"The West" Vs Thailand, Economically

[swissie]

We all know in what shape a good part of the european countries and the US are in.

How does Thailand compare ? As I gather, Thailand has increased it's foreign debt significantly over the last few years. Some sources quote that "if they continue like this, they will be the Greece of Asia soon". ?!?.

If anyone is a bit "in the know" and follows up on economical developements as far as Thailand is concerned, please give feedback, or list internet-links dealing with this matter.

Thanks & cheers.

[brit1984]

The Thai economy is in good shape.

Unlike many Western countries the economy is growing and debt is actually relatively low.

Inflation and political instability are the main potential issues.

Sent from iPhone; please forgive any typos or violations of forum rules

[Naam]

Thailand's external debt is less than its forex reserves. and its debt/gdp ratio of less than 35% would make the finance ministers of many industrialised countries extremely happy.

[impulse]

"The Thai economy is in good shape."

The CIA factbook indicates a slightly different comparison

Thailand GDP per capita = $9,500 (PPP basis, that's much higher than the official exchange rate)

Thailand GDP growth: 0.1% in 2011, 7.8% in 2010 and -2.3% in 2009.

Meanwhile, for example(s) in those fast sinking economies of the west:

Germany GDP per capita = $38,400 (PPP), USA= $49,000 (PPP)

Germany GDP growth in 2011= 3.1%, USA= 1.7%

Economies in Germany and the USA would have to fall off a cliff and into a big deep cave to be "in as good shape" as Thailand's economy.

Hey, and maybe they will, but my bet is that the average German and American will be better off financially throughout my lifetime.

Edited August 23, 2012 by impulse

[Naam]

only economic ignorants use "per capita" for any comparison. let me add something to clarify my claim.

in my home the consumption of Cuban cigars is 24 per capita/annum. neither my wife nor our three employees smoke.

the per capita income (dogs not counted) in my home is around 60,000 US-Dollars. do you think our cook, the maid or my wife's driver earns 5,000 Dollars per month?

[impulse]

only economic ignorants use "per capita" for any comparison. let me add something to clarify my claim.

If your contention is that the average Thai is better off financially than the average German or American, please point me to one number supporting that position.

If your contention is that the average Thai will be better off financially than the average German or American in the foreseeable future, please enlighten me- why?

Ditto for the "median" Thai, German or American.

Edited August 23, 2012 by impulse

[brit1984]

High / low wages can be preferable depending on whether you are an employee or an employer.

I think the OP was hoping to discuss the macro-economic outlook, rather than relative incomes / purchasing power parity.

[impulse]

I think the OP was hoping to discuss the macro-economic outlook, rather than relative incomes / purchasing power parity.

Good point and nicely made.

I do think the relative trajectory of the economy for Thai's and Thailand will be better going forward than it will be for the westerners I used as an example. They will probably be "betterer" off tomorrow (mo' better?) and see a higher percentage gain than that seen by Germans and Americans.

But make no mistake- they, like the Chinese, have a long way to go to get even close to a similar financial lifestyle (for lack of a better word after a long day). And with the world's population getting closer and closer to its carrying capacity, they may never get there.

They certainly won't in my lifetime- at least at current growth rates.

[davejones]

"The Thai economy is in good shape."

The CIA factbook indicates a slightly different comparison

Thailand GDP per capita = $9,500 (PPP basis, that's much higher than the official exchange rate)

Thailand GDP growth: 0.1% in 2011, 7.8% in 2010 and -2.3% in 2009.

Meanwhile, for example(s) in those fast sinking economies of the west:

Germany GDP per capita = $38,400 (PPP), USA= $49,000 (PPP)

Germany GDP growth in 2011= 3.1%, USA= 1.7%

Economies in Germany and the USA would have to fall off a cliff and into a big deep cave to be "in as good shape" as Thailand's economy.

Hey, and maybe they will, but my bet is that the average German and American will be better off financially throughout my lifetime.

I think you have misunderstood the question. We all know Thailand is a poorer country than Germany and USA, but it's economy is currently doing quite well. Yes, GDP growth was only 0.1% last year, but don't forget that they had the flooding to content with. I doubt the USA or Germany would have any growth with even half that flooding. The Thai economy is doing very well at the moment.

