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Is Thailand poor? (Not even slightly. Though wealth inequality is extreme!) - YouTube
Channel: Bangkok Unmasked
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Welcome to the forty-first video of Bangkok
Unmasked!
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The YouTube channel that helps you get the
most out of your visit to Bangkok city!
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If you're new here, please consider subscribing!
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In this video I'm going to try and answer
the question; Is Thailand poor?
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Over the years I have had numerous friends
and acquaintances try to tell me that Thailand
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is a poor 'third world' country.
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Usually I bite my tongue, but not today!
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Some interesting stats on Thailand's economy
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First off, for context, I'm going to start
this video with 11 stats on Thailand's economy
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that I find fascinating.
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Number 1.
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The IMF ranks Thailand 20 out of 195 countries
by GDP (Purchasing Power Parity).
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Number 19 is Australia!
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Number 2.
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Exports account for more than two-thirds of
Thailand's gross domestic product.
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Number 3.
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In 2017, according to the IMF, Thailand had
a GDP of 15.45 trillion baht (or US$455 billion).
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This makes Thailand Asia's 8th largest economy.
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Number 4.
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The industrial and service sectors are the
main drivers of Thai gross domestic product.
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In 2012 they accounted for 39.2% and 52.4%
of Thailand's GDP respectively.
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Number 5.
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Thailand's agricultural sector produces 8.4
percent of GDP -- lower than the trade and
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logistics and communication sectors, which
account for 13.4 percent and 9.8 percent of
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GDP respectively.
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Number 6.
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Thailand is the second-largest economy in
Southeast Asia, after Indonesia.
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Its per capita GDP however ranks in the middle
of Southeast Asian per capita GDP, after Singapore,
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Brunei, and Malaysia.
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Number 7.
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Thai household debt in Q4/2015 amounted to
11 trillion baht.
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This is a massive 81.5 percent of GDP.
Number 8.
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According to Friedrich Schneider, an economist
at Johannes Kepler University of Linz in Austria,
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Thailand's shadow economy was 40.9 percent
of real GDP in 2014.
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Number 9.
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According to the National Economic and Social
Development Board (NESDB) in a recent report
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titled "Poverty and Inequality in Thailand",
10 percent of the Thai population earned 35
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percent of Thailand's aggregate income and
owns 61.5 percent of its land.
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Number 10.
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Thailand was ranked as the world's third most
unequal nation, behind Russia and India, in
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the Credit Suisse Global Wealth Databook 2016.
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One percent of the Thai population is estimated
to own 58 percent of Thailand's wealth.
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Number 11.
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According to Trading Economics, Thailand's
average monthly wage in Q1/2018 was 13,721
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Baht/Month.
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So is Thailand poor?
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It's true that many Thai are poor.
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Though it has to be noted that very few Thai
are starving.
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The wealth inequality is simply staggering.
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Bangkok's rich will happily spend more on
a meal with a couple of friends than a taxi
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driver will earn in a month.
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And think nothing of it.
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With this said, in my opinion, Thailand is
not a poor country.
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According to the IMF, with a nominal GDP of
US$6,591 per capita in 2017, Thailand is typical
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of what economists call the 'middle-income
trap'.
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This is economies that have bootstrapped themselves
up to a reasonable level of development and
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industry but start to stagnate and fail to
develop into full-fledged service-based economies.
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Singapore, Japan, and South Korea, on the
other hand, are examples of countries who
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have managed to overcome the 'middle-income
trap' and become fully developed, modern economies.
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In 2017 Singapore's nominal GDP stood at $57,713,
Japan's nominal GDP stood at $39,440 and South
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Korea's nominal GDP stood at $30,091.
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There are several reasons why Thailand has
failed to overcome the 'middle-income trap'.
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Reason #1.
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Corruption
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Corruption in Thailand can be felt everywhere.
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Politicians, judges, civil servants, policemen,
army generals - literally everyone wants a
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piece of the action, and are ready to leverage
their institutional power for cash and favors.
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Some business people claim that cutting through
the red tape can be advantageous.
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However, what business really needs to thrive
is a fair and stable environment i.e. a 'rule
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of law'.
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If the rules keep changing all the time, and
everybody cheats, the vast majority of citizens
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lose.
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Reason #2.
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Political Stability
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Thailand has had 19 successful military coups
since it became a constitutional monarchy
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in 1932.
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Only one elected prime minister in the country's
history has managed to complete their 4-year
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term.
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Foreign capital is generally not enthusiastic
on a long-term investment in countries with
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such a volatile political climate.
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Reason #3.
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Education
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The Thai education system is horrific and
consistently ranks among the worst in Asia.
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This is why the majority of Thailand's elite
are educated overseas.
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Thailand's schools and universities are underfunded,
and teachers work under haphazard and often
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contradictory guidelines.
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As an outsider, it seems to me that the education
system in Thailand is more focused on instilling
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patriotism than critical thinking.
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Reason #4.
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A small middle class
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Thailand's middle class is small when compared
with most Western countries, and regional
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neighbors like Japan and Korea.
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There's a huge working class whose income
averages about $300 USD per month.
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There's also a very significant urban lower
middle-class i.e. university graduates and
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small business owners whose income averages
between $500 and $1000 USD per month.
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Then there's the 'hi-so'.
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This group is made of large business owners
and influential civil servants.
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Through their investments and connections,
they have reaped most of the benefits from
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the last decades' economic growth.
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This is the group driving all the luxury cars
in Bangkok, even though they're taxed at
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200%+.
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While the 'hi-so' has a significant impact
on the economy, they're not large enough as
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a group to fuel the economy on their own.
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Instead, it's the lower middle class that
has driven growth.
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However, in order to do so, they have taken
on a lot of debt.
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My guess is that this probably won't end well.
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Reason #5.
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Lack of competition
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Thailand has a very protectionist economy.
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There are high taxes on most imported goods
and limitations on foreign investment.
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The import taxes serve to nurture and develop
certain business categories, such as the car
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industry for example.
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With this said, many industries like the car
industry have grown too cozy over the years.
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This results in domestic made cars being more
expensive in Thailand than anywhere else.
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Final thoughts
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Ultimately Thailand is a fairly rich country.
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The problem is that the riches are very badly
distributed.
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This could potentially change if steps are
taken to overcome the 'middle-income trap'.
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However, after living in Thailand for the
past 19 years I'm not holding my breath.
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Anyway.
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that's it for this video.
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Expect a new video next week.
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For all you techies out there, this video
was shot on a Samsung Galaxy S8 Plus and edited
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using HitFilm Express.
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To check out details on arranging a bespoke
Bangkok tour with experienced tour guides,
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and luxury private transport, please click
on the link in this video's description section.
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Finally, please don't forget to subscribe
to this channel through the button below!
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Also, I'd like to hear from you if you have
any thoughts or comments on the question;
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is Thailand poor?
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Please do reach out to me through the comments
section of this video!
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Thank you very much for watching.
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I'll see you next week.
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Goodbye.
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