1:20 a.m. at Nana on a Friday Night

[FAT_AUSSIE]

 

The economy has no effect whatsoever on the people living on the villages because they are entirely decentralized from BKK and produce their own food and sell to each other or even exchange it with each other!

 

So does that mean if a MNCorp like, Honda or GM turn about and say we dont want to make cars in LOS anymore, the workers familys back up in Bahn Nok will be just fine?

 

Not sure about that, How many people pour out of BKK on the longer public hollidays to go home-shit loads! Think about those poeple and the generouse percentage of thier monthly income that would'nt be going up country had they no work.

 

You'd be surprised CT. Imagine cash in LOS originating from the employer going out to the rural families via the employee, then being used to purchase goods that are often made by the companies in BKK that employ the villagers children. see the loop? I think BKK industries are essential to rural Thailand.

 

I can't give the man at the bowser banannas for petrol just like he can't give his supplier som tam for goods recieved. Does'nt work like that.

 

FA.

 

[ChristianTroy]

That would go way too deep into the details to lay it all down but scratching on the surface a little should be okay! These factory jobs you mention create exports goods in large amounts, I think only 15% of them stay in the country. Thailand exports goods worth round about 110 million USD per year and the biggest part of it is Rice and Textiles!

 

I read in a journal that every 6200th Thai owns a car which isn't older than 2years. That is round about 1,000 Thai people in the entire country, the others are all bought on leasing contracts which fail to be completed by over 70%, this has an impact of the economics like a fly hitting a wall! Textiles and rice are different and here I must fully agree with you. Economics is about resources, production, distribution and consumption of services and goods. And by having a closer look on the demographics in Thailand you will notice the extremely high rate of short time emplyoment. That doesn't build up to buying power what an economy needs to grow! If it wasn't for the export the country would be a dessert right now and since the villagers don't get a piece of the pie they have created their own system and when I mean villages I am not talking about Cities like Khon Kaen I am talking about the small dusty villages where our brownish looking companionship girls are coming from. Here Thai economy doesn't take place because none of the goods that they sell on the market have taxes on it, the government sees nothing from it and gives nothing in return nor intends to change things. Here it is the village economy that takes place, basically what you have said just that the Honda Factory is a banana tree! If my source is correct than 32% of all Thais are living under these circumstances, there is no buying power so they exchange goods! A slow down on Thai economy has no effect on these people and I thought it was clear we are discussing it in this context since we were talking about boardwalk birds!

 

However, discussing Thai economics is frustrating because government is xenophobic and doesn't realize that the brand new Honda cannot be afforded by average Thais but by farangs that's why it causes me a headache when I see what is happening at the moment! Bars contributing taxes, need supplies, need drinks, hotels, hotel staff, laundry, car rentals, taxies etc... everything that is influenced by tourists presence is put in stake with stupid actions like at the moment. This blind arrogance that they could survive without the tourists is too much for me to describe. Every satang given from a farang to a thai is giving the thai buying power! A child would understand it, these xenophobic doesn't!

[Old Hippie]

Should also note, Saturday morning 3 a.m. Nana lobby, I was quoated 5K bht for short time...reason being she really needed the money...I try to tell these whores I only pay for experience...NOT inexperience...

[Gadfly]

As to the "Thailand is getting poorer" statement I don't find it accurate in the absolute sense. If the real economy grows by 3 per cent the country is - in my logic - getting 3 per cent richer, albeit at a slower rate, and not poorer.

 

Let me provide a short (it's Sunday night, so this will be short) synposis about why a the current GDP growth rate in Thailand is troubling:

 

- The government itself acknowledges that Thailand is having economic problems. See this 30 April edition of 30 April 2007 leading article from The Nation about how the government announced "measures to revive the flagging economy and ward off job losses have been sent to the Finance Ministry for inclusion in a state stimulus package." Governments don't acknowledge these problems or make these sorts of announcments unless they have to, and Thailand has to.

 

- If you want something concrete, look at sales of automobiles. Car sales go down when confidence is down because it is a major purchase you can always put off when you are concerned about the economy, and a 30% decline on year-on-year sales says the Thai middle class is obviously concerned.

 

- Anything below 5% starts to create unemployment problems. Even when the projections were at 4%+, the commentary was negative. See BMI :

Thailandâ??s economy is set to experience a slowdown in 2007, with GDP expected to expand at its slowest rate in six years. Our core scenario envisages a deceleration in the growth rate to 4.4% this year,...

The projections are now down to 3%. I know this organization is not popular with some people here, but the World Bank's April 2007 Report on Thailand provides one of the best current summaries of where the Thai economy is at. Even if you disagree with their policy recommendations, it is pretty hard to dispute their assessment of where the economy is at. The report is long, but the overview (the link is to the overview) is short and easy to read.