[davejones]

I think the OP was hoping to discuss the macro-economic outlook, rather than relative incomes / purchasing power parity.

Good point and nicely made.

I do think the relative trajectory of the economy for Thai's and Thailand will be better going forward than it will be for the westerners I used as an example. They will probably be "betterer" off tomorrow (mo' better?) and see a higher percentage gain than that seen by Germans and Americans.

But make no mistake- they, like the Chinese, have a long way to go to get even close to a similar financial lifestyle (for lack of a better word after a long day). And with the world's population getting closer and closer to its carrying capacity, they may never get there.

They certainly won't in my lifetime- at least at current growth rates.

But that misses the point that someone earning $30,000 a year who's salary drops to $25,000 gets pretty depressed. But another person who's salary rises from $5,000 to $10,000 is very happy and optimistic. If it's all about wealth, then why are so many people in rich Western countries so unhappy about their economic situation. After all, they're only a few percent worse off than a few years ago, so are close to being as wealthy as they've ever been. You are looking at things in overly simplistic terms.

Edited August 23, 2012 by davejones

[yourauntbob]

only economic ignorants use "per capita" for any comparison. let me add something to clarify my claim.

in my home the consumption of Cuban cigars is 24 per capita/annum. neither my wife nor our three employees smoke.

the per capita income (dogs not counted) in my home is around 60,000 US-Dollars. do you think our cook, the maid or my wife's driver earns 5,000 Dollars per month?

Huh? I would say just the opposite. Per capita is a much better comparison than whole numbers, especially when comparing large and small counties. Using straight GDP Thailand is more prosperous than Singapore. To be fair, you cant use just one economic indicator to see the whole picture and they are all flawed as GDP doesnt account for the underground economy (which is much larger here than in the west), per capita can be skewed as pointed out in your post, there are several levels of unemployment which can be misleading.....

On the basis of growth, I think Thailand is in a much better position than the west. This is in part due to the fact it is soo far behind and has plenty of room to grow. Another thing that should be pointed out is that it is situated nicely between two economies which most believe will eventually overtake the USA (China and India). Thailand as a country needs to learn to innovate and no copy, strengthen its intellectual property right laws, improve the schooling system, and invest in infrastructure to be sure but the problems are very correctable if they can ever stop the infighting politically and start working together.

Just my two cents.

[BirdsandBooze]

Thailand`s economy is in pretty good shape considering the set back it endured caused by the floods. Low wages keep Thailand competetive and will keep it rolling unless populist pay policies derail it. The UK`s problem is it`s almost complete reliance on the financial services industry to generate income. What little manufacturing it has is almost entirely foreign owned.

[Naam]

only economic ignorants use "per capita" for any comparison. let me add something to clarify my claim.

If your contention is that the average Thai is better off financially than the average German or American, please point me to one number supporting that position.

If your contention is that the average Thai will be better off financially than the average German or American in the foreseeable future, please enlighten me- why?

Ditto for the "median" Thai, German or American.

i didn't say that Impulse. only wanted to point out that any "per capita" figure is purely academic, see my examples above. shooting from the hip i could list another half dozen examples (most probably many more) which clearly prove "per capita" clearly ad absurdum.

another good example is the per capita GDP of a tiny country like Luxembourg where people do not create one iota more GDP than the citizens of neighbouring France and Germany. most of Luxembourg's GDP is generated by financial institutions which employ a fraction of the country's population.

[Naam]

only economic ignorants use "per capita" for any comparison. let me add something to clarify my claim.

in my home the consumption of Cuban cigars is 24 per capita/annum. neither my wife nor our three employees smoke.

the per capita income (dogs not counted) in my home is around 60,000 US-Dollars. do you think our cook, the maid or my wife's driver earns 5,000 Dollars per month?

