Thai Household Debt

[chiang mai]

> Not to mention the fact that the middle class here is so small as to be relatively unimportant.

No, it's the exact opposite, the Thai middle class is significant:

Thai middle-class

Although in the West, businessmen get excited about a so-called “upcoming middle-class” in emerging economies, it would be wise to determine first how to define this middle-class. A middle-class is only realistically measured by free-disposable income and purchasing power. In, for example, Indonesia, where salaries are low and the cost of living high, there is no middle-class to speak of, with enough free-disposable income and true purchasing power. In Thailand, on the other hand, there is a large middle-income group with a substantial percentage of its income freely available for purchases. (Read also BTA Report: Middle-class living conditions of 2008).

http://businesstrend...e-to-china.html

Google, "Middle Class in Thailand" and read some of the articles from that newspaper that we are not permitted to link or quote from, there's a bunch o data out there.

Yeah, that's one of those personal contact / personal experience issues. People are mostly in contact with one group or the other and then assume that the whole class/group/segment is one way or the other.

Well no one person is going to have a truly representative sampling of personal acquaintances.

Looking at both median and average income/asset statistics, I would continue to assert that the middle class, although certainly increasing in numbers and significance in recent decades, is not that significant a driver of macro-economic statistics.

I would argue that the borrowing/repayment patters of both the population sliver at the top that controls nearly all the significant assets of the country, and the huge majority that is still hand-to-mouth are still both much more significant than the middle.

Of course the latter group doesn't participate at all in the formal debt industry, so I guess wrt the NPL issue I see the middle class as the tail that won't wag the dog.

But even to the extent the middle class is important in such measurements, I see them as much more financially responsible than consumers in the West.

Much.

I don't believe this is a personal acquaintance experience issue either, I did read that twenty years ago the middle class in Thailand was so small as to be negligible, the picture looked siomething like 1% higher class, 5% middle and 94% poor and from experience that was probably about right. I've also read somewhere else that todays middle class is estimated to account for uo to fifty per cent of the population although since I can't provide a link you can treat this with the same suspicion you treat BOT reporting.

[BigJohnnyBKK]

I don't believe this is a personal acquaintance experience issue either, I did read that twenty years ago the middle class in Thailand was so small as to be negligible, the picture looked siomething like 1% higher class, 5% middle and 94% poor and from experience that was probably about right. I've also read somewhere else that todays middle class is estimated to account for uo to fifty per cent of the population although since I can't provide a link you can treat this with the same suspicion you treat BOT reporting.

Of course it all depends on how you define your terms.

Being able to own property isn't as relevant here as in the West since the peasantry still dominates the countryside.

I'd personally set the bar at say 20K single/ 30K couple/ 40K with kids, combined with net worth assets greater than two years income.

Take the top 5% (arbitrary upper class) and next 10% down (arbitrary upper-middle) out of the equation, and I'd reckon the remainder fitting the above benchmark at less than 20%.

And their total assets, debt, income, whatever would IMO be a very very small fraction of the 15% above them.

I'd define lower-middle as everyone between them and the true hand-to-mouth, which I believe are still well in the majority here.

Of course the fact that poor relations are supported by their wealthier family members is a major complicating factor, I'd personally think counting them separately makes sense.

All admittedly total WAG. . .

[CPH]

I think it is correct that the middle class is maybe 50 percent today, and that middle class pays very little taxes. That is why many thais have more money than we would expect. Thai banks are much harder in valuing collateral and they act swiftly and take over the collateral (house) if the debtor fails to pay. That is the

reason why banks in Asia is in a much better position than the banks in the EU an US. The banks in Thailand learned the lesson in 1998 during the Asian crisis where NLPs were extremely high and many financial institutions went bankrupt. All Thailand had went bancrupt had it not been for the IMF.

