THAILAND'S NORTHEAST PROVINCES: AN ECONOMIC SOFTSPOT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00826A001200010023-7
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 27
• Document Creation Date: December 16, 2016
• Document Release Date: November 8, 2004
• Sequence Number: 23
• Publication Date: December 1, 1965
• Content Type: IR

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CONFIDENTIAL
N2 131
CIA/RR ER 65-38
December 1965
INTELLIGENCE REPORT
THAILAND'S NORTHEAST PROVINCES:
AN ECONOMIC SOFTSPOT
DIRECTORATE OF INTELLIGENCE
Office of Research and Reports
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Excluded from automatic
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WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
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CONTENTS
Page
Summary 1
I. Introduction 5
II. Government and the Threat of Subversion 7
III. Potential for Agriculture 11
A. Conditions of Agriculture 11
B. Principal Crops 12
IV." Potential for Industry
V. Northeast Development Plan
VI. Northeast and Mekong River Basin Project
15
17
21
Table
Value of Production of Selected Crops in Thailand and
Its Northeast Region, 1963 13
Illustrations
Figure 1. Thailand: Northeast Road Construction
Proposed Under the Seven-Year Highway Plan,
1965-71 (map) following page
Figure 2. Production of Selected Crops in Thailand and
Its Northeast Region, 1954-63 (chart)
following page
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THAILAND'S NORTHEAST PROVINCES:
AN ECONOMIC SOFTSPOT*
Summary
The Northeast region, encompassing one-third of
Thailand's national territory and one-third of its population,
is the poorest of the four regions of the country and has a
per capita gross domestic product (GDP) of little more than
one-half the national figure. This poverty, plus a traditional
isolation of the Northeast from the rest of Thailand, has given
rise to a threat of political disaffection by the region. The
security problem of the Northeast is of long standing but has
increased recently because of political developments in the
region and in neighboring countries. Even though political
apathy is the general rule at present and Communist front
organizations have as yet found no broad-based support,
there is evidence of an intensified subversive effort. The
formation of several Communist front organizations and an
increase in terrorist and propaganda activities, for example,
indicate that subversion has become better organized and more
aggressive. Propaganda includes criticism of the Thai govern-
ment for the economic hardships of the region.
Subsistence agriculture is the way of life in the North-
east, with almost 90 percent of the people engaged primarily
in agriculture on small plots using traditional labor-intensive
methods. Because of unfavorable soils and inadequate water
control, the agricultural output of the region compares
unfavorably with that of the nation as a whole. Three-fourths
* The estimates and conclusions in this report represent
the best judgment of this Office as of 1 December 1965.
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of the farmland of the region is devoted to rice, but yields are
only 62 percent of the national average. Maize has become an
important export crop for Thailand, but even though produc-
tion has expanded in most of the country, it has actually de-
clined in the Northeast. A similar pattern exists for cotton.
Production of kenaf (a fiber plant similar to jute) has been
expanded greatly in the Northeast, but it remains a relatively
unimportant crop, and substantial increases in production are
not expected.
Much of the economic poverty of the Northeast can be
traced to the natural conditions of the region, and these con-
ditions will prevent an easy solution to its economic problems.
Mineral resources are limited and provide no natural base
for industry. Soil conditions are poor, and the monsoon
climate and flat terrain combine to produce alternating periods
of excess and deficiency of water. Traditional agricultural
techniques that have developed in response to these natural
conditions are not conducive to substantial expansion of
production.
The government's development program, in recognition
of the particular economic and political situation in the North-
east, has centered special attention on the region. It is hoped
that an expansion of transportation and water control systems,
along with the introduction of improved materials and methods
of cultivation, will substantially improve productivity. Even
through improvement is possible, the region's agricultural
potential probably will remain below that of other parts of
the country. Given the existing limited base and the neces-
sarily long-term nature of the government's programs, no
appreciable increase in incomes will be realized in the near
future by most of the farmers in the Northeast. To bridge
the gap between initiation of programs and realization of
results and to help meet the immediate political need to
demonstrate the government's interest in the area, a Mobile
Development Unit (MDU) program has been undertaken. Still
a small-scale effort, this program consists of sending teams
through the villages in assigned areas to conduct political,
social, and economic programs at the village level. The
program is designed to encourage local initiative in develop-
ment by demonstrating the benefits of digging wells, employ-
ing improved techniques of cultivation, and practicing better
standards of health and sanitation.
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Thailand is participating in the long-range international
effort to develop the Mekong River Basin, and the Northeast
will derive many benefits from the execution of the program.
At present, Thailand is building two tributary projects in the
Northeast to provide power and irrigation for the region.
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I. Introduction
The Northeast region of Thailand is comprised of the Korat Plateau
which is separated from the rest of the country by mountain ranges.
