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East-West-South: Bangkok And Its Partners In The EU And Elsewhere

  • July 1st, 2012
  • Posted by EUEditor

img_0090_2.JPGWriterFallon Smith

How does a single, middle-sized country make its way in an uncertain world economy?

The Kingdom of Thailand, never a European colony, has been striving for centuries to make a secure, and independent future.

It is in the middle of several different influences, and one of them is the link to Europe.

The European Union is wanting to take away with one hand, trade preferences it gives to developing countries – Thailand now rising to mid-range economic status and becoming less eligible for aid.

bangkok-river.jpgThe EU is with the other hand, offering a reciprocal free trade deal; in effect a make-up for Thailand that would keep the trade barriers down between the two sides.

Just last week, 26.6.12, they settled a deal for the sale of raw chicken meat to Europe. It’s a huge trade, and had been closed off, after disputes in the past over problems with additives in foodstuffs, like antibiotics.

bangkok-dancer.jpgIt does not help matters now, that European countries are experiencing recession, meaning less chance of them placing orders for goods and services in South-east Asia.

bangkok-pagoda.jpgIn Bangkok, senior officials say their textiles and electronics manufacturing industries are under some threat – also rubber and jewellery.

Other pressures:

  • The severe floods of 2010-11 that threatened or actually inundated thousands of factories and workshops.
  • Political unrest that was eventually settled when the present government was elected to power.
  • More political tension over government policies for change, including an increase in the minimum wage to 300 baht, approximately $10, per day – in country areas a rise of up to 50%. (Popular among millions; likely to raise the ire of powerful opponents).
  • The need to manage the economy very well, to keep up good credit with outside lenders.

At present public debt is some 40% of Gross Domestic Product, and the plan is to hold it to less than 60%, healthy enough by general world standards.

bangkok-tuk-tuk.jpgKeeping up good links with trading partners, including that other middle-sized player to the South, Australia, can be expensive.

Thai business investment in Australian minerals and gas, to assure a share of resources, far outweighs the value of business brought in by many companies operating in the opposite direction.

Australian interests send gold, cotton, crude petroleum and aluminium to Thailand; compete with it for sales of farm products like sugar, and turn up as tourists: they make up 11.5% of the market, behind such giant contributors of visiting people as Malaysia, China and Russia.

Australia and Thailand made a free Trade Agreement in 2005, and collaborate in many areas: exchanges of expertise in handling natural disasters; development aid; law enforcement; aviation; border protection; education, and peace-keeping missions overseas.

Looking at the economic slow-down in Europe, the government in Bangkok says it is worried about having its eggs in not enough baskets, so it wants many participants.

It is perhaps a case of East (Thailand, in South-east Asia), meeting West (the European Union), and also the South (the land Down Under).