It is interesting to examine the development path in the early 1980s compared to
export led growth from the mid-1980s to the early 1990s. The 1980s was a period of contrast
for Thailand. In fact, the world economy was in crisis, namely, the slow-down in industrial
countries, and most Third World countries were subjected to a series of historically
unprecedented external shocks at the beginning on the 1980s.26 The persistent current
accounts deficits and rapidly increasing foreign debt were certainly major problems and it is
not an exaggeration to state that the Thai government represented by the Bank of Thailand
had to go to the IMF and the World Bank for balance of payments support and adjustment
assistance (Thanapornpun, 1990). As mentioned before, the unfavorable terms of trade led to
the largest trade deficit the country had experienced since the Second World War; the deficit
rose from 5.8 in 1978 to 9.8 per cent of GDP in 1983. The prices of rice and other traditional
crops were dramatically declining and the Thai government and public enterprises had been
heavily burdened with accumulated debts since the 1970s. However, Thai technocrats are
renowned for adopting very conservative monetary policies, as evidenced by their ability to
maintain a fixed nominal exchange rate of the baht against the dollar for a period as long as
twenty-six years (1955-1981).