Where does the money come from?

[Kenny202]

I live up country Isaan. Have lived in Khon Kaen 4 years, I think the 3rd or 4th biggest city in LOS. Its a very modern city and everything nice but business here is hopeless. I dont think there would be one non multi national business here even a Thai would be envious of. Most open and shut within 3 months. There are some businesses that seem to endure but never appear to have many customers. I suspect rich parents setting the kid up in a job. My wife has a small business and while she is making some money it ranges from quiet to ordinary. No one here seems to have any money apart from govt workers whom most I know are in debt up to their necks. There is a small percentage of people who seem to be obscenely wealthy.

 

I am forever pondering how the country functions? Its certainly not us crusty old expats propping things up. I know there is tourism and exports but no one in small to medium businesses appear to pay tax? Most are cash businesses.

 

Where I live anyway the economy is clearly depressed and has been for a long time. Many business owners talk about the boom years over 5 or 6 years ago. I assume much of the rest of the country is the same.

 

How can the baht be so strong and on the surface everything rosey? I assume interest rates and inflation low. I even read per capita debt low, very hard to beleive unless the figures are based on 20% of the population swimming in debt and the other 80% too poor to even qualify for a loan. Although there must be a huge ammount of black debt in the villages?

 

Where does all the money come from to pay the govt workers?

 

Why does Thailands economy appear to be so strong?

 

Sent from my SM-J730GM using Thailand Forum - Thaivisa mobile app

 

 

[johng]

Amazing Thailand !

[Denim]

They are still spending the money they confiscated from Thaksin.

[Cadbury]

Part of the explanation might be that Thailand has one of the highest black economies in the world at 41%. So that 41% plus corruption must keep the wheels of commerce greased and turning to some degree.

I know black economies don't pay government/military/fatcat salaries so presumably it is the taxes of the filthy rich 1% which go toward this unproductive part of the economy.

Or perhaps Thailand could be described as an Ineptocracy. 

........a system of government where the least capable to lead, are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.

[whiteman]

and do not forget the haircut shops

[cornishcarlos]

5 minutes ago, vinniekintana said:

I would say there are just way too many retail shops and bars/restaurants/coffee-shops

...at least that's what I observe here in the South.

Total market saturation.

 

I agree 100%.. My wife has just opened up our restaurant that we built about 4 years ago. We are on the main highway with a lot of traffic but  there must be at least 6 other restaurants within a couple km stretch on both sides !!! She had previously rented it out at 5000/month. Now she employs 3 staff at 300/day and today the turnover was probably 500 max.. To be fair yesterday was 3500 but it's still gonna take a lot to make it profitable. Hopefully she can bring in more than the 5000/month rent she was getting ????????

 

She also runs a private tutor place that employs 2 other teachers plus her. That does make good money but no taxes paid so how does it all work !???

 

I know I'm supporting at least 5 other families in the town so all good...

[Kenny202]

 

I agree 100%.. My wife has just opened up our restaurant that we built about 4 years ago. We are on the main highway with a lot of traffic but  there must be at least 6 other restaurants within a couple km stretch on both sides !!! She had previously rented it out at 5000/month. Now she employs 3 staff at 300/day and today the turnover was probably 500 max.. To be fair yesterday was 3500 but it's still gonna take a lot to make it profitable. Hopefully she can bring in more than the 5000/month rent she was getting [emoji848][emoji848]

 

She also runs a private tutor place that employs 2 other teachers plus her. That does make good money but no taxes paid so how does it all work !???

 

I know I'm supporting at least 5 other families in the town so all good...

All of the noodle shops, restaurants, barber shops etc are about the only safe bet. Very small profit but enough for a Thai to live, particularly if they have no qualifications or education. Pay 3000-6000 baht a month rent. Normally business and accomodation upstairs or at the back. Eat the leftovers from the restaurant and a few thousand baht grog / lottery money. I pity these poor farang pump a million baht or so into these ridiculous coffee shops [emoji37][emoji37]

 

Youll probably find shell be busy first 2 to 3 months then it will trail off again. Then for no reason a spurt. No rhyme or reason to anything...like you could never nominate your "busy" day. This week it might be Saturday. Next Saturday dead and Monday busy. Then theres all the holidays and interuptions (Vote, Songkrahn, buddha days etc). I feel very sorry for the poor Thais who exist hand to mouth

