Thailand joined the IMF on May 3, 1949[1] and has been the recipient of numerous IMF programs, most notably in its role as the source of contagion in the 1997 Asian financial crisis. Thailand currently has a quota of 3,211.9 million SDR's, which gives it the second most voting power in its constituency after Turkey.[2] The IMF opened a technical assistance office in Thailand in 2012 to provide technical assistance and training to the Lao PDR and the Republic of the Union of Myanmar.
During the span between 1973 and 1985, Thailand experienced a 36% fall in trade, stagnating GDP growth, sharp inflation, and increasing current account deficit coupled with increasing external debt. In order to counter this trend, Thailand entered into IMF backed adjustment program in which it devalued its currency while implementing stricter fiscal policies. The structural changes that this period of adjustment implemented resulted in 10 years of strong economic performance. Between 1987 and 1989, the GDP grew at over 10%, inflation dropped to just 5 percent, and current account deficit was less than 3% of the GDP.[3] Despite this, some argue that the short-term focused structural changes in the 1980s were the catalysts for Thailand's economic crisis just 10 years later in 1997. Specifically, most of the growth in the ten years following the 1983 IMF adjustments were in the non-tradable sector rather than the export-oriented tradable sector. Furthermore, the IMF adjustments cut infrastructure investment from 8.9% of total GDP to just 5.2% in 1989.[3]
IMF Involvement during the Asian Financial Crisisedit
In 1997, Thailand faced an economic crisis stemming from a variety of pressures. During the ten-year span between 1987 and 1997, Thailand's current account deficit continued to grow. By 1996, the deficit had grown to 7.887% of the total GDP.[4] During this same period, foreign direct investment increased sharply as continuing currency devaluations, first in the 1980s and then as an effect of the Plaza Accord. Real estate investors overestimated the demand for real estate and used the Bangkok International Banking Facility's relatively cheap loans on construction projects that were left vacant due to lower demand than initially thought.[5] Predicting further currency devaluation, speculators launched a series of attacks on the Thai Baht. The Thai government initially attempted to protect the Baht by buying it back and expending its international reserves, but was ultimately forced to float the currency.[6] In August 1997, the IMF unveiled a relief package for Thailand that would offer a total of 17.2 billion US dollar's worth of bilateral and multilateral assistance. The initial period of policy-making was designed to manage the baht's floating exchange rates, restructure Thai financial institutions, cut public expenditures, promote the private sector, and to attract more foreign capital. The IMF's conditionality for the Thai bailout is characterized by monetary policy reform, fiscal policy reform, and financial sector reform.[7]
Under Thailand's former finance minister, Tarrin Nimmanahaeminda, Thailand's financial sector restructuring began with the liquidation of insolvent finance companies and resulted in the closure of 56 bankrupt finance companies. The government intervened in weak banks and the banking system was recapitalized. In 1998, the banks who received government intervention were privatized, assets were disposed of, and corporate debt was restructured. Bankruptcy law, foreclosure procedures, and foreign investment restrictions were all reformed. Fiscal policy initially demanded a surplus of 1 percent of GDP at the outset of the crisis, but by February 1998 switched its target to a small deficit of 2 percent of GDP. Finally, monetary policy attempted to stabilize the exchange rate while helping Thailand recover from the crisis.[7]
IMF Capacity Development Office Thailandedit
The IMF opened a Technical Assistance Office in Thailand (TAOLAM) in September 2012 to provide support for Laos and Myanmar, and now also covers Cambodia and Vietnam on a project-by-project basis. Thailand and Japan donate to the upkeep of this office, and the Bank of Thailand hosts the office. The office offers resident project technical advisers in macroeconomic management, public financial management, regional treasury management, monetary and foreign exchange operations, government finance statistics, and external sector statistics. This office works closely with the IMF-Singapore Regional Training Institute (STI) and the Regional Office for Asia and the Pacific in Tokyo (OAP).[8] On September 10, 2018, TAOLAM was renamed to the IMF Capacity Development Office in Thailand (CDOT). The name change reflects the complementary role that training plays with technical assistance, as the two pillars of capacity development at the IMF. The principal objective of CDOT has remained to strengthen capacity in macroeconomic management and statistics in support of countries’ reform priorities. CDOT’s activities are made possible through direct financial support from the Government of Japan and an in-kind contribution from the Bank of Thailand.[9]
Referencesedit
^"List of Members' Date of Entry". www.imf.org. Retrieved 2017-06-06.
