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Thailand In Ten Years

  • Written by Mr. Lucky
  • September 6th, 2006
  • 9 min read


This FR is based on a late-night excursion in January, 2006.
Inspired by a recent stroll through the giant shopping mall that is Ploenchit Road, I'm putting on my Nostradamus hat to speculate on the future of our beloved Thailand.

Let me preface by saying, anyone familiar with Thailand knows better than to attempt predictions. No matter what you try here, the results are never quite what you expect. It's part of the charm.

However, there is one thing that is always constant. Thais will be Thais and they are not ever likely to change. In particular, Thai society will continue to be stratified. The tiny portion of the population who are rich will continue to grab all the chips to spend on overseas shopping trips. The poor will remain where they are, one step up from subsistence farming, while the middle class will continue to fool themselves that they might someday join the hi-so ranks.

The only thing that will change about this situation is the relative sizes of each group. Specifically, the ranks of the poor are going to increase, as the rich realize they are rapidly losing money and proceed to fire the middle-class from their service industry jobs.

I figured this all out during a stroll through Bangkok's central shopping area this past week. I started at Chitlom where the luxury mini-mall at Erawan went up last year. Inside that bastion of hi-so living, there weren't many shoppers, hi-so or otherwise. A few guests from the Hyatt were wandering around with confused looks like they'd walked out the wrong door. An upscale diner held only two tables of diners, but I'll forgive them as it was not quite lunchtime.

I proceeded at noon to the old Central Chitlom building. Its food center upstairs was filling with local business folk, but it still looked empty. It's a large space and there are too many seats for too few butts. The store itself was a little eerie. I've seen it crowded before but on this mid-week noontime it was filled only with pods of chatting staff. Where were all the people?

Ah, I thought, I'd find them down the street, ogling the giant new stores. Next stop was the expanded Central World Plaza. It's freakin' humongous. They've at least doubled the size of the thing. Unfortunately they forgot to double the number of customers (and the old place was never remotely crowded).

I exited onto the walkway under the skytrain and found my way to Siam Paragon. If you're feeling hot and claustrophobic on the busy streets of Bangkok, this place is the answer to your prayers. Lots of cool, spacious spaces, and you don't have to share them with anyone. It's impressive, attractive and a nice place to check out Ferraris and BMWs, but I have to say the architects did not consider their audience. Thais do not like a long walk and in Siam Paragon, everything is a long walk from everything else. There was only one busy area here and it was the aquarium.

I found much the same situation at the Siam Discovery complex next door. The stores are packed in closer but they still outnumbered the customers.

Yet Thais love shopping, so where were they? I found them on my last stop. Mahboonkhrong was packed to the gills as it always is. Every floor, with the exception of the furniture section, was shoulder-to-shoulder with shoppers.

This is where the revelation of doom really hit me. These hi-so types are putting up high-end shopping centers, as if that was all it would take to bring Thailand out of the third world. You need a majority middle-class before you need up-market shopping malls. But if their marketers are brave enough to tell them their pet project has no market, they're not listening.

Now, downtown Bangkok definitely needs a high-end department store, but it doesn't need a half dozen of them. It's true that, at the moment, Thailand's middle class is growing, but this growth is being driven by increases in the service sector – that is, the opening of these giant shopping centers. Once this spate of growth levels off, where is the money going to go? Does Siam Paragon sell any Thai-made goods? Nope, the money is flowing right out of the country in exchange for foreign goods.

Instead of building up the quality of Thailand's own unique industries, the hi-sos will continue to spend the country's wealth on foreign cars, clothes and vacations. In downtown Bangkok, one of the department stores will be selected as "the place to be", while half the stores in the less popular joints will close doors. Meanwhile MBK will continue to chug merrily along, floating firmly in mid-stream of Bangkok's income spectrum. If anything, it will get more popular as the wealth drains out of the country and all those nice service industry jobs start disappearing.

The Tourism Authority of Thailand's head and hi-so-wannabe, K. Juthamas Siriwan, assures us that these big malls will be full of free-spending tourists, but then she also said the Thailand Elite card would bring millions of customers. Obviously, she is sadly delusional.

