As Covid-19 batters Thailand’s economy, even pawnshops are running out of customers

[webfact]

A forfeited watch is seen at a pawnshop in Bangkok, as Thais struggle for cash during the Covid-19 pandemic. Photo: Vijitra Duangdee

 

● A pawnshop owner says the fallout from the Covid-19 pandemic is worse than the Asian financial crisis in 1997, as indebted Thais ‘have nothing left’

 

● With GDP forecasts slashed, Prime Minister Prayuth Chan-ocha’s government is hoping economic stimulus measures will boost growth

 

Vijitra Duangdee

 

From his dusty Bangkok pawnshop, where gold deposits are still recorded in heavy wooden ledgers, Danai Tangvatanangkoon has had a ringside seat to decades of Thai economic crises.

 

But since opening his business in 1989, nothing compares to the current crunch, he said, with forfeited power tools and watches stacking up as the economy crumbles under a third wave of the Covid-19 pandemic, the deadliest yet to hit Thailand

.

“People don’t have anything left to pawn. Our sales are even worse than the Tom Yum Kung crisis,” he said of the 1997 financial meltdown, which wiped out the savings of millions of Thais before spinning out across Southeast Asia.

 

“At least then people still had their jobs … now they have nothing.”

 

Full story: https://www.scmp.com/week-asia/economics/article/3141870/coronavirus-batters-thailands-economy-even-bangkok-pawnshops

 

-- © Copyright South China Morning Post 2021-07-23

 

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[ezzra]

Sadly, it is only the tip of the iceberg, worse things are yet to come until most people will be vaccinated, which will be a mammoth job to implement in the coming months...

[ukrules]

It's still getting started, things are going to get ugly.

 

[NONG CHOK]

I never thought I'd ever see the day when the soi dogs have done a runner in Pattaya.

[nightfox]

I'm sure local loan sharks are doing a roaring trade these days.

[ThailandRyan]

1 hour ago, nightfox said:

I'm sure local loan sharks are doing a roaring trade these days.

At recovering their money how? By taking the loan collateral? Or in hiring thugs to torment the families? Just  qyestions.

[Asquith Production]

1 hour ago, nightfox said:

I'm sure local loan sharks are doing a roaring trade these days.

Im sure they are as some see borrowing as a way out without thinking how they are going to repay. As it says in the article some people do not have anything else to pawn or sell. Its then when loan sharks get ugly. Not a situation I want any Thai to be in.

[bbko]

It wouldn't surprise me if we start hearing of an increase in home break-ins. 

[khunpa]

 

Sad to see so many Thais having their lives destroyed. All because of selfish rich people.

 

 

[Brickbat]

Necessity is the mother of invention. Maybe they’ll learn to be of more value than be bar girls or doing massage . They are so big on hope and luck 

[itsari]

Interesting indicator of the Thai economy . Even more when the pawn shop business is in demand more than the debt crises in 1997 .

How the banks are surviving baffles me . Bangkok bank posted a 14 billion profit in the first quarter of 2021 . I believe they are sitting on so called non performing loans with payment holidays when in reality they should be written off . Then you would see a different picture .

[hotchilli]

3 hours ago, webfact said:

“People don’t have anything left to pawn. Our sales are even worse than the Tom Yum Kung crisis,” he said of the 1997 financial meltdown, which wiped out the savings of millions of Thais before spinning out across Southeast Asia.

All the family silver is gone, Thais are now struggling in the lower and middle classes.

[hotchilli]

3 hours ago, webfact said:

“At least then people still had their jobs … now they have nothing.”

Never fear the Phuket sandpit scheme will save the nation.

[Walker88]

22 minutes ago, Brickbat said:

Necessity is the mother of invention. Maybe they’ll learn to be of more value than be bar girls or doing massage . They are so big on hope and luck 

What job is it that these folks should have taken? A female from Isaan who gets pregnant at a tender age, is forced to drop out of school, and isn't exactly in high demand among employers. For years there was this myth that jobs were plentiful in Thailand's economy. UE was low BECAUSE so many found work in the trades you mention.

 

Perhaps I'm a simp, but I have sympathy for females whose entire life is changed forever from a single act (having sex), whereas there is virtually no price to pay for males who engage in, or even initiate, those sexual liaisons. Never having walked in those shoes, I cannot criticize the subsequent choices such females take. Unlike many western nations, there is no social safety net in Thailand on which anyone can lean to restart their lives.

 

Sorry if off topic.

[davemos]

'Let them eat cake' ,springs to mind .

[dallen52]

3 hours ago, NONG CHOK said:

I never thought I'd ever see the day when the soi dogs have done a runner in Pattaya.

Probably been eaten.

 

A huge number of cats and dogs have disappeared around the villages.

(Seriously)

[Jimbo2014]

Buckle down, this debacle is only just warming up.  Cascade events of mismanagement are only just beginning.  

[wwest5829]

1 hour ago, Walker88 said:

What job is it that these folks should have taken? A female from Isaan who gets pregnant at a tender age, is forced to drop out of school, and isn't exactly in high demand among employers. For years there was this myth that jobs were plentiful in Thailand's economy. UE was low BECAUSE so many found work in the trades you mention.

 

Perhaps I'm a simp, but I have sympathy for females whose entire life is changed forever from a single act (having sex), whereas there is virtually no price to pay for males who engage in, or even initiate, those sexual liaisons. Never having walked in those shoes, I cannot criticize the subsequent choices such females take. Unlike many western nations, there is no social safety net in Thailand on which anyone can lean to restart their lives.

 

Sorry if off topic.