(For a map of the Northeast, see Figure 1.) The region has long re-
mained somewhat isolated from the rest of the country, in spite of its
large size and its fairly large share of the country's total agricul-
tural production. Lack of natural resources and the unfavorable con-
ditions for agriculture have made the Northeast the poorest region
in Thailand, with a per capita GDP of about $60, only one-half the
national figure. The population of the Northeast, according to the
1960 census, totaled about 9 million, or just over one-third of the
country's population of 26.3 million. 1/* The area of the Northeast
is also about one-third of the national total, and the population
density in 1960 was 53 persons per square kilometer. Given Thailand's
relatively high population growth rate of 3.1 percent per year, the
population in the Northeast in 1965 may be estimated at 10.5 million.
Traditional subsistence agriculture is the way of life of most of
the people in the region. In 1960, 88 percent of the population was
engaged primarily in agriculture, compared with 74 percent nationally
and only 53 percent in the better developed Central region of the
country. 2/ The requirements of agriculture have contributed to a
concentration of population in the broad valleys of the Mun and the
Chi Rivers, which drain about three-fourths of the water runoff of
the Northeast.
Traditionally relying on higher levels of government to provide
leadership, the villager often displays a lack of initiative in
overcoming his problems. He also exhibits a reluctance to accept
substantial changes in his way of life to improve his lot. Never-
theless, land fragmentation caused by overpopulation has been avoided
in areas near the rivers by population migrations motivated by eco-
nomic considerations. Such movements have generally occurred out
of the overcrowded Mun and Chi Valleys, where rice yields are low,
to more northern provinces where availability of better land results
in higher rice yields. Nevertheless, the general reluctance to make
such a change is indicated by the 1960 census. The migration rate
for the Northeast is the lowest of Thailand's four regions, only
9 percent of the people having moved from the province of their birth.
Moreover, the share of the migrants who left the region -- 20 per-
cent -- is the lowest for the four regions, and the Northeast has
experienced only a small net migration outward. 3/ Thus spontaneous
migration cannot be expected to ease the low standard of living in
the Northeast, and the tradition-bound inhabitants will have to be
helped within the region itself.
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Another response to economic considerations, although a short-sighted
one, has contributed to the low level of education in the Northeast. The
villagers generally have had at most a compulsory four years of education
beginning at age seven. This training has made three-fourths of the
populace officially literate, but many have lost the skill from lack of
use since leaving school. Very few persons go on to secondary education,
largely because the advantages to be derived are considered small com-
pared with the benefits from performing productive work on the family
farm plots. In 1961, only about 6 percent of the Thai students who had
completed preuniversity training were from the Northeast region.
Reliance on traditional agriculture in the unfavorable setting of
the Northeast has made it the poorest of Thailand's four regions. In
1963 the Northeast accounted for only 18 percent of Thailand's GDP,
and even this amount represented a small decline from its share in
1960. 4/ On a per capita basis the Northeast's GDP is little more than
one-half the national figure and less than one-third that of the Central
region. These low figures must be qualified by noting the marked differ-
ence in circumstances of people who live in towns and those who live in
villages. The former has an average per capita income of $125 per year
and in many cases enjoys a standard of living comparable to that of a
resident of Bangkok. Villagers, on the other hand, comprising more
than 90 percent of the total, earn a total per capita income of only
$43 per year. 2/ Such low incomes do not imply anything like starva-
tion, for the subsistence farmer can generally provide adequately for
his family's needs. They do mean, however, that the village family
enjoys few amenities of life. Virtually everyone in the village, for
example, drinks untreated water from a canal, only 10 percent have any
sanitary facility, and 0.3 percent have electricity. 6/ (By comparison,
67 percent of people in towns in the Northeast and 94 percent of Bangkok
residents have electricity.)
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THAILAND
NORTHEAST ROAD CONSTRUCTION PROPOSED
UNDER THE SEVEN-YEAR HIGHWAY PLAN
1965-71
Road constructed
ss Road under construction
Province boundary
ci Province capital
Damsite
Other road
--- Track or trail
Province names are the same as their administrative centers.
0
25
Scale 1:3,500,000
50 75 100 125
Statute Miles
0 25 50 75 100 125
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II. Government and the Threat of Subversion
Poverty, ignorance, and lack of favorable contact with the govern-
ment have created in the Northeast what the Thai government believes to
be a situation ripe for subversion. Although most Northeasterners are
politically apathetic and there appears to be no broad-based support
for existing subversive groups, much of the government's development
effort in the region can be traced to a concern for a potentially threat-
ening political situation. The increased attention of the government
to the region, in recognition of its exposed position to Communist
action in Laos and elsewhere in Southeast Asia, contrasts with a long-
standing neglect of the region.
