The agricultural sector, employing almost 64 per cent of the labour force, produced
less than 13 per cent of GDP (in 1990). This paradox implies that there is a very low level of
productivity in the agricultural sector (see Ezki, 1990). Judging from any standard textbook
in economic development, it is neither possible to regard Thailand as being a newly
industrializing economy, nor can it be said that Thailand has achieved economic
development. A common characteristic of the industrialization process can be measured by
the proportion of the working population engaged in manufacturing. An addition the
secondary industry shows an increasing trend which was confirmed in a classic study by the
late Simon Kuznets. He also suggests that the gap of productivity per head will be narrow
over the passage of time. Nevertheless, the imbalance of Thailand’s structure of employment
and the structure of production leads notably to a widening of the income differential between
agricultural and manufacturing sectors. There is nothing wrong with rural agricultural
workers moving to cities, particularly to a metropolitan area like Bangkok, but the industrial
sector has not been successful in absorbing the labour force migrating out of the agricultural
sector. In addition, industrial wages have been artificially kept at a lower level by the low
food price policy. It is also evident that a rapid increase in the rate of industrialization in
production was simply not accompanied by a concurrent increase in the rate of
industrialization in employment (see Watanabe, 1992). The shares of the industrial and the
manufacturing sectors in GDP have increased with rapid economic growth, but the share of the
agricultural sector in GDP has been declining continuously in Thailand. The progress made in
shifting the labour force out of agriculture into industrial jobs has been very slow moving. As
the evidence of the past has always shown us, this imbalance might not be exclusively