Comments on: How is Thailand really doing? http://www.tfs2m.com/main/2007/07/07/how-is-thailand-really-doing/ Insiders take on Thailand - Take 2 Sun, 05 Jul 2009 04:05:41 +0000 http://wordpress.org/?v=2.6.5 By: How I am learning to play the member clubs - Part 1 at The FARANG Speaks 2 Much http://www.tfs2m.com/main/2007/07/07/how-is-thailand-really-doing/#comment-12920 How I am learning to play the member clubs - Part 1 at The FARANG Speaks 2 Much Tue, 31 Jul 2007 05:53:56 +0000 http://www.tfs2m.com/2007/07/07/how-is-thailand-really-doing/#comment-12920 [...] Interesting times in Thailand as usual. Head on over to the latest article at the Asia Times for a view into the politics. First time I have seen so much public talk about the coming era of succession. Was talking recently to a large supplier (Thai company) of kitchen, beer and concession equipment about how bad Thailand is really doing. The media keeps pointing people to the stock market, the baht and public projects as signs of strength but this guy was telling me that his business and that of most of his Thai friend’s businesses have experienced record year over year declines. He was frank in explaining that it is the fault of the current political environment where lackluster tourism, foreign investor rules and so on have spooked people out of growing or starting their businesses in Thailand. I agree. [...] [...] Interesting times in Thailand as usual. Head on over to the latest article at the Asia Times for a view into the politics. First time I have seen so much public talk about the coming era of succession. Was talking recently to a large supplier (Thai company) of kitchen, beer and concession equipment about how bad Thailand is really doing. The media keeps pointing people to the stock market, the baht and public projects as signs of strength but this guy was telling me that his business and that of most of his Thai friend’s businesses have experienced record year over year declines. He was frank in explaining that it is the fault of the current political environment where lackluster tourism, foreign investor rules and so on have spooked people out of growing or starting their businesses in Thailand. I agree. [...]
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]]> By: smitty http://www.tfs2m.com/main/2007/07/07/how-is-thailand-really-doing/#comment-12298 smitty Tue, 24 Jul 2007 15:32:36 +0000 http://www.tfs2m.com/2007/07/07/how-is-thailand-really-doing/#comment-12298 Another interesting editorial on Thailand from the IHT: http://www.iht.com/articles/2007/07/15/opinion/edbowring.php I love this quote: Perhaps the best that can be hoped for is a peaceful return to the unstable and corrupt - but open and freewheeling - multiparty politics of the pre-Thaksin era, and an eventual deal that will allow a chastened and less wealthy Thaksin to return to Thailand and to politics. But the military will need to back off further than its constitution and internal security bills so far suggest. Those unstable and corrupt times make for some of the best nightlife! Another interesting editorial on Thailand from the IHT:

http://www.iht.com/articles/2007/07/15/opinion/edbowring.php

I love this quote:

Perhaps the best that can be hoped for is a peaceful return to the unstable and corrupt - but open and freewheeling - multiparty politics of the pre-Thaksin era, and an eventual deal that will allow a chastened and less wealthy Thaksin to return to Thailand and to politics. But the military will need to back off further than its constitution and internal security bills so far suggest.

Those unstable and corrupt times make for some of the best nightlife!
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]]> By: Jesper http://www.tfs2m.com/main/2007/07/07/how-is-thailand-really-doing/#comment-11822 Jesper Tue, 17 Jul 2007 07:09:12 +0000 http://www.tfs2m.com/2007/07/07/how-is-thailand-really-doing/#comment-11822 Ooops, I don't know what I was smoking when I missed Christoffer's post that discussed the Gini index. What a shame that I used the same source. It would have been cool if we at least had different sources and they were in agreement :-) Statistics are of course of limited value. After all it is well-known that 90% of all statistics are flawed... To bring it back to your point in the main post. I do agree that rosy articles like "Foreign investors unfazed by problems in Thailand" skips lightly over a lot of the fundamentals. The biggest problem in my mind is that the country doesn't have solid institutions that protect the average honest citizen. It's no less corrupt and run by the elite than it has ever been (in a different way than the US is run by the elite). As long as this is the case, you cannot expect the Thais to embrace entrepreneurism, invest savings and take (healthy) risk. All things that are necessary to build a healthy economy based on diverse, domestic ownership and enterprise and not just a few big foreign investments. Foreign investment is great, but it has to be complemented with domestic investment for the country to withstand the ups and downs of the economic cycles. All in all, good to get the inside observations on this blog. Keep up the good blogging. Ooops, I don’t know what I was smoking when I missed Christoffer’s post that discussed the Gini index. What a shame that I used the same source. It would have been cool if we at least had different sources and they were in agreement :-)