[chiang mai]

I don't believe this is a personal acquaintance experience issue either, I did read that twenty years ago the middle class in Thailand was so small as to be negligible, the picture looked siomething like 1% higher class, 5% middle and 94% poor and from experience that was probably about right. I've also read somewhere else that todays middle class is estimated to account for uo to fifty per cent of the population although since I can't provide a link you can treat this with the same suspicion you treat BOT reporting.

Of course it all depends on how you define your terms.

Being able to own property isn't as relevant here as in the West since the peasantry still dominates the countryside.

I'd personally set the bar at say 20K single/ 30K couple/ 40K with kids, combined with net worth assets greater than two years income.

Take the top 5% (arbitrary upper class) and next 10% down (arbitrary upper-middle) out of the equation, and I'd reckon the remainder fitting the above benchmark at less than 20%.

And their total assets, debt, income, whatever would IMO be a very very small fraction of the 15% above them.

I'd define lower-middle as everyone between them and the true hand-to-mouth, which I believe are still well in the majority here.

Of course the fact that poor relations are supported by their wealthier family members is a major complicating factor, I'd personally think counting them separately makes sense.

All admittedly total WAG. . .

It's a really long read and you'd have to be seriously interested in the subject to read it all, but this is a fascinating paper written by two Japanese guys that covers the history and emergence of the middle class in Thailand, page 246 (!) gives one description.

http://www.ide.go.jp/English/Publish/Periodicals/De/pdf/03_02_07.pdf

[Rimmer]

Flame and quoted reply removed

[chiang mai]

Numbers here suggesting 8% of population below the poverty line as of 2008.

http://www.indexmundi.com/g/g.aspx?v=69&c=th&l=en

[SurichTan]

According to Kennichi Ohmae, the middle class will diminish in his

M-shaped society

http://en.m.wikipedia.org/wiki/M-shaped_society

It is true in Malaysia where I onced stay. I used to live comfortably with my graduate salary when young, now fresh Uni graduates are finding tough to own car and house. Malaysian youngs are made broke by Government. locallly made cars Proton are overpriced n imported cars are levied beyond youngs' reach. Face-loving people kill themselves financially. Thais?

I am retired but still being consulted on a yearly > 2-million-baht contract. Consider myself middle class by Singapore standard. i live frugally with my married son. don't have a car or house in Singapore but keep other assets in Malaysia.

Using a China-made Haipai I9220 dual SIM 'galaxy note' at SGD220. Good enough for reading TV n posting. I Think you can buy it in MBK too. I used to use a hand-me-down iPhone 3gs from son who chases new gadgets. but he could afford with his 300K Bahts per month salary.

Babyboomers are more thrifty, i guess.

I read somewhere that a young Chinese sold one of his kidney for an iPad. So it's OK to spend if you don't hurt yourselves.

Sent from my i9220 using Thaivisa Connect App

Edited October 26, 2012 by SurichTan

[cheeryble]

Chiangmai

Thankyou for all the data links

However

Heng is absolutely right to suggest that any Central Bank figures should be viewed with some degree of suspicion, more often it's a problem with what they don't say rather than what they do say, BOE is a classic example. On that basis I would view BOT numbers with more than just a grain of salt.

The much emulated Financial Sector Master Plan decrees that indicators must be done to standardised international norms.

It is unlikely we can get nearer real data than the stats you cite.

Anything's possible including that official indebtedness is up because black lending is down.

I'm not an economist but it's also possible, even likely, that debt is an essential ingredient of strong growth.....which may repeat may be perfectly healthy.

Anecdotally, Mrs Cheeryble manages many little purchase debts with amazing prestidigitation knowing that Mr Cheeryble has long pockets but short fingers and having a job she ain't getting bailed out except in life threatening emergencies and presents for sister's kids. Purchases seem to get paid off then voila the next acquisition. Her optimisation of cheap calls and multiple Sim cards would need Google's main server to duplicate.

