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Thailand's Northeast Has Potential, If Only It Was Given A Chance


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STREET WISE

The Northeast has potential, if only it was given a chance

By Achara Deboonme

The Nation

It is astonishing to learn that in Thailand today, 5.4 million people are living under the poverty line.

It is even more astonishing when the poverty line is set at the shockingly low figure of Bt1,134 per year.

That is extremely worrying, considering that in 2009 Thailand's per capita income was US$8,000, or about Bt25,000, according to Wikipedia, based on a gross domestic product of $540 billion.

Just as astonishing is the Finance Ministry's figure that the income gap between those in the top 20 per cent and those in the bottom 20 per cent is 12 times.

To the envy of the Pheu Thai Party, the Abhisit government is boasting about the success of its economic stimulus programmes, which have resulted in a fast economic recovery. Reflecting that success, the Stock Exchange of Thailand index has been on an upward trend, with 1,100 points as the target for the next six months. Some are sceptical whether this will translate into better living conditions for the poor. Others are optimistic that on the back of this overall economic recovery, the poor will also see a better quality of life. They are optimistic that if incomes grow faster across the board, this will narrow the gap. But will it?

Research carried out by Siam Commercial Bank (SCB) and published last week, shows us something to the contrary. SCB's data points to the fact that farmers in the Northeast are the poorest sector in the country, and that if they want to see a rise in their income, they can do so only by home relocation or change of employment. But farmers, as we know, lack all kinds of opportunities to catch up with higher earners.

From 1990 to 2007, figures show that the income gap widened. In 1990, the income of small-business owners in Bangkok was twice that of factory workers in Bangkok, and more than 10 times higher than that of farmers in the Northeast. In 2007, the gap had widened to three and 12 times, respectively.

I am from the Northeast and went to Khon Kaen University. When I graduated 20 years ago, the available jobs at home were for bank-tellers and administration officers at sugar mills. Or, I could opt for a public service job. Those types of employment are fine for those who enjoy routine work. But although there are many new businesses up and running in the region, the types of work opportunities have not really become any more interesting. And as most jobs are not exciting, the pay scale is low. As a result, the purchasing power of people in the Northeast has remained low.

Central Plaza in Khon Kaen may be packed at the weekends, but I bet that its revenue generation does not match that of the company's smaller branches in Bangkok.

During a speech in Khon Kaen last week, economist Kosit Panpiemras said that, so far, economic growth has been concentrated in Bangkok, and that this is a sign of low quality growth. To him, the Northeast has huge potential, as it is home to two-thirds of the labour force and 58 higher educational institutions. However, the region still fails to attract new investment. As a result, graduates continue to escape to Bangkok to seek better job opportunities.

I can't help but agree with them. Without interesting jobs, quality workers will leave. Even farmers have to migrate to Bangkok for construction jobs that provide them with only a slightly higher income than they can get from the land.

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-- The Nation 2010-09-08

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2009 Thailand's per capita income was US$8,000, or about Bt25,000

US dollar crashes to Bt 3 shock horror

Who writes this stuff?

And the poverty level is 1,134 baht per year? 3.1 Baht per day?

And, 5.4 million are below this level?

Thai innumeracy appears to be alive and well.

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Thai innumeracy appears to be alive and well.

^ Another thing holding back northeast residents and one of the reasons why no multinational accounting firms have moved their Thailand HQ to Khon Kaen.

Achara is smiling in the photo as The Nation employed her on a salary of US$100,000 a year. ( So she believes )

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2009 Thailand's per capita income was US$8,000, or about Bt25,000

US dollar crashes to Bt 3 shock horror

Who writes this stuff?

I can say one thing for sure. In Bangkok, the minimum rate of pay is about 260b per 8 hour day, 6 days a week. This works out to be about 6,000 per month. Using the exchange rate of 28.5b to $1.00aud this is about $210 aud, times 12 months (as there is likely no provisions for holidays and sick pay) and you get $2520 Australian dollars per year. These figures are quoted by a good friend of mine who is the floor manager of one of Bangkok's bigger textile factories, where they make products for NIKE, ADIDAS ect....