 

- The problem, in a nutshell, is as follows: 70% of Thailand's economy comes from exports. The factories that supply those exports are near capacity, which limits the ability to increase exports with the exisiting factories. New factories requires new investment. Investment is way down, particularly new foreign investment. I don't think any of this, thus far, is disputed by anyone. Now here is my commentary: this is why I think measures that spook foreign investors, such as adding new restrictions on foreign investment in Thailand by amending the Foreign Business Act, imposing capital controls and anything that sounds like the property of forigners is being seized (and many current measures have that ring), are very bad idea.

[chuckwoww]

Couldn't it be simply that Thailand can't compete with China when it comes to cheap labour costs?

[playtheblues]

Valid arguments for a TROUBLED economy, an economy with problems or a stagnating economy or an economy on its way to becoming poorer if correct measures are not being taken.

 

I just commented on the semantics. A growing economy is not really "poorer" in the absolute sense of the word. If GDP is 100 units in real term in year n and 103 in the year n+1, semantically speaking the economy on the whole is, cet par not "poorer". But it can have more more troubles and many of its citizens can be poorer.

 

Mine was just a note on logic or language. We are professionals, arent we, so we are keen on the semantics. In substance your arguments about a stagnating economy seem be valid but that's another issue.

 

 

[playtheblues]

China's low labour cost economy challenges the whole quasi feudal Thai labour market setup. The spoiled Thai oligopols have reaped enormous profits by exploiting the submissive loyalty of the uneducated Thai labour force. Since Thai business oligarcs are not advanced industrialists or entrepreneurs in the Western sense, they can only compete by keeping a low labour cost type of industries and thus do not wish to advance the technological or value added level of Thai industrial structure. Such progress would imply a better educated labour force and expose Thai business leaders to international competition from advanced engineering, management, product development etc. Instead they want to stay in the comfortable low value added structure, which has been very profitable until now - until the growing competion from China - due to an undervalued baht. This is why all the talk has not been on competition by advancing productivity but on keeping favourable exchange rates.

 

Given this deeprooted socio-cultural quasifeodalism, I am less optimistic than maybe Gadfly is about the possibility that more capital by foreign investment would significantly improve the situation. Up to a point labour productivity would increase but, given the low level of education, giving labour more machines can only increase output that much, then marginal return of capital will soon come into play. Or in Paul Krugman's words, total productivity, thus including also capital productivity, would stop increasing quite soon. But of course, foreign investments can help to change attitudes and in that way contribute to breaking up the quasifeodal labour market structure, add mangerial skills, better product development, on the job training for workers etc.

[Hardy641]

While I mainly agree with the posts about teh Thai economy in this thread I don't agree to put the blame on the coup and the current guys in power.

The Thai economy is definitely in decline. Business is going very slow and most private investors take a wait and see approach until the next (hopefully democratic)government will be elected. Thus, donâ??t expect any changes (at least not for the better) before 2nd quarter 2008.

 

But who is to blame for it? I believe it isnâ??t fair to put the blame on the current government. The measurements the â??old guysâ?? introduced (30% capital deposit and amendments to the FBA) only accelerated a trend originally started by â??Thaksinomicsâ??. They are just 8 months in power â?? much too short to be the cause of the current economic slam.

The economical growth during the years of 2001 to 2004 has been generated mostly due to local demand triggered by cheap and easy-to-get loans. What Thaksin did was a gamble, which works as long as the economy is growing 7% or more a year. Already in 2005 and 2006 this growth couldnâ??t be reached and a lot of Thai business people have been expecting hard times ahead despite Thaksinâ??s propaganda.

For early closing, this government hasnâ??t changed anything. All has been introduced by TRT particular by Purachai who has been backed by Thaksin that time. All these measurements are in place since 2002 and after the coup things have been actually loosing up at little with many after hour places popping up in Bangkok (Spicy, Tunnel, Spicy 2â?¦). So again donâ??t blame the current government for it but the previous.

You might blame the current government for not reversing this nonsense though!

 

[chelseafan]

That's what I call a god observation!

 

The country didn't get poorer and BKK is the most unrepresentative city for Thailand of all.

 

It is the the new rules that has been enforced on the city, it is a major loss of business, when a bar looses 20k to 30k per night than this is a major loss and when the leases increase there is no other way but firing some of the girls.

 

Down here I don't see increased desperation, actually I think Pattaya had an amazing high season which also adds up to the problems BKK has right now. Torrenova mentioned it, the people have to take care of their money a little bit more and that made large amounts of BKKist going to Pattaya!

 

Exactly what the lawmakers want, but nobody believes me!

 

I actually believe that the "law-makers" want it both ways, they want to shed LOS of its image and bring in the caribbean families, whilst maintaining (reluctanctly) the whore-mongering crowd

[chuckwoww]

I actually believe that the "law-makers" want it both ways, they want to shed LOS of its image to bring in the caribbean families, whilst mainting (reluctanctly) the whore-mongering crowd

 

Good observation....there may be room for both kinds of tourism to exist side by side. In fact I think quite a few 'normal' tourists find the naughty side of Thailand a tourist attraction in itself. Hubbies have even been known to find compelling reasons to go back to Thailand on their own...usually for business of course.