What amazes me is how much she genuinely enjoys and uses what she quietly buys. She says "When I like something I REALLY love it". Which for some odd reason seems to apply to me!

Edited October 26, 2012 by cheeryble

[simple1]

Numbers here suggesting 8% of population below the poverty line as of 2008.

http://www.indexmund...?v=69&c=th&l=en

Do you have the Thai government monetary definition of poverty? A few weeks back the Australian government reported that 8% of children in the populace lived below the poverty line. I understand the Australian government definition of poverty is family earnings at or below 50% of the median income. Total population below the poverty line as of 10/2012 was 2.2 million, that's around 10% of the population. You would make the assumption poor Australians would have relatively better access to reasonable housing, quality health care and education, so cannot make a direct comparison.

[chiang mai]

Thankyou for all the stats...nice to have some real data

However

Heng is absolutely right to suggest that any Central Bank figures should be viewed with some degree of suspicion, more often it's a problem with what they don't say rather than what they do say, BOE is a classic example. On that basis I would view BOT numbers with more than just a grain of salt.

However

The much emulated Financial Sector Master Plan decrees that indicators must be done to standardised international norms

Is that like the Police are committed to upholding the law, a rehtorical question of course.

[Heng]

> Not to mention the fact that the middle class here is so small as to be relatively unimportant.

No, it's the exact opposite, the Thai middle class is significant:

Thai middle-class

Although in the West, businessmen get excited about a so-called “upcoming middle-class” in emerging economies, it would be wise to determine first how to define this middle-class. A middle-class is only realistically measured by free-disposable income and purchasing power. In, for example, Indonesia, where salaries are low and the cost of living high, there is no middle-class to speak of, with enough free-disposable income and true purchasing power. In Thailand, on the other hand, there is a large middle-income group with a substantial percentage of its income freely available for purchases. (Read also BTA Report: Middle-class living conditions of 2008).

http://businesstrend...e-to-china.html

Google, "Middle Class in Thailand" and read some of the articles from that newspaper that we are not permitted to link or quote from, there's a bunch o data out there.

Yeah, that's one of those personal contact / personal experience issues. People are mostly in contact with one group or the other and then assume that the whole class/group/segment is one way or the other.

Well no one person is going to have a truly representative sampling of personal acquaintances.

Looking at both median and average income/asset statistics, I would continue to assert that the middle class, although certainly increasing in numbers and significance in recent decades, is not that significant a driver of macro-economic statistics.

I would argue that the borrowing/repayment patters of both the population sliver at the top that controls nearly all the significant assets of the country, and the huge majority that is still hand-to-mouth are still both much more significant than the middle.

Of course the latter group doesn't participate at all in the formal debt industry, so I guess wrt the NPL issue I see the middle class as the tail that won't wag the dog.

But even to the extent the middle class is important in such measurements, I see them as much more financially responsible than consumers in the West.

Much.

IMO it's those personal definitions that we're clearly not agreeing on here. For myself I'd include every single family that owns their properties outright and conduct commerce from those properties whether it's a single shophouse metalworks/restaurant/general goods/gold shop/dentist's office/etc. up to the line where any business (present to 80-90 years ago to account for the last 'largish' waves of Chinese immigrants) that was a 'large' (again relative) SME, multinational, and perhaps publicly listed as 'middle class' going back 80-90 years. I would think that that group as I define middle class as 'significant.'

I think in the west we're accustomed to defining the middle class based on annual salaries and then only talk 'net worth' for the upper middle class and upper class. Here it might be more appropriate (IMO) to define the middle class by family net worth.