Huh? I would say just the opposite. Per capita is a much better comparison than whole numbers, especially when comparing large and small counties. Using straight GDP Thailand is more prosperous than Singapore. To be fair, you cant use just one economic indicator to see the whole picture and they are all flawed as GDP doesnt account for the underground economy (which is much larger here than in the west), per capita can be skewed as pointed out in your post, there are several levels of unemployment which can be misleading.....

On the basis of growth, I think Thailand is in a much better position than the west. This is in part due to the fact it is soo far behind and has plenty of room to grow. Another thing that should be pointed out is that it is situated nicely between two economies which most believe will eventually overtake the USA (China and India). Thailand as a country needs to learn to innovate and no copy, strengthen its intellectual property right laws, improve the schooling system, and invest in infrastructure to be sure but the problems are very correctable if they can ever stop the infighting politically and start working together.

Just my two cents.

so you think because of Thailand's underground economy it is fair to state that our cook, maid and driver earn each $5k per month and each of them, including my wife smoke 24 cigars per annum? did you actually read and understand my posting?

Edited August 24, 2012 by Naam

[TommoPhysicist]

Would you rather be working in 'middle management' in Thailand, Germany or the USA.

Why restrict your choice to those, pick career of choice, list any western countries you like along with Thailand.

Did anyone not have Thailand as their last choice?

There is your answer.

[Time Traveller]

Maybe Naam is saying that you can't use just one measure to compare the economic situation of different countries. The GDP per capita can tell you an average figure for income, but it does't tell the full picture. If combined with Gini coefficent which indicates income inequality than it can tell a little more. Then looking of costs of living, inflation, the government's fiscal position and other indicators you get a better picture.

Don't worry Thailand will never be the "Greece of Asia", that's political scaremongering (the Demo-rats). Thailand government debt would need to rise from about 40% of GDP to over 140% of GDP. For that to happen it would need the government run a fiscal deficit of at least 5% every year and also for the economic growth to be zero for the next 20 yrs to come close. But it's important to distinguish Public(government) debt which in Thailand is acceptable from private debt (households & companies) which is different. Governments in Europe Japan and US may be in bad shape, but those countries still have the highest levels of household wealth and many corporations (not the banks) with low debt.

Edited August 24, 2012 by Time Traveller

[Naam]

Maybe Naam is saying that you can't use just one measure to compare the economic situation of different countries. The GDP per capita can tell you an average figure for income, but it does't tell the full picture.

what i was trying to say is that any "per capita" figure is worthless if used for a comparison of two countries who's basics do not match because the result is totally misleading as given in my examples above, e.g. the "per capita" (average) consumption of cigars in my household.

[chainarong]

The Thai economy has been in good condition since the Thai-tanic in 1997, the measures introduced buy the Chuan Government for the banking regs have ensured good economics, as previously said, unstable government and sovereign risk remain a problem for nervous investors, however there are good things to be had for any large corp,interested in Thai , in good deals from the Investment Board of Thailand , (BOT). The experts on the money channels quite often praise the Thai economy, some also recommend Indonesia, so that says something. In short , its Okay. it can also can change very quickly.

[yourauntbob]

only economic ignorants use "per capita" for any comparison. let me add something to clarify my claim.

in my home the consumption of Cuban cigars is 24 per capita/annum. neither my wife nor our three employees smoke.

the per capita income (dogs not counted) in my home is around 60,000 US-Dollars. do you think our cook, the maid or my wife's driver earns 5,000 Dollars per month?

Huh? I would say just the opposite. Per capita is a much better comparison than whole numbers, especially when comparing large and small counties. Using straight GDP Thailand is more prosperous than Singapore. To be fair, you cant use just one economic indicator to see the whole picture and they are all flawed as GDP doesnt account for the underground economy (which is much larger here than in the west), per capita can be skewed as pointed out in your post, there are several levels of unemployment which can be misleading.....

On the basis of growth, I think Thailand is in a much better position than the west. This is in part due to the fact it is soo far behind and has plenty of room to grow. Another thing that should be pointed out is that it is situated nicely between two economies which most believe will eventually overtake the USA (China and India). Thailand as a country needs to learn to innovate and no copy, strengthen its intellectual property right laws, improve the schooling system, and invest in infrastructure to be sure but the problems are very correctable if they can ever stop the infighting politically and start working together.