Having traveled a bit, having studied history, having lived in Thailand a decade ... I respect the Thai girls, including the bar girls and those practicing massage. I grow less tolerant of the western puritanical values being foisted on other cultures. I eat, I breathe, I make love ... why would anyone need to feel "guilty"? My only opposition comes into the picture if trafficking/force is involved.

[Xonax]

2 hours ago, Asquith Production said:

Im sure they are as some see borrowing as a way out without thinking how they are going to repay. As it says in the article some people do not have anything else to pawn or sell. Its then when loan sharks get ugly. Not a situation I want any Thai to be in.

The population is learning from the masters - The Thai government.

[Mr Meeseeks]

12 minutes ago, wwest5829 said:

Having traveled a bit, having studied history, having lived in Thailand a decade ... I respect the Thai girls, including the bar girls and those practicing massage. I grow less tolerant of the western puritanical values being foisted on other cultures. I eat, I breathe, I make love ... why would anyone need to feel "guilty"? My only opposition comes into the picture if trafficking/force is involved.

You'll hate Thai conservative and puritanical values even more then. Thailand is a deeply conservative society even moreso than the West.

 

Trafficking and force is a huge part of the sex-for-sale industry which is why it is so big here. 

 

They are very good at hiding it from naïve foreigners though, it's almost an art.

[poskat]

note to self:

add going watch shopping to the weekend "to do" list.

[MrJ2U]

Gold shops up here in Issan.  I haven't seen a western style pawn shop with bikes, tools, etc.

[Mario666]

"I never thought I'd ever see the day when the soi dogs have done a runner in Pattaya."

"Probably been eaten.

 

A huge number of cats and dogs have disappeared around the villages.

(Seriously)"

 

Probably <deleted> Off to Laos or Cambodia where they feel safer???  

 

[Xonax]

31 minutes ago, Mr Meeseeks said:

You'll hate Thai conservative and puritanical values even more then. Thailand is a deeply conservative society even moreso than the West.

 

Trafficking and force is a huge part of the sex-for-sale industry which is why it is so big here. 

 

They are very good at hiding it from naïve foreigners though, it's almost an art.

Trafficking is a huge part of the sex-for-sale industry in Thailand, but only when you see the girls parents or other family members being the traffickers. Many girls from poor families have no other options than to work in the sex-trade, because they, in addition to their eventual children, are required to provide for their parents and often other family members as well. Setting up a state pension fund for the many poor elderly people, should be the Thai governments highest priority.

[pissedoff2am]

2 hours ago, itsari said:

Interesting indicator of the Thai economy . Even more when the pawn shop business is in demand more than the debt crises in 1997 .

How the banks are surviving baffles me . Bangkok bank posted a 14 billion profit in the first quarter of 2021 . I believe they are sitting on so called non performing loans with payment holidays when in reality they should be written off . Then you would see a different picture .

Won't ever happen again. Central banks around the world seem to have conspired to keep the music playing, rates will stay near or below zero and nothing will be marked to market.

[Cake Monster]

2 hours ago, itsari said:

Interesting indicator of the Thai economy . Even more when the pawn shop business is in demand more than the debt crises in 1997 .

How the banks are surviving baffles me . Bangkok bank posted a 14 billion profit in the first quarter of 2021 . I believe they are sitting on so called non performing loans with payment holidays when in reality they should be written off . Then you would see a different picture .

Even if the Banks are sitting on massive amounts of NPL and special mention Loans, sooner or later that ugly figure will bubble to the top.

Thats when the S@@t hits the Fan.

[pissedoff2am]

5 hours ago, ezzra said:

Sadly, it is only the tip of the iceberg, worse things are yet to come until most people will be vaccinated, which will be a mammoth job to implement in the coming months...

Or you know, we could just stop this experiment of locking down all the not as risk groups and get on with life instead of pretending that we can get to zero covid.

[ThailandRyan]

25 minutes ago, pissedoff2am said:

Or you know, we could just stop this experiment of locking down all the not as risk groups and get on with life instead of pretending that we can get to zero covid.

And you believe this virus only attacks the at risk groups, good one. Now try again and research it.  Especially now who are the ones being hospitalized the most, yes the young and 20 to 50 age groups. Don't take my word for it DYOR.

[Nanaplaza666]

3 hours ago, Asquith Production said:

Im sure they are as some see borrowing as a way out without thinking how they are going to repay. As it says in the article some people do not have anything else to pawn or sell. Its then when loan sharks get ugly. Not a situation I want any Thai to be in.

And i think that when things get back to some kind of normal , the amount of working girls will explode trying to pay of their parrents' debts .

[Walker88]

46 minutes ago, Cake Monster said:

Even if the Banks are sitting on massive amounts of NPL and special mention Loans, sooner or later that ugly figure will bubble to the top.

Thats when the S@@t hits the Fan.

Yes. Debt moratoriums are wonderful for borrowers, but not so good for banks, even though generous accounting rules allow them to ignore actual NPLs.

 

The question is: if the economy doesn't immediately bounce back (unlikely it would), at some point banks have to call a spade a spade, which means admit the high levels of NPLs. That Thais have already hawked their liquid possessions (per this article), that suggests an inability to repay borrowings.

 

NPLs are not just consumer borrowers, but construction loans, RE developers, and corporates, too.

 

I went back and looked at corporate debt growth (bank loans plus bonds) since 2011. It exceeded actual GDP growth by a multiple of almost 3 times. In other words, the last ten years were debt driven with minimal organic growth. Along comes Covid, which hammers both the consumer and major borrowers, and one has to begin to wonder about the banking system.

 

Every economy is wildly in debt, but some nations have the luxury of being able to print without the market caring much, as the economy is so large that capital has few other places to go. Thailand is not a nation with that luxury.

 

That's all the more reason Thailand has to get Covid under control as fast as possible. Sadly, the current leadership does not seem to be up to the task.