Value of Sex industry to Thailand

[Lord Toad]

There has been much speculation about exactly what sex tourism and prostitution is worth to Thailand.

I caught a newspaper article a couple of weeks back which said prostitution account for 10 – 14% of Thai GDP (Gross domestic Product). That got me thinking because if it is true, or anywhere near the truth, it makes it just about as important as Thai’s gems and jewellery business. And therefore if closed down would cause massive harm to Thailand’s economy.

So with a little free time I surfed the net and came up with some very interesting figures. There are many different bits of information, all of which must be in part guestimates, although good methodology has been used.

These were 3 bits of information I extarcted:

Quote 1 "In Thailand, close to 300 million dollars was transferred annually from urban to rural areas by women working in the sex industry. Significantly, this was much larger than the budgets of many development programmes funded by the Thai Government. "

 

Quote 2 "A Thai study estimated that the sex industry generated revenues equivalent to 10 percent of Thailand's GDP, and a 1997 Thai survey found that only 62 percent of the 104,000 persons employed in 7,800 sex establishments were prostitutes, reflecting the importance of "support staff." (page 9). Thai prostitutes in urban areas sent an estimated $300 million a year to their families in rural areas (page 10)."

 

Quote 3 "In Thailand, where prostitution is highly visible but illegal, more than 500,000 tourists engage prostitutes annually. Annual income from the sex sector is estimated at between $22.5 and 27 billion, or about 10 and 14 per cent of GDP."

The figure of 300 million dollars from urban Bangkok to the North is interesting because I presume it comes from bank statistics. As a matter of interest the whole village scheme (1 mil. Baht to 70,000 villages) is worth 1,610 Mil. $, so the 300 mil from urban Bangkok will, I suspect, be worth more than that scheme to Northern Thailand.

The 38% support staff does not, I assume, include hotels, taxi drivers etc. I would safely suggest that the real figure is one for one, and if you include money home it probably means one prostitute is supporting 3 + people.

The last piece of information is suspect because Thai GDP this year is forecast at 5,208,600 million baht, or about 121 billion $. Of course those are the official GDP figures and it is officially accepted that the black (unofficial) economy could be another 8 – 13%. I have seen other estimates of 20 +% to 43%. My own experience would suggest official estimates are always low (they have got to be!) and so you take the guess you wish, but what ever the figures are significant.

Now the crunch question is what are we, filthy farangs, worth to all of this. I think the 500,000 figure for tourists using prostitutes is low. I have seem the figure of over 1 million used based on single male arrivals from key countries (Europe, Americas, Japan, Korea, Middle East, Oceania). If you split the difference then say 750,000. And then there is the question of how often? Clearly some who live here maybe hundreds of times, whereas for some visitors may only be 1 or 2. If you say 2 times and assume an average spend of $50 (bar fine 500, drinks 600, girl 1,000) each time that puts our worth at 75 million $ to the economy, but that looks far to low when you look at the real of the figures. If you say 6 times then the direct input from farangs using prostitutes become worth $2,25 billion to the Thai economy and that is about 2% of the official GDP.

However the figure is higher when you consider hotels, meals, general drinking etc. Not to mention buying houses and paying stupid rents of gogo bars and bar beers. I am sure that figure would easily double. I know, on a night of quite drinking around the bars, that I spend more on booze than I ever do on getting laid!

Well that should give some of you cynics something to nor at.

PS No I don't have all the URLs I searched under: Prostitutes, % GDP, Thailand

using details google search engine

[aussiedoug]

This is indeed a thorny question, you need to know how many men(let's forget the dykes)come her on tourist visa and on business visa and for the prime purpose of getting it wet. Then how often and how much they pay etc. The governemt view is that the businessman only does business and the tourist spends most of his time looking at temples etc. Also why the idiots in charge at the moment figure shutting all the shops up won't affect the economy. Most of the "figures" trotted out for the sex industry in Thailand, also include the local industry, which is huge compared to the farang water holes. They won't touch the locals, they vote.

