But Just How Poor Is Thailand?

[sriracha john]

Boy all this is interesting but is Thialand poor?

They can't be too poor if they got 5 and half Billion baht just laying about the Treasury to hand out to select government officials for bonuses...

Officials set to receive bonuses

Many officials at the Finance Ministry will this year receive bonuses, equal to up to six months' salary, as the ministry was the best performing state agency last year.

Suparat Kawatkul, permanent secretary for finance, revealed that the Public Sector Development Commission's Office, for the second year, rated the Finance Ministry top in terms of performance among all 20 ministries by giving it 4.92 out of five for officials' performance in fiscal 2005.

Continued here:

http://www.bangkokpost.com/News/26May2006_news03.php

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sheesh.... 6 months salary as a bonus...

that's a nice little windfall... is it copied in the private sector anywhere?

[meemiathai]

What is the definition of being poor?

The last time I was in BKK I asked the massage girls, each of them told me that they work over 12 hours a day, no holidays all year round. 300baht for a 2 hour massage. Though enough money to support their family back in the village, I don't think they have much to spend on anything luxurious. I think that is quite poor.

My sister in law came to visit us in the hotel where me and my wife was staying. She nearly got knocked out when she heard what the price of the hotel was. She works over 12 hours a day in a factory earning less than 6000 baht a month. I think that is poor.

And for other thais I have not much idea.

I did feel uneasy though when I walked into the Emporium. Crazy prices!

[Heng]

Figures can be so misleading, everyone's heard of the impoverished north-east.

But in our village near Bandung, Udon Thani, pickups abound; the owner may have a shop making about 200 baht a day profit but he or she has got sons or daughters working abroad or in one of Thailand's industrial centres sending money back every month.

A lot of revenue and foreign investment (in this case I mean Thais abroad repatriating funds) doesn't make it into 'statistics and figures.' Along the same lines as what you mentioned above, Thais who own businesses abroad send funds home as well, not necessary to literally 'support' their folks or poor relatives as the Issanites do, but to invest in businesses and real estate. I remember doing this on a weekly basis in Chinatown in Houston when I was younger, explained to me when I was around 8 or 9, we'd make a cash deposit in Houston and then the funds would be credited and could be withdrawn by our relatives in Bangkok the next day, less a flat fee. Then whenever we visited, our funds would be ready for purchase of property.... always with the lesson "this is for the future... always plan ahead and you'll always be comfortable, it's what my father did, what his father did, and what you should do as well."

No wire transfer required, just ledger notations. There has always been quite a bit of hand carried cash traffic as well. I can't imagine what the scale must be for China who has more numerous and much larger permanent expatriate colonies worldwide.

[KhunPadThai]

A lot of revenue and foreign investment (in this case I mean Thais abroad repatriating funds) doesn't make it into 'statistics and figures.' Along the same lines as what you mentioned above, Thais who own businesses abroad send funds home as well, not necessary to literally 'support' their folks or poor relatives as the Issanites do, but to invest in businesses and real estate. I remember doing this on a weekly basis in Chinatown in Houston when I was younger, explained to me when I was around 8 or 9, we'd make a cash deposit in Houston and then the funds would be credited and could be withdrawn by our relatives in Bangkok the next day, less a flat fee. Then whenever we visited, our funds would be ready for purchase of property.... always with the lesson "this is for the future... always plan ahead and you'll always be comfortable, it's what my father did, what his father did, and what you should do as well."

No wire transfer required, just ledger notations. There has always been quite a bit of hand carried cash traffic as well. I can't imagine what the scale must be for China who has more numerous and much larger permanent expatriate colonies worldwide.

Heng,

This glimpse of the business ethic of your Thai family is fascinating. I gather that your family is Thai-Chinese? This kind of planning for the future by the family would seem to provide an enormous advantage over other families who plan very little at all. From within your family culture it must seem that most other families are just stumbling around financially, getting into stupid consumer debt, and failing to get the big picture of accumulating wealth.