 

Sent from my SM-J730GM using Thailand Forum - Thaivisa mobile app

 

 

 

[KMartinHandyman]

Up here in rural Issan a lot of money is gotten from bank borrowings against land titles to pay off other bad debt or buy toys and as the price of rice fields in the sticks has skyrocketed there’s begun to be a lot of legacy land being sold creating new wealth.
Recently an older friend of ours, the local tinker sold 8 rai on the edge of a vintage tiny village for 2 million baht. Someone’s invested in bringing in a lot of dirt, put up barbed wire fencing, a few open lean to buildings and stocked hay. Looks to be some type of livestock, cattle farm coming.
The price of a standard razed lot, maybe 25m x 75m (guessing) inside our evolving little city is going for 4 million baht and it’s away from the roundabout prime area.

[fruitman]

We just had 2 aircons cleaned...1000 baht for 20 min work.....

 

Yesterday we ate japanese, nothing special but 1100 baht.

 

And nope, i 'll never go to Isan because i can't stand it when everything is low quality or goes wrong.

[Trembly]

Plenty of money in the food and beverage business. 

I was friendly with a chap who owns a 10-table noodle restaurant in Bangkok, tucked away in a back alley of Ladprao. Nothing fancy (starts at 45 baht per bowl), but clean, good quality ingredients, a signature flavour, and efficient. He employs 5 Burmese staff and still clears 7-10k in net profit daily. His margins are between somewhere between 40-50%. 

Edited April 8, 2019 by Trembly

[AlexRich]

I suspect that Thailand's wealth is skewed more than most countries, and is in the hands of the top 5% ... mostly centred around Bangkok. There are many wealthy Thais.

[NCC1701A]

3 hours ago, Kenny202 said:

Where I live anyway the economy is clearly depressed and has been for a long time.

yes where you live, but in Bangkok, Pattaya, Phuket and here in Hua Hin things are booming. And all down the coast to PKK and beyond.

 

Some people living up north think things are bad. they are not. I felt that way too visiting all over the north.   

 

going forward the biggest challenge facing expats in Thailand is the poor exchange rate, with maybe the exception of the US Dollar.   

 

anyone who thinks the strong baht is temporary or some sort of 1997 style crash or a huge correction is coming is fooling themselves. 

 

[fruitman]

9 minutes ago, NCC1701A said:

yes where you live, but in Bangkok, Pattaya, Phuket and here in Hua Hin things are booming. And all down the coast to PKK and beyond.

 

Some people living up north think things are bad. they are not. I felt that way too visiting all over the north.   

 

going forward the biggest challenge facing expats in Thailand is the poor exchange rate, with maybe the exception of the US Dollar.   

 

anyone who thinks the strong baht is temporary or some sort of 1997 style crash or a huge correction is coming is fooling themselves. 

 

Just look at what's sold in BKK, nothing cheap or made in thailand....mostly imported goods for double or triple the price of the West and they survive so must be selling.

 

I fish in a restaurant costs 300+ these days, and it's a smaller one than some years ago when they were 180...

 

Just look at the queue's at Sizzlers every single day again, all day long...why can't anybody copy that because it's so simple?

 

Or look at Chockchai steakhouse, always busy and even icecreams are sold for 100 baht a piece, those cost 8 baht at ikea.

 

In Isan i even can't order a hotdog at the 711 because they have no idea what that is...a hotdog 555555...and i order that because the rice in the restaurant which was recommended to us was stinky and from yesterday and kept in the cooker all night without chilling it...

 

 

[cornishcarlos]

47 minutes ago, fruitman said:

We just had 2 aircons cleaned...1000 baht for 20 min work...

 

They didn't do it properly then if it only took 10 mins per unit !! 500 baht is the going rate though.. Anything perceived as "technical" commands a premium as your average person here is afraid to have a go themselves.. Personally I'm happy to pay 500 baht a unit if it's done properly...