Statistics are of course of limited value. After all it is well-known that 90% of all statistics are flawed…

To bring it back to your point in the main post. I do agree that rosy articles like “Foreign investors unfazed by problems in Thailand” skips lightly over a lot of the fundamentals. The biggest problem in my mind is that the country doesn’t have solid institutions that protect the average honest citizen. It’s no less corrupt and run by the elite than it has ever been (in a different way than the US is run by the elite). As long as this is the case, you cannot expect the Thais to embrace entrepreneurism, invest savings and take (healthy) risk. All things that are necessary to build a healthy economy based on diverse, domestic ownership and enterprise and not just a few big foreign investments. Foreign investment is great, but it has to be complemented with domestic investment for the country to withstand the ups and downs of the economic cycles.

All in all, good to get the inside observations on this blog. Keep up the good blogging.
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]]> By: smitty http://www.tfs2m.com/main/2007/07/07/how-is-thailand-really-doing/#comment-11815 smitty Tue, 17 Jul 2007 06:11:26 +0000 http://www.tfs2m.com/2007/07/07/how-is-thailand-really-doing/#comment-11815 Jesper - good points. We talked about the Gini index earlier and a lot of people don't find it highly accurate for 2.5 world countries with large underground economies like Thailand. hence I had quoted this from the IHT: Not even the Thai economic miracle of recent decades could spare the country from one of the world’s highest income inequalities — the wealthiest 20 percent of Thais earn an estimated 60 percent of the nation’s income and the poorest 20 percent earn less than 5 percent. Does not seem to gel at all with the Gini index. Good points on the Europe and US and the feeling of opportunity. SO true. Jesper - good points. We talked about the Gini index earlier and a lot of people don’t find it highly accurate for 2.5 world countries with large underground economies like Thailand.

hence I had quoted this from the IHT:

Not even the Thai economic miracle of recent decades could spare the country from one of the world’s highest income inequalities — the wealthiest 20 percent of Thais earn an estimated 60 percent of the nation’s income and the poorest 20 percent earn less than 5 percent.

Does not seem to gel at all with the Gini index.

Good points on the Europe and US and the feeling of opportunity. SO true.
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]]> By: Jesper http://www.tfs2m.com/main/2007/07/07/how-is-thailand-really-doing/#comment-11781 Jesper Mon, 16 Jul 2007 16:57:12 +0000 http://www.tfs2m.com/2007/07/07/how-is-thailand-really-doing/#comment-11781 "Seeing" difference between rich and poor with the naked eye can be difficult. It depends on how much rich and poor mingle. In my mind, US is deceptive here. If you have a decent job and reasonable coin in the US you will easily end up never ever meeting a poor person. Your job, your neighborhood and your hangouts contain people of the same income group as you. Since Americans mostly commute by car, they lose this most valuable opportunity to "mix". In Bkk and in many other cities in the world, you bump into people on every rung of the ladder every day. Well, maybe not every rung, but still, you see a bigger cross section with your own eyes. Another thing I found curious is that for example in the LA area, you will find "black" beaches where mostly black people hang out. Not necessarily dirt poor or anything, but they just don't mingle with the white folks on Venice, St. Monica etc. In Rio de Janeiro, favella kids and rich kids hang out side by side on Ipanema and Copa Cabana. If you go, you will see a more fair cross section of society than in the US. As another point, I looked up the Gini index for US and Thailand. This is the most common parameter for measuring income disparity and it's explained on Wikipedia here: http://en.wikipedia.org/wiki/Gini_coefficient It turns out, the US Gini index is 40.8 and Thailand is 42. An index of 1 means perfect inequality where 1 person earns everything and 0 is perfect equality where everyone earns the same. To compare, Denmark actually ranks #1 (more equal) with an index of 24.7 and Brazil (considered very inequal) is at 54. You can find the numbers here: http://en.wikipedia.org/wiki/List_of_countries_by_income_equality Wikipedia cites UN as the source, so we'll have to take their word for it or dig deeper. Now income inequality and fairness are of course two different things. I think it's pretty obvious that in the US, poorer people have a much better shot at improving their social standing than they do in Thailand. However while US used to excel at this discipline (social mobility) it's getting worse these days and I think Europe is comparing more favorably now than in the past. “Seeing” difference between rich and poor with the naked eye can be difficult. It depends on how much rich and poor mingle. In my mind, US is deceptive here. If you have a decent job and reasonable coin in the US you will easily end up never ever meeting a poor person. Your job, your neighborhood and your hangouts contain people of the same income group as you. Since Americans mostly commute by car, they lose this most valuable opportunity to “mix”. In Bkk and in many other cities in the world, you bump into people on every rung of the ladder every day. Well, maybe not every rung, but still, you see a bigger cross section with your own eyes. Another thing I found curious is that for example in the LA area, you will find “black” beaches where mostly black people hang out. Not necessarily dirt poor or anything, but they just don’t mingle with the white folks on Venice, St. Monica etc. In Rio de Janeiro, favella kids and rich kids hang out side by side on Ipanema and Copa Cabana. If you go, you will see a more fair cross section of society than in the US.

