Thailand: Relations with the U.S., Economic Recovery, and Problems with Burma -- A Research Trip Report

This report summarizes information and observations from a research trip to Thailand conducted May 27-June 5, 2000, with supplementary material from other sources. This report provides an overview of Thailand's relations with the United States, recovery from the financial crisis, and problems with Burma (Myanmar) centered on illegal drug trafficking and refugees. Thailand is of interest to the United States at this time because its apparent economic recovery can be a bellwether for the region and the country is facing a threat to its national security from the narcotics trade and refugees from Burma. Since Thailand is a military ally, the United States has a direct interest in its disputes with Burma. U.S. relations with Thailand are generally favorable both in terms of security and economics. A consensus existed among Thai government officials and business executives that their economy was on the road to recovery. After growth rates of -1.8% in 1997, -10.0% in 1998 and 3.6% in 1999, real gross domestic product (GDP) is expected to expand by about 4% in 2000. A question remains, however, about the sustainability of the recovery and the strategy of relying on exports to the booming American economy. Since the onset of the financial crisis in 1997, the U.S. bilateral trade deficit with Thailand has doubled. Thailand's northern border with Burma (Myanmar) presents the greatest current threat to Thai security. It is the scene of increased illegal drug trafficking -- aimed at the Thai population -- and a flood of refugees -- mostly from ethnic groups in Burma. Thailand has pursued a policy of engagement with Burma and led in the movement to admit Burma as a member of the Association of Southeast Asian Nations, although that policy of engagement now seems to be undergoing revision. Thai authorities are taking stronger action to stem the illegal drug trade and to attempt to deal with the displaced persons from ethnic groups across the border. This encompasses a larger role for the Thai military who are cooperating with the police in drug interdiction and suppression. The drug problem with Burma has gone beyond the traditional opium and heroin to methamphetamines. These are produced primarily in plants across the border in the Shan state and aimed at Thai consumers. In 1999, an estimated 200 million tablets were smuggled into the country. Thailand is housing more than 100,000 displaced persons from Burma in ten temporary camps -- which all too often have turned into semi-permanent settlements. An estimated 700,000 additional Burmese live in Thailand outside the established camps. Most have been displaced because of the fighting between the military junta and ethnic minorities along the border areas with Thailand. These refugees are placing a heavy economic, social, and political burden on the Thai government. For FY1999 and 2000, the U.S. State Department is administering U.S. appropriated funds related to the crisis in Burma and along the Thai-Burmese border of $6.5 million.