The people that have university degrees and are lucky enough to get a job in the airconditioned offices, they usually start at about 9,000 per month on their way to earning a maximum of about 15,000 per month. Using the same exchange rate of 28.5 this ends up as a yearly salary of just over $6,300 Australian per year, (you can do the math and change to US if you like). The figures quoted above are probably a little too generous to say the least.

The fact is that while profits have been on the increase for the companies, and their high executives, this has not bee reflected in the earnings of the people on the floor. For all of us farang, just try and imagine living on just 6,000b per month and you will get the picture, I know that I use about 5,000 every week.

What I can say here is that under international pressure, at least the working conditions for the factory workers has gotten much better over the years, and my friends factory is at least clean and well organised. They do supply cheap food at the canteen, and some are offered accommodation at a reasonable rate.

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2009 Thailand's per capita income was US$8,000, or about Bt25,000

US dollar crashes to Bt 3 shock horror

Who writes this stuff?

And the poverty level is 1,134 baht per year? 3.1 Baht per day?

And, 5.4 million are below this level?

Thai innumeracy appears to be alive and well.

Good to see that the education system is alive and well in Thailand. Maybe they need to boost the education system in Bangkok too, not just Isaan to give the educated more chance also. Of course, there is a good chance that she was educated overseas which is in and of itself quite worrying.

"Bangkok has great potential, if only people could do basic mathematics."

Edited by Thai at Heart
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$35.00 a year is the poverty line ? This is disgustingly disgracefull in Thailand when you consider that the people in this class are the producers of one of Thailands major exports , a simple answer to this victimisation would be for the government to do away with the middle men who help to cause the farmers situation . The government should form co-ops in the villages who collect and deliver the rice direct to the mills , this alone would create a far more equitable income for all concerned "Nick nack paddy wack , give the dog a bone " .

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2009 Thailand's per capita income was US$8,000, or about Bt25,000

US dollar crashes to Bt 3 shock horror

Who writes this stuff?

I can say one thing for sure. In Bangkok, the minimum rate of pay is about 260b per 8 hour day, 6 days a week. This works out to be about 6,000 per month. Using the exchange rate of 28.5b to $1.00aud this is about $210 aud, times 12 months (as there is likely no provisions for holidays and sick pay) and you get $2520 Australian dollars per year. These figures are quoted by a good friend of mine who is the floor manager of one of Bangkok's bigger textile factories, where they make products for NIKE, ADIDAS ect....

The people that have university degrees and are lucky enough to get a job in the airconditioned offices, they usually start at about 9,000 per month on their way to earning a maximum of about 15,000 per month. Using the same exchange rate of 28.5 this ends up as a yearly salary of just over $6,300 Australian per year, (you can do the math and change to US if you like). The figures quoted above are probably a little too generous to say the least.

The fact is that while profits have been on the increase for the companies, and their high executives, this has not bee reflected in the earnings of the people on the floor. For all of us farang, just try and imagine living on just 6,000b per month and you will get the picture, I know that I use about 5,000 every week.

What I can say here is that under international pressure, at least the working conditions for the factory workers has gotten much better over the years, and my friends factory is at least clean and well organised. They do supply cheap food at the canteen, and some are offered accommodation at a reasonable rate.

The sad tragedy is that if the minimum wage is increased, the companies employ foreign labour and get round everything.

The idea that labour is imported to do the jobs that the natives won't do is one of the biggest lies ever propagated in business, when you put it in the context of "labour is imported to do jobs for which companies will not pay a fair wage" I feel it reflects reality a lot better.

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2009 Thailand's per capita income was US$8,000, or about Bt25,000

US dollar crashes to Bt 3 shock horror

Who writes this stuff?

I can say one thing for sure. In Bangkok, the minimum rate of pay is about 260b per 8 hour day, 6 days a week. This works out to be about 6,000 per month. Using the exchange rate of 28.5b to $1.00aud this is about $210 aud, times 12 months (as there is likely no provisions for holidays and sick pay) and you get $2520 Australian dollars per year. These figures are quoted by a good friend of mine who is the floor manager of one of Bangkok's bigger textile factories, where they make products for NIKE, ADIDAS ect....

The people that have university degrees and are lucky enough to get a job in the airconditioned offices, they usually start at about 9,000 per month on their way to earning a maximum of about 15,000 per month. Using the same exchange rate of 28.5 this ends up as a yearly salary of just over $6,300 Australian per year, (you can do the math and change to US if you like). The figures quoted above are probably a little too generous to say the least.

