privileges to promoted firms.20 In the early 1970sThai technocrats started to realize that
serious problems confronting them were (i) inefficiency of some import-competing industries
as a result of high wall protection from tariffs and heavy reliance on imported capital goods
and intermediate products, (ii) limited employment absorptive capacity and (iii) heavy
concentration of manufacturing activities in Bangkok and the surrounding provinces.21 In
addition, the Third national Plan specified poverty problems created by rapid
industrialization. It emphasized increasing income disparity between households in different
regions, between residents in rural and urban areas and rising trade and current account
deficits which were symptomatic of inadequate domestic savings to finance rapidly growing
investment.