I grew up in a typical middle-class family here in the US. Beyond the expectation that we would go to college, my family provided no long-term financial planning. I suppose that is the expected financial horizon of the nuclear family as compared to the extended family.

Would love to hear more from time to time about your family's financial strategies.

Khun Pad Thai

[Diablo Bob]

I grew up in a typical middle-class family here in the US. Beyond the expectation that we would go to college, my family provided no long-term financial planning. I suppose that is the expected financial horizon of the nuclear family as compared to the extended family.

I too am from a typical middle-class family in the US. I don't know you or your parents age, but in my case both of my parents were Depression era kids/students and I kind of think that considering their background they had no long term strategies.

I look back and strategies used today for asset management didn't work in the 30s, 40s and part of the 50s. Real Estate was a long term gainer but to the tune of 1.5% per annum (60's & early 70s) it wasn't until later in certain markets that it really kicked butt. In my part of California it wasn't until the late 90s that it started to perform.

Stocks, well again my family lost alot of money in 1929 and my parents counceled me on the stock market. They didn't trust it...........

How poor is Thailand...... not very!

How poor is the Thai Government, now that is another question.

[Heng]

A lot of revenue and foreign investment (in this case I mean Thais abroad repatriating funds) doesn't make it into 'statistics and figures.' Along the same lines as what you mentioned above, Thais who own businesses abroad send funds home as well, not necessary to literally 'support' their folks or poor relatives as the Issanites do, but to invest in businesses and real estate. I remember doing this on a weekly basis in Chinatown in Houston when I was younger, explained to me when I was around 8 or 9, we'd make a cash deposit in Houston and then the funds would be credited and could be withdrawn by our relatives in Bangkok the next day, less a flat fee. Then whenever we visited, our funds would be ready for purchase of property.... always with the lesson "this is for the future... always plan ahead and you'll always be comfortable, it's what my father did, what his father did, and what you should do as well."

No wire transfer required, just ledger notations. There has always been quite a bit of hand carried cash traffic as well. I can't imagine what the scale must be for China who has more numerous and much larger permanent expatriate colonies worldwide.

Heng,

This glimpse of the business ethic of your Thai family is fascinating. I gather that your family is Thai-Chinese? This kind of planning for the future by the family would seem to provide an enormous advantage over other families who plan very little at all. From within your family culture it must seem that most other families are just stumbling around financially, getting into stupid consumer debt, and failing to get the big picture of accumulating wealth.

I grew up in a typical middle-class family here in the US. Beyond the expectation that we would go to college, my family provided no long-term financial planning. I suppose that is the expected financial horizon of the nuclear family as compared to the extended family.

Would love to hear more from time to time about your family's financial strategies.

Khun Pad Thai

Thanks. Thai Chinese from the US actually. As for those "stumbling" around, I can't say I look at it that way all the time. It's all relative.

Anyway, I'm simply offering a bit of insight, just as you're doing, that's it's not all one way or the other and that gross generalizations for an entire society of credit, drugs, and rock and roll being responsible for this or that leave out large portions of the population where they don't apply. By the way, I know plenty of average middle class folks stateside who do quite a bit of financial planning family wise. Granted, IMO it does seem more common in cultures with more cohesive family structures.... for instance it seemed fairly pervasive in friends/families of Jewish heritage. Indian and Italian friends too now that I think of it... and then of course again common in American families of Eastern Asian descent.

Edited May 28, 2006 by Heng

[ace]

Threads like this are why I still check out TV even though I spend most of my time (not for too much longer I hope...) in UK. Quality.

China V. India argument interesting, good points by both posters, reminds me of an article I read just today in the Times. Apparently Indian stocks have been trading on a p/e ratio of 20 to 25 times earnings recently, compared to China at 12 to 13.5 times p/e. Apparently this is now in the process of correcting, with Indian shares moving lower. Even so it would appear the stock market tends to the pro-India camp. Presumably due to concerns over corporate governance and transparency in the main.

