Growing Pains: Thailand's Maturation

[aTomsLife]

Currently tourism amounts to about 10% GDP. That money is of course cycled through the economy, itself creating even more wealth (the old adage: it takes money to make money). So in the last ten years we’re looking at 12% --15% of GDP, year on year, as a reasonable estimate.

But what about in the past? Say, from the onset of the Vietnam War to present, by decade. What percentage of GDP was tourism to Thailand’s economy overall? And how has it impacted things here for the average person, compared to the rest of the region?

In other words, where would the country be without the last sixty years of tourist revenue?

I’m also interested in how opium helped Thailand grow, but am wary that such a topic by itself would bring out the bashers, rather than keep the discussion focused solely on economic growth. (Remember, Britain grew its economy selling opium, too, for example, so try to stay objective.) I’m adding the aforementioned here as an addition. If you have a take on this second point, feel free to add it to your comment. If not, simply focus on the first part, and we can all proceed from there like the gents we are.

Edited November 24, 2014 by aTomsLife

[fey]

you have the current figures, now you want past ones?

without tourism it would be far behind closer to cambodia or loas i'm guessing. things would not be as clean, infrastructure not as good. possibly no bts/mrt, more disease...

my guess would be vietnam would overtake as dominate player in the region due to their business savvy and manufacturing cooperation with other countries we are currently seeing.

i dont believe thailand is capable of that type of cooperation.

[aTomsLife]

Yes, I'm interested in past figures--in knowing if in, say, 1990, tourism accounted for a higher percentage of GDP than it does today?

You say Thailand would be like Laos and Cambodia, but as a country Thailand was still far more stable than most of its neighbors twenty years ago. Thailand would still have gotten the bulk of the manufacturing contracts it did, and still have had more agricultural products, as well as a larger fishing industry than its neighbors (with perhaps Vietnam being an exception for the latter).

And one can't discount decades of opium sales, either.

Certainly, without tourism, Thailand wouldn't be as wealthy as it is today. But, again, to rephrase, how much further behind economically would the country really be?

[CaptHaddock]

Currently tourism amounts to about 10% GDP. That money is of course cycled through the economy, itself creating even more wealth (the old adage: it takes money to make money). So in the last ten years we’re looking at 12% --15% of GDP, year on year, as a reasonable estimate.

You have a peculiar misconception there, that results in overcounting the tourism sector. All sectors of the economy including tourism, manufacturing, agriculture, etc. must add up to 100% of GDP by definition. It's true of every sector that the production of that sector becomes income for people and companies which gets spent and so on and on in a virtuous circle. Tourist money is not special in that regard except that it boosts foreign currency, which Thailand has plenty of anyway since it is almost always a net exporter. Therefore if you tack on 2% to 5% for knock on effects for the tourism industry, you have to add on something for manufacturing and agriculture and all the rest, resulting in a total GDP of more than 100% of GDP. So, that's obviously wrong.

Thai incomes have been boosted since the 80's mainly by the increase of manufacturing, not tourism although tourism has grown as well. Opium was a govt monopoly in the 19th century up until outlawed by Sarit around 1959 due to pressure from Western countries.

[aTomsLife]

Currently tourism amounts to about 10% GDP. That money is of course cycled through the economy, itself creating even more wealth (the old adage: it takes money to make money). So in the last ten years we’re looking at 12% --15% of GDP, year on year, as a reasonable estimate.

You have a peculiar misconception there, that results in overcounting the tourism sector. All sectors of the economy including tourism, manufacturing, agriculture, etc. must add up to 100% of GDP by definition. It's true of every sector that the production of that sector becomes income for people and companies which gets spent and so on and on in a virtuous circle. Tourist money is not special in that regard except that it boosts foreign currency, which Thailand has plenty of anyway since it is almost always a net exporter. Therefore if you tack on 2% to 5% for knock on effects for the tourism industry, you have to add on something for manufacturing and agriculture and all the rest, resulting in a total GDP of more than 100% of GDP. So, that's obviously wrong.

Thai incomes have been boosted since the 80's mainly by the increase of manufacturing, not tourism although tourism has grown as well. Opium was a govt monopoly in the 19th century up until outlawed by Sarit around 1959 due to pressure from Western countries.

Thanks for your response. I understand what you mean about GDP needing to total 100%. If I might amend what I wrote to better clarify, I would posit that it's by way of the "virtuous cycle"--i.e., money making more money--whereby we see the increase in overall GDP that I'm referring to.

In other words, even though the total must amount to a 100%, the figure accounting for the 100% itself gets bigger, year on year.

That said, it makes sense that Thai incomes grew more as a result of manufacturing than tourism or through the drug trade.

