Why Is Thailand Not Seen As A Successful Economy

[Abrak]

I just wish to express an underlying feeling that I feel is prevalent.

If you gave an economist a book of economic statistics who had never visited Thailand, I do believe he would feel it was one of the most successful economies in the world over the last ten years.

I also believe that there is an underlying feeling that this is not the case on the basis that it just doesnt feel that way. This is clearly the way that a TV viewer sees it but I also believe that Thais do not think their economy has been a success. I do believe there is a rational explanation but I wondered what other people thought. I mean lies and deception, no asset inflation, no evidence of success, an illusion, a conspiracy whatever.

[astral]

Not job related.

//MOVED//

[Travel2003]

Maybe, and Im just guessing here, foreign investors are a bit afraid of the unstable political environment here.

When governments change often, and military coups are not uncommon, not to forget civil unrest (air port take overs, barricades down town).

This can also mean sudden change of rules and regulations in regards to foreign investments, etc.

Again, I just guessing here.

[GuestHouse]

Tens of millions of Thais are living hand to mouth, while a few tens of thousands are spending money like water. You might observe the latter and imagine the economy is healthy and booming.

This boom, since the last bust, has massively increased the gap between the rich and the poor and opened the door for the incidents of the past year.

The issues that gave rise to those incidents have not been resolved and I not yet read or heard anyone discussing anything like a real resolution.

It's anybody's guess which way the resolution will go - but I doubt very much it will be in the direction of removing the protected status of those who control the Thai business world.

[lovelomsak]

Questhouse is correct in stating the rich to poor gap will only get worse. But the economy will keep growing and one of the factors is the ability to maintain a cheap labour force in an industrial developing country. Thailand is just beginning. The way things happen maynot be pretty but they will certainly be effective. China needs Thailand for alliance to stay ahead of India. Thailand and China will be able to control trade and commerce in a whole new international financial world. Most people have to pull their heads out of the sand and face reality.

[prometheus]

In terms of the past couple of decades, Thailand or more specifically Bangkok and its vincinity, has been doing very well in terms of economic development. I can attest that. When we first moved to the house in Bangkok in the bangna area, there were still cows crossing the street and a lot of the roads were simply dirt roads. There was only 1 supermarket in the area and we looked around you could see the farmlands all the way to the horizon.

Flash forward another 15 years, now the same house that used to be surrounded by farms are now surrounded by about 3 shopping malls, countless supermarkets within 5 minutes (good traffic assume) driving radius and connection to the skytrain system not too far away with a lot of high quality schools, Thai ones and International school of world class standard and world's top 10 busiest airport within 30 minutes radius.

Contrary to the recent political turnoil, there really has been a reasonably successful economic development in Bangkok and its vincinity.

What concerns people who has been here is not Bangkok, which is generally a positive city until recently, but the "inequality" outside the area.

The question is, can we solve inequality by simply spreading the wealth ? Well, to a certain extend, but you need to move the whole average up for everyone to be earning more.

Again, there are no short cuts to do this, again contrary to the popular beliefs, people are not "stupid ignorant who can not think for themselves" a lot of them start up their own interesting businesses now.

keep your eyes open and don't let your negative prejudice overshadow the positive ones.

[manarak]

It is not perceived as a successful economy because it lacks a debt bubble that enables (foreign) investors and traders to make money quickly.

Also, doing business in Thailand to take advantage of the country's natural resources (farming, gems) is restricted, and repatriation of profits is only partly possible.

[wintermute]

It is not perceived as a successful economy because it lacks a debt bubble that enables (foreign) investors and traders to make money quickly.

Also, doing business in Thailand to take advantage of the country's natural resources (farming, gems) is restricted, and repatriation of profits is only partly possible.

Thailand has been fairly smart so far in controlling its natural resources but real estate practices here are very questionable. Most foreigners may be limited (and I actually agree with their stance) but it doesn't stop the ultra rich class of Thais from exploiting the country with regular Thais powerless or too apathetic to do anything about it.

[Chunky1]

The SET is just shy of reaching it's 2007, pre-market crash high.

That is AMAZING.

USA still down 30%+. China down 70%+.

