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| Focus
on the Northeast
of Thailand |
Northeast:
Economic Overview
 Characterized
by rolling terrain and undulating hills, the Northeast has an arid
and harsh climate, often suffering from floods and droughts. This
region has approximately one-third of the total area and population
of Thailand.
Agricultural
products have dominated the Northeast’s economy with the four main
crops being rice, cassava, sugar cane and corn. Rubber and fruit
are two products of lesser importance to the region. Livestock production
also plays a crucial role in the Northeast with poultry and cattle
being the most prevalent animals raised. In the region's current
phase of industrialization, labor- intensive manufacturing concentrated
in textiles, electrical parts and footwear are the top revenue earners.
Silk is also a famous product from the Northeast, having the advantage
of being non-dependent on a large source of water and the benefit
of being pollution free.
Finance
Market
The
Northeast relies upon domestic sources of funding, with roughly 80
percent coming from financial institutions and 20 percent from retained
earnings or personal savings. Commercial banks dominate the local
finance market operating 537 branches in the region. The capital available
to the Northeast had been steadily growing until the larger crisis
began in 1997 following a regional financial downturn in 1996. These
events caused available credit to decrease by 10.2% creating liquidity
problems for most small and medium enterprises. Exporters in the region
were better equipped to cope with the economic downturn, as companies
dependent solely upon the domestic market suffered due to decreases
in consumer spending.
Border Trade
Connected
with Laos and Cambodia, the Northeast is the gateway of trade and
investment into the Indochina region. Laos is the largest Indo-Chinese
trading partner of Thailand also attracting significant investment
volumes. Thailand-Laos trade is more developed than Cambodian-Thai
because of advantages in Laotian utilities and infrastructure. In
1998, the leading export goods to Laos were construction materials
and consumer products, which increased by 22 percent in 1998.
Investment
The
Board of Investment (BOI), and the Industrial Estate Authority of
Thailand (IEAT) have jointly undertaken a wide range of public utility
and facility upgrades through the establishment of numerous industrial
estate projects, which have executed the government’s policy of
economic decentralization from Bangkok to less developed regions
in the Kingdom. Industrial estate projects in the Northeast region
include Nakhon Ratchasima Province Project, which supports general
industries and export processing plants. Udon Thani, Nong Khai and
Ubon Rachathani also have Province Projects that are joint ventures
with the private sector.
In
1998, private investment was delayed as credits to industrial and
trading sectors dropped significantly. The number of applications
to open factories also declined due to the poor economic climate,
although some medium and large sized manufacturing factories were
relocated to Nakhon Ratchasima and Khon Kaen.
Tourism
 Founded
as a center of culture dating from prehistoric times through the
Khmer period in the 12th and 13th centuries,
the Northeast offers a wide array of natural and historical attractions.
The majority of tourist attractions in this region are historical
sites, with lesser interest found in the region's natural and scenic
beauty.
1998
saw the number of Thai tourist arrivals increasing slightly while
foreigner arrivals exploded by 76 percent. The most popular destination
is Nakhon Ratchasima, followed by Khon Kaen, Udon Thani and Ubon
Ratchatani. Compared to the north or south of Thailand, tourist
arrivals and revenues earned in this region are quite low.
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