On topic I think Thailand is definately a developing economy. I expect with the introduction of good governance, anti-corruption, proper education system and basic social security we will see Thailand motor forwards. I expect Thailand to pass UK going the other way in about 30 years.

--Ace--

[Oogleman]

I dont think Thailand is poor is terms of ability to live happily off what they earn. Where i do think they are poor is in the quailty of education - especially at the higher levels.

I also wish they would make alcohol a hel_l of a lot more expensive (tax?) as over the last 6 years of staying in so called "poor" villages and mixing with locals in bangkok and other cities it is staggering the amount on their income that is wasted on alcohol.

Edited May 29, 2006 by Oogleman

[oopapasan]

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?

Coruption plain and simple

Edited May 29, 2006 by oopapasan

[Heng]

The problem is, when they can't afford it, there are plenty around who will make it. It's amazing how many folks know how to distill alcohol from just about every single fruit and grain there is.

I think it's questionable whether formal education will ever be able to teach the common sense of prudent consumption. IMO placing the blame on the media/product manufacturers/and gov't is a cop out for families not teaching common sense/practicality/frugalness/etc. at home.

[KhunPadThai]

Thanks. Thai Chinese from the US actually. As for those "stumbling" around, I can't say I look at it that way all the time. It's all relative.

Anyway, I'm simply offering a bit of insight, just as you're doing, that's it's not all one way or the other and that gross generalizations for an entire society of credit, drugs, and rock and roll being responsible for this or that leave out large portions of the population where they don't apply. By the way, I know plenty of average middle class folks stateside who do quite a bit of financial planning family wise. Granted, IMO it does seem more common in cultures with more cohesive family structures.... for instance it seemed fairly pervasive in friends/families of Jewish heritage. Indian and Italian friends too now that I think of it... and then of course again common in American families of Eastern Asian descent.

So, let me ask this: what is the view of astute real estate people in Thailand about the current conditions both in Thailand and in other siginigicant markets? Do they have a traditional valuation method against which they measure current opportunities? For example, do they only buy cash-flow positive properties? Is there a property bubble in Thailand now? What about China and the US? Do they time the property market or are they prepared to buy pretty much at any time and hold? How does the US RE market compare to Thailand?

I grew up in an Irish-American family that valued education, but looked a little askance at business. It is only as an adult that I have become interested in economics and investing, probably because I have managed to move up a notch in the economic scale as a benefit of improved educational opportunity and the great rising tide that has lifted so many boats in the US over the last thirty years. At the moment I am most interested in understanding/managing risk and observing financial bubbles.

[elkangorito]

I think that Thailand is rich...in the sense that when all the money has gone, these people will still be able to look after themselves while the western countries will be in total ruin.

Edited May 30, 2006 by elkangorito

[sramkok-pratum]

i don't think thais are poor. Once they have a house with 30 years loan , it's hard to find thai homeowners pull equity for paint, remodeling bath&kicthen or any home improvements. they try to payoff the loan as fast as they can.

(unlike,my parents in law , they got equity line to build $50,000 swimming pool how stupid was that while they still have 19 years to go and now they are 58 and thinking about reverse mortgage ) .

Most of thais that i know , they have land from their parents they just ask the loan for build the house on that land. If nothing goes wrong they can have 2-3 house in their life time and pass it to their kids.

[Heng]

There are certainly locals out there who go for the extra finance and refinancing/double mortgage. After all, the banks and finance companies market it, just like anywhere else in the world.

It all depends on who you know. Most of the folks I know either purchase for cash or treat property financing like a bridge or swing loan (where you pay it off in a few months to a few years while the interest is still inexpensive). But yes, I also do know of more than a few of the high interate rate risk exposure, payments for 15+ years crowd as well.