Thailand tackles household debt crisis: doubts over effectiveness

[webfact]

 

To tackle the escalating household debt crisis in Thailand, the government has launched a series of measures aimed at combatting informal debt and loan sharks.

 

However, researchers and industry leaders have voiced concerns about the effectiveness of these measures, urging the government to address the root cause of the problem by ensuring fair income distribution and creating high-income employment opportunities.

 

The government’s initiatives involve collaboration with different agencies, the Interior Ministry, and the National Police Bureau to prevent unregulated lending. The measures include helping debtors, mediating disputes, and taking stringent actions against intimidation and unfair debt collection practices. After the mediation process, the government will assist in restructuring the debt.

 

Household debt in Thailand is estimated to exceed 90% of the country’s GDP. The government’s conservative estimates put informal debt at 50 billion baht. However, some suggest the figure could be as high as 1 trillion baht. Economists remain sceptical about the probable success of the government’s initiatives. Kasikorn Research Center (K-Research) has voiced support for the government’s measures.

 

by Alex Morgan

Photo by Kostiantyn Li on Unsplash

 

Full story: The Thaiger 2023-12-18

 

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[lordgrinz]

If you relieve household debt in Thailand, they will just go out and buy more stuff with new loans putting them back in the same debt situation. The objective should be education and limiting their ability to obtain loans (especially for depreciating assets) of which they will most certainly never repay. 

[expat_4_life]

I have doubts on the effectiveness too!

The Covid years wreaked a lot of havoc.  In the wake of that period, tourism is still down and inflation feels like it has taken hold.

Meanwhile debt has risen, interest rates are up, dining out is up substantially and so are food prices - got to be tough for many households

[Enoon]

 

There are several images available from photo libraries depicting a house made from Thai currency.

 

Why use one made of dollars to illustrate this article?

 

It's not Ben Franklins fault.

 

 

[hotchilli]

3 hours ago, webfact said:

To tackle the escalating household debt crisis in Thailand, the government has launched a series of measures aimed at combatting informal debt and loan sharks

Why not change the criteria for banks to loan small amounts to low earners so that repayments and interest goes into the bank coffers instead of forcing them to use loan sharks.

[hotchilli]

34 minutes ago, Enoon said:

 

There are several images available from photo libraries depicting a house made from Thai currency.

 

Why use one made of dollars to illustrate this article?

 

It's not Ben Franklins fault.

 

 

 

[klauskunkel]

Quote

Thailand tackles household debt crisis: doubts over effectiveness

Thailand has been tackling for years:

 

Corruption

PM2.5

Education

Road Carnage

Household Debt

 

the one common theme is: doubts over effectiveness

 

[Thingamabob]

This is how the ruling elite control Thailand. They allow private debt to accumulate in all sectors of the public, bail the debtors out and, on the back of all the gratitude they receive, allow the process to start all over again. Keeps everybody in place, dependent and grateful.

[Srikcir]

"Inequality fuelling the fire for Thailand’s political change"

11 July 2023

eastasiaforum.otg

Author: Thorn Pitidol, Thammasat University

• "Thailand is going through one of the most significant moments in its recent history. After nine years under military rule, the coalition of political parties opposing the military-backed government achieved a substantial victory in the national election, winning 313 out of 500 seats. The election result signifies an overwhelming rejection of military influence and the general-turned-prime minister Prayuth Chan-ocha."

Well, except the referenced coalition did not succeed to take over the government because the military appointed Senate refused.

Some editorial gems from the article point to likely quick failure or as a minimum lack of practical LONG-TERM solutions that require a progressive, liberal government rejected by the Senate:

• "Thailand’s level of inequality has long been one of the highest in Southeast Asia. The problem is rooted in policies and institutions that existed before the Prayuth government. 
• "From 2013–2019, the Thai economy grew only 3 per cent on average, making Thailand’s growth rate one of the lowest in Southeast Asia. The slower growth has set limitations on upward mobility, leading to a lack of optimism among the younger Thai generations."

Add to this Thailand's historical long-term inadequacy for high quality education and technical training of the low to middle classes. But "Garbage In and Garbage Out" seems the immediate future. Thailand has not become the Hub of ASEAN but rather a dented rim.

 

[henry15]

The Prayuth government did  the same. IMHO its completly useluss as long as the Thai have no financial discipline.

[NoshowJones]

22 hours ago, lordgrinz said:

If you relieve household debt in Thailand, they will just go out and buy more stuff with new loans putting them back in the same debt situation. The objective should be education and limiting their ability to obtain loans (especially for depreciating assets) of which they will most certainly never repay. 

This is a sensible post, but only one thing, you cannot educate stupid. The majority of Thai people are decent, honest and non confrontational, but all that goes out the window when they get behind the wheel of a car or jump on a motorbike. and yes, I am talking about most Thai people, though there are still a minority of decent drivers and riders.