Current Political Divide and the Longer Term Consequences for Expats

[thailiketoo]

Robby. I am on a retirement visa switching to non imm b.. Business. I don't need to but I am.

I have a Thai company fully supported by total foreign money or 9 Thais have no jobs. Double normal Thai wages.

U was doing a BOI company. 3 months ago HUGE ASSISTANCE. now ZERO. I was told, 3 a week are leaving Chiang Mai. I was told currently government policy is they don't want us as they want ooorr uneducated people easier to control,

Their own officials told me this.

As my cash is all in overseas banks and i only transfer what I need week to week there is no risk.

To answer you BOI is Board if Investment. For foreigners. So things ARE getting worse and if this mob stays it will become harder in all retirees and expats

Marcusd. Via tapatalk

Which mob and what is, "3 a week are leaving Chiang Mai." 3 what?

[iancnx]

It's not significant except to those we help, and they are usually not even considered worthy to mop the floors of TPTB I'm talking about, as I said they'd rather see the rural poor kept in their place, not waltzing around with foeigners.

And you seemed to be conflating this SPENDING with "international investment", my point being one's got nothing to do with the other, if they kicked out the 99% of residents here not associated with MNCs, the real investment inflow wouldn't be at all affected.

Next you'll be saying they wouldn't dare ever enforce nominee PLCs fraudulently holding Thai land in resort areas because prices would plummet and a few corrupt officials would get egg on their face. . .

Now that's actually one thing I COULD see happening, relatively minor hiccup in the big picture but would be funny, som nam na. . .

And yes, that's definitely a low income by US standards, with a few kids would put you at the official poverty line.

I disagree with a number of your points.

As a retiree who owns condo's and a house with no debt I consider 90,000 baht expenditure per month into the local economy be it in the city, or in the country, to be significant compared to the average middle class Thai. You mention in your country this would be close to the poverty line. You are comparing chalk and cheese. We are not in the US or London for that matter.

I am not confusing expat expenditure with inward investment. My point is a significant amount or foreign currency is bought into the country by expats and spent on a daily basis, If we were encouraged to leave those foreign currency inflows would dry up, and, existing deposits would be shipped out. One might think this would have an effect on the local economy and deposit outflows might have some short term effect of liquidity.

Add to this a sale of thousands of foreign owned condos and likely outflows of currency as a result.

Additionally inward investment might well stall in a scenario where it was made difficult to reside as an expat - I am talking about international investors perception of the country here.... Would they rather deal with a negative Thai change in policy towards foreigners or go elsewhere?

This is all hypothetical of course, but your suggestion that if 99% of expats like me were expelled there would be little effect seems to be wide of the mark to me.

[Thai at Heart]

Calm down. It might get interesting, but it isn't going to get any more restrictive

The immigration and investment laws are about as restrictive as they could be and no one got seriously put off yet.

You have to give away 51% of your company and get treated like a pariah by immigration already. How bad could it get?

Give away 75% and have to employ 20 thais to get your work.permit?

I am confused now. I thought you could only own 49% of the company. How is it you came to own all of it. You had to in order to give 51% away.

It must be a very lucrative thing for you or you would not have brought it to this country.

If you give away 51%, how much do you own?

Let's not split hairs. Many an instance where the capital is brought by the foreigner and the shares go to thais. Apparently you can't legally give it away although many a joint venture business seems to accept it.

As I said...how much worse can it be, and yet the numbers of visitors long and short terms are still strong.

Who said I brought anything to thailand. In rwality, the immigration rules and investment rules couldn't get any harsher could they?

[Thai at Heart]

It's not significant except to those we help, and they are usually not even considered worthy to mop the floors of TPTB I'm talking about, as I said they'd rather see the rural poor kept in their place, not waltzing around with foeigners.

And you seemed to be conflating this SPENDING with "international investment", my point being one's got nothing to do with the other, if they kicked out the 99% of residents here not associated with MNCs, the real investment inflow wouldn't be at all affected.

Next you'll be saying they wouldn't dare ever enforce nominee PLCs fraudulently holding Thai land in resort areas because prices would plummet and a few corrupt officials would get egg on their face. . .