[Elation]

While everyone has been taking the theme that the loss of Farang nightlife will be a severe impact on the Thai economy, I for one believe that this perspective is narrow and short sighted and driven by our own desires to keep things the way they are. The unfortuate state of things is that "the way things are" is not doing the Thai economy very much good, either now or in the near future. The economy continues to spiral downward and the image of Thais overseas is unfairly tarnished. While a short term impact is real for many, a radical departure or change is often the ingredient to change a bleak future to a better. I think that Thailand is taking a bold (and maybe a brillant) new move in the right direction.

A classic example on a transformation from straw to gold is Las Vegas. For those that remember, LV was on a downward spiral. For years it lived off gambling and hookers and the same old formula of trying to get gamblers and high rollers to come to town. But as the infrastructure got older, there was other alternatives popping up all over. A brave, bold move to convert Las Vegas to a Family destination not only saved the gambling industry, but fueled the economic miracle and its rebirth in the desert.

My guest is that Thailand as a mainstream tourist destination and even a destination where cheap family fun can be had can generate far more revenue than will be "lost" from the sex tourist. It will also legitimize Thailand as a true economic citizen and fuel development of its young people in more honorable professions. It will also attract larger companies who are not worried about tainting their image by their presence in Thailand.

There are those that just like things the way they were, and unfortunately they will be those that stand on the sidelines and wondered what happened.

[Guest]

Very interesting research. I've often thought about this and wondered what the real figures would be like. One thing is certain, this country would go down the shitter if they shut off the honey. LOS would stand for something else then. Also, I wonder if this takes into account all the money that comes in from outside LOS in the form of "monthly stipends" for TG's/BG's from their boyfriends abroad. Finally, I suspect a significant percentage of this money has come from members of this forum!!!! LOL Cheers

[Guest]

I don't think Las Vegas is "fundamentally" much different from what it used to be. True, more families go there now, but mostly it's the same as it's always been, girls and gambling, it's just that it's been upgraded and marketed differently. If gambling and call girls were banned, I don't think the place could survive on the family vacation theme. The same would happen in Thailand. They don't have much (that's legit) to replace the sanuk scene with. There would be a glut on the market of used cell phones and platform shoes. Not to mention a lot of long faces when they have to go back to the rice patties to make a living. That would make them humble real fast. Then the sanuk scene would move to the Phillipines. We will see...

[Elation]

Please don't get me wrong that converting Thailand to a purely family oriented destination is what I was implying. Its the "Re-Imaging" of the destination into more of a legitimate package that gives the payoff. While gambling and girls is still a part of the Las Vegas Scene, its dependency on these two items is not so critical anymore. There is far more revenue generated from conventions, business meetings, exhibitions, and vacation than the old Las Vegas could ever muster. More importantly, the re-imaging lured more investments from main stream corporations that found the old Las Vegas too tacky.

Its the difference in saying "Came to Las Vegas for Gambling and Sex" vs "Came to Las Vegas for Vacation" (and actually have someone BELIEVE you.)

[Guest]

quote:

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The unfortuate state of things is that "the way things are" is not doing the Thai economy very much good, either now or in the near future. The economy continues to spiral downward and the image of Thais overseas is unfairly tarnished. While a short term impact is real for many, a radical departure or change is often the ingredient to change a bleak future to a better. I think that Thailand is taking a bold (and maybe a brillant) new move in the right direction.

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And who will decide which direction the Thai economy takes? The government? We may not agree on what the "right direction" is, but if the last century has proved anything, it has proved that when a government tries to dictate the course of a country's economy, it invariably gets it wrong, at high cost to productivity and personal liberty.

And that is exactly why Thailand's "economy continues to spiral downward." Governments can provide an infrastructure - legal and physical - for economic development, but they should not try to direct the movement of the economy. In Las Vegas, the government's role was limited to enhancing the infrastrucure.

