Macro Signals Declining Effici

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relative role of the private sector increased in the economy, the importance of enterprise management and performance correspondingly increased. Looking more deeply at Thailand�s performance, manufactured exports grew by about 23% per year between 1980 and 1995, almost doubling during 1992-1995. However, in 1996 export growth fell practically to 0 per cent, with labor-intensive exports usually identified as the main culprit. Certain factors are generally cited as responsible for this abrupt and dramatic decline:
� External factors cited included the emergence of new competitors, with the coming on stream of new production facilities in lower income/lower wage countries such as China, Indochina, Philippines, further complicated by the30% devaluation of the Chinese yen in 1994;
� Domestic factors cited generally relate to rising wage rates and overvalued exchange rates. Domestic wage rates during 1991-95 rose about 11%, on average or about 5% increase in real wages per year, cited as ...

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