Just my two cents.

so you think because of Thailand's underground economy it is fair to state that our cook, maid and driver earn each $5k per month and each of them, including my wife smoke 24 cigars per annum? did you actually read and understand my posting?

Not sure how you got that from my post. You made a valid point on why per capita cannot be used alone, but i dont think it should be ignored. I was simply trying to show that ALL stats are flawed in one way or another. The underground economy part of my post was to demonstrate that GDP itself is not a reliable figure (there are many more flaws with it but we would be here a while). I would say only "economic ignorants" would disregard certain stats in favor of others. Economists use many figures to find the health of an economy and without taking into consideration the size of the population whole numbers become meaningless when comparing counties. Whole numbers such as GDP are best used in comparing a country to itself year to year and then comparing percentage growth/decline between counties. To do a proper analysis one would also need to consider the unemployment rate, inflation, budget deficit/suplus, national debt as compared to GDP, average hourly wage, cost of living, etc.....

[CaptHaddock]

Don't worry Thailand will never be the "Greece of Asia", that's political scaremongering (the Demo-rats). Thailand government debt would need to rise from about 40% of GDP to over 140% of GDP. For that to happen it would need the government run a fiscal deficit of at least 5% every year and also for the economic growth to be zero for the next 20 yrs to come close. But it's important to distinguish Public(government) debt which in Thailand is acceptable from private debt (households & companies) which is different. Governments in Europe Japan and US may be in bad shape, but those countries still have the highest levels of household wealth and many corporations (not the banks) with low debt.

Thailand can not become Greece as long as it has its own currency. This fact was demonstrated in the Tom Yum crisis of 1997 when Thailand had a substantial debtload in dollars that it had incurred based on an overvalued baht. Although the debt was a burden Thailand could become competitive in exports by devaluing the baht, which it did. The Thaksin govt was able to retire the IMF debt some years later, ahead of schedule. Had the debt been too burdensome, Thailand could have defaulted on its debt as Argentina partially did after it decoupled its peso from the USD following the 2002 collapse. The increase in exports subsequent to devaluation revived the Argentine economy and the world debt markets turned out to be more forgiving than not.

The problem of Greece and the rest of the southern tier of the EU is that those countries cannot devaluate the currency. The only route to restore wage competiveness with Germany is by "internal devaluation", i.e. cutting nominal wages. The problem is that doing so causes riots in the streets as workers resist.

In any case, countries like Thailand that run a current account surplus either do not go deeply into debt (China, Norway) or can fund relatively high levels of debt without crisis (Japan.)

[yoshiwara]

only economic ignorants use "per capita" for any comparison. let me add something to clarify my claim.

If your contention is that the average Thai is better off financially than the average German or American, please point me to one number supporting that position.

If your contention is that the average Thai will be better off financially than the average German or American in the foreseeable future, please enlighten me- why?

Ditto for the "median" Thai, German or American.

i didn't say that Impulse. only wanted to point out that any "per capita" figure is purely academic, see my examples above. shooting from the hip i could list another half dozen examples (most probably many more) which clearly prove "per capita" clearly ad absurdum.

another good example is the per capita GDP of a tiny country like Luxembourg where people do not create one iota more GDP than the citizens of neighbouring France and Germany. most of Luxembourg's GDP is generated by financial institutions which employ a fraction of the country's population.

Populist conception of GDP set against actual figures doesn't wash. Just a left-wing bash mostly.

[yoshiwara]

A poor country can post sterling figures of growth compared to more mature economies but if the base figure is distinctly lower then the 'doing much better' statement needs to be radically qualified.

The unfortunate thing about Thailand is that the benefits of growth do not appear to be smartly ploughed back into infrastructure. I would compare with South Korea which appears to be doing so.

[Naam]

only economic ignorants use "per capita" for any comparison. let me add something to clarify my claim.

If your contention is that the average Thai is better off financially than the average German or American, please point me to one number supporting that position.

If your contention is that the average Thai will be better off financially than the average German or American in the foreseeable future, please enlighten me- why?

