Foreign Aid, Poverty Reduction, and Economic Growth in Thailand

Abstract

This chapter describes the background knowledge of foreign aid in Thailand over 50 years, including economic growth, poverty reduction, and foreign direct investment from the practitioners’ point of view. The main points are summarized for the following three points. First, it is shown that Thailand experienced nearly 5% growth for this period continuously, and the poverty ratio drastically reduced during the time. Second, the policy stance for both donor countries and the Thai government changed during the late 1970s and the beginning of the 1980s, and foreign aid was mainly donated as aid loans for constructing social infrastructure or social capital. Third, social capital constructed by foreign aid has been used efficiently since the foreign direct investment was enlarged drastically by the yen appreciation after 1985. Overall, these are the main reasons practitioners believe foreign aid has a positive effect on Thailand as a recipient country.