[chiang mai]

The Asian Development Bank has this view:

"In its recent report on the emerging middle classes of Asia, the Asian Development Bank (ADB) uses a basic definition of people living on approximately US$2-20 per day as determining middle class status. For a family of two parents and two children, therefore, that would equate to a family income of around 7,200-72,000 baht per month. That would encompass the great majority of urban, salary-owning Thai citizens. Those earning less than this tend to be marginalized urban people in the informal sector (although some would qualify), rural subsistence agricultural families, unregistered (and some registered) migrant workers and undocumented residents (e.g. ethnic minority people in the Chiang Rai region)".

http://jcwalsh.wordpress.com/2010/08/24/the-middle-class-in-thailand/

Personally I think that bar is set very low and as such almost certainly includes a segment that I would regard as poor.

[Heng]

Yeah for me I'd use something (again roughly) like family net worth between 3 million and 100 million for the middle class. In Thai Visa terms, there has been much head scratching and probably general eczema type scratching over how 8,000 to 15,000 Baht salaried employees are 'clearly' living beyond their means. Surely many folks are. But there are plenty of folks who seem to be living well beyond their means that are actually living quite frugally compared to what their family net worth and cash flow can actually afford. Salary should of course be figured in some how, but there's also the issue of trying to account for rental income, share groups and private interest income, and of course normal business revenue (say in the case of merchants) that are largely unreported.

p.s. after some contemplation I'm tempted to push that upper range higher.

Edited October 26, 2012 by Heng

[cheeryble]

. I understand the Australian government definition of poverty is family earnings at or below 50% of the median

A peculiar definition based purely on relative terms with no absolute acceptable norm......meaning that unless there were amazing equality there would always be "poor" people.

Edited October 26, 2012 by cheeryble

[aussiebebe]

The OP's query was how Thais seem to be able to afford so much on such modest salaries. There are a number of factors. Firstly, the young professionals you might see may well be living with their parents - that's quite common in Thailand and is in stark contrast to young guys and girls in Western countries who have a large chunk of their pay taken in rent/mortgage or saving for a deposit. Another factor is that all luxury goods can be purchased on hire purchase through a credit card, usually at 0%interest over 10 months, so a 21,900baht S3 will work out to only 2,190baht, which is quite affordable to young people who live at home.

Another issue is whether they are government workers; I am still friends with a Thai woman I used to know through my work who eventually passed exams to get a government job. She went to work for the Thai Customs and although she started on a low salary, the job was permanent and she is basically guaranteed a job for life. Within a year she had a Toyota Vios E - close to 700,000baht - and revealed that it was easy for her to be given a low interest deal over a very long term of 10 years. The finance companies will give loans to government employees as they have fixed employment and pre-determined wage increments.

[inthepink]

They are random but I never said they were average. I said if. And it's more common for a household to have that kind of money than some realize. The average doesn't speak to the whole.

The average annual salary in the US is nowhere near $100,000

Didn't intend to imply and didn't say it was average. I was more thinking that it was far more common in the US than LOS. A married couple, both public school teachers can make a lot more than that in a lot of places, plus bennies. A garbage truck driver in NYC makes $130k plus bennies. They just finished a strike for it. I'm only saying it's not rare.

I don't want to have a protracted argument either but the fact you pulled those particular figures out of the air to back your opinion would seem to indicate you think they are common, which, if average salary figures for the US are to be believed, they are not. I think the average is around $42k and that includes the really high earners of course, who tend to distort mean averages far more than the lowest earners do.

I can't find any articles about garbage truck drivers in NYC earning that much but I did find one that said the national average for all garbage collection staff is about $29,860.

I don't want to dissect the rest of your post but are you telling me that all financial institutions in the USA demand a 20% deposit for mortgages and have done for the last 5 or 10 years? Or is this a recent development / something that only applies to major banks?

One small example of differing credit practices that I have noticed between Thailand and the West (the UK in my case) is that credit card holders in Thailand are required to pay a minimum of 10% of their balance every month, whereas in the UK it is often 1% plus that month's interest. The Thai banks' policy would seem to be more sensible.

Edited October 26, 2012 by inthepink

[CPH]

Most thais net worth is very low, because they spend all the money they have, and then borrow some. By the way maybe it is not so bad an idea to borrow money in a

high inflation economy. At the time you pay back the money your salary is much higher than when you borrowed the money.

