But Just How Poor Is Thailand?

[baboon]

Following on from the overcharging topic.Here in Chumphon city,the ammount of new housing {1m Baht and above} being gobbled up [by Thai people] is astonishing,not to mention these land cruiser cars or 4x4s or whatever they are called.Where is the money coming from?I could not live even half as well in the U.K.I honestly do not begrudge these people a single satang,but take for example the bar I am writing this from.I was joking with the owner about tipping to be told how folks live here in abject misery.When I asked about the cars and the houses she smiled and said I knew too much!Of course,there is poverty here like the rest of the world,but how bad is it really?I would welcome your comments.

[Donz]

The poverty is pretty bad, but there are alot of worse places then Thailand

[skylar]

It's called credit. Pretty much the same as anywhere else. Remember, Mercedes-Benz's largest market before the Economic Crisis was none other than Thailand.

[britmaveric]

3rd world country and majority of the citizens are spread out in the rural areas. I think for the most part the people are alright if they live within their means - thats the key IMHO.

[drewtown]

Right, the bank owns the asset until fully paid.

It's called credit. Pretty much the same as anywhere else. Remember, Mercedes-Benz's largest market before the Economic Crisis was none other than Thailand.

[PeaceBlondie]

Maybe some of us just see the most obvious displays of newly-bought wealth, even if it is bought on credit. Hua Hin is plagued with big SUV's on the weekend; I assume they come from BKK. When I visit the big city, I'm amazed at the number of 7-series BMW's, 6-liter Benz supercars, the occasional FERRARI, and too many big station wagons to count.

On a lesser scale, is there nobody in Thailand, over the age of 21, who doesn't own at least one motorcycle? Surely there is, but there are a lot more motorcycles here than in Shanghai, for example, where bicycles are more common, and the motors are smaller.

We are told that the mobile phone problems are due to 30 million phones being used in this country. Subtracting the children, that's well over half of all Thais.

How many working class Thais are deep in debt?

[baboon]

Credit I understand,but in order to obtain credit they must have good ratings from a bank,therefore no credit risk,therefore a good income,surely?

[Donz]

Credit I understand,but in order to obtain credit they must have good ratings from a bank,therefore no credit risk,therefore a good income,surely?

Its easy to fool the bank, My friend got a loan in Thailand on our last trip there and he was born there but lived in australia his whole life, he had to pretend the house was his and his sister trained him what to right when the papers were given to him

[markuk]

like any country the rich are very rich and the poor are very poor. This said they may be poor in money terms but they live to the means they know. People can still be happy on what we weterners would consider poor however they may consider themselves rich.

I dont think Thailand is generally as poor as the outside world thinks..

[tuky]

Credit I understand,but in order to obtain credit they must have good ratings from a bank,therefore no credit risk,therefore a good income,surely?

Didn't a well known politician, or atleast acting poly recently make loans easier to get?

[wolf5370]

Awful lot of loan sharks too. Credit is always get-able at least until you run out of ancestral/public gifted land and other assets to use as collateral, that is.

I know someone that nearly had someone else's house reposessed when she decided it would be good collateral to use her friend's house against her gamgling loan debt. Loan sharks didn't care that it was not her house and played real heavy with the real owners. Their kids (married to farang) are still paying this other person's loan off.

I don't think the loansharks have a legal leg to stand on, but that's easy, they can cut the legs off their opposition to even things up!

--------------------------------------------------------------Edit-----------------------------------------------------------------

Just found out that the house was put in the other person's name for some wiered reason (the kids lived overseas and were not there when the house had to be paid for) - the 'other person' was family and did the exchange, but said the house builders would only sign the property over to the person who delivered the money (most likely a lie) - so she put it in her name. Later she used the paper work she got at the point of sale to get a loan - the house, I think, had been transfered to the rightful owner, but she had paperworkm and the sharks accepted it. Nice.

Edited May 22, 2006 by wolf5370

[trt]

Yup all borrowed money... a lot of people take out loans that they can never repay just so they can be seen driving around in a Benz or BMW...

Give you face you see....

[tuky]

What is the most recent avergae wage?

[sriracha john]

Credit I understand,but in order to obtain credit they must have good ratings from a bank,therefore no credit risk,therefore a good income,surely?

Credit cards are available to those that make US$390 a month.... (15,000 baht)

[KhunMarco]

Yup all borrowed money... a lot of people take out loans that they can never repay just so they can be seen driving around in a Benz or BMW...

Give you face you see....

I remember reading somewhere shark-loans are very common. Might be the old lady next door.

Even among very young Thais, they want the new mobile now, don't matter it will cost twice with the interest.

Bad money management is a plague in this country, so they say.

[tuky]

The local "loan shark" is a family friend. They are a great source of credit.

[Heng]

Where is the money coming from?

For some folks, it's merely an accumulation of property, interest/business/rental income over generations. For some, it's credit. The latter is almost a moot point as in the end those with the former philosophy end up with the goods (whether it's toys or real assets), just like everywhere else in the world. Don't be fooled by the cars or new houses. It'd be more accurate to count property deeds (it's easy to overlook the much higher value older houses and buildings around that are 100% equity) and fixed accounts.

