Publication Code: Y87B
As a small open economy, Thailand is highly vulnerable to fluctuations and changes in external conditions. Since 1973, the world economy has undergone periods of rapid and substantial change accompanied by a high degree of uncertainty in both the real and monetary sectors. Inevitably, such changes have had serious repercussions on the Thai economy which, in turn, have increased the need for appropriate the timely responses on the part of the Thai Government. This paper represents an attempt to trace significant developments in the world economy from 1973 to the present, relate them to major changes in the Thai economy, and examine the role played by policy adjustment in response. No attempt will be made to be comprehensive in the treatment of the problem, and the paper will concentrate only on salient features of such policy responses. Several areas of policy intervention will thus be dealt with only in passing or entirely left out because they did not, in retrospect, have a significant impact on the overall problem of structural adjustment. And, as the focus of the paper is on the management of policy changes, it will concentrate on three aspects of the problem, namely, the effectiveness, the timeliness, and the process of policy response.
November 1987