As another point, I looked up the Gini index for US and Thailand. This is the most common parameter for measuring income disparity and it’s explained on Wikipedia here:

http://en.wikipedia.org/wiki/Gini_coefficient

It turns out, the US Gini index is 40.8 and Thailand is 42. An index of 1 means perfect inequality where 1 person earns everything and 0 is perfect equality where everyone earns the same. To compare, Denmark actually ranks #1 (more equal) with an index of 24.7 and Brazil (considered very inequal) is at 54. You can find the numbers here:

http://en.wikipedia.org/wiki/List_of_countries_by_income_equality

Wikipedia cites UN as the source, so we’ll have to take their word for it or dig deeper.

Now income inequality and fairness are of course two different things. I think it’s pretty obvious that in the US, poorer people have a much better shot at improving their social standing than they do in Thailand. However while US used to excel at this discipline (social mobility) it’s getting worse these days and I think Europe is comparing more favorably now than in the past.
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]]> By: Christoffer Larsson http://www.tfs2m.com/main/2007/07/07/how-is-thailand-really-doing/#comment-11779 Christoffer Larsson Mon, 16 Jul 2007 16:20:45 +0000 http://www.tfs2m.com/2007/07/07/how-is-thailand-really-doing/#comment-11779 Smitty, I don't think our differences are that large. The income inequality in Thailand is surely great. I am merely trying to say that this is the case in most of the developing world as well as some developed countries. So I don't see Thailand standing out in this respect. I am also trying to say that this is not a very easy problem to tackle, even without rich people fighting to maintain their privileges. India attempted a path of equality for 40 years, but with no economic performance, it still left 85% of the population in poverty. The Philippines invested in excellent education, but with poor job creation, many left for opportunities elsewhere. Vietnam, may be more equal now, but with adoption of market economy policies, you will soon see inequalities rising there too. I have studied in universities both in Thailand (AIT) and California (UC San Diego), so I am not totally ignorant about the differences. About open FDI rules, I did my master thesis with the Board of Investment. Their policies are quite sensible, and the current government has not caused any changes. I don't think investments are down much so far this year. Vietnam is attracting far more FDI, but Thailand does not have the low cost advantage as they do anymore. Just checked the exchange rate. Th US dollar is now standing at 30 to the Baht (offshore)!!! That is bad news... Smitty,

I don’t think our differences are that large. The income inequality in Thailand is surely great. I am merely trying to say that this is the case in most of the developing world as well as some developed countries. So I don’t see Thailand standing out in this respect.

I am also trying to say that this is not a very easy problem to tackle, even without rich people fighting to maintain their privileges.

India attempted a path of equality for 40 years, but with no economic performance, it still left 85% of the population in poverty. The Philippines invested in excellent education, but with poor job creation, many left for opportunities elsewhere. Vietnam, may be more equal now, but with adoption of market economy policies, you will soon see inequalities rising there too.

I have studied in universities both in Thailand (AIT) and California (UC San Diego), so I am not totally ignorant about the differences.

About open FDI rules, I did my master thesis with the Board of Investment. Their policies are quite sensible, and the current government has not caused any changes. I don’t think investments are down much so far this year. Vietnam is attracting far more FDI, but Thailand does not have the low cost advantage as they do anymore.

