This study has three basic objectives. First, it estimates the subsidy rates for the officially supported external financing received by the Thai public sector. Second, it attempts to provide some analysis of the impact of this concessional funding on the domestic allocation of resources. Third, it aims to estimate the supply and demand functions for the officially supported export credits received by Thailand from 1976 to 1985.

A relatively detailed review of the period from 1975 to 1985 revealed a deteriorating external debt situation for Thailand. External public debt rose from a low of US$900 million in 1973 to US$12.8 billion in 1985 with comparable public debt service ratios of 2.9 per cent and 11 per cent, respectively. This occurred despite the customary conservative external borrowing policy of the Thai government and its centralized administrative control of public debt creation.

Concessional ODA financing averaged 21 per cent of total net financial flows in ...