The North is a mountainous region made up of 17 provinces famous for its numerous valleys watered by rivers and streams. It is spread over an area of 169 000 square kilometers, having one third of the total area of Thailand.

Agriculture has long been the lifeblood of this region with principal crops, in terms of area planted and production value, being rice, sugar cane, corn, tobacco, soybeans, vegetables and fruits. Vegetables and fruit crops have increased in importance to the Northern economy with significant growth in revenues earned from longans, lychees, strawberries, coffee, garlic, and onions. Recently several temperate fruit crops including apples, apricots, peaches and pears have been introduced and successfully grown in the Northern region. The major industrial activities are focused on electronics, sugar processing and cement with large earnings also made from the production of ceramics and handicrafts.

In 1998, agricultural output increased by two percent while industrial output jumped by 16.3 percent led by the export production of electronic parts and sugar production. The service sector grew by seven percent resulting from the increase in the number of tourists visiting the region.

Finance Market

The Northern financial market is dominated by commercial banks, with 523 branches operating in the region. The Northern economy grew at an annual average rate of approximately six percent between 1992 and 1996, benefiting from easy access to credit. However, in 1999, it slowed to only 3-4% as the financial crisis froze new lending from the banks. Future growth in the Northern economy is dependent on further stimulus for economic growth outside of Bangkok, and the improvements in the liquidity of small-medium enterprises in the region.

Border Trade

The North of Thailand has borders with Myanmar and Laos making the region a gateway for trade with the two countries along with China. Over 85 percent of the goods exported to the neighboring countries passed through the Chiang Mai International Airport with the remaining goods passing overland. Myanmar is the largest destination of goods from the North with consumer goods, tires and construction materials being the key earners.

Investment

The Northern Region contains numerous industrial estates offering manufacturers and exporters significant location incentives. The regional industrial estate operated by the IEAT is located in Lamphun province with other private sector facilities found in Nakhon Sawan, Phitsanulok, Phrae, Lampang and Chiang Rai Provinces.

While the number of investment projects in the region has slowed because of the economic downturn, signs of development from private sector indicators foreshadow a stronger regional economy and improved investment in the region.

Tourism

The North of Thailand is an important and prolific tourist destination serving as a center of culture and religion for Thailand, and containing many ancient historical sites and monuments. Chiang Mai is the hub of regional tourist activity offering tourists numerous historical attractions along with shopping facilities for local and tribal handicrafts. Tourists also flock to Sukhothai in order to view the dazzling array of historical sights contained in the former capital of Thailand. Other regional attractions in Chiang Rai and Lampang draw significant numbers of visitors as well. Tourism has been steadily increasing in the region as of late, with six percent hikes in foreign tourist arrivals contrasting slight decreases from Thai local travelers.

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