An American in Asia: His Quest for Cosmic Truth (or at least a Decent Espresso)

 

Thailand in Ten Years

Inspired by a recent stroll through the giant shopping mall that is Bangkok's city center, I'm putting on my Nostradamus hat to speculate on the future of my beloved Thailand.

Siam Paragon, the latest upmarket shopping behemoth, under construction last year.

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 economically stratified. The tiny portion of the population who are incredibly 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 ("hi-so" being Thai-English slang for "high society" or upper class - there is also a "lo-so").

The only thing that is likely to 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.

Siam Paragon, now completed.

I figured this all out during a stroll through Bangkok's central shopping area this past week. I started at the east end of Ploen Chit Road, where a luxury mini-mall, called 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 attached Hyatt hotel were wandering around with confused looks like they'd walked out the wrong door. An upscale diner held only two tables of actual diners, but then it was not quite lunchtime.

I proceeded at noon across the street to a long-standing landmark, the old Central Chitlom department store. 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?

The belly of the whale: revamped insides of Central World Plaza.

Ah, I thought, I'd find them down the street, ogling the giant new stores. Next stop was the recently 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 the brand new 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 BMW's, 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.

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

One small section of the sprawling city-within-a-city, Mahboonkhrong.

Yet Thais love shopping, so where were they? I found them on my last stop. Mahboonkhrong (MBK) 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. Yet you need a majority middle-class before you need upmarket shopping malls. There are simply not enough people with disposable income. Though if the hi-sos' 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 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.

A Bleak Future

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 by the moneyed few 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 real income spectrum. If anything, MBK will get more popular as the wealth drains out of the country and all those nice service industry jobs start disappearing.

Juthamas Siriwan, the TAT's foggy-headed dictator and a major hi-so-wannabe

The Tourism Authority of Thailand's (TAT) ex-governor and new consultant-for-life, K. Juthamas Siriwan, assures us that these big malls will be full of free-spending tourists. This is the woman behind the Thailand Elite tourist card, which she predicted would bring millions of customers (they're struggling with their first thousand). Obviously, she is sadly delusional.

These targeted high-end tourists come from Singapore, Hong Kong, Korea and Japan, which 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 quoted price. That means the outdoor market at Chatuchak 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 soon be entertaining some long-lost cousins from Bangkok for more than just a short visit.

The Competition

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 four decades.

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. Foreigners can't buy cheap homes in Malaysia.

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.

To the south, Phuket will remain a moneymaker as long as they can keep trees on the hillsides and jet-skis confined to Patong. Koh Samui is doomed for those exact failures. I give that poor island another 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 upmarket investors to keep the local governments in "tea money" (a Thai euphemism for bribe), 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 increasingly violent yearly floods.

Pattaya will always be Pattaya. Its huge tracts of girly bars may even benefit from an increase in recently unemployed Bangkok office workers. 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.