Value Of Farang Residents To Thai Economy?

[The_Other_Mac]

If farangs exited en-masse in the sense that Western companies withdrew their investments, I believe quite a few of the major banks would collapse. And supermarkets...

I can't find the figures I'm looking for, but since the SET must keep foreign ownership of public companies under 49%, they do track it precisely. This page (note that's just trading volumes) at least shows that the fraction is significant.

Of course western investors no more care about accusations of dictatorship in Thailand than they do about accusations of dictatorship in the U.S, as long as the returns are good. Fleeing expats isn't exactly a good sign for the economy, but even Burma manages to keep its foreign investors happy.

[Heng]

Wow.... TVs, cars, and refrigerators.   You guys fishing for those 6th place participation ribbons they used to hand out to the 'special kids' back in grade school on sports day?

Yes loving it here and no I don't need a ribbon to understand my value. A simple business principal applies repeat business is a good thing, not a bad thing. The question was asked and I answered, want to read more into then that Up 2 U

Not reading anything into it at all.

[Heng]

Wow.... TVs, cars, and refrigerators.   You guys fishing for those 6th place participation ribbons they used to hand out to the 'special kids' back in grade school on sports day?

I dont think so, anyway yesterday I was reading that you are building 170 properties near Pattaya?

Selling them ALL to Thai's?

Or do you make a living off a bit of farang money too?

More like making gravy.

[ray23]

Wow.... TVs, cars, and refrigerators.   You guys fishing for those 6th place participation ribbons they used to hand out to the 'special kids' back in grade school on sports day?

<{POST_SNAPBACK}>

Yes loving it here and no I don't need a ribbon to understand my value. A simple business principal applies repeat business is a good thing, not a bad thing. The question was asked and I answered, want to read more into then that Up 2 U

<{POST_SNAPBACK}>

Not reading anything into it at all.

<{POST_SNAPBACK}>

Oh I'm sorry you were speaking of yourself getting ribbons in the special Olympics, I see from your responses your certainly qaulify. good luck maybe they will give of bowl gravy as well.

[Godders]

Minimal.

Never fall for the old argument, 'if it wasn't for us farangs spending our money here Thailand would fall to its knee's'. That is complete and utter &lt;deleted&gt;.

<{POST_SNAPBACK}>

The economy wouldn't fall to its knees, but an awful lot of bargirls and their families would.

[Godders]

Minimal.

Never fall for the old argument, 'if it wasn't for us farangs spending our money here Thailand would fall to its knee's'. That is complete and utter &lt;deleted&gt;.

<{POST_SNAPBACK}>

Oh yeah? Been to Krabi, Phuket or Phang Na lately?

[cobra]

Samran and Steve O,

Excellent, I think you hit the nail on the head.

I've often pondered the "Farang Factor" as if it might be some economic engine, but just how many Singha's is going to make a difference ..

[OlRedEyes]

I think the whole issue is being vastly oversimplified. The knock-on effect of tourism, expats and foreign investment into other sectors of the economy is virtually impossible to measure.

Transfer of skills, creation of demand for new goods and services by both the foreigners as well as the locals' changing consumption patterns which are influenced by exposure to new ideas and cultures, are but some of the issues to consider.

No country advances significantly on their own. If Thailand stayed isolated, I have no doubt that its economy would not have grown much in the past few decades. Even their exports, which are not much now, would have been lower as the neccesary skills for increasing these would not have been aquired.

There is a vast number of Thais who got 'rich' by trading with expats and tourists, creating a further knock-on effect in the economy.

[craigt3365]

Remember when HK was going to kick out all those Filipino maids, or reduce their salaries? I don't remember the exact numbers, but the amount of money they sent home was significant. I mean big. Same is true in Cuba. It is the #1 source of income in Cuba (mainly Cubans living in Florida sending money home). I wonder how big that amount is in Thailand? I hear ya on what expats spend while living there...but what about the foreigners who send money there every month or so?

I have only been to two small villages, but in those, every new (and big) home was financed by foreigners. Many were built for moms by their daughters that had foreigners for husbands. It was just amazing. ######, my mother in law lives in a new house!

I know I also send home a little money every month. My wife's cousin who lives and works in Virginia just sent home over 1MM baht for a new home for her parents.

I met many, many girls in Thailand who get some amount of money on a monthly basis from a foreigner who does not live there permanently. One got 40k baht a month! And this poor guy only visited 4 times a year! Man, she lived very nice. I just got an email from a female friend who is all happy now that she has located a sugar daddy. He is living overseas but is paying for her college, etc. He visits her every 3-4 months. Nice.