Now that's actually one thing I COULD see happening, relatively minor hiccup in the big picture but would be funny, som nam na. . .

And yes, that's definitely a low income by US standards, with a few kids would put you at the official poverty line.

I disagree with a number of your points.

As a retiree who owns condo's and a house with no debt I consider 90,000 baht expenditure per month into the local economy be it in the city, or in the country, to be significant compared to the average middle class Thai. You mention in your country this would be close to the poverty line. You are comparing chalk and cheese. We are not in the US or London for that matter.

I am not confusing expat expenditure with inward investment. My point is a significant amount or foreign currency is bought into the country by expats and spent on a daily basis, If we were encouraged to leave those foreign currency inflows would dry up, and, existing deposits would be shipped out. One might think this would have an effect on the local economy and deposit outflows might have some short term effect of liquidity.

Add to this a sale of thousands of foreign owned condos and likely outflows of currency as a result.

Additionally inward investment might well stall in a scenario where it was made difficult to reside as an expat - I am talking about international investors perception of the country here.... Would they rather deal with a negative Thai change in policy towards foreigners or go elsewhere?

This is all hypothetical of course, but your suggestion that if 99% of expats like me were expelled there would be little effect seems to be wide of the mark to me.

The influx of money from expats might not break the country, but people underestimate its value because they don't understand the multiplier effect.

Tourism is also undervalued in the GDP numbers because it is cash I hand.

Bear in mind also 90k per month is the same as what 115k in earned income. Top 5% of thai salaries. No doubt. Whole towns and resorts would dry up.

Phuket and pattaya would become wasteland. Maybe not a bad outcome.

[wym]

Not saying it wouldn't have any effect, but if they decided there was good reason to kick us out, the financial consequences wouldn't be enough to sway them - obviously 90% of the money spent on condos etc would stay in Thailand since the prices would adjust back to realistic levels IOW a very small fraction of the silly money currently being asked.

And I'm sure the impact on Phuket/Samui and especially Pattaya would be well foreseen and intentional.

Anyway my main point is that nothing of the kind is going to happen simply because we just aren't all that important, not even on the radar screen wrt government policies these days or basically ever.

Which is nice, being ignored is much better than having attention focused on the shenanigans we get up to.

[iancnx]

Not saying it wouldn't have any effect, but if they decided there was good reason to kick us out, the financial consequences wouldn't be enough to sway them - obviously 90% of the money spent on condos etc would stay in Thailand since the prices would adjust back to realistic levels IOW a very small fraction of the silly money currently being asked.

And I'm sure the impact on Phuket/Samui and especially Pattaya would be well foreseen and intentional.

Anyway my main point is that nothing of the kind is going to happen simply because we just aren't all that important, not even on the radar screen wrt government policies these days or basically ever.

Which is nice, being ignored is much better than having attention focused on the shenanigans we get up to.

I sincerely hope you are right - that we are not that important.

But I sense a growing feeling of anti-falang out there, (and there are some fairly high profile individuals said to be against expats generally) and if a change in policy in the future were to make things much harder, then what would be the consequences for the different groups of expats in the OP. Just interested in more varied views, not just the business perspective. Personally for me if I had to leave my comfortable life would cease to exist - not something many would wish to contemplate.

[wym]

if a change in policy in the future were to make things much harder, then what would be the consequences for the different groups of expats in the OP.

I suppose the consequences would depend on exactly HOW they "made things harder".

I would imagine one thing would be simply to raise the bar financially. Requiring decent health cover, ideally funding it as part of the public scheme, just more expensive as you get older, from 1000 say up to a 10K THB p.m. would be a start.

Doubling or tripling the income/assets formula, but really better to require that we prove we're actually spending "appropriate" sums each month rather than just proving we have the capacity.

Requiring STD/HIV testing.

Doing like Cambodia and making it illegal to marry a local once you get past a certain age.

We may think each of these measures would "hurt" different subsets in different ways, but I imagine many Thai would agree that those who hurt at all from any of them shouldn't actually be here in the first place.

