how free is the free market in Thailand?

[hermespan]

Economists and libertarians put on your thinking caps!

I just posted a specific FXS question to the SE Asia forum and now wonder in general...

If you compare Thailand to its ASEAN neighbours how pure capitalist is the marklet place and how much is there intervention by the State and monopoly corporations?

Money supply

Lending rates

Capital controls

etc

Seems to me, that based on my brief but over 25 years of trips in Thailand that Thailand had or maybe still has, many more restrictions on economic activity than Cambodia, making it closer (financially speaking) to communist Vietnam. I am not speaking as a perjorative, but factually, in numbers and in in terms of economics, not politics or society.

A related question could be how independent is Thailand economically, in terms of trade balances etc. Does the economy (government related but separate question?) of Thailand have to submit to the will of other markets or is it self-sufficient? And is that even a good thing?

[NOC]

[beechguy]

They seem to be able to create scams on a regular basis, so I would say it is very free.

Edited September 10, 2015 by beechguy

[recycler]

Thailand as an economy is run by a small group of Sino-Thai family conglomerates that mutually agree on how to optimize their profits.

[Suradit69]

Money supply

Lending rates

Capital controls

To some degree, every country (tries) to exert some control on these things. Much of the havoc, past and present, in the US, Europe, Japan, China ... has prompted governmental reaction or, arguably, come about in reaction to such things as the various forms of QE that have be used to (attempt to) manipulate liquidity, exchange rates and lending rates. The Central Banks or other government agencies attempt to influence lending rates and to dictate allowable margin in investment purchases, minimum capital cushions for banks, how far stock prices can fall, etc.

Political intervention undoubtedly lead to the debt crisis in 2007/2008 and seems headed toward even worse potential consequences, nor only in China, but in debt laden, shaky economies in the west.

...factually, in numbers and in in terms of economics, not politics or society.

It's really impossible to separate the three and "factually" is a relative term since much of government manipulation is hidden behind smoke and mirrors and, even in western countries is undertaken while fully aware of the potential political consequences.

These days all the markets in the world seem to rise and fall in (over) reaction to politically engineered fiascoes or in anticipation of Central Bank's rate changes or further QE or liquidity pumped into banks. In the US right now, prices move not so much because of fundamentals but because of uncertainty as to when/if the Fed will hike rates and you can be assured that next year what they may or may not do will have to take into consideration the national elections.

Edited September 11, 2015 by Suradit69

[gandalf12]

They seem to be able to create scams on a regular basis, so I would say it is very free.

But only if you are Thai so not totally free

[Suradit69]

Thailand as an economy is run by a small group of Sino-Thai family conglomerates that mutually agree on how to optimize their profits.

In most countries wealth and power is controlled by a tiny faction no matter how hard they try to sell the myth of democracy. In most of "modern" history, Europe has been controlled by the aristocracies of one sort or another and in the US now control of wealth and ownership of government is increasingly in the hands of a few ... despite the ludicrously expensive and farcial elections held there regularly.

US wealth inequality - top 0.1% worth as much as the bottom 90%

http://www.theguardian.com/business/2014/nov/13/us-wealth-inequality-top-01-worth-as-much-as-the-bottom-90

Edited September 11, 2015 by Suradit69

[recycler]

Thailand as an economy is run by a small group of Sino-Thai family conglomerates that mutually agree on how to optimize their profits.

In most countries wealth and power is controlled by a tiny faction no matter how hard they try to sell the myth of democracy. In most of "modern" history, Europe has been controlled by the aristocracies of one sort or another and in the US now control of wealth and ownership of government is increasingly in the hands of a few ... despite the ludicrously expensive and farcial elections held there regularly.

US wealth inequality - top 0.1% worth as much as the bottom 90%

http://www.theguardian.com/business/2014/nov/13/us-wealth-inequality-top-01-worth-as-much-as-the-bottom-90

I fully agree with you about Europe and the US, but Thailand is even far worse.

According to the Economist in an article of October last year, 0.1% of Thais own half the nation’s assets, a concentration of wealth that makes America’s mind-bogglingly unequal wealth distribution (where 0.1% of citizens own 22%) look like a socialist dream come true.

One of the symptoms is that there is no competition, for example 2 family owned breweries control 95% of the beer market in Thailand and keep the prices high, CP group owns everything from the pigs food to the shop where they sell the sausage at 3 to 4 times the price of a top brand sausage in western Europe where they do have competition. Locally manufactured BMW's and Mercedes are twice the price of the same models in Europe, not because taxes, but because the distributors in the hand of a few agree to keep the prices high.

[oxo1947]

Thailand as an economy is run by a small group of Sino-Thai family conglomerates that mutually agree on how to optimize their profits.

What is their names recycler------ and before you send them to me maybe you had better place your tin foil lined hat on so they don't microwave read your thoughts..............................

PS And if you want to quote the libel laws --PM them to me I will post.

[yellowboat]

Hong Kong is the best, but so darn expensive to live. Many Thais have bank accounts there or Singapore. If money comes from overseas, that is how you even things up. To be successful in Asia, you have to play to the strength and weaknesses of each country and territory.