It would be interesting to know how big this amount is. I don't think the Thai's would be interested in knowing...too embarassing I think????

[LivinLOS]

I would say entire sections of issan are surviving (or at the very least getting a massive economic boost) on that dollar..

Also what no one seems to have pointed out is that each dollar sent into the economy from outside is direct foriegn exchange..

A country doesnt get richer beacuse they pass money between each other inside the conomy.. a country gets richer when it gets money from outside of its economy sent in.. Even in the case of export businesses they still need to spend money on raw materials (possibly import) and energy (oil) and other costs that dilutes the total net worth..

A farang bringing in 1 mil in savings each year and simply spending it in the Thai economy is worth many many multiples of that amount in thai on thai trade..

[opothai]

take out gdp from tourism and it would have a massive impact on thailand, coupled with falang resident spending power in thailand it would have a devistating effect.

it would take maybe 1-2 years to kick in but the roll on effect over this period of time

hotel and leisure industry

air industry

beverage industry

auto industry

building industry

jobs lost upwards of 2 million

loss of tax to the government for re-investment immeasurable

spending power of 2 million plus workers lost, causing further job losses and further tax losses

see the picture

[kidtongue]

take out gdp from tourism and it would have a massive impact on thailand, coupled with falang resident spending power in thailand it would have a devistating effect.

it would take maybe 1-2 years to kick in but the roll on effect over this period of time

hotel and leisure industry

air industry

beverage industry

auto industry

building industry

jobs lost upwards of 2 million

loss of tax to the government for re-investment immeasurable

spending power of 2 million plus workers lost, causing further job losses and further tax losses

see the picture

<{POST_SNAPBACK}>

GDP about $524,800,000,000 (CIA FactBook) $163.5 billion Worldbank (youo pick which number you like, everyone else does)

The poverty line in Thailand is defined as 1,100 Baht/month. Notionally, 12% of the population. Add to that 1/2 of the surface water is unusable.

There's some study that indicates that 70% of tourist dollars leave the country (airlines, MNC's etc.) and Thailand has a ways to go to remain in the race.

There were 12,432,600 tourists last count(about the same as Portugal),

6,000,000 less than Malaysia but accounting for $23,000,000,000 with a net of about $5.8 Billion

So tourism is worth about 4.382 % of the GDP

(Collateral impact ratchets that up to 16.48% World Bank figure, thus leading everything else on the table)

http://www.wttc.org/frameset3.htm

(The big export earners are electrical,auto parts)

In March, ten sub-committees were set up to review the 377 laws identified by line ministries to be redundant, outdated, or in need of a new law. However, specific reform activities and detailed work plan of the sub-committees and timeline have

not been determined. The NLRDC, chaired by a Deputy Prime Minister, was established to replace the slow moving Legal Reform Committee for the Development of Thailand established in 2001 under the Council of State. The new committee, comprised mostly government officials with a few private sector and academic representatives, has received a comprehensive mandate for legal reform and development.

(I don't know which 377 laws they're referring to which could be interesting)

One of the major challenges Thailand faces in undertaking large infrastructure investments is the efficiency of the infrastructure delivery system. The Thai Government is embarking on a major infrastructure investment program in order

to improve Thailand’s competitiveness and the well-being of the population. The mega-projects are estimated to cost over Bt 1.5 trillion (US$39 billion) for the next five years or roughly 5 percent of GDP per years. In the short term, the program

would contribute significantly to the aggregate level of public investment. In the medium and long term, it is expected to contribute to improved national competitiveness. The challenge facing the Government is the efficiency of the infrastructure delivery system – how to select the good projects and how to finance and implement the projects quickly and appropriately.

FDI, which is basically Japan,US,NL,UK, Germany,Sinagpore,Taiwan& SK ran about $7,000,000,000 USD/yr. from early 80's into the 90's but dropped to $2,539,000,000 in the last 4 years.GDP is approximately $524,800,000 billion so FDI is 7/529 = 1.32325 % of GDP or (lately) 0.0047259% ... pick a multiplier to calculate the effect locally (6% direct effects?)

Susbsidies from the Oil Fund $2,500,000,000, substantially less than tourism

Civil servants were budgeted for 68,000,000,000 Baht. approximately $1,700,000, or less than Tourism (annuities and gratutities took 63% of that; actual salary expense is reported at 11,000,000,000 Baht....$2,500,000,000

Inefficiency is the constant complaint and may be fun if it's someone else's business.

The point is it takes infrastructure do make all this happen.

The infrastructure overwhelmingly requires foreign technology and gets communicated in English, as do the tourists. If Thailand were to only trade in it's language group the markets would be Malaysia, Cambodia, Laos and Burma. And a % of each at that.