^"IMF Members' Quotas and Voting Power, and IMF Board of Governors". www.imf.org. Retrieved 2017-06-06.
^ abChowdhury, Anis (1999). "Villain of the Asian Crisis: Thailand or the IMF?". ASEAN Economic Bulletin. 16 (2): 166–174. doi:10.1355/AE16-2B. JSTOR 25773575.
^"Report for Selected Countries and Subjects". www.imf.org. Retrieved 2017-06-06.
^Phō̜nchōkchai, Sōphon (2008). Housing Finance Mechanisms in Thailand. UN-HABITAT. ISBN9789211320381.
^Zenker, Anja (2014-01-08). Currency Speculation in Fixed Exchange Rate Regimes: Theory and Empirical Evidence. Springer Science & Business Media. ISBN9783658048297.
^ ab"Recovery from the Asian Crisis and the Role of the IMF -- An IMF Issues Brief". www.imf.org. Retrieved 2017-06-06.
^"IMF Capacity Development Office in Thailand". www.imf.org. Retrieved 2019-02-14.
May 04, 2024
thailand, international, monetary, fund, this, article, relies, excessively, references, primary, sources, please, improve, this, article, adding, secondary, tertiary, sources, find, sources, news, newspapers, books, scholar, jstor, june, 2017, learn, when, re. This article relies excessively on references to primary sources Please improve this article by adding secondary or tertiary sources Find sources Thailand and the International Monetary Fund news newspapers books scholar JSTOR June 2017 Learn how and when to remove this message This article needs additional citations for verification Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources Thailand and the International Monetary Fund news newspapers books scholar JSTOR June 2017 Learn how and when to remove this message Thailand joined the IMF on May 3 1949 1 and has been the recipient of numerous IMF programs most notably in its role as the source of contagion in the 1997 Asian financial crisis Thailand currently has a quota of 3 211 9 million SDR s which gives it the second most voting power in its constituency after Turkey 2 The IMF opened a technical assistance office in Thailand in 2012 to provide technical assistance and training to the Lao PDR and the Republic of the Union of Myanmar Contents 1 IMF Involvement in the 1980 s 2 IMF Involvement during the Asian Financial Crisis 3 IMF Capacity Development Office Thailand 4 ReferencesIMF Involvement in the 1980 s editDuring the span between 1973 and 1985 Thailand experienced a 36 fall in trade stagnating GDP growth sharp inflation and increasing current account deficit coupled with increasing external debt In order to counter this trend Thailand entered into IMF backed adjustment program in which it devalued its currency while implementing stricter fiscal policies The structural changes that this period of adjustment implemented resulted in 10 years of strong economic performance Between 1987 and 1989 the GDP grew at over 10 inflation dropped to just 5 percent and current account deficit was less than 3 of the GDP 3 Despite this some argue that the short term focused structural changes in the 1980s were the catalysts for Thailand s economic crisis just 10 years later in 1997 Specifically most of the growth in the ten years following the 1983 IMF adjustments were in the non tradable sector rather than the export oriented tradable sector Furthermore the IMF adjustments cut infrastructure investment from 8 9 of total GDP to just 5 2 in 1989 3 IMF Involvement during the Asian Financial Crisis editSee also 1997 Asian Financial Crisis In 1997 Thailand faced an economic crisis stemming from a variety of pressures During the ten year span between 1987 and 1997 Thailand s current account deficit continued to grow By 1996 the deficit had grown to 7 887 of the total GDP 4 During this same period foreign direct investment increased sharply as continuing currency devaluations first in the 1980s and then as an effect of the Plaza Accord Real estate investors overestimated the demand for real estate and used the Bangkok International Banking Facility s relatively cheap loans on construction projects that were left