[SOUTHERNSTAR]

Thailand as an economy is run by a small group of Sino-Thai family conglomerates that mutually agree on how to optimize their profits.

What is their names recycler------ and before you send them to me maybe you had better place your tin foil lined hat on so they don't microwave read your thoughts..............................

PS And if you want to quote the libel laws --PM them to me I will post.

You can do some research yourself but, lets start with CP, which owns 7/11, Macro, CP foods, True and massive farming ventures on about 600 000 rai. Then you have several others that own assets like Thaibev, Hotel groups like Centara and Robinsons. If I remember correctly Thailand has the +- 15 th worst wealth inequality in the world (you can have a look and the CIA fact book to verify the exact position. There was an article in the BKK post a while back and the figures was approximately that the top 10% of land owners owns 60% of the land (measured by area not number of plots) and the bottom 50% owns 10%.

[toooa]

The free market does exist in Thailand, it's all the black market and some of the grey market business that goes on. Obviously the normal, white, taxable market is subject to the most government intervention and is therefore the least free. On the other end of the scale, the purely black market is 100% free, except that in order for it to prosper, it requires payments to the white market controlling officials...ie: corruption. It is a continuum between the poles of Black (free) & white (controlled).

The success of businesses on the books often benefits from crony capitalism, where the "good people" are put into positions of interest to facilitate the success of certain favored businesses at the expense of others. Rampant in Thailand, where business all about having "connections".

Foreigners are severely restricted by labor laws and visa rules in terms of what they can do legally here...we all know why that is of course, something to do with the locals not being able to successfully compete in a real free market.

A good example of the inefficiency of the controlled market is the English teaching industry. So many regulations and so much red tape that the schools can't get good experienced foreign teachers, and if they do, can't keep them. In their quest for control the ministerial brainiacs are retarding their country's development. They don't care though, as long as they get to keep their parasitical perches.

The more government, the less free market. Thailand seems determined to follow the foolish footsteps of the West in swelling the role of government and the parasite classes while convincing the public that the government is there to take care of them, keep them safe...the usual BS. The United States was at it's best when government limited and the market was the most free, allowing economic activity free from hindrance. With a massive increase in government interference over the last century, the US is now an empire in decline. Europe is also in decline and still the idiotic voters choose socialism over the free market.

[toooa]

[quandow]

I remember some time within the last six months or so reading how Thailand changed a contract with a large car manufacturer (Nissan?) and declared they owed so much more now in taxes. If they can do it to the big dogs, I imagine they can put the screws to just about anybody. Every business owner I've met had a horror story or two of how Thainess bit them in the butt.

Edited September 12, 2015 by quandow

[scorecard]

Thailand as an economy is run by a small group of Sino-Thai family conglomerates that mutually agree on how to optimize their profits.

In most countries wealth and power is controlled by a tiny faction no matter how hard they try to sell the myth of democracy. In most of "modern" history, Europe has been controlled by the aristocracies of one sort or another and in the US now control of wealth and ownership of government is increasingly in the hands of a few ... despite the ludicrously expensive and farcial elections held there regularly.

US wealth inequality - top 0.1% worth as much as the bottom 90%

http://www.theguardian.com/business/2014/nov/13/us-wealth-inequality-top-01-worth-as-much-as-the-bottom-90

I fully agree with you about Europe and the US, but Thailand is even far worse.

According to the Economist in an article of October last year, 0.1% of Thais own half the nation’s assets, a concentration of wealth that makes America’s mind-bogglingly unequal wealth distribution (where 0.1% of citizens own 22%) look like a socialist dream come true.

One of the symptoms is that there is no competition, for example 2 family owned breweries control 95% of the beer market in Thailand and keep the prices high, CP group owns everything from the pigs food to the shop where they sell the sausage at 3 to 4 times the price of a top brand sausage in western Europe where they do have competition. Locally manufactured BMW's and Mercedes are twice the price of the same models in Europe, not because taxes, but because the distributors in the hand of a few agree to keep the prices high.

Ultimately meaning that the rich get richer and the poor get poorer.

Also meaning that the rich get more power and more control, and get richer...

Edited September 12, 2015 by scorecard

[richard10365]

No market is 100% free. For example, have you heard of quantitative easing? The US federal reserve controls the interest rates on loans it gives to big banks. The lower the cost of the loan, the more money that is borrowed and reloaned out to businesses and individuals. The supply of money demanded and supplied impacts the money market exchange rates (among other things) making imports and exports either more or less expensive due to the exchange rates. Or the borrowing is used to start businesses which stimulates the market. A true free market would have no intervention by the government and let the economy collapse or expand according to market conditions.

Also, don't confuse democracy and the free market. They are about as related as good year tires and spinach. Thailand doesn't currently have a democracy but their market is about as free as anyplace else.

[beechguy]

They seem to be able to create scams on a regular basis, so I would say it is very free.

But only if you are Thai so not totally free

The Afircans on Soi 3, Suk. in Bangkok seem to make a living.

[beechguy]

As to income inequality, I think it probably is more of a disadvantage in Thailand, because it does seem to be more monopolized . In the U.S. it has more to do with poor financial education.