Self- employment of micro and small entrepreneurs in urban northern Thailand after the Asian crisis

The eruption of the Asian Crisis in the middle of 1997 has pushed the Thai economy into a deep recession. The economic recession caused real gross domestic product (GDP) to fall by 8.5% in 1998, unemployment was 60% higher than in February 1997. Although the dramatic social effects can hardly be estimated, the Dusit Study found that more than 40% of the people that had lost their jobs because of the crisis must take care for at least two other persons. Moreover, 70% of them were indebted. Micro and small enterprises (MSEs) in the informal economic sector often function as employer for this group who got unemployed during the Asian Crisis. MSEs play an important role in the Thai economy. According to the National Statistical Office, 80% of all enterprises fall into this category. The objectives of this paper are (1) to give an overview of the immediate effects of the Asian Crisis on the labor market in Thailand, (2) to describe the supply side of financial sources for MSEs, and (3) to present a systematic analysis of the self-employment activities among micro and small entrepreneurs in the urban Muang Chiang Mai District in Thailand. The primary and secondary data analyzed in this paper were collected from February to May 2000. In total, the self-employment activities were surveyed by using a structured questionnaire among 85 informal and 42 formal micro and small entrepreneurs. The collected micro-economic data were analyzed using explorative statistical instruments.