[simple1]

. I understand the Australian government definition of poverty is family earnings at or below 50% of the median

A peculiar definition based purely on relative terms with no absolute acceptable norm......meaning that unless there were amazing equality there would always be "poor" people.

Forgive the off topic comment, but any government will need to draw a "poverty line" for the purpose of data analysis for input to the development and costings of policy to address poverty related issues, policy to assist migrating poor families to the middle class strata etc. You may already be across this, but Wikipedia provides a good overview of this topic at:

http://en.wikipedia....verty_threshold

Edited October 26, 2012 by simple1

[connda]

There's a credit bubble in Thailand that is eventually going to pop, and I'd guess sooner rather than later. Either way, it's going to be mess when the bill comes due.

That's the only thing I can come up with too. Eventually Thailand is going to have 2008 type of event fueled by excessive credit. I have people living all around me who are middle and lower class who drive newer cars and trucks. I can sit at my home in our village and watch the traffic flow by in the remote rural area of Lamphun, and I'm floored by the number of shiny cars and trucks in the 1 million baht range that drive by the house. It sort of goes against the common perception of "poor rural farmers".

I probably out earn the average Thai out here by 5x to 10x, but I drive a 22 year old Toyota that I've had serviced by a mechanic that owns the exact same vehicle. So I have a great running car for under 100K.

Well, I'm not trying to keep up with the Chalerns and a don't give a rip about status -- but I don't see how any of these folks can afford a 1M + baht vehicle even on credit.

[chiang mai]

There's a credit bubble in Thailand that is eventually going to pop, and I'd guess sooner rather than later. Either way, it's going to be mess when the bill comes due.

That's the only thing I can come up with too. Eventually Thailand is going to have 2008 type of event fueled by excessive credit. I have people living all around me who are middle and lower class who drive newer cars and trucks. I can sit at my home in our village and watch the traffic flow by in the remote rural area of Lamphun, and I'm floored by the number of shiny cars and trucks in the 1 million baht range that drive by the house. It sort of goes against the common perception of "poor rural farmers".

I probably out earn the average Thai out here by 5x to 10x, but I drive a 22 year old Toyota that I've had serviced by a mechanic that owns the exact same vehicle. So I have a great running car for under 100K.

Well, I'm not trying to keep up with the Chalerns and a don't give a rip about status -- but I don't see how any of these folks can afford a 1M + baht vehicle even on credit.

If there's a credit bubble in Thailand you'll need to demonstrate where and what it is, because all the numbers thus far suggest very clearly that there is not and that what we are witnessing is nothing more than an economic environment that is growing strongly, well within acceptable parameters.

Edited October 26, 2012 by chiang mai

[Heng]

Well, I'm not trying to keep up with the Chalerns and a don't give a rip about status -- but I don't see how any of these folks can afford a 1M + baht vehicle even on credit.

It's because not all of those cars are on credit and there are plenty of people who can afford it. Not pointing fingers here but IMO a lot of TV'ers perhaps associate (maybe their own family members) with locals who may have debt issues and there may be some psychological need to assume that the majority of people are in debt as well. Even if you're not going to assume 'outright cash purchase,' (which is actually pretty common in my experience... we build and sell condos and houses and regularly sell units to people who come in like you might walk into your 7-11 and pick a few things up) if you just look at the basic cash flow required to purchase an X million Baht automobile, house, etc. (depending on who you're stalking or observing at the time) you're going to have to come to the conclusion that there are at least that many people who can afford to make these purchases. If you plug in the numbers, there are plenty of purchases that would probably make you scratch your head to know that the 'payments' likely total 200-300k Baht a month. Even living hand to mouth -which a lot people like to assume in other 'Ferrari in front of a shophouse' type thread-, that's not exactly a pitifully low cash flow level.