Thailand may want to pretend it is otherwise but the numbers indicate that farang investments and people and markets make up well over 50% of the Thai economy.

Your mileage may vary.

[kidtongue]

I'm trying to get an idea how much economic value is added by us farang residents. Greatly appreciate anyone who can point me to the appropriate source, and if it's been covered in the forums already, that's great too.

Some friends told me that permanent and seasonable residents bring Thailand something like 1% of it's foreign exchange earnings. Tourism 3-4%. But they didn't have the references.

Thanks for any help.

<{POST_SNAPBACK}>

Hey, posted references elsewhere as I hadn't seen this. Tourism impact is estimated at 16.48% of the GDP

[samran]

Minimal.

Never fall for the old argument, 'if it wasn't for us farangs spending our money here Thailand would fall to its knee's'. That is complete and utter &lt;deleted&gt;.

<{POST_SNAPBACK}>

Oh yeah? Been to Krabi, Phuket or Phang Na lately?

<{POST_SNAPBACK}>

Fine if we are talking about legit tourists. Totally agree. But the long termer visa runner won't be missed very much, which is my main point.

Foreign investment and efficency gains though, bring it on...

[Thaipwriter]

But the long termer visa runner won't be missed very much, which is my main point.

You mean the guys that have bought houses, cars, motorcy, gold, dozens of mobile phones...etc, etc, etc right?

[samran]

But the long termer visa runner won't be missed very much, which is my main point.

<{POST_SNAPBACK}>

You mean the guys that have bought houses, cars, motorcy, gold, dozens of mobile phones...etc, etc, etc right?

<{POST_SNAPBACK}>

Yup.

The saying that you can give a man a fish, or you can give him the a rod an d reel and teach him how to fish applies equally to the Thai economy as a whole.

Those who are here being productive, working, investing money and creating growth in the economy are the ones that are going to make a difference. If simply throwing money at a problem worked, we wouldn't have undeveloped countries in the world. Simply bringing in foreign exchange for consumption purposes does nothing to encourage viable long term economic growth.

Remember dear leader tried the same trick with his million baht per village scam. What happened? Money was spent on consumables, villages bought a new motorbike or mobile, very little was invested into businesses, and everyone is back in the same position that they were in before they saw the million baht. There was no proper risk mechanism in the market to ensure that money would be spent on prodcutive undertakings. Giving away free money is always a recipe for disaster and only ever encourages dependence, nothing more.

Compare this to areas where projects run by HM the King, or even people like Senator Mechai (Mr Condom) are being run. Minimal money is being spent, except on basic stripped down functional equipment and training to improve farming practices and efficency. They could then produce a better product, year in, year out, and buy those things off their own bat. No farang needed.

If you want to compare yourself to Dr T, you are most welcome, as all he is doing is leading to country to economic ruin as it becomes dependent on his handouts and largess.

Also, as an aside, I can't figure out how a visa runner can afford a house, car, gold, and buffalo taxes. If he could, there would be no need for him to tramp to a border every month.

[LivinLOS]

However it isnt just given away is it ??

Its the money these people inject into the local economy, and I have always maintained the tourist who stays in a resort and spends all his money in that hotel resturant and complex actually puts less into the local economy simpy as its pulled out by one company that takes all the profit and employs thais at the lowest wages the market will bear.. The expat or traveller tourist supports many more locals who have thier own biz from the noodle stall to the local bars..

And if you dont know that 1000's of 'residents' are on tourist or visa on arrivale you must not know how hard it is for a non working, unmarried under 50 to get a visa.. Please suggest which legal visa they should apply for.. Ohh I forgot, there isnt one..

[ray23]

But the long termer visa runner won't be missed very much, which is my main point.

<{POST_SNAPBACK}>

You mean the guys that have bought houses, cars, motorcy, gold, dozens of mobile phones...etc, etc, etc right?

<{POST_SNAPBACK}>

Yup.

The saying that you can give a man a fish, or you can give him the a rod an d reel and teach him how to fish applies equally to the Thai economy as a whole.

Those who are here being productive, working, investing money and creating growth in the economy are the ones that are going to make a difference. If simply throwing money at a problem worked, we wouldn't have undeveloped countries in the world. Simply bringing in foreign exchange for consumption purposes does nothing to encourage viable long term economic growth.

Remember dear leader tried the same trick with his million baht per village scam. What happened? Money was spent on consumables, villages bought a new motorbike or mobile, very little was invested into businesses, and everyone is back in the same position that they were in before they saw the million baht. There was no proper risk mechanism in the market to ensure that money would be spent on prodcutive undertakings. Giving away free money is always a recipe for disaster and only ever encourages dependence, nothing more.

