Impact on International Business Of Thailand's Economic System - Case Study Example

Thailand has been able to attract foreign direct investment to develop its infrastructure. Its heavy dependence on exports has made it suffer from the global recession. Major underlying problems are due to social and political instability. Private enterprises abound due to the privatization but obstacles exist from lack of planning to increased competition, and rising production and labor costs. There is also a need for different policies to support each other. Exports account for 2/3 of Thailand’s GDP.

Prior to the recession, it has generally enjoyed a positive balance of trade. Thailand is a leading supplier of gypsum, rice, and shrimp. Its greatest trading partners are Japan and the U.S. as well as China. Its exports have been rising overall but took an impact during the global recession. Its main imports are capital and intermediary goods, and its major import partner is Japan. Its imports show a roughly similar trend to its exports but have taken a greater impact from the recession. Its main business attractions are cheaper labor and resources.

Thailand is also a favorite tourist destination, which attracts foreign exchange. Thailand is a founding member of the ASEAN, and is also a member of several other regional and global trade bodies and has signed many trade agreements. It has a positive attitude towards promoting trade. Thailand and the U.S. have roughly similar GDP trends. However, the current global recession began earlier in the U.S. than it did in Thailand. Thailand’s GDP per capita is much lower than in the U.S. reflecting vast differences in living standards.

Thailand’s GDP composition by sector is more even for industry and services whereas the U.S. has a predominantly service-oriented economy with declining importance of its industry.