A Comment On the Local Economy

[sceadugenga]

I think that last night would have been getting close to my tenth Chiang Rai Loy Khratong celebration and I couldn't help comparing this one and my first.

Back in the day half the neighbor's kids turned up to watch our fireworks and I only noticed one other lantern launch point in the village area.

Last night it was family only, the sky all around was filled with lanterns while our teenagers posed and snapped away with their smart phones.

More lanterns, definitely more fireworks and kids running around with high tech phones.

Now no one's won the lottery, I haven't noticed any increase in the standard of education or better jobs, but the locals seem to have made a definite move into the middleclass.

[villagefarang]

I am not sure I would label people middle class just because they own a few more toys. Debt levels seem to have increased but people do seem to be working harder to find alternative sources of income, some more successfully than others.

On the surface one sees a patina of modernization but what still lingers beneath takes time to develop. These days one may need to travel further afield to find people squatting on a dirt floor with rat on a stick but I see that as a good thing.

On some levels I welcome this modernizing trend but it does have a destabilizing effect, as people become more and more competitive, and less rooted in the harmonizing traditions of the past. Parents often seem ill-equipped to deal with what is happening in their children’s lives.

In the village environment some of the older generation, who are tasked with caring for younger kids while parents are off making money, are still illiterate, which makes it hard for them to supervise children who are on the internet all the time. While there has always been a generation gap, it does appear a bit more extreme these days.

Edited November 18, 2013 by villagefarang

[villagefarang]

I guess people aren’t feeling very talkative these days. With our varied backgrounds, interests, and tenure in the area I would expect we hold a variety of views on the local economy. Our observations may be quite diverse but I guess we will never know.

Thanks for making the effort Scea and sorry there were no takers.

[sceadugenga]

Yes, would have made a topic for debate.

I'd like to see a "changes I've seen" thread, I was waiting in MacDonalds with friends the other day and chatted to an elderly American who claimed to have lived in Chiang Rai for about 40 years.

What stories he would have to tell..

[villagefarang]

I would suspect some might resist and resent all change while others, like me, welcome change. How one views change would most likely depend on how long you have been in Thailand and what changes you have witnessed over that timespan.

[Big Gary]

I have been reading lately in the Bangkok Post that ALL Banks are experiencing a spiraling Debt Defaults on all Loans ( Cars and Houses especially) Credit Card Default is also on a rapid increase. It has been too easy(Banks fault) for a Thai to get a BIG Loan which they cant afford. A brand new car for 60/80,000 deposit and on the never never for up to 8 years. Motor Bikes/Phones/Flat Screens etc all on HP etc. I have wittnesed this in my village as the word gets around as Cars/Bikes etc are being repossed near daily. Thats been my observations.

[A1Str8]

I think that last night would have been getting close to my tenth Chiang Rai Loy Khratong celebration and I couldn't help comparing this one and my first.

 

Back in the day half the neighbor's kids turned up to watch our fireworks and I only noticed one other lantern launch point in the village area.

Last night it was family only, the sky all around was filled with lanterns while our teenagers posed and snapped away with their smart phones. 

More lanterns, definitely more fireworks and kids running around with high tech phones.

 

Now no one's won the lottery, I haven't noticed any increase in the standard of education or better jobs, but the locals seem to have made a definite move into the middleclass. 

 

 

They are just deeper in depts.

[WitawatWatawit]

My 25 years in Thailand have been spent entirely in an urban environment, so any knowledge I have of village life is gleaned from articles or posts from people like yourselves. It seems from what I have read above that a similar situation is occurring in the villages as what occurred after the 1997 crash. (deja vue - all over again ) Back then it was the trappings of a more materialistic lifestyle - cars, TVs, stereos, motorbikes. Today, other things that are a little cheaper have been thrown into the mix - mobiles being the best example - but these, I would guess, are having a much more widespread and diverse effect on village life. While TV might have raised general wealth expectations 15 years ago, the mobile/internet age of today seems more specifically to have affected younger people and has created a social scenario that makes them want more than their parents, who still seem happy to advance their social status with a new car. Does having a smart phone make them feel more sophisticated? Does internet access give rise to higher and more costly expectations? And can their parents meet those expectations? Hmmm - I wonder how many iPhones are being repossessed? Is this what you would call an economic change?

Wit.