One noneconomic factor that appears to have contributed to the
alleged political instability in the Northeast is the structure of the
Thai government. Initiative descends from Bangkok, and it is difficult
for villagers to convey local requests to responsible high-level offi-
cials. Provincial governors in Thailand are appointed out of the
Ministry of the Interior and are responsible to the Ministry. Beneath the
governor of the province are the district officers, also appointed by
and responsible to the Ministry of the Interior. At the lowest level,
village headmen are elected, and they in turn elect the commune headman
over a number of villages within a district. These elected officials
must convey their constituents' needs to the district officers and win
local adherence to government directives. Established procedures exist
for transmitting directives downward, but local villagers seldom en-
counter a government official with sufficient authority to give them
satisfaction in their requests. The National Police have much autonomy
within the Ministry of the Interior and often have abused their authority
at the village level. Understaffing has made it impossible to give
remote villages adequate police protection. Thus the villager's con-
tact with government officials has been limited and, where it has
occurred, often unfavorable.
The cultural ties of many Northeasterners with their neighbors in
Laos has taken on new significance for the Thai government in light
of the subversive threat posed by developments across the Mekong River.
The Northeasterners speak a dialect different from that of central
Thailand and similar to that of southern Lao. These cultural and
linguistic similarities and ease of movement across the Mekong have
oriented many of the border residents more toward Laos than toward
the rest of Thailand. Thus foreign agents, propagandists, and other
subversive influences have easy access to the people of the Northeast.
Of immediate concern to the government is the presence of about
40,000 Vietnamese refugees in the Northeast. Most of these entered
Thailand late in the 1940's to escape the fighting at home, but they
remain devoted to Ho Chi Minh and are under the influence of Commu-
nist Viet Minh cadres. These refugees have been content to remain
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in their areas of concentration in five Northeast provinces: Sakon
Nakhon (5,000), Ubon Ratchathani (4,000), Udon Thani (5,000), Nong Khai
(12,000), and Nakhon Phanom (10,000). // Their presence in such centers
of subversion as Nakhon Phanom has been of continuing concern to the
authorities.
About 35,000 of the original 75,000 refugees were repatriated to
North Vietnam between 1959 and 1964 by agreement of the two governments.
The North Vietnamese government suspended the program in August 1964,
ostensibly because safe movement of these people could no longer be
assured. Thai authorities are concerned that the remaining communities
are being used by agents infiltrated back into Thailand after repatria-
tion and training in North Vietnam. In spite of this concern, the
government is reluctant to undertake a costly relocation of the refugees
because they have so far posed no overt difficulty.
Communist activity in the Northeast and the rest of Thailand has
a long and unsuccessful history and antedates the efforts of Ho Chi Minh
to promote its cause in 1928, when he was a refugee from Indochina.
The Communist effort in Thailand has been firmly suppressed whenever
its agitation became widespread. The Communist Party of Thailand and
the Chinese Communist Party of Thailand were forced underground early
in the 1950's, and Communist leadership was dispersed. Nevertheless,
Communist activities continued on a small scale into the 1960's through
such fronts as the Solidarity Movement centered in the Northeast
Province of Sakon Nakhon. Early in the 1960's, approximately 200 North-
east youths reportedly were recruited by leftist elements for military
training in Laos. Also during this period evidence of skillful propa-
ganda activity was discovered.
Subversion in the Northeast has been stepped up recently by the
formation of new front organizations that have been openly encouraged
and apparently guided by North Vietnam and Communist China. The latter
country recently related its support of subversion in Thailand to Thai
support of the US effort in Vietnam. ?_/ In December 1964 the Voice
of the People of Thailand, a Communist clandestine ratio station that
has operated out of Laos or North Vietnam since 1962 announced the
formation, on 1 November 1964, of the Thailand Independence Movement. 9/
In January 1965 it announced the formation of the Patriotic Front of
Thailand. Both organizations included among their stated objectives
the overthrow of the That government and the destruction of "US imperi-
alism." In November 1965 the Thailand Independence Movement merged
with the Patriotic Front of Thailand. Subsequently, other fronts were
announced for various Thai groups such as lawyers, priests, and workers.
Propaganda of various kinds includes criticism of the economic hardships
of life in the Northeast and blames conditions in large part on neglect
of the region by the government.
There is no evidence that these fronts have yet received much
broad-based support, but terrorist acts have occurred, including the
assassination of a number of local officials and police informers,
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III. Potential for Agriculture
The Northeast will remain almost exclusively an agricultural region
for many years, a prospect recognized in Thailand's development planning.
Given the physical environment and the traditional methods of agri-
culture in the region, it is unlikely that a substantial improvement in
incomes will occur until a long period of intensive effort and broad
change has elapsed.