These targeted high-end tourists come from Singapore, Hong Kong, Korea and Japan. They all have larger and better shopping centers, delivering a wider range of goods for similar prices. Are Europeans going to buy imported European fashions in Bangkok? Thrifty Americans certainly won't. They come to Bangkok expecting to bargain a poor shop owner down to a tenth of the price they'd pay back home. That means Chatuchak Market and, once again, MBK.

If I was stupidly rich (and Thai) I'd buy the lot across the street from MBK and build another one just like it, only bigger and cleaner.

So where is Thailand going in the next decade? At best, expect an economy in a controlled nose-dive. In Bangkok you will be able to enjoy wide-open, air-conditioned spaces in a lot of big empty malls. Upcountry folks may not notice a big change, because how can a farmer at near-subsistence levels get any poorer? Though they may be entertaining some long-lost cousins from Bangkok for more than just a short visit.

This downward spiral may well be accelerated as Thailand is surpassed by ASEAN neighbors who are moving with the times. Vietnamese children study as hard as the Japanese and it shows. Vietnam's tourism industry took only eight years to evolve from a backpacker backwater to where five-star resorts are popping up in every city. It took Thailand 40.

Down in Malaysia, laws that encourage regulated foreign investment are being written and enforced with the kind of fairness and transparency foreign investors love. We're talking 10-year renewable visas and foreign ownership of up to two properties, land included, with one brilliant hitch: foreign buyers must spend above a certain amount for any property. This protects the locals from being edged out of the market for small, cheap housing – because foreigners can't buy cheap homes.

Burma doesn't look so good yet, but man, if they could ever get rid of the junta, they'd kick Thailand's ass up, down and sideways. We're talking more of everything: more beaches, more islands, more weaving rivers, more ancient temples, and a piece of the Himalayas that makes Thailand's little northern hills look pre-pubescent. Top this off with smiling locals and cheap eats, and how can Thailand compete?

What does it all mean for foreign visitors and residents? Bangkok will certainly be more affordable (after a short period when they try the uniquely Thai economic strategy of raising prices to make up for the lack of customers). With a less-attractive shopping experience, Bangkok hotels will have less to offer for their rates. In the bars, punters may see an increase in ex-middle-class girls. Who knows? Barfines might even go down.

Phuket will remain a moneymaker as long as they can keep trees on the hillsides and jet-skis confined to Patong. Samui is doomed for those exact failures. I give it five years.

Other developing tourist resort areas don't have such a great outlook either, since the major players in Khao Lak, Krabi and Koh Chang are going to take a big hit on their Bangkok investments. Any development in those secondary tourist centers will be in the hands of hungry locals. Without up-market investors to keep the local government in tea money, they'll be selling off great swaths of the national parks to encroachers.

Chiang Mai and the northern region is a bit more self-contained, so it might weather the storm if it isn't washed away in the next flood.

Pattaya will always be Pattaya. With national economic troubles, it might get more dangerous, but who would notice?

It's a dark outlook for sure. Maybe I've lived here too long and I've grown jaded, but I believe I've taken a balanced view. As every good reporter knows, if you want to find the truth, follow the money.

OK, here's a bonus for any teachers who have read this far: "How to impress your students with your paranormal ability to spot cheaters."

On the first day of class, hand out a worksheet with a series of 200 boxes. Tell the students their first homework assignment is an experiment in randomness. Do coins really flip evenly? Tell them they must flip a coin 200 times and write down either 'H' (heads) or 'T' (tails) in each box.

When they hand in the papers the next day, you deftly flip through the stack and pick out the cheaters. Announce the list of honest students and give them some sort of reward, then announce that the rest of the class cheated and gets nothing.

How do you identify the cheaters? Probability Theory, dear Watson. It turns out that, in a random series of two choices over 200 instances, there is a 98% probability that you will see a series of six or more of the same result in a row. At least six 'heads' or six 'tails' should show up in a row somewhere in the list.

If the student really does the task, there will be at least one section where either heads or tails appears consecutively six or more times. A student who forges the results without flipping a coin is unlikely to write out a series of six heads or tails, because it doesn't look random. If you pull this trick off with some drama, it will put a fun scare into them. You just have to hope the whole class doesn't cheat.

Stickman's thoughts:

I am much more optimistic about Thailand's economic future. I think some of the things that Westerners are not so fond of may not change, but I think that economically the outlook is not too bad.