the earlier three

national technology centres: The National Centre for Genetic Engineering and Biotechnology

(BIOTEC), the National Metal and Materials Technology Centre (MTEC) and the National

Electronics and Computer Technology Centre (NECTEC). Moreover the government is also

funding nine selected universities of Thailand under the project launched by the Higher

Education Commission of the Ministry of Education named National Research Universities

Project 2009 to build capacity of universities in Thailand to be world class universities. The

motive behind this is to develop Thailand as the regional educational hub and to strengthen

human resources in research and innovation to increase Thailand’s competitiveness at the

global level.