A. Conditions of Agriculture
A major deficiency of the Northeast is its generally poor soils.
The infertile sandstone soils have suffered from the intense weathering
action of the tropical climate and from intensive cultivation. Much
water flows in the rivers during the rainy season, but the major rivers
originate in sandstone hills and so contribute little to the restoration
of depleted soils. Flood waters collect in many shallow depressions
called "tungs", but the silt deposited in these hollows is conducive
to the growth of little besides coarse grass. Fertilizers are little
used, and traditional attempts to overcome the deficiencies of the soil
include such practices as flattening large termite nest mounds and
employing the heavier soil brought up from greater depth in small plots
to grow local fruit crops.
Another problem faced by the farmer is that of insufficient
water. Because supplies of ground water are inadequate for more than
domestic use, water for agriculture must come from local rainfall and
the rivers. The Northeast shares Thailand's monsoon climate and also
experiences the effects of tropical storms from the east. Consequently,
rainfall is erratic in amount and uneven in distribution. The shallow
soils themselves do not hold water well, and runoff is high. The ter-
rain of the Northeast is flat, and the swollen rivers flood extensive
areas. Annual floods cause substantial damage to roads and crops. The
shallow tungs ease the flooding problem somewhat by holding water back
behind natural levees, but subsequent drainage and evaporation leave
these dry in the dry season. Even the main rivers are reduced to low
levels and sluggish flow when the rainy season is over.
The traditional pattern of cultivation is yet another hindrance
to agricultural productivity. The farm plot is typically only a few
acres, worked by an individual family unit on a labor-intensive basis.
Commercial farming exists only on a limited scale in certain locales,
such as in the sugar cane growing areas in Udon Thani and Nong Khai
Provinces. Paddy cultivation in the crowded river regions has been
pushed to marginal lands, which receive insufficient water and at
the same time deprive lower land of necessary water runoff. Fertilizers
are very little used, in part because they are uneconomic at the pre-
sent prices of fertilizer and rice. One of the most damaging practices,
common in the Northeast as in other parts of Southeast Asia, is shifting
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cultivation. Forest areas are burned off to provide both space and a
natural fertilizer for growing upland crops. These crops deplete the
soils rapidly and cause the destruction of large areas of forest. Within
two or three years, production must be shifted to another location.
B. Principal Crops
Growing rice dominates the economy of the Northeast. Of 4 mil-
lion hectares estimated to have been devoted to farm use in 1963 (one-
fifth of the total area of the Northeast), about 75 percent was planted
to rice -- the highest percentage of the four regions in the country. 11/
Local tastes in the region favor the glutenous variety of rice over non-
glutenous, and most of the rice grown is of the former type. The demand
for glutenous rice on the international market is relatively mall.
Much of the land in the Northeast is not well suited to growing
rice, but the Northeasterner is slow to alter his traditional way of
life. In 1963 the paddy yield was only 1,100 kilograms per hectare
planted, whereas that of the Central region was 1,780 kilograms per
hectare planted (only a fair yield by world standards). 12/ From 1950
to 1963, the area planted to rice in the Northeast had increased one-
third, the largest increase in any of the four regions of Thailand.
Thus in 1963 the Northeast accounted for 41 percent of the total rice
area in the country but only 30 percent of its rice production. The
value of rice and other crops produced in the Northeast compared with
Thailand's national production in 1963 is shown in the table. Com-
parison of the volume of Thai national production of selected crops
with that in the Northeast region during 1954-63 is shown in the chart,
Figure 2.
Even though production of crops other than rice has increased
substantially in the Northeast during the past decade, as it has in
the whole of Thailand, the Northeast generally shows up poorly in
comparison with the rest of the country. Under a government program
to encourage agricultural diversification, the share of commodities
other than rice in total national agricultural production has failed
to increase, but upland food crops have grown relatively at the ex-
pense of other non-rice categories from 9 percent of the total in 1957
to 19 percent in 1963. 13/ The Northeast has maintained its important
share in producing fruit -- one of the upland food crops -- but has
performed poorly in producing maize, a crop that has increased greatly
in importance and in 1963 became Thailand's third largest export. The
national acreage planted in maize rose from 43,000 hectares in 1950 to
423,000 hectares in 1963. The Northeast's share of the acreage, which
was 31 percent in 1950, was only 9 percent in 1963, and the Northeast's
acreage has declined absolutely by one-half since 1960. 14/ Moreover,
although the yield in the Northeast exceeded the national figure in
1950, it fell below it in 1963, as Northeast yields doubled in the
period and national yields tripled. Consequently, the region produced
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PRODUCTION OF SELECTED CROPS
IN THAILAND AND ITS NORTHEAST REGION
1954-63
(1,000,000 Metric Tons)
PADDY RICE
11111111111111
INENIPr
1954 1955 1956 1957 1958 1959 1960 1961 1962 1963
5
4
3
2
1
i0,0oo Metric Tons) RAW COTTON
11111111PIIF
11/Pqpr
Pr
11111111111111
1954 1955 1956 1957 1958 1959 1960 1961 1962 1963
52626 11-65
10
8
6
4
2
0
1954 1955 1956 1957 1958 1959 1960 1961 1962 1963
(i00,000 Metric Tons)
MAIZE
MIMI"
IIP:"dghom
36
32
28
24
20
16
12
8
4
(10,00o Metric Tons)
KENAF
Notarial
(Northeast a
all of natio
-count!