The fact is that while profits have been on the increase for the companies, and their high executives, this has not bee reflected in the earnings of the people on the floor. For all of us farang, just try and imagine living on just 6,000b per month and you will get the picture, I know that I use about 5,000 every week.

What I can say here is that under international pressure, at least the working conditions for the factory workers has gotten much better over the years, and my friends factory is at least clean and well organised. They do supply cheap food at the canteen, and some are offered accommodation at a reasonable rate.

Most companies employing Thai labour dont pay the minimum rate as Thai people in genral wont work for it. If they want cheap labout they use Lao or Burmese labour that can be paid less than this. Even up north members of the wifes family doing day labour get paid well over the local minimum although that still isnt much. A lot of factory jobs also pay a base salary, which isnt wonderful (but better than daily minimum) for a fixed hour working week but offer overtime at levels that can double or more the salary. This is quite popular with a lot of up country workers who gravitate to this work. Some even use their earnings to start small businesses serving the newer factory workers. Some factory and other jobs also offer free accomodation. The deals offered for unskilled to semi-skilled labour also vary quite widely even within a small area.

I cant say I know many college graduates who started on less than ten grand, and I know a lot of college graduates. And quite a number earn considerably more than 15K and I m talking about outside BKK. Even so it isnt great by interantional standards but it isnt bad by Thai standards.

Although in all cases things arent wonderful they are a bit better these days than you lay out.

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It is even more astonishing when the poverty line is set at the shockingly low figure of Bt1,134 per year.

That is extremely worrying, considering that in 2009 Thailand's per capita income was US$8,000, or about Bt25,000, according to Wikipedia, based on a gross domestic product of $540 billion.

So assuming that the same error was repeated, the GDP per capita would be around 250,000 THB, with 5.4 million people below the poverty line of 11,340 THB.

That's pretty crazy no matter what way you look at it.

Are foreign companies even allowed to invest in Isaan? Or if they want to setup a factory etc does it have to be in the BKK region?

Government could setup some kind of incentives for regulated (min wage / conditions) foreign (or local) investment in the region to really give it a boost. Although I guess it's distance to any major ports would be a problem still.

That high speed train they just approved might work though, if it passes through Isaan. As building it will create a tonne of jobs, and the potential to send manufactured + primary goods would probably be a good incentive for investment in Isaan.

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2009 Thailand's per capita income was US$8,000, or about Bt25,000

US dollar crashes to Bt 3 shock horror

Who writes this stuff?

I can say one thing for sure. In Bangkok, the minimum rate of pay is about 260b per 8 hour day, 6 days a week. This works out to be about 6,000 per month. Using the exchange rate of 28.5b to $1.00aud this is about $210 aud, times 12 months (as there is likely no provisions for holidays and sick pay) and you get $2520 Australian dollars per year. These figures are quoted by a good friend of mine who is the floor manager of one of Bangkok's bigger textile factories, where they make products for NIKE, ADIDAS ect....

The people that have university degrees and are lucky enough to get a job in the airconditioned offices, they usually start at about 9,000 per month on their way to earning a maximum of about 15,000 per month. Using the same exchange rate of 28.5 this ends up as a yearly salary of just over $6,300 Australian per year, (you can do the math and change to US if you like). The figures quoted above are probably a little too generous to say the least.

The fact is that while profits have been on the increase for the companies, and their high executives, this has not bee reflected in the earnings of the people on the floor. For all of us farang, just try and imagine living on just 6,000b per month and you will get the picture, I know that I use about 5,000 every week.

What I can say here is that under international pressure, at least the working conditions for the factory workers has gotten much better over the years, and my friends factory is at least clean and well organised. They do supply cheap food at the canteen, and some are offered accommodation at a reasonable rate.

Most companies employing Thai labour dont pay the minimum rate as Thai people in genral wont work for it. If they want cheap labout they use Lao or Burmese labour that can be paid less than this. Even up north members of the wifes family doing day labour get paid well over the local minimum although that still isnt much. A lot of factory jobs also pay a base salary, which isnt wonderful (but better than daily minimum) for a fixed hour working week but offer overtime at levels that can double or more the salary. This is quite popular with a lot of up country workers who gravitate to this work. Some even use their earnings to start small businesses serving the newer factory workers. Some factory and other jobs also offer free accomodation. The deals offered for unskilled to semi-skilled labour also vary quite widely even within a small area.