At that point you have to then queue the thread where you assume that these people must all be criminals or politicians.

[thaibeachlovers]

I have always wondered about this too and it's not as though the cars are old either. In Oz there are heaps of older cars on the roads. I read somewhere a few years ago that Thai household debt was climbing at an alarming rate. I notice that many poorer farmers are being offered credit cards. Gotta go pop one day.

I also wonder about this, but it's not just Thailand. Back home everyone seems to have new cars and flash houses, but I could never afford either, and I had a good job.

Re Thailand, I have asked my wife, and she just says that they don't save anything, and get it all on credit. My in laws live in a shack, but they just bought a new pick up truck. Makes no sense to me!

Come to think of it, nothing about the world's financial system makes sense to me. Everyday, I see on tv that Europe/ UK and the US is in "crisis", so who is filling the 5* hotels they keep building on the beaches? Why are the aeroplanes full of western package tourists.

Even in Asia, it's inexplicable. Indonesia can't make enough m'bikes to keep up with local demand, but you can't tell me that the average wage is higher than in LOS.

They say that Japan has been in crisis for 20 years, but they seem to have a high standard of living there.

What I think, is that someone is selling us a line of BS.

[thaibeachlovers]

Well, I'm not trying to keep up with the Chalerns and a don't give a rip about status -- but I don't see how any of these folks can afford a 1M + baht vehicle even on credit.

It's because not all of those cars are on credit and there are plenty of people who can afford it. Not pointing fingers here but IMO a lot of TV'ers perhaps associate (maybe their own family members) with locals who may have debt issues and there may be some psychological need to assume that the majority of people are in debt as well. Even if you're not going to assume 'outright cash purchase,' (which is actually pretty common in my experience... we build and sell condos and houses and regularly sell units to people who come in like you might walk into your 7-11 and pick a few things up) if you just look at the basic cash flow required to purchase an X million Baht automobile, house, etc. (depending on who you're stalking or observing at the time) you're going to have to come to the conclusion that there are at least that many people who can afford to make these purchases. If you plug in the numbers, there are plenty of purchases that would probably make you scratch your head to know that the 'payments' likely total 200-300k Baht a month. Even living hand to mouth -which a lot people like to assume in other 'Ferrari in front of a shophouse' type thread-, that's not exactly a pitifully low cash flow level.

At that point you have to then queue the thread where you assume that these people must all be criminals or politicians.

So, as the average wage must be around 10,000 a month, where do all these non criminals or politicians get their multi millions from?

[thaibeachlovers]

. I understand the Australian government definition of poverty is family earnings at or below 50% of the median

A peculiar definition based purely on relative terms with no absolute acceptable norm......meaning that unless there were amazing equality there would always be "poor" people.

Forgive the off topic comment, but any government will need to draw a "poverty line" for the purpose of data analysis for input to the development and costings of policy to address poverty related issues, policy to assist migrating poor families to the middle class strata etc. You may already be across this, but Wikipedia provides a good overview of this topic at:

http://en.wikipedia....verty_threshold

I think you are talking about how the socialist governments take money from people that actually work, to redistribute it to people that think it should all be given to them!

[chiang mai]

Well, I'm not trying to keep up with the Chalerns and a don't give a rip about status -- but I don't see how any of these folks can afford a 1M + baht vehicle even on credit.

It's because not all of those cars are on credit and there are plenty of people who can afford it. Not pointing fingers here but IMO a lot of TV'ers perhaps associate (maybe their own family members) with locals who may have debt issues and there may be some psychological need to assume that the majority of people are in debt as well. Even if you're not going to assume 'outright cash purchase,' (which is actually pretty common in my experience... we build and sell condos and houses and regularly sell units to people who come in like you might walk into your 7-11 and pick a few things up) if you just look at the basic cash flow required to purchase an X million Baht automobile, house, etc. (depending on who you're stalking or observing at the time) you're going to have to come to the conclusion that there are at least that many people who can afford to make these purchases. If you plug in the numbers, there are plenty of purchases that would probably make you scratch your head to know that the 'payments' likely total 200-300k Baht a month. Even living hand to mouth -which a lot people like to assume in other 'Ferrari in front of a shophouse' type thread-, that's not exactly a pitifully low cash flow level.