mai pro
for al
Juctior
1954 1955 1956 1957 1958 1959 1960 1961 1962 1963
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Value of Production of Selected Crops in Thailand and Its Northeast Region
1963
Commodity
National Northeast Northeast Production
Production Production as a Percent
(Million US $) (Million US $) of National Production
Rice
466.5
138.8
30
Maize
43.7
3.3
8
Sugar cane
29.6
6.4
22
Fresh fruit
75.8
24.9
33
Coconuts
37.7
3.9
lo
?
0
1
Cotton
7.8
2.2
28
;
T
Kapok and bombax
18.6
9.1
49
H
Kenaf
27.8
26.8
96
V
Tobacco
22.4
5.8
26
X
H
Total value of
selected commodities
Total value of Thailand's
agricultural production
Thailand's gross domestic
product
729.9 221.2 30
1,233.0
3,250.5
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less than 8 percent of the national production of maize in 1963. One
reason for the decline in the Northeast appears to be the marketing
difficulties arising from the geographic dispersion of maize growing.
In several other crops the performance of the Northeast has
been deficient in some respects. For example, in growing coconuts the
Northeast has expanded plantings much more than has the rest of the
country, and in 1963 plantings were thirteen times those of 1950. 15/
But production is lower per planted unit in the Northeast, and this
region contributed only 11 percent of the volume of national production
in 1963. Cotton is a much less important crop in Thailand but is one in
which the government has expressed some hopes for the Northeast. The
Northeast rate of yield is somewhat better than that for other parts of
Thailand, but production has been curtailed in the region because the
low quality of Northeast cotton has contributed to marketing diffi-
culties. Planting cotton has doubled in Thailand since 1950 but has
actually declined in the Northeast. There the area planted to cotton
fell from 60 to 25 percent of the national total during 1950-63. 1_6./
The pattern for kenaf illustrates both the potential and the
limitations of agricultural diversification and expansion in the
Northeast. Until 1960 the production of kenaf, a near substitute for
jute, was negligible in Thailand, but favorable market conditions
since 1960 have encouraged its expansion. The area planted to kenaf,
virtually all of it in the Northeast, was tripled in 1960, compared
with 1959, and was almost doubled again in 1961. 11/ In 1961 the value
of kenaf produced in the Northeast was almost one-half that of paddy
rice. High prices on the world market led to overproduction, and,
when the price declined in 1962, production was sharply reduced. The
area planted was only about 40 percent of that planted in 1961, and
production declined 60 percent in volume and 75 percent in value.
Both the price and volume rose in 1963, so that the value of production
was comparable to that in 1960; volume increased 13 percent in 1964
above 1963, and the outlook for 1965 is for a further substantial
increase. Price has been the key determinant in these marked fluctu-
ations in production.
This pattern suggests that Northeastern farmers are ready to
respond to favorable economic incentives and that, in some cases at
least, marked production increases are possible within a short period.
Sales of kenaf, however, are heavily dependent on foreign markets,
and, compared with India and Pakistan, Thailand remains a very small
producer, so it is not clear how market conditions will develop in
the future. As kenaf accounted for only 2 percent of the value of
Thailand's agricultural production in 1963, no substantial increase
in the Northeast's GDP is likely to occur from this source. Yet the
rise in kenaf's share of all crops from 0.1 percent to 2 percent in
a decade is itself impressive and suggests the possibility that other
new crops may become important to the Northeast in the future.
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IV. Potential for Industry
The present industrial base of the Northeast is negligible, and
prospects for a significant expansion are dim. Transportation to dis-
tant markets is costly, and the region itself has limited purchasing
power. The known resource base of the region is limited, labor skills
are at a low level, and living conditions are not attractive to out-
siders who might be desired for a skilled labor force.
The completion of the Nam Pong and the Nam Pung Dams in 1965, along
with existing powerplants throughout the Northeast, will provide a sub-
stantial surplus of available power for a long time to come. The
region's power distribution system is undeveloped, and the transfer
of power over long distances to limited markets is likely to be costly.