Still if possible, I would like to get a clearer picture on how tourism has helped grow Thailand year on year. But according to my--admittedly superficial--research, I don't think those statistics have been kept long enough to provide any kind of definite answer.

[Emster23]

As George Bush so brilliantly put it "Make the pie higher"! Not so sure about use of "takes money to make money". To me that means have to invest something and then perhaps the money will come in.... unless of course doing the dating link scams or other low to no cost enterprises. I wonder how many of those tourist dollars are spent on local businesses compared to international corporations, overseas bookings etc.... spending on locally owned businesses results in much higher "knock on" effect to local population

[Jimbo2014]

Opium helps - If you smoke enough of it you can predict the Thai economy will grow at 4% next year.... Ooops

[jamiesilver]

i could of sworn the title said - Growing pains - Thailands Masturbation...

[jpinx]

"Tourism" would need to be defined. The USA basically established Pattaya as a R&R centre during the Vietnam war. Before that there was very little short-term tourism, but there have been waves of arrivals of non-Thais for various reasons over many hundreds of years. The Chinese influx probably had most effect in what they knew as "South Land", since they were business savvy, but you can't ignore the considerable Indian population, some of whom are 3rd and 4th generation Thai born, but still describe themselves as "·Indian". Siam was a successful agricultural economy, but suffered the vagaries of climate variations, making planning a bit haphazard. One could reasonably blame that for the famous mai pen rai attitude to circumstances over which they have no control and the ability to tighten their belts and continue till times got better again.

Opium was producing too much money to be totally stamped out, but nowadays it's been replaced by YaaBa. Just because a country's income is "black" or "illegal" does not mean it shoudln't be counted. UK has just had it's "black market" included in the GDP figures used by the EU in calculating the contribution, hence the huge increase. The alleged billions currently being unearthed in anti-corruption investigations would have a significant impact on the figures if included. Tourism itself has a very large black market, including the many scams frequently alluded to in here. Calculating Thailands actual GDP would be at best a calculated guess.

Edited November 26, 2014 by jpinx

[aTomsLife]

i could of sworn the title said - Growing pains - Thailands Masturbation...

haha.

Managing expectation vs. reality: probably helps explain why, at present, there's 800 views and only 8 (now 9) replies.

[Thai at Heart]

Currently tourism amounts to about 10% GDP. That money is of course cycled through the economy, itself creating even more wealth (the old adage: it takes money to make money). So in the last ten years were looking at 12% --15% of GDP, year on year, as a reasonable estimate.

You have a peculiar misconception there, that results in overcounting the tourism sector. All sectors of the economy including tourism, manufacturing, agriculture, etc. must add up to 100% of GDP by definition. It's true of every sector that the production of that sector becomes income for people and companies which gets spent and so on and on in a virtuous circle. Tourist money is not special in that regard except that it boosts foreign currency, which Thailand has plenty of anyway since it is almost always a net exporter. Therefore if you tack on 2% to 5% for knock on effects for the tourism industry, you have to add on something for manufacturing and agriculture and all the rest, resulting in a total GDP of more than 100% of GDP. So, that's obviously wrong.

Thai incomes have been boosted since the 80's mainly by the increase of manufacturing, not tourism although tourism has grown as well. Opium was a govt monopoly in the 19th century up until outlawed by Sarit around 1959 due to pressure from Western countries.

Thanks for your response. I understand what you mean about GDP needing to total 100%. If I might amend what I wrote to better clarify, I would posit that it's by way of the "virtuous cycle"--i.e., money making more money--whereby we see the increase in overall GDP that I'm referring to.

In other words, even though the total must amount to a 100%, the figure accounting for the 100% itself gets bigger, year on year.

That said, it makes sense that Thai incomes grew more as a result of manufacturing than tourism or through the drug trade.

Still if possible, I would like to get a clearer picture on how tourism has helped grow Thailand year on year. But according to my--admittedly superficial--research, I don't think those statistics have been kept long enough to provide any kind of definite answer.

The logic is true, issue is that tourism I.e. businesses outside the main quality hotels are turning cash which is undeclared. So in and of itself, the tourism business is likely to be underestimated much more easily than say the car industry which involves large MNCs and public companies.

Then of course you have the multiplier effect if employing hundreds of thousands of people in tourism on low wages who spend thtr vast majority of their earning versus corporations banking their money in more developed businesses.

So tourism is still vital to Thailand and probably accounts for more than three stated amount of GDP. It moves cash into many people hands versus more developed manufacturing industry that needs heavy capital to move.

Pay 100 waitresses 10k per month or 10 engineers 100, and measure how much cash turns in the economy, and how far it reaches.