It's AMAZING to me that Lad Prao condominiums selling for 100k/m2... 10 million to live on an expressway in a 100meter room? Just WOWZERS!

31 THB / USD and FALLING.

:whistling:

Where is the evidence that rich/poor gap has increased since the recovery?

[Chunky1]

Thais do seem to claim that the economy is bad. I don't know why. I think maybe it's just the political mood. I know consumer spending has crashed during these protests but who knows what its been like afterward.

It's possible that small business has suffered and thus the word of mouth doom and gloom. the thai social scene seems to revolve around small businesses.

[LaoPo]

Questhouse is correct in stating the rich to poor gap will only get worse. But the economy will keep growing and one of the factors is the ability to maintain a cheap labour force in an industrial developing country. Thailand is just beginning. The way things happen maynot be pretty but they will certainly be effective. China needs Thailand for alliance to stay ahead of India. Thailand and China will be able to control trade and commerce in a whole new international financial world. Most people have to pull their heads out of the sand and face reality.

Aahhh, Dr. Lovelomsak's economics....

MY words:

"Sure, 43%+ of Thailands' GDP is created from industry but "produced" by only 20% of Thai labor force. Total Thai labor force is some 40 million workers so 8 million of them produce 43% of GDP;

WHAT do the other workers do ?

Agriculture, on the other hand, produces a mere meager less than 12% of GDP but has a staggering labor force of 42% or 17.2 million people, mostly poor.

You want numbers for the Service Industry ? a staggering 38% (or 15.2 million workers) of the labor force produces 45% of GDP."

From my post:

http://www.thaivisa....ost__p__3836782

YOUR words:

China needs Thailand for alliance to stay ahead of India. Thailand and China will be able to control trade and commerce in a whole new international financial world.

Really?

I suggest you have a good read of my post, above; Thailand is just a small island with 66 million people in an Ocean of Asian countries, totaling 4 to 4.2 BILLION people

Only a mere 20% of the Thai labor force work in Industry; 80% work in Agriculture (42% or 17 million workers) and Service (38% or 15.2 million workers) combined !!! Total: 32 million workers.

ALL of the other countries in Asia are standing in line to take their share of the markets and if Thailand doesn't watch out they will lose track.

LaoPo

[prometheus]

Questhouse is correct in stating the rich to poor gap will only get worse. But the economy will keep growing and one of the factors is the ability to maintain a cheap labour force in an industrial developing country. Thailand is just beginning. The way things happen maynot be pretty but they will certainly be effective. China needs Thailand for alliance to stay ahead of India. Thailand and China will be able to control trade and commerce in a whole new international financial world. Most people have to pull their heads out of the sand and face reality.

Aahhh, Dr. Lovelomsak's economics....

MY words:

"Sure, 43%+ of Thailands' GDP is created from industry but "produced" by only 20% of Thai labor force. Total Thai labor force is some 40 million workers so 8 million of them produce 43% of GDP;

WHAT do the other workers do ?

Agriculture, on the other hand, produces a mere meager less than 12% of GDP but has a staggering labor force of 42% or 17.2 million people, mostly poor.

You want numbers for the Service Industry ? a staggering 38% (or 15.2 million workers) of the labor force produces 45% of GDP."

From my post:

http://www.thaivisa....ost__p__3836782

YOUR words:

China needs Thailand for alliance to stay ahead of India. Thailand and China will be able to control trade and commerce in a whole new international financial world.

Really?

I suggest you have a good read of my post, above; Thailand is just a small island with 66 million people in an Ocean of Asian countries, totaling 4 to 4.2 BILLION people

Only a mere 20% of the Thai labor force work in Industry; 80% work in Agriculture (42% or 17 million workers) and Service (38% or 15.2 million workers) combined !!! Total: 32 million workers.

ALL of the other countries in Asia are standing in line to take their share of the markets and if Thailand doesn't watch out they will lose track.

LaoPo

You got it spot on there.

In the older days, people use to belief in "free trade" theory, ie, you produce what you are best at producing then overall everyone will be better off, farmers will be richer so will car producers and software producers. Both Bill Gates and a Thai rice farmers will be billionaires in short time.