I cant say I know many college graduates who started on less than ten grand, and I know a lot of college graduates. And quite a number earn considerably more than 15K and I m talking about outside BKK. Even so it isnt great by interantional standards but it isnt bad by Thai standards.

Although in all cases things arent wonderful they are a bit better these days than you lay out.

Family relative, 22 years of age, overseas accountancy degree, bilingual, starts work with major multinational accounting firm last year.

18k + minimal overtime, office central Bangkok.

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When I worked in Bangkok a new guy asked me what the rank and file locals earned per month. I answered " About 3000."

" $3000 is pretty good." he said.

" That's baht mate" I replied

It took some convincing after he'd worked out what 3000 baht in USD was that I wasn't pulling his leg.

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This is ludicrous.

Person A

Chooses to work in rice farming or other agricultural endeavors

Does work involving full-time labor for perhaps 1/3 to 1/2 of a year

Engages in off again on again work for the remainder of the year

Has plenty of time off not working, often several months per year

Pays no rent and has little transportation costs

Lives in a serene and pastoral environment

Invests nothing in professional development (not even in agriculture education)

Person B

Works in business fields

Does work involving full-time labor all year long

Works 50-80 hours per week

Has very little time off, perhaps only a week or maybe two per year

Pays high rent and transportation costs

Lives amongst massive noise, light, and chemical pollution

Invests significantly in higher education and professional development

Is it any wonder why Person B makes considerably more money? There is nothing wrong with either Person A or Person B. Each has made life choices. Each lifestyle has advantages and disadvantages. Many of the expats living here spent their working lives as Person B with the express purpose of spending their golden years as Person A.

Edited by way2muchcoffee
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It is even more astonishing when the poverty line is set at the shockingly low figure of Bt1,134 per year.

That is extremely worrying, considering that in 2009 Thailand's per capita income was US$8,000, or about Bt25,000, according to Wikipedia, based on a gross domestic product of $540 billion.

So assuming that the same error was repeated, the GDP per capita would be around 250,000 THB, with 5.4 million people below the poverty line of 11,340 THB.

That's pretty crazy no matter what way you look at it.

Are foreign companies even allowed to invest in Isaan? Or if they want to setup a factory etc does it have to be in the BKK region? Is Issarn part of the BOI area seems they should be doing more in that area. IMO that's why companys setup near BKK to take advantage of the BOI

Government could setup some kind of incentives for regulated (min wage / conditions) foreign (or local) investment in the region to really give it a boost. Although I guess it's distance to any major ports would be a problem still.

That high speed train they just approved might work though, if it passes through Isaan. As building it will create a tonne of jobs, and the potential to send manufactured + primary goods would probably be a good incentive for investment in Isaan.

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This is ludicrous.

Person A

Chooses to work in rice farming or other agricultural endeavors

Does work involving full-time labor for perhaps 1/3 to 1/2 of a year

Engages in off again on again work for the remainder of the year

Has plenty of time off not working, often several months per year

Pays no rent and has little transportation costs

Lives in a serene and pastoral environment

Invests nothing in professional development (not even in agriculture education)

Person B

Works in business fields

Does work involving full-time labor all year long

Works 50-80 hours per week

Has very little time off, perhaps only a week or maybe two per year

Pays high rent and transportation costs

Lives amongst massive noise, light, and chemical pollution

Invests significantly in higher education and professional development

Is it any wonder why Person B makes considerably more money? There is nothing wrong with either Person A or Person B. Each has made life choices. Each lifestyle has advantages and disadvantages. Many of the expats living here spent their working lives as Person B with the express purpose of spending their golden years as Person A.

Amen brother, I'm about as 'Person A' now that one could possibly be and grinning like a Mule in a brier patch.

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Family relative, 22 years of age, overseas accountancy degree, bilingual, starts work with major multinational accounting firm last year.

18k + minimal overtime, office central Bangkok.