In Thailand, the exact opposite situation exists. The government does little to enhance the infrastructure, and actually engages in "rent taking" that inteferes with efforts by private investors (for example, BTS) to provide the infrastructure that the government should provide, but does not. Policies are enacted to protect vested interests and keep out competitors. Consider the new law placing restrictions on Foreign ownership of telecoms or the old Alien Business law.

These are are not bold and brillant new moves. They are not even new moves. It is repackaged crony capitalism where the government is used as a tool to distort market forces.

[ December 31, 2001: Message edited by: William Ginzer ]

[Guest]

Let's not forget that the farang oriented sex for sale scene if just the tip of the iceburg when thinking about these figures, valid or not.

quote:

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Originally posted by Lord Toad:

Quote 3 "In Thailand, where prostitution is highly visible but illegal, more than 500,000 tourists engage prostitutes annually. Annual income from the sex sector is estimated at between $22.5 and 27 billion, or about 10 and 14 per cent of GDP."

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If it were only tourist patronizing the sex sector this would be $50000 per tourist, acorting to their figures. I don't think so.

I'm guessing that this 'annual income from the sex sector' does include things like bar tabs, karaoke room fees, establishments 'barfines'/massage parlor cuts, etc. and is not just girls 'fees'.

[Guest]

quote:

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Originally posted by Elation:

A classic example on a transformation from straw to gold is Las Vegas. For those that remember, LV was on a downward spiral. For years it lived off gambling and hookers and the same old formula of trying to get gamblers and high rollers to come to town. But as the infrastructure got older, there was other alternatives popping up all over. A brave, bold move to convert Las Vegas to a Family destination not only saved the gambling industry, but fueled the economic miracle and its rebirth in the desert.

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Elation,

I understand your point, but I'm not sure it is an equal analogy. Las Vegas is a small city. Creating a few golf courses and theme parks with proper marketing can do wonders on such a small scale. Thailand can't do the same thing.

Perhaps there is something to this change, if all they are doing is cleaning up the IMAGE, while allowing those so inclined to indulge former vices in a less public venue. In fact, this isn't a bad idea. I would be happy to take a wife or girlfriend to Chaing Mai, or Phuket, or Ko Samui. Not a chance in hell I would take them to Pattaya. There is no escape from the seedier aspects of life in Pattaya.

I still think true elimination of the nightlife tourism industry is a bad decision for Thailand. I need only look at Angeles City in the Phillipines to see that nothing is going to replace it like magic. And the result is another depressed area.

As a part time resident of Pattaya, I think the majority of revenue there comes from male tourists. The trickle down of their money from bars, hotels, restuarants and of course to the girls fuels the entire city. Cutting this off will turn Pattaya into a wasteland inside of a year.

Since Thailand hasn't the money or incliniation to assist the poor people with training and jobs, destroying the sex industry will, IMO, destroy the economy for the poor.

[Guest]

I posted this a few months ago:

The easily titillated Business Week recently reported that the prostitution industry in Thailand was worth US25 Billion. That's a lot of Baht left on the dressing table seeing it represents 10% of the Thai economy given current GDP figures. Frank Lombard in a letter to the Bangkok Post this week revealed story behind this ba-ba-baboor statement, explaining that the Business Week figure came from Dr Pasuk Phongpaichat of Chulalongkorn University, quoted in the Nation and the Bangkok Post in 1966. "...Subsequently it was used as the basis for numerous articles and editorials and enshrined in a prize-winning report on regional prostitution by ILO author Lin Lim in 1998..." According to Frank, "...Pasiuk showed us her arithmetic... and she had slipped a decimal point and was too high by a factor of 10...". Now 1% is about what this week's FEER estimates as the contribution of the prostitution industry to Japan's GDP (and most of the sex workers there are imported from overseas and kept in slavery, fear and for no salary by Japan's "yakuza"). Which all goes to reinforce to good researchers that you should always take precautions before rushing into action...