Over the 1960s and 1970s, the structure of international trade considerably changed.
Diversification began dramatically in the early 1970s, both within the agricultural sector into
a wide range of crops, and out of agriculture into manufacturing and trade in services, In the
first half of the 1970s, Thailand was severely hurt by the first oil shock. Fortunately, being a
major exporter of primary commodities whose prices increased steeply between 1972 and
1974 as a result of the world wide drought, the Thai economy still performed soundly.
Thereafter, the economy promptly recovered in the second half of the 1970s through a surge
in infrastructure investment and a rapid expansion of manufactured exports. In the early
1970s, Thai bureaucrats started promoting export-oriented industries. A larger number of
import substituting industries began to become exhaustible to the small domestic market, but
the problem Thai technocrats were confronted with was how to cope with an increase in
imported inputs, materials and capital goods which showed no sign of declining. They began to realize that high protection tariffs and other incentives received by import competing
industries might have been in vain.