[wgdanson]

13 minutes ago, cornishcarlos said:

 

They didn't do it properly then if it only took 10 mins per unit !! 500 baht is the going rate though.. Anything perceived as "technical" commands a premium as your average person here is afraid to have a go themselves.. Personally I'm happy to pay 500 baht a unit if it's done properly...

I am just about to have mine done. What is 'doing it properly' please?

[Lacessit]

Good businesses do well. Poor businesses fail.

My GF's relations started up a Japanese restaurant in Chiang Mai. Very clean, good food, not expensive. It's now packed with Thais and a few Japanese every day.

[jmd8800]

45 minutes ago, NCC1701A said:

yes where you live, but in Bangkok, Pattaya, Phuket and here in Hua Hin things are booming. And all down the coast to PKK and beyond.

 

Some people living up north think things are bad. they are not. I felt that way too visiting all over the north.   

 

going forward the biggest challenge facing expats in Thailand is the poor exchange rate, with maybe the exception of the US Dollar.   

 

anyone who thinks the strong baht is temporary or some sort of 1997 style crash or a huge correction is coming is fooling themselves. 

 

I just spent a week in Bangkok and the shopping malls of Lower Suk were packed. At Terminal 21 around 12:30 pm ... lunchtime... I would guess there were 50 people standing in line to get or cash in their cards at the food court. There was no place to sit in the food court. Most restaurants had a line outside. The place was packed. Were people buying shoes, pants, eye glasses and other goods I don't know but the mall was full.

 

One thing that probably deserves mentioning here is that money (capital) has migrated to the city. That is global not just Thailand. (In the USA it is referred to as 'fly over country') Small farms are being replaced by corporate farms that do not need much of a workforce to run. And the workforce is dirt cheap. Plus the profit realized from farming is made in the markets not in the production. So these 'shoppers' are making their money from the markets staffed by ex-farm workers who moved to Bangkok to find a job.

[Pravda]

Where does the money come from? That question is a bit lame as Bangkok has been developing for decades. Have you noticed the rapid public transport expansion that in the west would most likely take a decade just for a single line to get approved. Obviously there is Bangkok and then there is everything else. God forbid, you may even find a woman here that doesn't require monthly salary. Just sayin

[cornishcarlos]

51 minutes ago, wgdanson said:

I am just about to have mine done. What is 'doing it properly' please?

 

Well properly involves taking it apart and cleaning with a coil cleaner and then rinse thoroughly. Normally takes about 30 mins per unit for the guy does ours !! Let us know how it goes with yours 

[Kenny202]

Up here in rural Issan a lot of money is gotten from bank borrowings against land titles to pay off other bad debt or buy toys and as the price of rice fields in the sticks has skyrocketed there’s begun to be a lot of legacy land being sold creating new wealth.

Recently an older friend of ours, the local tinker sold 8 rai on the edge of a vintage tiny village for 2 million baht. Someone’s invested in bringing in a lot of dirt, put up barbed wire fencing, a few open lean to buildings and stocked hay. Looks to be some type of livestock, cattle farm coming.

The price of a standard razed lot, maybe 25m x 75m (guessing) inside our evolving little city is going for 4 million baht and it’s away from the roundabout prime area.

 

I wouldnt have thought rural land has appreciated up here at all, not unless its within 30km from a decent size city. Anywhere where there is little work or anything to do the land may be valued at whatever but near impossible to sell. I do agree with you though about the village loans and the inabillity for small subsistence farmers to survive. Village I lived in the lady owned the processing depot loved to loan money to people with small farms, particularly 5 or 6 in a row. Id hear them say she was stupid. They of course wouldnt even make the first payment. At more than 10% a month interest over even a year a small loan would have increased to a point where it could never be repaid. Shed show up with the bikies one day and give them a day to clear out. I never felt sorry for them as their own intentions were bad and they thought they were cheating the loan shark

 

Sent from my SM-J730GM using Thailand Forum - Thaivisa mobile app

 

 

 

[fruitman]

1 hour ago, cornishcarlos said:

 

They didn't do it properly then if it only took 10 mins per unit !! 500 baht is the going rate though.. Anything perceived as "technical" commands a premium as your average person here is afraid to have a go themselves.. Personally I'm happy to pay 500 baht a unit if it's done properly...