One goes much further and wider into the economy than another.

[GOLDBUGGY]

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Currently tourism amounts to about 10% GDP. That money is of course cycled through the economy, itself creating even more wealth (the old adage: it takes money to make money). So in the last ten years we’re looking at 12% --15% of GDP, year on year, as a reasonable estimate.

You have a peculiar misconception there, that results in overcounting the tourism sector. All sectors of the economy including tourism, manufacturing, agriculture, etc. must add up to 100% of GDP by definition. It's true of every sector that the production of that sector becomes income for people and companies which gets spent and so on and on in a virtuous circle. Tourist money is not special in that regard except that it boosts foreign currency, which Thailand has plenty of anyway since it is almost always a net exporter. Therefore if you tack on 2% to 5% for knock on effects for the tourism industry, you have to add on something for manufacturing and agriculture and all the rest, resulting in a total GDP of more than 100% of GDP. So, that's obviously wrong.

Thai incomes have been boosted since the 80's mainly by the increase of manufacturing, not tourism although tourism has grown as well. Opium was a govt monopoly in the 19th century up until outlawed by Sarit around 1959 due to pressure from Western countries.

I agree with a lot of what you have said. In that Thailand is known as the land of plenty. That it is an exporting country and that manufacturing plays a significant part in that. But I think the point our friend tried to make here was that this 5% figure used for GDP from tourism is not a true reflection of what tourist dollars actually bring in. In this regard he would be correct.

Consider for a moment the 1,000 Baht the Bar Girl gets from a Sex Tourist. The 500 Baht she sends home to Momma & Poppa and the rest she spends from the food cart lady or a sexy new outfit. Does that money count as Tourist Dollars? Does it even count as GDP? Or how about the new pair of shorts or swim suit the tourist buys,but doesn't claim the Vat Tax back later, or the tax on alcohol and cigarettes he buys when he is here. Does that show up as Tourist Dollars and part of that GDP?

Look at Construction in the Manufacture Sector. How many Condos are being built for Farangs? Are they in fact not just long term Tourists? Would they be here and decide to live here if Thailand wasn't Tourist Friendly? Would other companies set up business here? So how much of this construction money goes into the calculation of Tourist Dollars? Would zero be the correct answer? And this hidden list goes on and on my friend.

In my book his estimate of tourism generating 15% of the GDP is low! Not all of the GDP is being counted and especially not all of the GDP is separated into what tourist actually brings into this country, or the jobs they create.

[micmichd]

To me, "Maturation" sounds like a threat: a society is ecinomically mature when everything is sacrificed to money.

GDP is rather one-dimensional, everything counts.

Kill lots of people, then you need more police, they get paid, so killing increases GDP.

Bomb an area, or tear down buildings, someone has to put off the bricks and gets osid, congratulations, you increased GDP.

Sell land to foreign investors, they drive the inhabitants away who then commit suicide, you increased GDP.

AIDS, lung cancer, car accidents etc. count for GDP.

Raising babies counts nothing as long as baby's wear is used by following babies.

Sustainability counts nothing, overfishing counts a lot.

Tourists litter a lot, their garbage still counts because someone gets paid to put it away.

This is the inherent problem with GDP: you don't get a balance.

[micmichd]

Opium is of course a contribution to GNP as long as the distribution is legal and can therefore be taken into account. So is AIDS.

Tourism can be taken into account as long as tourists pay for taking photos. If they use their mobiles and put everything on Facebook, then the contribution to Thailand's GNP wouldn't be too much, would it?

Scam counts a lot if professionally done, officially it's called advertising, and some people make a good living out of this.

Raising chicken is rather contra-contraproductive, the trash they sell at Mc Donalds counts more because it costs more. You may face yourself being immune to antibiotics now, to find out is GNP-positive. Then you die of blood-poisoning, you need a funeral, costs a lot, counts a lot.

Want some more?

[micmichd]

Last not least, every scandal published in Thaivisa is a contribution to GNP. So, please go ahead, economy needs more of these.

Quantity counts in GNP, not quality.

[aTomsLife]

Geez, micmichd, you must be fun at parties.

Some rather bizarre statements you've made. There is nothing inherently threatening about maturing. In fact, just about everything you wrote says more about you and your jaded world view than it does contribute to a rational discussion. I'm not going to go through all you wrote because, frankly, it's not worth my time. But if I'm going to limit myself to one example, it's this gem that stands out most:

"Kill lots of people, then you need more police, they get paid, so killing increases GDP."

If what you wrote was true, Cambodia would've emerged as an economic powerhouse. Last time I checked, though, when people die they stop producing and consuming, which results in a loss of GDP.