I'll add to this -

Brother in Law #1 - a lawyer for an insurance company here for 23 years and now has the monthly income of 18,000 Baht + expenses so he flies to Nakhon Si Thammarat 4 times a month for cases and gets an extra 1,000 baht per day for top-off whilst the insurance company creams zillions

Brother in Law #2 - graduated Law - was working for 8,000 a month at an Insurance company - now an Insurance Broker and makes about 22,000 a month

Brother in Law #3 - graduated Law - not working - has been unable to get work for 2 1/2 years and very good at what he does - I employ him on contract rates per job

Brother in Law #4 - B Sc, Master of Economics, now doing PhD and works CP Group as a manager- base is 30,000 plus car - on graduation he will get 100,000 a month

Brother in Law #5 - B Bus, MBA (Melbourne Australia) - works for me - could not get work here - gets 2,500 a day casual rates + percentage on success of management of people I contract.

My wife - before I married her, was B Ed and working for the housing commission on 8,000 a month - 0700 out the door and home 2000 at night, as well as all day Saturday. Needless to say she has not worked since we got together for Thai companies.

Notwithstanding that when I first came here I employed an MBA secretary for 30,000 a month and she did not even know what a Chart of Accounts was yet her 'references' were impeccable!

Thailand will not stop the endemic corruption until they start paying - the North East is a classic example of the Bangkok elite & rich companies and people deliberately keeping the poor... poor and uneducated. A friend of mine has a daughter in Lop Buri and her school turns on a TV set at 9:30 whilst the 'teachers' go have refreshments. They are not paid enough to teach! Complain and they shrug! But without the 'price competitiveness' of 'slave' labour, where would Thailand really be?

Education is certainly an answer to this problem. And there are many companies in Thailand who could take advantage of unskilled labour at competitive prices by decentralising to North East but there are few (almost no) incentives from Government and the transport links to BKK and ports are insufficiently developed to sustain competitiveness thus the companies pay a premium for land and rents in BKK rather than decentralise.

Similarly if farmers were paid for their product and not 'handled' there would be more money to go around. I made a note in a post some time ago of rice farmers I know in Si Saket. They still get the same payment they got 8 years ago yet rice during the oil scam/push took prices up from 90 Baht for 5kgs in supermarkets to 220 where they are now. So the middlemen cream it and the country has no incentive to produce. If they withheld their produce for a higher price and formed some co-ops they may start to bring more money to their area but there is no organisation due to lack of education and that is not going to improve.

The Post is about the Northeast having potential and I agree. But with the likes of Thaksin having sold off concessions for wood chipping using Eucalyptus Gums to his cronies and leasing land from the North Eastern farmers, after the crop, the land was so acidic from the trees, they can't even grow weeds (or food) and will not be able to for 10 years and he laughed all the way to the bank - again! Did any of the Red Shirts take that into account about their beloved leader?

No Thailand is all about looking after oneself and at the expense of others. There is too much corruption and it is not going to change anytime soon. Ineffectual police, a hogtied Govt mixed with cronyism and self indulgence, banks who have very little commercial sense and a PR machine saying Thailand has more than 94% literacy rate!!! Confusion reigns.

For the North East, there needs to be land management for farmers, there needs to be education and entrepreneurial programs. And there is no knowledge transfer as demonstrated by my own family connections. Even with an education there is no Mercedes for the Lawyers! Makes you wonder.

ermm.gif

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It is even more astonishing when the poverty line is set at the shockingly low figure of Bt1,134 per year.

That is extremely worrying, considering that in 2009 Thailand's per capita income was US$8,000, or about Bt25,000, according to Wikipedia, based on a gross domestic product of $540 billion.

So assuming that the same error was repeated, the GDP per capita would be around 250,000 THB, with 5.4 million people below the poverty line of 11,340 THB.

That's pretty crazy no matter what way you look at it.

Are foreign companies even allowed to invest in Isaan? Or if they want to setup a factory etc does it have to be in the BKK region?

Government could setup some kind of incentives for regulated (min wage / conditions) foreign (or local) investment in the region to really give it a boost. Although I guess it's distance to any major ports would be a problem still.

That high speed train they just approved might work though, if it passes through Isaan. As building it will create a tonne of jobs, and the potential to send manufactured + primary goods would probably be a good incentive for investment in Isaan.

They might need people from the Isan to build it......but no high speed train through the Isan. ( Imagine all the buffaloes, Kubotas, cows and Somtham lao.......)