vacant due to lower demand than initially thought 5 Predicting further currency devaluation speculators launched a series of attacks on the Thai Baht The Thai government initially attempted to protect the Baht by buying it back and expending its international reserves but was ultimately forced to float the currency 6 In August 1997 the IMF unveiled a relief package for Thailand that would offer a total of 17 2 billion US dollar s worth of bilateral and multilateral assistance The initial period of policy making was designed to manage the baht s floating exchange rates restructure Thai financial institutions cut public expenditures promote the private sector and to attract more foreign capital The IMF s conditionality for the Thai bailout is characterized by monetary policy reform fiscal policy reform and financial sector reform 7 Under Thailand s former finance minister Tarrin Nimmanahaeminda Thailand s financial sector restructuring began with the liquidation of insolvent finance companies and resulted in the closure of 56 bankrupt finance companies The government intervened in weak banks and the banking system was recapitalized In 1998 the banks who received government intervention were privatized assets were disposed of and corporate debt was restructured Bankruptcy law foreclosure procedures and foreign investment restrictions were all reformed Fiscal policy initially demanded a surplus of 1 percent of GDP at the outset of the crisis but by February 1998 switched its target to a small deficit of 2 percent of GDP Finally monetary policy attempted to stabilize the exchange rate while helping Thailand recover from the crisis 7 IMF Capacity Development Office Thailand editThe IMF opened a Technical Assistance Office in Thailand TAOLAM in September 2012 to provide support for Laos and Myanmar and now also covers Cambodia and Vietnam on a project by project basis Thailand and Japan donate to the upkeep of this office and the Bank of Thailand hosts the office The office offers resident project technical advisers in macroeconomic management public financial management regional treasury management monetary and foreign exchange operations government finance statistics and external sector statistics This office works closely with the IMF Singapore Regional Training Institute STI and the Regional Office for Asia and the Pacific in Tokyo OAP 8 On September 10 2018 TAOLAM was renamed to the IMF Capacity Development Office in Thailand CDOT The name change reflects the complementary role that training plays with technical assistance as the two pillars of capacity development at the IMF The principal objective of CDOT has remained to strengthen capacity in macroeconomic management and statistics in support of countries reform priorities CDOT s activities are made possible through direct financial support from the Government of Japan and an in kind contribution from the Bank of Thailand 9 References edit List of Members Date of Entry www imf org Retrieved 2017 06 06 IMF Members Quotas and Voting Power and IMF Board of Governors www imf org Retrieved 2017 06 06 a b Chowdhury Anis 1999 Villain of the Asian Crisis Thailand or the IMF ASEAN Economic Bulletin 16 2 166 174 doi 10 1355 AE16 2B JSTOR 25773575 Report for Selected Countries and Subjects www imf org Retrieved 2017 06 06 Phō nchōkchai Sōphon 2008 Housing Finance Mechanisms in Thailand UN HABITAT ISBN 9789211320381 Zenker Anja 2014 01 08 Currency Speculation in Fixed Exchange Rate Regimes Theory and Empirical Evidence Springer Science amp Business Media ISBN 9783658048297 a b Recovery from the Asian Crisis and the Role of the IMF An IMF Issues Brief www imf org Retrieved 2017 06 06 IMF Technical Assistance Office THAILAND www imf org Retrieved 2017 06 13 IMF Capacity Development Office in Thailand www imf org Retrieved 2019 02 14 Retrieved from https en wikipedia org w index php title Thailand and the International Monetary Fund amp oldid 1168604370, wikipedia, wiki, book, books, library,