[wolfmanjack]

Well I think everyone would acknowledge that change is around the corner irrespective of what party win what. The current political divide is the driver for change any which way.

I'm not sure there are any stats that indicate how important expat investment is. Hence my asking for views.

For example

if there are a 1000 guys out there similar to me (20k per annum) then total expenditure in thai would be £20 million

If there are 100,000 guys out there similar to me then total expenditure in thai would be £2 billion

That's just the retirees daily spend.

Not such a small amount perhaps.

Just to point out that, due to the 'multiplier-effect', that number ought to be several times larger.

The money we spend, then goes round-and-round within the economy, generating more wages & taxes & sales for locals.

Many of us also support more-than-one other person directly, which would also increase our relative worth, to the Thai economy.

Not that I'd ever expect any internal decision to take due account of us farangs, of course.

Ricardo, You are quite correct about the multiplier effect, for every Dollar (Pound, Euro, Yen ect.) that an expat or tourist brings into the Kingdom and spends it generates around a $5-$6 increase to the GNP! Right now Thailand is in a bit of a precarious situation given that Burma is opening up and Vietnam, Cambodia, Malaysia and Indonesia (not to mention India) are competing not only for tourist Dollars but for foreign investment as well. It would be hard to imagine that Thailand would go back to an isolationist existence after they have enjoyed such an explosion in their economy over the past few decades, however this fascist nut suthep does give me pause Once the dust settles I would imagine everything will remain much the same, after all Thailand does have one of the more restrictive immigration policies in place already

When you are trying to figure out the affect the money we spend has on the economy you have to look at both the money multiplier and the velocity of money.

The money multiplier, according to the 2004 data, is around 9 times which means for every baht deposited in a thai bank there is actually 8 baht injected into the money supply. the original 1 baht plus the 8 baht created by the bank loans = 9 baht.

The velocity of money is how many times the money spent changes hands before it is sucked out of the economy by savings and taxes. In 2004 thailand velocity of money was around 28.

Now you not only have to look at the velocity of money spent by the expat you also have to look at the money created by the banks and the velocity of money on the newly created money.

Then you have to take into account all the money injected into the economy by the taxes that are spent that would not have been available to be spent if the money was not created by the expat injecting it into the economy in the first place.

[iancnx]

Well I think everyone would acknowledge that change is around the corner irrespective of what party win what. The current political divide is the driver for change any which way.

I'm not sure there are any stats that indicate how important expat investment is. Hence my asking for views.

For example

if there are a 1000 guys out there similar to me (20k per annum) then total expenditure in thai would be £20 million

If there are 100,000 guys out there similar to me then total expenditure in thai would be £2 billion

That's just the retirees daily spend.

Not such a small amount perhaps.

Just to point out that, due to the 'multiplier-effect', that number ought to be several times larger.

The money we spend, then goes round-and-round within the economy, generating more wages & taxes & sales for locals.

Many of us also support more-than-one other person directly, which would also increase our relative worth, to the Thai economy.

Not that I'd ever expect any internal decision to take due account of us farangs, of course.

Ricardo, You are quite correct about the multiplier effect, for every Dollar (Pound, Euro, Yen ect.) that an expat or tourist brings into the Kingdom and spends it generates around a $5-$6 increase to the GNP! Right now Thailand is in a bit of a precarious situation given that Burma is opening up and Vietnam, Cambodia, Malaysia and Indonesia (not to mention India) are competing not only for tourist Dollars but for foreign investment as well. It would be hard to imagine that Thailand would go back to an isolationist existence after they have enjoyed such an explosion in their economy over the past few decades, however this fascist nut suthep does give me pause Once the dust settles I would imagine everything will remain much the same, after all Thailand does have one of the more restrictive immigration policies in place already

When you are trying to figure out the affect the money we spend has on the economy you have to look at both the money multiplier and the velocity of money.

The money multiplier, according to the 2004 data, is around 9 times which means for every baht deposited in a thai bank there is actually 8 baht injected into the money supply. the original 1 baht plus the 8 baht created by the bank loans = 9 baht.