Ditto for the "median" Thai, German or American.

i didn't say that Impulse. only wanted to point out that any "per capita" figure is purely academic, see my examples above. shooting from the hip i could list another half dozen examples (most probably many more) which clearly prove "per capita" clearly ad absurdum.

another good example is the per capita GDP of a tiny country like Luxembourg where people do not create one iota more GDP than the citizens of neighbouring France and Germany. most of Luxembourg's GDP is generated by financial institutions which employ a fraction of the country's population.

Populist conception of GDP set against actual figures doesn't wash. Just a left-wing bash mostly.

please translate the meaning in a language i understand.

[TommoPhysicist]

please translate the meaning in a language i understand.

Please list the languages you understand, so we may choose.

[Naam]

please translate the meaning in a language i understand.

Please list the languages you understand, so we may choose.

french, german, schwyzerdütsch, english, spanish, portuguese, italian and arabic.

[bangkokburning]

Per Capita is a very valid tool among many, cmon Nam.

It is a small, over protected economy run by Patricians. It need not be open to the world, but many economic mechanism wholly protect privilage and caste.

[impulse]

Maybe Naam is saying that you can't use just one measure to compare the economic situation of different countries. The GDP per capita can tell you an average figure for income, but it does't tell the full picture.

what i was trying to say is that any "per capita" figure is worthless if used for a comparison of two countries who's basics do not match because the result is totally misleading as given in my examples above, e.g. the "per capita" (average) consumption of cigars in my household.

The difference being that your household is too small to apply such statistics. Meanwhile, the hundreds of millions living in Thailand, Germany and the USA can be sampled to get a statistically valid population.

Of course, you have to look at the shape of the income distribution curve, where Thailand's is similar to the USA much less equitable than Germany's. That's according to the numbers supplied by the Thai government. Other sources place Thailand's Gini coefficient much different than the official numbers provided by the government- and much less equitable.

Bottom line, you can't have a meaningful discussion of the relative economies of various countries without starting from a per capita number.

[GuestHouse]

About a third of all government spending disappears under the table while the Thai education system has not tackled the fundamental problems that to my certain knowledge have been discussed for the past 20 years.

Government interference in energy prices and agricultural industry are costing the country (and those sectors) dearly, while the protectionism the Thai economy has 'enjoyed' has only served the cartels who control government policy, all the while undermining Thai competitiveness in world markets.

And in the meantime the gap between the haves and the have nots is accelerating, a point not missed on a particular individual, who like the Gracchi before him, has identified promises to fix things for the poor as a means of gaining power.

The resulting cost of populist policies and the inevitable political clash do not bode well for the Thai economy.

[Naam]

Bottom line, you can't have a meaningful discussion of the relative economies of various countries without starting from a per capita number.

my "thai" answer is "up to you!"

[manarak]

Per capita GDP is NOT a good comparison, and here's why

A cook cooking a meal at a restaurant in Switzerland will "produce" about 50 USD, while the cook in Thailand will also cook a meal, but his GDP contribution will be only 5 USD.

Yet, both are meals, and I'd go for the 5 USD meal.

To clarify a bit more, imagine some family living in Thailand, the husband as an IT shop at Tukcom that's doing well and the wife a profitable hair salon. They own a fully paid for house, a fully paid for car, aircon, etc. and hardly have to worry about taxes.

Yet together they pull only 150000 baht a month.

Imagine the same in the "west": They would maybe pull 30.000 USD a month together but they will have had to borrow money to buy the house because of incredibly inflated real estate prices and they would have to pay high taxes, high health insurance, etc. and work their asses off to pay for everything.

Therefore it isn't fair to compare GDP per capita on a monetary basis.

The GDP per capita can be used in relation with other figures to evaluate the health of an economy.

- public debt per capita / GDP per Capita (the lower the better)

- private debt PC / GDP PC (the lower the better)

- basic local cost of living / GDP PC (the lower the better)

- yearly growth % of GDP

- business creations / closures ratio

- % of unpaid debt

- loan interest rates (anything below 5% indicates a problem - I guess I will have to explain that later, LOL)