Tourism concerns

[mos]

Do the members believe that the Baht should be devalued to promote tourism .

[ubonjoe]

Not visa related. Moved to the general forum.

[Fiddlesticks]

No. I believe it should be devalued because it is BETTER FOR ME when I have money brought over. Practicing my Thainess.

[chrisinth]

I think you are over rating tourism.

Before they start taking drastic actions like that, they need to clean their act up and make it a country of interest again for tourism.

[mesquite]

Pretty much all currencies, including the Baht, are in the "race to the bottom."

[sdanielmcev]

No.

[Berkshire]

Pretty much all currencies, including the Baht, are in the "race to the bottom."

Hmmm, I would think that if "all currencies" were in the race-to-the-bottom, it would mean no change in currency exchange rates.

Generally speaking, the baht and US$ are doing fine. I'd be worried if I had loads of rubles, though.

[Soutpeel]

Funny this thread suggesting government manipulation of the THB while other posters in the "oil," threads accuse the government of manipulation of the fuel price and calling them banana eating monkeys

[TooPoopedToPop]

A baht devaluation would no doubt increase tourist numbers, as well as boost exports.

What would be some of the possible negative effects?

Obviously, imports would be more expensive, but Thailand produces much of its basic needs.

Its hard not to see it as a good thing for people who don't buy a lot of luxury products.

[Gecko123]

OP:

Thailand doesn't control the value of its currency as your post implies. Thailand has a floating currency and its value is determined by the demand for its currency in relation to other currencies. The main way a government can influence its exchange rate is by raising or lowering the short-term interest rate. When interest rates are lowered, less foreign money is attracted to its capital markets and typically the value of the currency drops as well, and vice versa.

When a central bank adjusts the short term interest rate wide sectors of the economy are impacted. For example savers, borrowers, employment, housing, exporters, and importers are all impacted. While the impact on tourism might well be factored into an overall evaluation of a proposed interest rate change, it is doubtful that this would be the primary motive for an interest rate change, unless the country's economy was heavily dependant on tourism, which Thailand is not.

Edited December 15, 2014 by Gecko123

[Digitalnomade]

yes Thailand is heavily dependent of tourism. people don't know what the are talking about. most money come from the tourism industries. if people rent, buy condo,... it s thanks to tourism. you kill tourism, you kill the country. simple as that.

[IMA_FARANG]

yes Thailand is heavily dependent of tourism. people don't know what the are talking about. most money come from the tourism industries. if people rent, buy condo,... it s thanks to tourism. you kill tourism, you kill the country. simple as that.

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That's an old mistaken fantasy, Farangs have.

I guess it makes them feel important.

Much of Thailand's income has little to do with Tourism .less than 20% of it's foreign income comes directly from Tourists.

Yes, there is a effect from items made in Thailand and purchased by tourists, but it is still Items made in Thailand and exported that is the main foreign exchange earner for Thailand.

For some years now, the most important source of foreign income for Thailand is, like it is in many other countries, the products that are manufactured or assembled here in Thailand, and exported (one way or the other) from Thailand.

If, for example, if a Japanese factory assembles a automobile in an assembly pant that has 2000 Thai workers, each one paid a salary for their job in that factory. then the economic effect for Thailand of the income the Thai workers receive is far more important than what a tourist pays for a few nights in a Thai hotel.

Thai buyers (consumer spending) is rapidly becoming the driving force in the Thai economy.

Bottom line: looking at real generated income figures, the effect on the Thai economy is far greater from exports from Thailand than that from tourism and has that way now for many years.

Edited December 16, 2014 by IMA_FARANG

[inwardglee]

I am not sure whether it is a falang thing to declare tourism vital for Thailand, or any country. But we know that a sector, as little as it may seem, can create a chain reaction if it is doing well or not.

I am Swiss, and Switzerland has a multitude of sectors that contribute to its wealth, and I see that everybody always looks carefully at tourism numbers, we take that tiny fraction of the overall economy serious.

In the official numbers of governments, it is always hard to tell what tourists or immigrants contribute as tail wagging the dog. Official statistics are incapable to state why this or that amount of money has flown into a country. Incoming money is booked for export of services. How would anyone be able to see for what service export the incoming money came from.

What is tourism anyway in Thailand? How to define? Are the retirees included who leave back their savings and wealth in LOS? When crossing the countryside of Thailand, especially Isaan, seeing nice houses anyone knows they have sprung up by the inflow of falang money, and wow, Isaan looks quite different by that than thirty years ago ...

Multitudes of Thai women got married to falang, live in the West may be, and when there is a pressure in their home family, they shoot in money. My ex-wife, Thai, now being a Swiss police woman, sends money to her sister for chemotherapy with the hope she survives her cancer. Without that, she would be dead, leaving a son and husband without income. What plight would that cause to overall Thai society? Is the money sent included in the tourism sector? Is there a sector that counts for all falang money flowing in from wives or ex-wives who became emigrants?

I have a friend here who tried his luck here in Thailand when getting retired. I see that three different women got wealthy by him, while he has no money anymore except his pension. Is that included in the tourist numbers?

I believe that Thai authorities are well aware that there is no social system here, and that falangs (seen as tourists) in many cases fill in that gap, providing funds for so many abandoned women with their kids.

German saying: Das Zünglein an der Waage: the little tongue tipping the balance. We heard in theory that a butterfly can make a bridge crumble. In economics that happens more often than anyone expects, then called the "black swan".

[Robert24]

A baht devaluation would no doubt increase tourist numbers, as well as boost exports.

What would be some of the possible negative effects?

Obviously, imports would be more expensive, but Thailand produces much of its basic needs.

Its hard not to see it as a good thing for people who don't buy a lot of luxury products.

Well a weak baht would certainly lead to higher inflation which is something the BoT was trying to tackle. high inflation is not good for the economy and usually hurts the weakest most (i.e. those without hard assets). Also the baht is a free floating currency so the BoT or Thai government cannot just devalue the currency. They can lower interest rates trying to weaken the baht but that may lead to other problems, i.e. further acceleration of lending growth etc.

if you want to look at what is happening if you have a weak currency, take a look at the Rubel and let me know if you think that is good for the Russian economy.

[VegasVic]

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I think you are over rating tourism.

Before they start taking drastic actions like that, they need to clean their act up and make it a country of interest again for tourism.

Tourism is indeed important to Thailand on many direct as well as ancillary levels, however the export sector is far more important, but both would greatly improve if the baht were to weaken. The BOT will likely not have to take any substantial actions to try and weaken the Baht, this will happen all on its own with the rotation out of Asian assets, as foreign investor funds in the SET sell their assets and exchange their Baht for Dollars, Yen, Euros and Pounds as they expatriate their funds. Thailand being a relatively small market in world economic terms really doesn't have as much power over where their currency trades as you would think, my guess would be that as the Baht weakens there will be a point in time perhaps a couple years from now where the BOT will once again try and tie the Baht to the U.S. Dollar for stability.