Compare this to areas where projects run by HM the King, or even people like Senator Mechai (Mr Condom) are being run. Minimal money is being spent, except on basic stripped down functional equipment and training to improve farming practices and efficency. They could then produce a better product, year in, year out, and buy those things off their own bat. No farang needed.

If you want to compare yourself to Dr T, you are most welcome, as all he is doing is leading to country to economic ruin as it becomes dependent on his handouts and largess.

Also, as an aside, I can't figure out how a visa runner can afford a house, car, gold, and buffalo taxes. If he could, there would be no need for him to tramp to a border every month.

<{POST_SNAPBACK}>

Don't forget permaneant residents may not be monthly visa runners. I wonder how many annual visa are issued these days. The baby boomers are starting the retirement cycle and there is a lot of them. If Thailand was user friendly for business there are many of us who would have started a business and built it up, which would in turn help economy. A lot of guys herein Issan have invested in farms and emply local people, some have opened other business operations, but none of them can own them. A few of these busines opeartions are bars most are not. Not every investor can afford millions of dollars to start up a business. Howver most of us have the money to start small and grow here. Most of the people that I know here in Udon are either on an annual visa or in the process of getting one.

The baby boomer retirement cycle is going to change the entire world, not just Thailand. I have sufficient monies to exist in the states, I have more then enough to live here. Enough that if the busines enviornment were more friendly to the small investor I could and would do a lot more.

So do guys like me have an impact as much a Thailand lets us.

The guy who takes a chance and starts a farm and employees locals, has very little impact on Thailand as a whole, but he has a major impact on the small village he lives in. Have you ever asked yourself why there are so many people working construction and living away from thier homes. It's simply there is no way to earn cash in the form a job, in the villages.

Being an Issan farmer does not make you a fool, where all the money is spent on booze, new Tv's and pickup trucks. Many of these people use the money they earn to improve thier own farms start thier own busineses. So I believe where we can and do make a difference is when we give the guys the tools to improve thier lives.

If I'm going to help someone I don't pick the local drunk or someone who is looking for a free ride, but the guy who is working to improve his life.

Does my income help the big business guy in Bangkok, no but he doesn't need the help, his nest is well feathered.and always has been. Can I make a difference for the small guy YEP!!!!!!!!!!!!!

[Heng]

But the long termer visa runner won't be missed very much, which is my main point.

You mean the guys that have bought houses, cars, motorcy, gold, dozens of mobile phones...etc, etc, etc right?

Yup.

The saying that you can give a man a fish, or you can give him the a rod an d reel and teach him how to fish applies equally to the Thai economy as a whole.

Those who are here being productive, working, investing money and creating growth in the economy are the ones that are going to make a difference. If simply throwing money at a problem worked, we wouldn't have undeveloped countries in the world. Simply bringing in foreign exchange for consumption purposes does nothing to encourage viable long term economic growth.

Remember dear leader tried the same trick with his million baht per village scam. What happened? Money was spent on consumables, villages bought a new motorbike or mobile, very little was invested into businesses, and everyone is back in the same position that they were in before they saw the million baht. There was no proper risk mechanism in the market to ensure that money would be spent on prodcutive undertakings. Giving away free money is always a recipe for disaster and only ever encourages dependence, nothing more.

Compare this to areas where projects run by HM the King, or even people like Senator Mechai (Mr Condom) are being run. Minimal money is being spent, except on basic stripped down functional equipment and training to improve farming practices and efficency. They could then produce a better product, year in, year out, and buy those things off their own bat. No farang needed.

If you want to compare yourself to Dr T, you are most welcome, as all he is doing is leading to country to economic ruin as it becomes dependent on his handouts and largess.

Also, as an aside, I can't figure out how a visa runner can afford a house, car, gold, and buffalo taxes. If he could, there would be no need for him to tramp to a border every month.

Good points.

[dr_Pat_Pong]

But the long termer visa runner won't be missed very much, which is my main point.

<{POST_SNAPBACK}>

You mean the guys that have bought houses, cars, motorcy, gold, dozens of mobile phones...etc, etc, etc right?

<{POST_SNAPBACK}>

No dummy. He means the 30 day poverrty packers. The POOR that border walk perpetually

[Ijustwannateach]

The OP asks about foreign residents. Taken very strictly, that wouldn't include anyone on a so-called "non-immigrant" type visa, would it? Or does this mean anyone who has an actual permanent resident permit? Those would be a very small subset of people here, but I'd wager a relatively valuable one- people with families, jobs or businesses, and serious investment of their life and time here (not to mention the hefty financial investment in the residency permit process).