[tuky]

I deleted several posts including my own.

Feel free to PM me for clarification, but too much was said for comfort.

[ColPyat]

Of course,there is poverty here like the rest of the world,but how bad is it really?I would welcome your comments.

It is difficult to say.

Thailand has with China the biggest gap between the poor and the rich in Asia. You have approximately 10% who are rich, and own about 90% of the land and assets. You have about 20% - 30% middle class with access to proper financing and credit, who appear richer as they are in reality.

The rest are poor. I don't know the exact percentage, but there are large sectors of those poor who own 5 rai or less land, and have to make do with a yearly income of ten to twenty thousand baht per family. Many of those do during long periods of the year mainly eat what they can hunt and gather in the fields and forests as employment for them is mainly seasonal, during planting and harvest season.

The poor are nowadys in huge debt thanks to Thaksin's easy loan schemes (and the traditional neglectance of the previous governments as well). Especially harmful will turn out the change in the sor por kor 401 legislation (land that is originally reserved for the poor), where different than before that land title can now be given as security to loans. Due to the lack of education and money management skills there is a very high possibility that those sectors will within the next few years slip into even more trouble.

There is a steady migration to the few industrial centres from the vast underdeveloped areas upcountry, which does cause enormous stress to the village societies, and contributes to the rising violence in these industrial centres.

The poverty is also mainly regional. I would say that nowadays the poorest areas are in the north, closely followed by Isaarn (some might disagree there). The south is generally better off, due to more rain and a generally better educational level.

Edited May 22, 2006 by ColPyat

[backflip]

"The poor are nowadys in huge debt thanks to Thaksin's easy loan schemes"

Brilliant analysis, and your spelling is almost spot on.

[sriracha john]

Nice to have those email notifications of posts written in their entirety, Tuky...

amusing to see Heng discrediting someone simply for hanging out with people above his own circle of contacts...

[skylar]

Hum, I'd forgotten about the loan sharks. They are endemic in Sydney among the Viet community and these people get gangsters to bash up family members of the borrower when they fail to pay up. Because the Viet community is tight lipped about their business, it just goes on and on. Very dangerous.

[tuky]

Nice to have those email notifications of posts written in their entirety, Tuky...

amusing to see Heng discrediting someone simply for hanging out with people above his own circle of contacts...

I shouldn't have said anything anyway mate. My mistake.

[Heng]

Sure.

[Dragonman]

Credit I understand,but in order to obtain credit they must have good ratings from a bank,therefore no credit risk,therefore a good income,surely?

Credit cards are available to those that make US$390 a month.... (15,000 baht)

My missus obtained a Credit Card, limit 30,000 baht. Her income zero, and she told them such.

[Ricardo]

Yup all borrowed money... a lot of people take out loans that they can never repay just so they can be seen driving around in a Benz or BMW...

Give you face you see....

So expect increasing debt-problems, and a rise in average-sickness of rural water-buffaloes, as the BoT now steadily-increases interest-rates.

[samran]

I deleted several posts including my own.

Feel free to PM me for clarification, but too much was said for comfort.

In the light of day, what you did was a very very good call, mate.

[astral]

Loan sharks abound. Rates of 10% per month are not unusual.

When people do not repay the money, then the collateral is seized.

Pop down to your local pawn shop and see the auction of unclaimed items.

In the extreme this is land and people loose their livelihood.............

However on the poverty scale Thailand is not too bad.

Go over to India and see the people who live and beg on the streets.

It is quite distressing.

You do not see that level of poverty in LOS.

[cclub75]

However on the poverty scale Thailand is not too bad.

Go over to India and see the people who live and beg on the streets.

It is quite distressing.

You do not see that level of poverty in LOS.

Agree. And hopefully.

On the "credit" problem now : it is pandemic.

One of my employee : good income (25 - 30 000 THB + 10 000 for his wife). 35 years old.

He took a loan for 1 million THB to buy land+building house.

On 30 years !

Minimum Lending Rate after 3 years (3 first years have fixed rates : 4.5 then 6 then 6.5). The MLR is now 7 % or 7.25.

So, in a way, he is not poor. But in another way, he is a slave.

If interest rates shot up (and they might), he will pay, pay, pay, all his life.

One accident (30 years...), and the house will be seized.

All the country works and thinks like that, that's the main issue.

[ColPyat]

Loan sharks abound. Rates of 10% per month are not unusual.

When people do not repay the money, then the collateral is seized.

Pop down to your local pawn shop and see the auction of unclaimed items.

In the extreme this is land and people loose their livelihood.............

However on the poverty scale Thailand is not too bad.

Go over to India and see the people who live and beg on the streets.

It is quite distressing.

You do not see that level of poverty in LOS.

I think it is difficult to compare India with Thailand.

Yes, India has poverty far more extreme than Thailand. On the other hand India has a far higher developed indigenous industry, especially manufacturing, and far better universities. There is more accountability and transparency in the sythem as well. While Thailand has stagnated, India has boomed in the recent years.

Here in Thailand, loan sharks and pawn shops are different things. Loan sharks are underground economy, and mafia controlled (the successful ones), while pawn shops are perfectly legal businesses.

Edited May 23, 2006 by ColPyat