The transportation network of the Northeast is deficient in many
respects but is unlikely to be a critical barrier to industry. One
railroad runs eastward from Bangkok across the southern part of the
Northeast to Muang Ubon, 48 kilometers from the southern border of
Laos near Pakse. Another railroad provides a connection from Bangkok
(branching off from the east-west route at Nakhon Ratchasima) to the
Laotian border at Nong Khai near Vientiane, Laos. A new highway,
financed in part by US aid, parallels this latter railroad. Other
major highways provide links across the northern and western sections
of the region.
The Thai government hopes that substantial mineral deposits will
be found in the Northeast and plans to make surveys to locate exploit-
able deposits. Foreign companies are welcome to prospect for oil, and
at least one application for exploration rights is being considered
at present. The known mineral deposits are minimal. Small quantities
of manganese are mined in Loey Province, but known deposits of lignite,
iron, and copper are too small for commercial exploitation. The North-
east contains one of the world's largest deposits of rock salt, but
salt requirements for related chemical industry can be obtained more
economically from sea water.
Thus, other than cheap land, the Northeast, compared with other
parts of Thailand, has little to offer industry. The development plan
for the Northeast suggests that 20 large-scale industries are feasible,
ranging from ore melting to manufacture of textiles and plastics, but
even this plan expresses little optimism concerning an early realiza-
tion of the government's hopes. l_q/ The most feasible course for the
region would appear to be the development of small-scale industry,
primarily that directly related to processing agricultural products,
such as milling of rice, which is already being done. The direction
such activities might take is suggested by plans to encourage expanded
production of silk in the Northeast, weaving the high-quality Thai
silk that is traditionally produced on a small scale by Northeast
farmers. Demand for Thai silk is strong at present, but prospects
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for increasing production from its present low commercial level are
poor, because low returns and the difficulties of raising silkworms
in the Northeast have caused the decline of sericulture over a long
period. If production of cotton can be increased, and quality improved,
it may be possible to establish a significant cotton textile industry
in the future.
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V. Northeast Development Plan
The development plan of the Thai government for the Northeast, a
five-year program covering 1962-66, was drawn up to specify the region's
share of the National Economic Development Plan, covering the six-year
period 1961-66; as such it reflects the same goals and priorities as
the National Plan. Thailand's planning assumes that development will
take place in an atmosphere of free enterprise, and consequently it
projects specific expenditures only for the public sector. The plan's
projected production levels for agriculture, being rather unambitious
extensions of production trends late in the 1950's, generally have been
exceeded. The target of a rate of growth of 5 percent per year for GNP
also has been realized during the past few years. The Thai planning
effort is rather unsophisticated and consists primarily of listing very
general goals and specific projects. It recognizes the problems faced
in the Thai economy but fails, in the words of the revised National
Plan, to treat "the establishment of the functional relationships
among projects, policies, measures, and anticipated targets both for
individual sectors and for the economy as a whole ... ." 12/ Basically,
the Thai government is attempting to concentrate its development efforts
on the building of an infrastructure that will be conducive to expansion
by the private sector in industry and agriculture.
The government is aware of the economic poverty of the Northeast
compared with the rest of the country and of the political and social
problems that in some degree are unique to the region. Consequently,
the government in its planning has attempted to give special con-
sideration to the Northeast. The Northeast Plan scheduled a total
spending of 3288 million, equivalent to 29 percent of the 31 billion
scheduled under the National Plan in its original form. 20/ The
Northeast Plan appears to address itself appropriately, if perhaps
on too limited a scale, to the problems of the region. About one-
half of all expenditures are to be devoted to transportation, communi-
cations, and power. Another one-third is to be spent on agriculture,
including irrigation projects and other efforts to overcome the acute
shortage of water in the region. The remainder of the expenditures
are to cover community services, health, and education.
Both the National and the Northeast Plans depend for success on
large infusions of outside financing. The Northeast Plan, for
example, anticipates that almost two-thirds of the total expenditures
will be financed by foreign loans and grants, the latter to be limited
to technical assistance and to projects having defense functions.
Thailand is experiencing some difficulty in meeting its investment
targets because of problems in negotiating foreign loans in time to
permit completion of construction within the Plan period.