At that point you have to then queue the thread where you assume that these people must all be criminals or politicians.

So, as the average wage must be around 10,000 a month, where do all these non criminals or politicians get their multi millions from?

Excellent question, what is the average wage? (proof or link required)

[Heng]

Well, I'm not trying to keep up with the Chalerns and a don't give a rip about status -- but I don't see how any of these folks can afford a 1M + baht vehicle even on credit.

It's because not all of those cars are on credit and there are plenty of people who can afford it. Not pointing fingers here but IMO a lot of TV'ers perhaps associate (maybe their own family members) with locals who may have debt issues and there may be some psychological need to assume that the majority of people are in debt as well. Even if you're not going to assume 'outright cash purchase,' (which is actually pretty common in my experience... we build and sell condos and houses and regularly sell units to people who come in like you might walk into your 7-11 and pick a few things up) if you just look at the basic cash flow required to purchase an X million Baht automobile, house, etc. (depending on who you're stalking or observing at the time) you're going to have to come to the conclusion that there are at least that many people who can afford to make these purchases. If you plug in the numbers, there are plenty of purchases that would probably make you scratch your head to know that the 'payments' likely total 200-300k Baht a month. Even living hand to mouth -which a lot people like to assume in other 'Ferrari in front of a shophouse' type thread-, that's not exactly a pitifully low cash flow level.

At that point you have to then queue the thread where you assume that these people must all be criminals or politicians.

So, as the average wage must be around 10,000 a month, where do all these non criminals or politicians get their multi millions from?

Buying something for a Baht and selling it for 2-3 works pretty well.

[DDBKK]

I don't have time to read to read all pages so i can only hope that someone has already mentioned how black markets operate on a national scale and how our understanding of western economics do not apply to a country that for most part does not pay tax.

"The department targeted 1.98 trillion baht for the fiscal year ending Sept 30".

http://www.bdo-thait...n-the-news/4335

Now do yourself a favour and find the corresponding figures for the UK and see how they compare as a ratio of tax collected vs population (in the context of GDP of course), you may be surprised.

Here's the raw data, maybe sombody can figure out the comparative ratio before I get back from the gym:

UK GDP = $2.43 trill

TH GDP = $346 bill

Population UK = 62.6 mill

Population Thai = 69.5 mill

Tax collected UK = 466,634 mill (2011)

Tax collected TH = 1.98 trill.

Congratulations on completely missing the point I was trying to make. Did you read the black market part or just blissfully ignore that part?

Do yourself a favour and google it!

[thaibeachlovers]

Well, I'm not trying to keep up with the Chalerns and a don't give a rip about status -- but I don't see how any of these folks can afford a 1M + baht vehicle even on credit.

It's because not all of those cars are on credit and there are plenty of people who can afford it. Not pointing fingers here but IMO a lot of TV'ers perhaps associate (maybe their own family members) with locals who may have debt issues and there may be some psychological need to assume that the majority of people are in debt as well. Even if you're not going to assume 'outright cash purchase,' (which is actually pretty common in my experience... we build and sell condos and houses and regularly sell units to people who come in like you might walk into your 7-11 and pick a few things up) if you just look at the basic cash flow required to purchase an X million Baht automobile, house, etc. (depending on who you're stalking or observing at the time) you're going to have to come to the conclusion that there are at least that many people who can afford to make these purchases. If you plug in the numbers, there are plenty of purchases that would probably make you scratch your head to know that the 'payments' likely total 200-300k Baht a month. Even living hand to mouth -which a lot people like to assume in other 'Ferrari in front of a shophouse' type thread-, that's not exactly a pitifully low cash flow level.