Well, it does not happen, only Bill Gates become billionaire and only industries make money, never in agriculture (unless you are as big as CP but it is more of food processing industry than raw material). For example Thailand has a growing computer animation industry, employs about a thousand people and make around 2-3 billion baht worth of industry.

http://www.champ.co.th/client/tam2006/tam_industry.pdf

You look at it, Korea and Japan, what do they have more ? its higher percentage of people employed in creative industries.

[lovelomsak]

Questhouse is correct in stating the rich to poor gap will only get worse. But the economy will keep growing and one of the factors is the ability to maintain a cheap labour force in an industrial developing country. Thailand is just beginning. The way things happen maynot be pretty but they will certainly be effective. China needs Thailand for alliance to stay ahead of India. Thailand and China will be able to control trade and commerce in a whole new international financial world. Most people have to pull their heads out of the sand and face reality.

Aahhh, Dr. Lovelomsak's economics....

MY words:

"Sure, 43%+ of Thailands' GDP is created from industry but "produced" by only 20% of Thai labor force. Total Thai labor force is some 40 million workers so 8 million of them produce 43% of GDP;

WHAT do the other workers do ?

Agriculture, on the other hand, produces a mere meager less than 12% of GDP but has a staggering labor force of 42% or 17.2 million people, mostly poor.

You want numbers for the Service Industry ? a staggering 38% (or 15.2 million workers) of the labor force produces 45% of GDP."

From my post:

http://www.thaivisa....ost__p__3836782

YOUR words:

China needs Thailand for alliance to stay ahead of India. Thailand and China will be able to control trade and commerce in a whole new international financial world.

Really?

I suggest you have a good read of my post, above; Thailand is just a small island with 66 million people in an Ocean of Asian countries, totaling 4 to 4.2 BILLION people

Only a mere 20% of the Thai labor force work in Industry; 80% work in Agriculture (42% or 17 million workers) and Service (38% or 15.2 million workers) combined !!! Total: 32 million workers.

ALL of the other countries in Asia are standing in line to take their share of the markets and if Thailand doesn't watch out they will lose track.

LaoPo

All I can say is we see the same things but from different perspectives.

First

If 20% of the labour force is producing 43% of the gdp then a large percentage of people are surviving on subsistance level waiting for a decent industrial job with poor wages and benefits and long hours. Industry is in complete control of labour. Simple math in my books .

Second

Agriculture will maintain a high employment level because subsistance people will be surviving there. They will work to feed themselves.

Third

The service industry will always be high. It is all over the world.

As I said before it willnot be pretty but it will be effective.

To sum this up we both see where Thailand is at the moment, just read different directions it will take..

Time will tell which of us or if either of us are correct.

[GuestHouse]

China needs Thailand for alliance to stay ahead of India. Thailand and China will be able to control trade and commerce in a whole new international financial world. Most people have to pull their heads out of the sand and face reality.

Where do you get the idea that China needs Thailand?

China is facing huge internal problems, not least of among which is the need to spread the new Chinese prosperty better amongst it's own people. To do this China needs to ensure it's own economy keeps growing.

The dams China is building on the Mae Khong are a perfect example of China's choise between internal growth and external cooperation.

Thailand has enjoyed three or four decades of being more or less the only place in Asia open for business - Incase you've not noticed the whole of Asia is now hunting Thailand's business.

Malaysia and Southern India have moved in on the tourism business - Vietnam is heading in that direction too, but meanwhile threatening Thailand's dominance of rice production. China's vehicle production is climbing rapidly and if you've ever driven from Hong Kong to Guandong you'll understand just how big China's manufacturing business has grown.

And we haven't even looked at education and training yet.

[roamer]

Are the basics for long term economic success in place ? I would say not. Disastrous educational system strongly reliant on rote learning, good for turning out factory fodder though. Thailand is a factory largely dependent on exporting its products, when it no longer manages to do so in competition with its Asian neighbors then the writing is on the wall because its a one trick pony. Taiwan invested some $200 million in Thailand in 2009, but $2 billion in Vietnam. The garment industry largely shut up shop and moved to cheaper production zones, no reason to think that much of the engineering industry won't follow suit in time, easier and quicker to move sewing machines than industrial plant but otherwise many, if not all, of the same factors apply.

Relevant to income Bangkok must be one of the worlds biggest property bubbles.