Thailand has placed a great deal of emphasis in its development
planning on the expansion and improvement of its transportation
network. In the Northeast, even the major highways have been
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substandard. The minor roads are often impassable in the rainy season,
leaving many mall villages virtually isolated. The Northeast Plan
specifies the construction of almost 1,000 kilometers of major roads
and the improvement of 1,500 kilometers of major roads. 21/ Some
modification of the plan has occurred, reflecting revised financial
and security priorities, but the overall program is proceeding fairly
well. Of the major routes, the highway from Nong Khai to Nakhon
Ratchasima (Korat) was opened in January 1965. Construction of the
routes from Udorn to Nakhon Phanom and from Loey to Khonkaen is
scheduled for 1966, as is the Lomsak-Saraburi Highway which is receiv-
ing assistance from the United States. Extension of major roads, as
well as the improvement of lesser roads, is expected to open extensive
new areas to agriculture and to contribute to the establishment of
regional marketing centers within the region. Improvements in trans-
portation, for example, are partly responsible for the increased pro-
duction of kenaf. The road program is heavily dependent on foreign
assistance, and the military benefits of part of the program are
believed to make grant assistance appropriate for some of the con-
struction. Australia and New Zealand, among other donors, are pro-
viding equipment and other assistance for road construction within
the Colombo Plan.
Perhaps the most important single facet of the Northeast Plan,
from both a short-run and a long-run point of view, is its attack
on the serious water problems of the region. The flatness of the
land results in damaging floods in the rainy season, and water sup-
plies are inadequate in the dry season; because of limited sources
of ground water, both aspects of the problem center on river control.
The water program combines construction of a few major dams with
the building of many small storage tanks, or reservoirs. The program
to build the latter dates back to before World War II but did not get
under way on a large scale until the 1950's, when it was expanded with
US aid. By the end of 1963, this program had resulted in construction
of 133 tanks supplying a potential irrigable area of 52,000 hectares,
of which two-thirds had been realized. 22/ An additional 6,500 hectares
can be irrigated by five tanks that were constructed during 1964. Poor
design and planning have made some of the tanks unsuccessful, but the
program is highly regarded and is scheduled for further expansion.
Although the flatness of the terrain makes large dams infeasible
in most of the Northeast, the few that are planned or under construe-
Lion can substantially expand the extent of irrigable land. Scheduled
for completion by the end of 1965 is the first phase of the Nam Pang
Dam, which potentially can irrigate 29,000 hectares in the rainy season
and 16,000 hectares in the dry season. 2_31 This dam is a multipurpose
project which ultimately can power a generating plant with a capacity
of 25,000 kilowatts; two-thirds of this capacity is being installed
initially, and. Thailand plans to install the remainder soon to provide
adequate capacity for power-sharing arrangements with Laos. It also
is hoped the reservoir can form the basis of a fishing industry.
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Another multipurpose project to be completed in 1965 or 1966 is the
smaller Nam Pung Dam to provide power, irrigation, and flood control.
Three additional dams scheduled for completion in 1967 and 1968 will
provide potential irrigation for 41,000 hectares in the dry season
and 61,000 hectares in the wet season.
The solution of the water problem in the Northeast is perhaps the
most important single contribution that the government's development
effort can make to improve agricultural conditions in the region.
Freedom from damaging floods, as well as a more reliable and plentiful
supply of water, should prove of great benefit to expansion and diversifi-
cation of agriculture. The potential of such efforts by themselves,
however, is limited. For example, the total irrigable land served by
completed and presently planned tank and dam projects is less than
324,000 hectares, about 8 percent of land presently under cultivation
in the Northeast. Furthermore, much of the potentially irrigable land
is already under cultivation, so that increases in production are by
no means directly proportional to expansion of irrigation, in spite of
the double cropping that will be possible in many cases.
In addition to undertaking such major construction projects as
those mentioned above, the Northeast Plan includes many programs that
eventually will have important indirect effects on the economy of the
Northeast. Health programs are being expanded, and so is the educa-
tional system. Better facilities for secondary education are being
provided to increase the percentage of Northeast students who complete
preuniversity training from 6 percent of the national total in 1961
to 10 percent by 1966. An institute for higher education being built
in the Northeast will stress those fields of study that would serve
the needs of the region in order to encourage its graduates to work
within the region rather than elsewhere. Eventual expansion of this
institute into the University of the Northeast is planned.
The development plan also makes provisions for such basic programs
as resource surveys and agricultural research. Knowledge of the re-
sources of the region is still limited, and studies of land use, mineral
resources, water resources, soil conditions, forest reserves, industrial
potential, and marketing and distribution are all required. Adequate
study of these matters is essential to intelligent planning in the
Northeast and will require several years to complete under the most
favorable conditions. As it is, the resources, both financial and man-
power, are too limited to permit the completion of these programs for
many years. Foreign technical assistance is being exploited where
possible, such as in the feasibility study of the Mun and Chi River
Valleys being conducted by the US Bureau of Reclamation.
Basic research also must be applied to the problems of improving
agricultural methods and materials, and this also is part of the Plan.
