an economic surge during the late 1980s (Thailand's QuikFacts, 1995, 177).
Although turned into a song in the musical, one of King Mongkut's long letters to Ms. Leuenowens, who actually spent more time teaching the king than the children, reflects some of the confusion of a thinking person:
When I was a boy, world better spot. What was so was so, what not so, not so. Now I am man and world has changed too lot. Some things 'nearly so.' Other things 'nearly not.' Now find confusion in conclusion long ago concluded. In my head be many, many facts of which am being wishing to know whether true or not (Leuenowens, 1898, 113).
In a way, that 1867 letter from the King of Siam sounds much like today's economists trying to puzzle out the macroeconomic crisis in Thailand. Let us continue, then, examining Thailand within the model of the "Triangle of Impossibility."
Triangle Leg 1: Thailand's Fixed Foreign Exchange Regime
In the early 1990s, the Thai government and its banking systems decided to "peg the baht" to the United States dollar, joining the other world currencies linked to the dollar (Shari & Corben, 1997). In an ironic symmetry, linking the baht to the dollar accounted for Thailand's astounding economic growth, and unlinking it, as it did in July of 1997 led to the current downturn. As Limsamarnphun analyzes, the crisis is due to the absence of a 'powerful brake' on the free-wheeling economy of the past decade, "without which a lot of foreign money was used for speculative purposes, especially for real estate and stocks. With the removal of the exchange rate guarantee by the Bank of Thailand in the wake of the baht float, fewer people will be willing to or have enough courage to invest" (Limsamarnphun, 1997, 21).
Gary Ciminero in a thoughtful essay points out that Thailand followed the pattern of its neighbors (Japan, Korea, China, and Malaysia) and exploited its low-wage/low-skilled labor forces, to lure f...