And we have not even begun to touch on the political side of things.

Surely its only a matter of time before

[Chunky1]

How can you call Bangkok a property bubble when there is very little leverage and only modest debt.

I have to admit, I find the Bangkok property to be unbelievably high. I just don't know a small 100m room in Lad Prao, which is like an expressway can sell for 10m baht. It's not like Bangkok is at all limited in space. You look at Hong Kong and there is literally nowhere to build. All they have to do here is remove a row of shacks/decrepit shop houses and there are almost an endless numbers of places to build up. The condominiums themselves are not even super nice and are not even of a very high standard.

This does not change the fact that there are no obvious signs of a property bubble in Bangkok.

[Abrak]

Are the basics for long term economic success in place ? I would say not. Disastrous educational system strongly reliant on rote learning, good for turning out factory fodder though. Thailand is a factory largely dependent on exporting its products, when it no longer manages to do so in competition with its Asian neighbors then the writing is on the wall because its a one trick pony. Taiwan invested some $200 million in Thailand in 2009, but $2 billion in Vietnam. The garment industry largely shut up shop and moved to cheaper production zones, no reason to think that much of the engineering industry won't follow suit in time, easier and quicker to move sewing machines than industrial plant but otherwise many, if not all, of the same factors apply.

Relevant to income Bangkok must be one of the worlds biggest property bubbles.

And we have not even begun to touch on the political side of things.

Surely its only a matter of time before

Hmmm... I just wonder if you have thought that explanation through properly.

[roamer]

Are the basics for long term economic success in place ? I would say not. Disastrous educational system strongly reliant on rote learning, good for turning out factory fodder though. Thailand is a factory largely dependent on exporting its products, when it no longer manages to do so in competition with its Asian neighbors then the writing is on the wall because its a one trick pony. Taiwan invested some $200 million in Thailand in 2009, but $2 billion in Vietnam. The garment industry largely shut up shop and moved to cheaper production zones, no reason to think that much of the engineering industry won't follow suit in time, easier and quicker to move sewing machines than industrial plant but otherwise many, if not all, of the same factors apply.

Relevant to income Bangkok must be one of the worlds biggest property bubbles.

And we have not even begun to touch on the political side of things.

Surely its only a matter of time before

Hmmm... I just wonder if you have thought that explanation through properly.

Well it was not so much an explanation, more a prediction. Furthermore its not simply my prediction, there are numerous articles echoing exactly the same thought. I am not denying Thailand's economic boom, far from it, I have profited from it, My point however was that the fundamentals are not in place to ensure continued economic success. As Guesthouse pointed out other Asian countries are now looking for a chunk of Thailand's business and they have a lot of things going for them. You have to look at the baseline, lower manufacturing costs. Add to that easier regulation for your staff, less corruption, better English skills, its really a no brainer for multi nationals. One simple fact, Thailand is now an expensive country to do business with.

[prometheus]

Are the basics for long term economic success in place ? I would say not. Disastrous educational system strongly reliant on rote learning, good for turning out factory fodder though. Thailand is a factory largely dependent on exporting its products, when it no longer manages to do so in competition with its Asian neighbors then the writing is on the wall because its a one trick pony. Taiwan invested some $200 million in Thailand in 2009, but $2 billion in Vietnam. The garment industry largely shut up shop and moved to cheaper production zones, no reason to think that much of the engineering industry won't follow suit in time, easier and quicker to move sewing machines than industrial plant but otherwise many, if not all, of the same factors apply.

Relevant to income Bangkok must be one of the worlds biggest property bubbles.

And we have not even begun to touch on the political side of things.

Surely its only a matter of time before

Hmmm... I just wonder if you have thought that explanation through properly.

Well it was not so much an explanation, more a prediction. Furthermore its not simply my prediction, there are numerous articles echoing exactly the same thought. I am not denying Thailand's economic boom, far from it, I have profited from it, My point however was that the fundamentals are not in place to ensure continued economic success. As Guesthouse pointed out other Asian countries are now looking for a chunk of Thailand's business and they have a lot of things going for them. You have to look at the baseline, lower manufacturing costs. Add to that easier regulation for your staff, less corruption, better English skills, its really a no brainer for multi nationals. One simple fact, Thailand is now an expensive country to do business with.