Farmers in the Northeast and elsewhere in Thailand have responded to
promising changes in cultivation, as shown in the increased growing
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of maize encouraged by development of a new hybrid grain well suited
to Thailand's agricultural conditions. Programs are being carried
out to control rice diseases, to develop better varieties of rice and
other crops, and to develop the use of fertilizers. Effective patterns
of cultivation and crop rotation also are to be developed. It is hoped
that by demonstrating the benefits to be derived from changing tradi-
tional cultivation habits, the farmers can be motivated to undertake
more productive practices. Of necessity these are long-range programs,
and, together with water control, they are the keys to agricultural
improvement in the Northeast.
Overall, the development program of the Thai government for the
Northeast is well designed to attack the problems of the area. It is
recognized, however, that, given the low base from which the develop-
ment programs can build, the present Plan effort will not produce
tangible results for most individual farmers for some years. To meet
the immediate need to make a favorable political impact in the North-
east, an imaginative MDU program for civic action was established in
t962 under the Defense Ministry with US aid. 24/ The objectives of
the program include dispensing medical aid, conducting propaganda
activities, and promoting public welfare and community development
at the village level. Specific activities include road improvement
on a limited scale, digging of wells, and introducing improved seeds
and agricultural techniques. In the first phase of the program,
teams of about 17 persons with a variety of skills move through the
villages in an assigned area for about six weeks, establishing rapport
with the villagers, evaluating local needs, and initiating related
activities. A second phase of follow-up activity, in which model
villages are set up and the larger projects are carried out, has
encountered problems as a result of inadequate planning and resources.
(An Accelerated Rural Development Program, initiated in 196)-h with US
aid, should help to remedy some of these shortcomings.) In a third
phase of the MDU program, responsibility is turned over to local
authorities. The MDU program at present is far too limited to contact
more than a very small share of the Northeast villages, but it has
been well received by the villagers. As a project to combine the
political, social, and economic efforts in the region, it represents
a promising part of the overall development program.
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VI. Northeast and Mekong River Basin Project
In 1957, Thailand joined Laos, Cambodia, and South Vietnam in
forming the Committee for Coordination of Investigations of the Lower
Mekong River Basin, or the Mekong Committee. The Committee has the
task of coordinating national and international efforts to develop
the navigational, agricultural, and industrial potential of the
waters of the Mekong and its tributaries. To date, the Committee
has been engaged primarily in conducting the many hydrologic, mapping,
economic, and other studies required for planning the major construc-
tion projects and the economic activities that they will make possible.
The Northeast of Thailand will derive its share of the potential bene-
fits of these programs. Construction so far has been limited to tribu-
tary projects, which for Thailand have been the Nam Pong and Nam Pung
Dams. 21/ Foreign assistance has been given for these as for other
individual projects. Japan, for example, helped in the planning stages,
and Pakistan planned the Nam Pong irrigation system. West Germany ex-
tended a 312.6 million long-term loan to finance part of the Nam Pong
construction cost, and the United Nations Special Fund is aiding an
experimental farm project in connection with Nam Pung.
Thailand also is involved in the Nam Ngum tributary project in
Laos, north of Vientiane. Planned as a 120,000-kilowatt power project
in its final form, combined with irrigation works, Nam Ngum was origi-
nally intended to have a 20,000-kilowatt plant in its initial stage,
and Thailand was to purchase about 20 percent of the power output.
Recently it was proposed to increase the first stage installation to
60,000 kilowatts, but Thailand's reluctance to commit itself to pur-
chase up to two-thirds of the power output resulted in a final plan
to install 30,000 kilowatts. The Northeast is not presently involved
in this proposed Thai purchase, except that the transmission line to
Bangkok will cross the region and become part of its power distribu-
tion network. Nam Pong capacity, however, will be increased to its
final capacity of 25,000 kilowatts to provide sufficient capacity
for Lao purchase of Nam Pong power for use in Vientiane until 1971,
when Nam Ngum power is available for the Vientiane area and for
transmission to Thailand.
Although construction of mainstream projects and completion of
the overall program is still many years in the future, the Northeast
has a high stake in its realization. Two of these projects will have
a direct impact on the region. The Pa Mong is the largest of the
proposed Mekong projects. To be located upstream from Vientiane, Laos,
where the Mekong is still the boundary with Thailand, this dam can
potentially power an electric generating plant of 1 million kilowatts.
Power in such quantities will long be far in excess of area require-
ments, but the dam reservoir, with a capacity two and one-half times
that of Lake Meade behind Hoover Dam in the United States, will potenti-
ally provide irrigation for 1 million hectares, 800,000 of these in the
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Northeast of Thailand. Furthermore, it is believed that water can be
diverted from Pa Mong to Nam Fong to increase the potential of the
latter. A third-priority mainstream project at Khemmarat, north of
the point at which the Mtn River flows into the Mekong, also would
provide power and water for irrigation of benefit to the Northeast.
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CONFIDENTIAL
CONFIDENTIAL
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