state of regional development in thailand

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  • 1. State of Regional Development in Thailand1. Interregional Disparities: Regional disparity is a matter of national developmentconcern for over a 26-year interval. There was clearly existent of strong core andrather weak periphery development pattern in Thailand. Bangkok as megacity andvicinities and the Eastern region represent the core regions with high urbanizationrate. Whereas other areas including border regions are regarded as periphery. In 1981,the Gross Regional Product (GRP) per capita differential of Bangkok and vicinitieswere higher than that of the average of the whole kingdom at 3.06 fold. Furthermoreits growth was well advanced than the Northeastern and Northern regions at 7.93 and4.85 fold, respectively. Then it kept increasing and widening due to adoption of acombination of import-substitution industrialization and export-orientedindustrialization strategies, complemented with promotion of inward FDI. Until 1997,Thailand faced economic 12,000Unit : US$ 10,0008,0006,0004,0002,000 01981 19821983 19841985 19861987 19881989 19901991 19921993 19941995 19961997 19981999 20002001 20022003 2004 20052006 20072008 2009 Bangkok and vicinities Central Western Eastern Southern NorthernNortheasternWhole kingdom Source: Office of the National Economic and Social Development Board. (2011). Figure 4.8 Gross Regional Product per capita at current market prices of Thailand during 1981-2009crisis that negatively affected the regional growth patterns. As a result, in 1999, it thenbrought the GRP per capita disparities of Bangkok and vicinities down to 2.83 timesabove the average of whole kingdom. This resulted from such dense concentration ofeconomic activities, including domestic and FDI were still concentrated in the coreregions. However, the differences of GRP per capita of the core regions remainedeven higher than that of Northeast and Northern regions as high at 8.79 and 5.7 fold,respectively. Interestingly, the growth of GRP per capita in Eastern region was alsohigher than the Northeast and Northern regions for as high at 5.77 and 4.01 fold,respectively. In 2009, the disparities of GRP per capita between Bangkok andvicinities and the whole kingdom steadily declined, but surprisingly the differences ofBangkok and vicinities and the Northeast and Northern regions remained almost atslightly lower points as it were in 1981, while Eastern region had even higher GRPper capita with a peak at 7 and 4 fold. This distinctly resulted from the GRP per capitaof these growth magnets consisting of Bangkok and vicinities and the Eastern regionhave been converging since 2006, and its growths remain increasing signifying aChoen Krainara: Dissertation titled Border Economic Zones and Development Dynamics inThailand: A Comparative Study of Bordering Countries, Regional and Rural DevelopmentPlanning Field of Study, School of Environment, Resources and Development,Asian Institute of Technology.

2. warning of wider regional disparities. Central region performed well above nationalaverage, and its tendency has continued to expand since 1994. Thus, Northeastern wasyet the most backward region, followed by Northern region. While Southern andWestern regions together went along with moderate level of development. Therefore,interregional income polarization has long been alarmed, and will continue to expand.2.Intra-Regional Disparities: Although many efforts have been made by both publicand private sectors to address regional disparities over recent decades; however, itappears that border regions have persistently been lagging behind the core and otherperipheral regions leaving apparent intra-regional disparities. In 2007, five borderregions where majority of people engaged in agricultural sector, and lived in ruralareas were homes of 23.33 millions accounted for 35.43 % of the whole countrypopulation. Moreover, border regions host eight out of top ten poverty prevalenceprovinces across country (NESDB, 2008). In 2010, Daily minimum wages in borderprovinces were ranged from 5.01-5.83 US$ compared to Bangkok at 6.77 US$(Department of Employment, 2011). Comparisons of eight years interval between2002 and 2009, the tendency of structure of outputs in all border regions weretrending towards greater reliance on non-agriculture sector particularly on trades andindustries. Border regions, which locate along main transport arteries, have seen bettereconomic prospects particularly on cross-border trade. Hence, flourishing local andregional cross-border trade growth in border regions not only help alleviate povertybut also possibly spread the benefits to narrow both inter and intra-regionaldisparities.3. Existing Industrial Investments along Thai Border Regions: The rapid growthof Bangkok and its vicinities which highly causes imbalanced spatial development hasprompted Royal Thai Government to implement policies on investment promotionsince 1993. The specific objectives were to equitably disperse economic activities outof Bangkok to regional areas. Thus, the BOI has spatially divided into threeInvestment Zones based on economic factors (BOI, 2008). Zone 1 consists of centralprovinces with high income and good infrastructure, including Bangkok and fivesurrounding provinces. Zone 2 comprises of 12 provinces in semi-peripheral region.And Zone 3 includes the remaining 58 peripheral provinces with low income and lessdeveloped infrastructure; all border provinces are located in this zone. A wide rangeof privileges on reduction of import duty on machinery and corporate income taxexemption for a certain period was granted to investors. Despite existent investmentpolicy, in 2010, approximate 77.72 % of capital investment was even now convergedin Zone 1 and Zone 2 owing to investors enjoys positive advantages of agglomerationeconomies in these regions (BOI, 2011). Nevertheless, actual investment in the borderregions has been far behind causing out migration of Thai labor to these strong growthcenters. While the striking border industrialization is evident in Maesod district, inTak province, in which up to 65 % of provincial factories mainly employed cheaperMyanmar migrant workers particularly on textile, apparel and agro-processedindustries are located (Tak Industrial Office, 2010).Choen Krainara: Dissertation titled Border Economic Zones and Development Dynamics inThailand: A Comparative Study of Bordering Countries, Regional and Rural DevelopmentPlanning Field of Study, School of Environment, Resources and Development,Asian Institute of Technology.