That shows nothing more than your own ignorance of what has been happening in Thailand. Read more real news than Thai Visa forum and perhaps you will learn.

[StreetCowboy]

8>< SNIP NESTED QUOTES DELETED ><8

That shows nothing more than your own ignorance of what has been happening in Thailand. Read more real news than Thai Visa forum and perhaps you will learn.

I am proud to present to you the FA Cup, for your helpful, insightful and intelligent contribution to the debate.

SC

[thaihome]

Tens of millions of Thais are living hand to mouth, while a few tens of thousands are spending money like water. You might observe the latter and imagine the economy is healthy and booming.

This boom, since the last bust, has massively increased the gap between the rich and the poor and opened the door for the incidents of the past year.

The issues that gave rise to those incidents have not been resolved and I not yet read or heard anyone discussing anything like a real resolution.

It's anybody's guess which way the resolution will go - but I doubt very much it will be in the direction of removing the protected status of those who control the Thai business world.

I am unsure what your timeframe of "This boom, since the last bust" exactly means. Currently the Gini index stands at about 43 or so, just about the same as the US.

You are sadly misinformed if you think the incidents of the past year are in anyway connected to the gap between rich and poor. The incidents were purely politically motivated and were entirely about trying to force an early election.

That is not to say that there is not a wealth gap in Thailand that causes social problems and they need to be addressesed. This is not unusual in country for this stage of development when the population starts to migrate to the urban centers. All of our home countries went through the same turbulence in late 19th and early 20th centuries.

But to say the UDD is about addressing these problems is totally untrue. The UDD is doing nothing but taking advantage of these issues for their leader’s personal agenda, which is simply to gain control of a majority in Parliament.

There are any number of organizations that are truly interested and have real agendas to address the poverty in Thailand. The UDD is not one of them. But perhaps, you could point out a link that would show the economic platform for the UDD and the past protests. Maybe I missed it.

TH

[GuestHouse]

You are sadly misinformed if you think the incidents of the past year are in anyway connected to the gap between rich and poor. The incidents were purely politically motivated and were entirely about trying to force an early election.

That is not to say that there is not a wealth gap in Thailand that causes social problems and they need to be addressesed. This is not unusual in country for this stage of development when the population starts to migrate to the urban centers. All of our home countries went through the same turbulence in late 19th and early 20th centuries.

But to say the UDD is about addressing these problems is totally untrue. The UDD is doing nothing but taking advantage of these issues for their leader’s personal agenda, which is simply to gain control of a majority in Parliament.

There are any number of organizations that are truly interested and have real agendas to address the poverty in Thailand. The UDD is not one of them. But perhaps, you could point out a link that would show the economic platform for the UDD and the past protests. Maybe I missed it.

TH

You are correct, the UDD did use the grievences arising from poverty and the wealth/power gap as a means to their own (The UDDs's) ends. But that is by definition a link between these issues and the incidents of the past year.

These issues are now forced onto the political agenda, the UDD have used aired these issues and spent months enraging the opionions and emotions of a large mass of people - Who the UDD have been promising to help.

And history frequently teaches us two lessons on raising the expectations of the masses with popularist promises. - Failing to meet the expectations often gives rise to revelutions and the popularist politions getting bitten by the crowd they've been courting.

[barsie]

If i'm not mistaken the thai economy can survive with any outside export/import it's one of the few nations that could theoretically be self sufficient.

Bangkok is a price bubble which 'should' burst - doesn't mean it will.

China control the world. The quality of a china graduate makes thai graduates skills comical. Thailand is of only small interest in China's growth plans. btw I recently found out chinese is now taught in thai school.

[dumball]

Not being an acclaimed economist , nor even actualy on Thai soil at this particular time of writing , please excuse my impudance for voicing an opinion here on thaivisa , however , my thoughts are , that to be a successfull economy , the large majority of a populace needs to improve both standard of living and monetary gain . The fact that this is not happening in Thailand , points to a malaligned economic benifit to the populace as a whole , that in actuality is only giving benifit to the already rich minority , this surely is not the way to true national economic success , but in the larger scenario , the rich are only shooting themselves in both feet .