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I can say one thing for sure. In Bangkok, the minimum rate of pay is about 260b per 8 hour day, 6 days a week. This works out to be about 6,000 per month. Using the exchange rate of 28.5b to $1.00aud this is about $210 aud, times 12 months (as there is likely no provisions for holidays and sick pay) and you get $2520 Australian dollars per year. These figures are quoted by a good friend of mine who is the floor manager of one of Bangkok's bigger textile factories, where they make products for NIKE, ADIDAS ect....

Just to let you know there are actually provisions for sick days and holiday pay in Thai labor law.

Beginning of each year the employer has to declare which 13 public holidays he will be observing the following year. Those working on salary are paid time and half if they work any of those days, those paid on daily pay are paid double time.

Thai's are also supposed to get 30 sick days a year with pay, I know seems high haha, but we just found out all of this first hand when writing up our new employee contracts. Plus of course the standard up to 48 hours per week is fine but everything over that is paid either time and half or double time and it is not supposed to be averaged over the course of the month.

There is obviously a lot more to the Labour Protection Act of 1998 but believe it or not it is a pretty good set of rules to protect employees not saying everyone follows it but the dept that enforces it takes complaints very seriously.

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What I find ASTONISHING about the OP is that the author finds the situation ASTONISHING.

When the average person walks around saying or thinking "mai pben rai" half their life, how likely is it that there will be any spark that will culminate in great progress being made? Sometimes it seems to me that what progress there has been in Thailand over the years, in fields such as economics and quality of life, happened to Thailand because of general progress in the world, rather than was brought about by Thailand.

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2009 Thailand's per capita income was US$8,000, or about Bt25,000

US dollar crashes to Bt 3 shock horror

Who writes this stuff?

And the poverty level is 1,134 baht per year? 3.1 Baht per day?

And, 5.4 million are below this level?

Thai innumeracy appears to be alive and well.

Isaan is the poorest area of the country. The average per capita income is about $400 per year and 70% of the population is classified as poor. In spite of this, the people themselves are happy and friendly.

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Isaan is the poorest area of the country. The average per capita income is about $400 per year and 70% of the population is classified as poor. In spite of this, the people themselves are happy and friendly.

With all due respect I feel that per capita income is not correct. That equates to less than 40 baht a day.

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2009 Thailand's per capita income was US$8,000, or about Bt25,000

US dollar crashes to Bt 3 shock horror

Who writes this stuff?

And the poverty level is 1,134 baht per year? 3.1 Baht per day?

And, 5.4 million are below this level?

Thai innumeracy appears to be alive and well.

Isaan is the poorest area of the country. The average per capita income is about $400 per year and 70% of the population is classified as poor. In spite of this, the people themselves are happy and friendly.

What isn't taken into account in any of these figure is:

A ) money sent home by those working in Bangkok. This levels the field substantially.

B ) Inferred value from the informal economy.

In other words, if I am living up country and decide to kill one of my chickens for dinner, I get a nice meal. At the same time, there is nothing recorded in any statistic that adds 100 baht to my income for killing my own chicken, but there should be.

Statistics are lovely, but ones such as these are meaningless, except where someone is trying to score political points. Are people in Issan poorer than other areas of the country? Sure. By how much? From personal observation I'd say some of the more wealthy farming areas around the country probably make about 30% more. The fact that the statistics don't agree with this simply means there is a problem with the way the statistics are calculated.

People would be dead if they truly had only 1130 baht per year in income. That isn't even enough to keep a person fed if it is per month. It is clearly a ridiculous figure, and obviously wrong. There are hidden sources of revenue coming from somewhere, such as an informal and unreported source of food from a farm. Reporters only harm their own credibility when they blindly repeat nonsense like this and then expect people to take them seriously.

I was always taught in school that after you arrive at answer, you should ask yourself, does this answer make sense? Check your work. Just do some basic, common sense checks to verify if your answer is reasonable.

Obviously, politicians and reporters never learned this valuable lesson.

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Isaan is the poorest area of the country. The average per capita income is about $400 per year

If this were true and Isaan were a country they'd be on a par with Burundi, about half that of Ethiopia and waaay behind Laos, Myanmar and Cambodia.

Edited by mca
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