The velocity of money is how many times the money spent changes hands before it is sucked out of the economy by savings and taxes. In 2004 thailand velocity of money was around 28.

Now you not only have to look at the velocity of money spent by the expat you also have to look at the money created by the banks and the velocity of money on the newly created money.

Then you have to take into account all the money injected into the economy by the taxes that are spent that would not have been available to be spent if the money was not created by the expat injecting it into the economy in the first place.

I totally get all that, though must admit surprised at the figures which suggest our modest foreign currency inflows are significant.

So do you have a view on the OP. If policy makers decide to make it tougher for some of us to remain here?

[Thai at Heart]

Well I think everyone would acknowledge that change is around the corner irrespective of what party win what. The current political divide is the driver for change any which way.

I'm not sure there are any stats that indicate how important expat investment is. Hence my asking for views.

For example

if there are a 1000 guys out there similar to me (20k per annum) then total expenditure in thai would be £20 million

If there are 100,000 guys out there similar to me then total expenditure in thai would be £2 billion

That's just the retirees daily spend.

Not such a small amount perhaps.

Just to point out that, due to the 'multiplier-effect', that number ought to be several times larger.

The money we spend, then goes round-and-round within the economy, generating more wages & taxes & sales for locals.

Many of us also support more-than-one other person directly, which would also increase our relative worth, to the Thai economy.

Not that I'd ever expect any internal decision to take due account of us farangs, of course.

Ricardo, You are quite correct about the multiplier effect, for every Dollar (Pound, Euro, Yen ect.) that an expat or tourist brings into the Kingdom and spends it generates around a $5-$6 increase to the GNP! Right now Thailand is in a bit of a precarious situation given that Burma is opening up and Vietnam, Cambodia, Malaysia and Indonesia (not to mention India) are competing not only for tourist Dollars but for foreign investment as well. It would be hard to imagine that Thailand would go back to an isolationist existence after they have enjoyed such an explosion in their economy over the past few decades, however this fascist nut suthep does give me pause Once the dust settles I would imagine everything will remain much the same, after all Thailand does have one of the more restrictive immigration policies in place already

When you are trying to figure out the affect the money we spend has on the economy you have to look at both the money multiplier and the velocity of money.

The money multiplier, according to the 2004 data, is around 9 times which means for every baht deposited in a thai bank there is actually 8 baht injected into the money supply. the original 1 baht plus the 8 baht created by the bank loans = 9 baht.

The velocity of money is how many times the money spent changes hands before it is sucked out of the economy by savings and taxes. In 2004 thailand velocity of money was around 28.

Now you not only have to look at the velocity of money spent by the expat you also have to look at the money created by the banks and the velocity of money on the newly created money.

Then you have to take into account all the money injected into the economy by the taxes that are spent that would not have been available to be spent if the money was not created by the expat injecting it into the economy in the first place.

I totally get all that, though must admit surprised at the figures which suggest our modest foreign currency inflows are significant.

So do you have a view on the OP. If policy makers decide to make it tougher for some of us to remain here?

The figures are significant. Its cash Monet, it goes to service jobs that normally sustain the lowest at the bottom of the food chain etc etc

[paddyjenkins]

Tourism is about 10 to 15% of the economy and that makes it vital...so thailand does need us. But even more importantly is that it is a part of the economy that supports those at the bottom of the economic pyramid, which makes it doubly valuable.

So cut out all the "we don't matter to those rich thais" and all that other expat bashing nonsense. Thailand is a pretty screwed up country and they need all the revenue they can get..period.

[wym]

Not saying not a lot of money, just that if/when they want to get rid of the vast majority of us that are just here for the girls, that factor won't count for much.

And tourism as a whole is much more important than the expat factor, totally different sectors.

The figures are significant. Its cash Monet, it goes to service jobs that normally sustain the lowest at the bottom of the food chain etc etc

And that's EXACTLY why those that run the place wouldn't care if that support were eliminated, would in fact work in their favor, the farang factor within Thai society really rocks the boat, they think we're nuts hooking up with those they see as monkeys only fit for scrubbing floors.

[aveabeeror2]

Where did you all get your crystal balls from? None of you know the answer.