At that point you have to then queue the thread where you assume that these people must all be criminals or politicians.

So, as the average wage must be around 10,000 a month, where do all these non criminals or politicians get their multi millions from?

Excellent question, what is the average wage? (proof or link required)

I'm going by what I see.

My wife makes 7,000 a month in a good low level job.

The vast majority of Thais are in low level jobs, many earning as little as 3,000 a month.

Allowing for Thais in banking type jobs that apparently earn between 10,000 and 15,000 I am ESTIMATING that the average wage is AROUND 10,000 a month.

By all means dispute that, but there are statistics and there are dam_n statistics, and from many years in Thailand I would dispute that most Thais earn enough to buy a multi million baht house or a million baht car, yet we see them everywhere.

[chiangmaikelly]

It's because not all of those cars are on credit and there are plenty of people who can afford it. Not pointing fingers here but IMO a lot of TV'ers perhaps associate (maybe their own family members) with locals who may have debt issues and there may be some psychological need to assume that the majority of people are in debt as well. Even if you're not going to assume 'outright cash purchase,' (which is actually pretty common in my experience... we build and sell condos and houses and regularly sell units to people who come in like you might walk into your 7-11 and pick a few things up) if you just look at the basic cash flow required to purchase an X million Baht automobile, house, etc. (depending on who you're stalking or observing at the time) you're going to have to come to the conclusion that there are at least that many people who can afford to make these purchases. If you plug in the numbers, there are plenty of purchases that would probably make you scratch your head to know that the 'payments' likely total 200-300k Baht a month. Even living hand to mouth -which a lot people like to assume in other 'Ferrari in front of a shophouse' type thread-, that's not exactly a pitifully low cash flow level.

At that point you have to then queue the thread where you assume that these people must all be criminals or politicians.

So, as the average wage must be around 10,000 a month, where do all these non criminals or politicians get their multi millions from?

Excellent question, what is the average wage? (proof or link required)

I'm going by what I see.

My wife makes 7,000 a month in a good low level job.

The vast majority of Thais are in low level jobs, many earning as little as 3,000 a month.

Allowing for Thais in banking type jobs that apparently earn between 10,000 and 15,000 I am ESTIMATING that the average wage is AROUND 10,000 a month.

By all means dispute that, but there are statistics and there are dam_n statistics, and from many years in Thailand I would dispute that most Thais earn enough to buy a multi million baht house or a million baht car, yet we see them everywhere.

So why is that? I mean Nissan just announced they are building another factory and Ford opened a new one this year and I think GM did too. 50% or more of Thai auto production is bought in Thailand. That's about a million new cars a year and only a couple of thousand new doctors?

[chiang mai]

I don't have time to read to read all pages so i can only hope that someone has already mentioned how black markets operate on a national scale and how our understanding of western economics do not apply to a country that for most part does not pay tax.

"The department targeted 1.98 trillion baht for the fiscal year ending Sept 30".

http://www.bdo-thait...n-the-news/4335

Now do yourself a favour and find the corresponding figures for the UK and see how they compare as a ratio of tax collected vs population (in the context of GDP of course), you may be surprised.

Here's the raw data, maybe sombody can figure out the comparative ratio before I get back from the gym:

UK GDP = $2.43 trill

TH GDP = $346 bill

Population UK = 62.6 mill

Population Thai = 69.5 mill

Tax collected UK = 466,634 mill (2011)

Tax collected TH = 1.98 trill.

Congratulations on completely missing the point I was trying to make. Did you read the black market part or just blissfully ignore that part?

Do yourself a favour and google it!

Perhaps you've overlooked that you also wrote, "a country that for most part does not pay tax", that means the majority or more than half, please remind us of the point you were trying to make but failed!

Edited October 26, 2012 by chiang mai