Edited November 23, 2013 by WitawatWatawit

[sceadugenga]

I suppose one of the goals to strive for to achieve true civilization is the same sort of personal and credit card debt that citizens of first world countries can boast of.

Edited November 23, 2013 by sceadugenga

[WitawatWatawit]

I suppose one of the goals to strive for to achieve true civilization is the same sort of personal and credit card debt that citizens of first world countries can boast of.

- I think they're striving very hard to achieve that. According to S&P, household debt is now 77% of GDP, up from 55% in 2008. In this part of the world, only Malaysia can top that, apparently. But the banks are vulnerable, so if local economies collapse, are the villages in a better position to ride it out than us city slickers? It seemed they did after 1997 and 2008.

[wooloomooloo]

It has been too easy(Banks fault) for a Thai to get a BIG Loan which they cant afford.

You missed the part about personal responsibility, Gary.

There will be those that can afford the repayments on the first major loan, but, have decided that further credit won't be a problem as it's all going so well. Hmm.

[Big Gary]

It has been too easy(Banks fault) for a Thai to get a BIG Loan which they cant afford.

You missed the part about personal responsibility, Gary.

There will be those that can afford the repayments on the first major loan, but, have decided that further credit won't be a problem as it's all going so well. Hmm.

They get their first item on Credit and keep up payments for a short while and get a good Credit Rating so go get something else on Credit and so on. Then their payments way outdo their income. Self Inflicted yes.

[sceadugenga]

But with plenty of encouragement, the lenders accept no personal responsibility at all.

[villagefarang]

You’ve got to love the way they work the village loan system. Get a bridge-loan to payback what they owe, in order to get a new loan. It is all seen as "spending money" and not really "investment money."

Nobody seems to save anything but I have always felt you need to reach a certain level of savings, where it provides income, before you really become vested in saving.

Without reaching that threshold there is no incentive to save and that doesn’t even take into consideration the present infatuation with immediate gratification. Everybody wants everything right now.

[WitawatWatawit]

VF, maybe this has parallels with the "me generation" of the West, which was characterised by hedonism and narcissism. The "me generation", the baby boomers, revelled in new-found freedoms after the war (and the great depression), so maybe that's the kind of thing going on in the villages. Years of deprivation, some of it the flow-on effect of 1997, and then suddenly a bit more money appears - the Bt1 million per village scheme, easier loans, strong rice prices for several years, the rice pledging scheme (real or imagined gains) ...that can be a heady concoction to the down trodden.

[wooloomooloo]

But with plenty of encouragement, the lenders accept no personal responsibility at all.

Oh, come on. My wife and I walk into your restaurant and enjoy a delicious meal. When it's time to pay I realise I haven't the funds to pay.

Is it the fault of the owner to have allowed us to sit and dine?

Sent from my iPhone using Thaivisa Connect Thailand

[sceadugenga]

People rarely do this because it could be classed as fraud or theft so the business sees this as a safety net.

Repossessing a meal may be little more complex than a phone or a car or a house.

A rather simplistic libertarian point of view.... but then most of their points of view are.

Edited November 25, 2013 by sceadugenga

[Will27]

But with plenty of encouragement, the lenders accept no personal responsibility at all.

Oh, come on. My wife and I walk into your restaurant and enjoy a delicious meal. When it's time to pay I realise I haven't the funds to pay.

Is it the fault of the owner to have allowed us to sit and dine?

Sent from my iPhone using Thaivisa Connect Thailand

You're comparing apples and oranges there.

The lending institutions are not completely blameless in a lot of these cases.

We all know banks are in it for the profit and to answer to shareholders, but

they still have to have some social responsibility. They should be trying to

implement ethical consumer lending.

They were largely to blame for the 2008 financial crisis and most of them

got off scott free.

[jdinasia]

Thailand does have a Credit Union organization that is quite interesting.

[monty9]

Most people refer to 2008 as an event, the Thai economy like most economies are still in the aftershocks of that year, and it's not over yet. Banks are in business of making money, loans personal and credit cards will always have a element of risk, but they cover themselves against that risk. Thai economy may well be finding its true level after the initial keynesian approach. True recovery to the world economies is still a long way to go.

If household debt is 77% of GPD, its still in a better place than most world economies.

[monty9]

News flash... 77% quoted, is actually personal plus government debt to GPD... again not too bad really.