"Steven"

[LivinLOS]

Well it depends how you measure it..

I am a 'resident' of Thailand even if my paperwork situation means I need to perform a visa run every 90 days..

[craigt3365]

I did that visa run thing for a long time. Mainly because I was under 50 and getting any kind of other visa was difficult. But, I liked it that way. About every other visa run was a 3 or 4 week journey to another country. Ummmm...now that I think about it, that was money Thailand was losing due to this visa issue. And I did buy the gold, the house, the buffalo taxes, etc. No car...yet...

When I did these visa runs, the people on the bus or at the border were not poor. Almost all were well off folks. I was kee nok among them! And I am pretty well off. That bus is packed leaving Bangkok. Not one of the people on that bus wore backpacker type stuff. Of course at 2000 baht, I guess you won't see backpackers on it. Many Japanese also...

As a matter of fact, one was working for a well know company that sponsors advertising here...he was helping get them started.

So, I think you underestimate the effect of the long term visa runner. I was burning through about 3000 USD a month while I was in Thailand!

I want to return to Thailand full time, but won't even try until I turn 50. Until then, I will just travel around and enjoy other countries...spend my money there...instead of in Thailand.

[dr_Pat_Pong]

I did that visa run thing for a long time.  Mainly because I was under 50 and getting any kind of other visa was difficult.  But, I liked it that way.  About every other visa run was a 3 or 4 week journey to another country.  Ummmm...now that I think about it, that was money Thailand was losing due to this visa issue.  And I did buy the gold, the house, the buffalo taxes, etc.  No car...yet...

When I did these visa runs, the people on the bus or at the border were not poor.  Almost all were well off folks.  I was kee nok among them!  And I am pretty well off.  That bus is packed leaving Bangkok.  Not one of the people on that bus wore backpacker type stuff.  Of course at 2000 baht, I guess you won't see backpackers on it.  Many Japanese also...

As a matter of fact, one was working for a well know company that sponsors advertising here...he was helping get them started.

So, I think you underestimate the effect of the long term visa runner.  I was burning through about 3000 USD a month while I was in Thailand!

I want to return to Thailand full time, but won't even try until I turn 50.  Until then, I will just travel around and enjoy other countries...spend my money there...instead of in Thailand.

<{POST_SNAPBACK}>

Yet another non compliant poverty packer. We'll miss you.

[craigt3365]

Since I am fully retired and traveling the world at age 48, I hardly call that a poverty packer. Plenty of money to do what I want. I will never work again. And I was not non compliant. I did the visa on arrival, rarely stayed more than 2 months in a row. I am just a traveler...like many others on this board. And I will be back!!!!! Can't get rid of me that easy!!!

[LivinLOS]

Yeah I guess living in a 70k per month 5 bed villa, retired at 30, maids, gardeners, etc.. 4k USD per month min outgoings..

makes me a poverty packer also ???

[craigt3365]

Yeah I guess living in a 70k per month 5 bed villa, retired at 30, maids, gardeners, etc.. 4k USD per month min outgoings..

makes me a poverty packer also ???

<{POST_SNAPBACK}>

Aw...I feel so sad for you! Poverty sucks, doesn't it!

[ray23]

Yeah I guess living in a 70k per month 5 bed villa, retired at 30, maids, gardeners, etc.. 4k USD per month min outgoings..

makes me a poverty packer also ???

<{POST_SNAPBACK}>

Aw...I feel so sad for you! Poverty sucks, doesn't it!

<{POST_SNAPBACK}>

Isn't it amazing what beliefs are what reality is

[LivinLOS]

Yeah this poverty packer is just back online from watching a DVD in the projection theater..

All people on visa runs are poor backpackers.. Thailand doesnt get any benefit from the pittance we drop around locally..

[craigt3365]

Yeah this poverty packer is just back online from watching a DVD in the projection theater..

All people on visa runs are poor backpackers.. Thailand doesnt get any benefit from the pittance we drop around locally..

<{POST_SNAPBACK}>

LivinLOS: What part of Thailand do you hang out in? I have been pretty much all over but still can't decide on one place to live full time. Each area there has so much to offer! Plus, I do like traveling...so not ready to commit to any one place full time just yet.

My parents are getting old and just built a new house. They have asked me and my wife to stay with them for a 5-6 months to help get everything sorted. My father went crazy and spent 30k USD on an entertainment room. Unreal. He doesn't even know how to use it...oh well...I will sure enjoy getting it all together and watching movies.