They did it perfect, very fast...i heard cracking noises when he opened them but there were no cracks...the guys have done it hundreds of times before i bet, we used over 20 different companies last years but these guys did it all perfect and very fast.

 

But i wished they sold aircons who could clean themselves...and if they costed double price it would be fine with me.

[fruitman]

1 hour ago, wgdanson said:

I am just about to have mine done. What is 'doing it properly' please?

Coming in time, not ruining anything else in your house/garden...not leaving the screen doors open...cleaning it properly and fast...not stealing anything...

[DaRoadrunner]

Where does the money come from? Corruption. Example:- Do you think it cost 400MB for sand on Pattaya beach? The bulk of the money went to line the pockets of the Thais that run Pattaya.

[MaksimMislavsky]

4 hours ago, Cadbury said:

Or perhaps Thailand could be described as an Ineptocracy. 

........a system of government where the least capable to lead, are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.

Sounds more like the Soviet Union (and probably some parts of the West are heading in the same direction)

[KMartinHandyman]

I wouldnt have thought rural land has appreciated up here at all, not unless its within 30km from a decent size city. Anywhere where there is little work or anything to do the land may be valued at whatever but near impossible to sell. I do agree with you though about the village loans and the inabillity for small subsistence farmers to survive. Village I lived in the lady owned the processing depot loved to loan money to people with small farms, particularly 5 or 6 in a row. Id hear them say she was stupid. They of course wouldnt even make the first payment. At more than 10% a month interest over even a year a small loan would have increased to a point where it could never be repaid. Shed show up with the bikies one day and give them a day to clear out. I never felt sorry for them as their own intentions were bad and they thought they were cheating the loan shark 
Sent from my SM-J730GM using Thailand Forum - Thaivisa mobile app
 
 
 

Maybe I used rural wrong as it’s 10 km from Muang Phon and there’s nothing but rice fields and villages of 200 or 300 people in sight which makes 250,000 baht a rai pretty steep.

[Stocky]

2 hours ago, NCC1701A said:

yes where you live, but in Bangkok, Pattaya, Phuket and here in Hua Hin things are booming. And all down the coast to PKK and beyond.

Hat Yai is certainly booming. Several of my wife's extended family have moved down here since we opted to live in Hat Yai. We've put them up for a week or so, but in no time they've found work and a place to rent. There's that much work that some have had two or three jobs in a couple of weeks before they've settled on something they're happy with. In Hat Yai much of it is retail, but there's plenty of construction and factory work too.

 

4 hours ago, vinniekintana said:

I would say there are just way too many retail shops and bars/restaurants/coffee-shops

Yes, there's a high churn rate on the bars and restaurants in Hat Yai. I'd guess the failure rate within the first six months to a year is greater than 50:50. Whilst there are many well established bars and restaurants, but there's a huge number that seem to change name and owner every month or so.

[madmen]

2 hours ago, fruitman said:

We just had 2 aircons cleaned...1000 baht for 20 min work.....

 

Yesterday we ate japanese, nothing special but 1100 baht.

 

And nope, i 'll never go to Isan because i can't stand it when everything is low quality or goes wrong.

you got ripped off. They should have been there over an hour if it was done professionally

[Pravda]

18 minutes ago, madmen said:

you got ripped off. They should have been there over an hour if it was done professionally

 

Yup, we just had 2 aircons cleaned also. Cleaned it thoughtfully with a high pressure hose. Definitely took mre than 1 hour and 800 baht.

[Kenny202]

Maybe I used rural wrong as it’s 10 km from Muang Phon and there’s nothing but rice fields and villages of 200 or 300 people in sight which makes 250,000 baht a rai pretty steep.

Funny. Got a mate trying to sell land at Phon and Mrs has a house block at Wang noi she cant give away. By a big city I didnt mean Phon lol. I dont know what theyre asking per rai but theyre not going to sell it at even a fraction of the prices being quoted. Its rubbish farm land for a start and theres just no money in rice

Sent from my SM-J730GM using Thailand Forum - Thaivisa mobile app

[justin case]

12 hours ago, Pravda said:

God forbid, you may even find a woman here that doesn't require monthly salary. Just sayin

in the end, those will take your house, car, ...  bad investments anyway, short trick or long game scam