The geographical center of Asia South East, the Kingdom of Thailand is more than a vibrant tourist destination paradise. It is one of the largest and most developed economies in the region. Highly export-oriented, Thailand is known for opening its economy and acceptance of foreign direct investment. Previously known as Siam (Luang Plaek Phibunsongkhram change it to Thailand in 1939), Thailand was since a long time ago a business and trade center. Among the most glorious periods in its history is the reign of Ayutthaya, which was founded in 1351 by King Ramathibodi, that was classified as one of the greatest centers of trade and commerce in Southeast Asia. The most famous of the Thai monarchs was, with no doubt, Mongkut who came to the throne in 1851 after spending 27 years as a scholarly Buddhist monk. He was quite a remarkable man in terms of intelligence and vision. He was determined to preserve the independence of his kingdom in the face of French and British acquisitions of the surrounding territories. He recognized the need for Siam to acquire Western learning, technology and institutions in order to fend off the French and British imperialists. So, King Mongkut (Rama IV) developed a strategy that enabled Siam to avoid the yoke of imperialism that overtook his kingdom’s closest neighbors. The King’s strategy was simple: his ministers signed unequal treaties that gave free trade, extraterritorial rights and special privileges to those imperial powers. The result was that by playing each one of these powers against another, Siam managed to maintain its independence. In 1932, a peaceful coup turned the country into a constitutional monarchy. Overall, Thailand can be regarded as one of the fastest growing economies among developing countries. The average annual growth rate between 1952 and 2000 is a respectable 6,6 percent. (FIGURE-1) Of course, high growth rates were not achieved year in year out, and were not identical between sectors of production, however, not a single year of negative growth of real output per hear of population was experienced over the four decades between 1958-1996, a unique achievement among oil-importing developing countries. Poverty incidence has declined dramatically, but economics inequality has increased. Economic progress has been reflected in very significant improvement in non-economic indicators of well-being such as life expectancy, infant and maternal mortality, and literacy. Nevertheless, the performance of the education system is chronically poor. One of the most important periods for Thailand’s growth process is probably the one between 1950 and 1973, which was the period when Thailand laid foundations for the subsequent high and stable economic growth. In 1950, Thai economy found itself in state of recovering from the severe damages left over from the Second World War. This turbulence was only put to an end in 1958, when Field Marshall Sarit Thanarat took complete control of the power through a coup d’etat. Sarit brought with his premiership a vision to run the country according to the international standard, which was a combination of a idea to promote economic growth through macroeconomic management, favorable business environment, and institutional strengthening; and a strong sense of fiscal discipline. The fiscal discipline, exhibited mainly by the curb on public debt creation, was an indispensable ingredient to the uninterrupted process of high and stable economic growth during one and a half decades that followed. In this regard, Thailand was lucky to be able to build such vital fiscal discipline under the corrupt military rulings. One of the consequences of this development was the soaring government budget deficit, arising from the increased government expenditure, which eventually led to the serious public debt problem during the first half of the 1980s. The economic hardship caused changes in politics. In 1980, General Prem Tinnasulanon took the office of Thailand’s premiership, where he stayed for the next eight years. His term is considered one of the most stable political in Thai History, in spite of the number of coup d’etat attempts. To worsen off even more Thailand’s economy, the rapid movements in some of the world major currencies affected in a great way Thai’s economy. After the collapse of the Bretton-Wood system, Thailand chose to continue pegging its currency with the US dollar. This decision proved to be costly when the US currency appreciated against other major currencies between 1978 and 1985. As a result, the Thai baht was appreciated which contaminated the country’s competitiveness. Thai government was forced to devalue the currency by 15% in 1981, and went on to abandon the single-currency fixed exchange rate to the basket system in 1984, which amounted to an effective devaluation against US dollar by another 15%. In contrast with the previous period, the 1986-1996 can be considered the most prosperous time of Th