Just checked the exchange rate. Th US dollar is now standing at 30 to the Baht (offshore)!!! That is bad news…
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]]> By: smitty http://www.tfs2m.com/main/2007/07/07/how-is-thailand-really-doing/#comment-11743 smitty Mon, 16 Jul 2007 05:05:35 +0000 http://www.tfs2m.com/2007/07/07/how-is-thailand-really-doing/#comment-11743 CL- We can just agree to disagree. No problem. In and out of Thailand here for 7 years and running businesses here I see a huge gap between rich and poor. Their level of education and opportunity. Watch as Vietnam currently soars past Thailand with proper english education, open FDI rules and a commitment to technology. The joke one of the Thais told me was they would have loved that Intel plant Vietnam got but the minister of technology in Thailand forget to read his email from Paul Otellini. The world bank is a joke - sorry. They get these enormous salaries and do what if I may ask? I think BBB nailed the education thing. Funny thing is if u talk to some foreign professors working at the Chula like places they will tell u that these good schools still pale in comparison to say a junior college in northern california. We all know the very moneyed Thais tend to get educated overseas rather than Thailand. I love thailand. That is why I am here but I think under the surface of the malls, the hi so lifestyles and the bar scene - the actual inner workings of the place are suffering. On the poverty front - could u imagine if all forms of prostitution were suddenly illegal? How many girls and families would be out of money? Tons is my guess since this number is hardly tracked and a huge part of the underground economy. I hope Thailand turns some of this stuff around and preserves their way of life while inching things forward a bit to make suer their people have a chance of things in the future. CL- We can just agree to disagree. No problem. In and out of Thailand here for 7 years and running businesses here I see a huge gap between rich and poor. Their level of education and opportunity. Watch as Vietnam currently soars past Thailand with proper english education, open FDI rules and a commitment to technology. The joke one of the Thais told me was they would have loved that Intel plant Vietnam got but the minister of technology in Thailand forget to read his email from Paul Otellini. The world bank is a joke - sorry. They get these enormous salaries and do what if I may ask?

I think BBB nailed the education thing. Funny thing is if u talk to some foreign professors working at the Chula like places they will tell u that these good schools still pale in comparison to say a junior college in northern california. We all know the very moneyed Thais tend to get educated overseas rather than Thailand.

I love thailand. That is why I am here but I think under the surface of the malls, the hi so lifestyles and the bar scene - the actual inner workings of the place are suffering. On the poverty front - could u imagine if all forms of prostitution were suddenly illegal? How many girls and families would be out of money? Tons is my guess since this number is hardly tracked and a huge part of the underground economy.

I hope Thailand turns some of this stuff around and preserves their way of life while inching things forward a bit to make suer their people have a chance of things in the future.
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]]> By: Bangkok Bad Boy http://www.tfs2m.com/main/2007/07/07/how-is-thailand-really-doing/#comment-11741 Bangkok Bad Boy Mon, 16 Jul 2007 04:34:07 +0000 http://www.tfs2m.com/2007/07/07/how-is-thailand-really-doing/#comment-11741 I think the education problems are more to do with the initial school education. Those bright enough to be admitted to Chula and Thammasat have already beaten the system, so they're hardly indicative of the majority. That majority have already been indoctrinated in the Thai learning methodology (or lack thereof) by the time they get to University age, and it's too late by then anyway. It's kind of like looking at the shambles that education has become in the UK, and saying "Well Oxford and Cambridge are still bastions of intelligence, so what's the problem?"... I think the education problems are more to do with the initial school education. Those bright enough to be admitted to Chula and Thammasat have already beaten the system, so they’re hardly indicative of the majority.

That majority have already been indoctrinated in the Thai learning methodology (or lack thereof) by the time they get to University age, and it’s too late by then anyway.

It’s kind of like looking at the shambles that education has become in the UK, and saying “Well Oxford and Cambridge are still bastions of intelligence, so what’s the problem?”…
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]]> By: Christoffer Larsson http://www.tfs2m.com/main/2007/07/07/how-is-thailand-really-doing/#comment-11740 Christoffer Larsson Mon, 16 Jul 2007 04:18:22 +0000 http://www.tfs2m.com/2007/07/07/how-is-thailand-really-doing/#comment-11740 Smitty, Chula and Thammasat are both publicly funded universities and tuitions are not especially high. They are certainly not targeting only rich people. According to the World Bank, the poverty rate in Thailand stands at about 10%. That is not very high for a developing country, and it's a bit lower than in the US. You can argue that this number is also not accurate, but be careful of always seeing what you have already decided that you like to see. Smitty,

Chula and Thammasat are both publicly funded universities and tuitions are not especially high. They are certainly not targeting only rich people.

According to the World Bank, the poverty rate in Thailand stands at about 10%. That is not very high for a developing country, and it’s a bit lower than in the US.

You can argue that this number is also not accurate, but be careful of always seeing what you have already decided that you like to see.
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]]> By: Blog Meetup at the Duke at The FARANG Speaks 2 Much http://www.tfs2m.com/main/2007/07/07/how-is-thailand-really-doing/#comment-11690 Blog Meetup at the Duke at The FARANG Speaks 2 Much Sun, 15 Jul 2007 06:04:15 +0000 http://www.tfs2m.com/2007/07/07/how-is-thailand-really-doing/#comment-11690 [...] week or so back laocowboy, distinguished blog reader and commenter, had mentioned meeting up for some drinks at the Duke. At first thought I was going to dismiss the notion, [...] [...] week or so back laocowboy, distinguished blog reader and commenter, had mentioned meeting up for some drinks at the Duke. At first thought I was going to dismiss the notion, [...]
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