Times Of Inflation: Tougher Bangkok Life?
Just had an eye-opener phone call. Was talking to a friend that the rising prices start taking a toll. That I’m thinking twice before driving upcountry with these gas prices. He, laughing: “Those gas prices don’t affect people like us, don’t they.”
I was lost for words for a second. Those prices do affect me. They not only bother me, they affect me. Or is it a badge of the affluent here to not bother about anything with a price tag attached?
Showing off with high prices has some roots here among Bangkok’s rich, newly rich and wannabe rich. Told me a retailer some time ago that certain products he can only sell with a hefty price tag. Otherwise the bag or sunglasses not only look cheap, they are cheap.
I remember the times before the financial crisis of 1997. You couldn’t find used car dealers in Thailand, let alone discount stores. Everybody was driving a new car and discounts seemed to bringing shame on oneself.
Today, even if you’re looking for discounts, some have become unimaginable. After the outbreak of Sars you could fly for a few hundred dollars to Europe or the U.S. A ticket today costs you an arm and a leg.
An inbound tourism operator here in Bangkok was just lamenting to me about the consequences. “Not good,” his words. Bookings from overseas are down, major airlines cut capacities.
And this is only the beginning of the new inflationary crisis – if the oil price doesn’t give in. The next buzz words will be stagnation and recession.
No Thaksin could become a hero of the poor in such an environment. His timing back then was just perfect.
Or the rising prices leave you cold? Just play three wise monkeys?
June’s figures have been published: CPI at +8.9% year-on-year.
Few comments:
- Indeed, we can play 3 wise monkeys … and even disguise as Santa Claus … But it’s going to continue. And get higher.
- Does this inflation hit us? Yes and no. At least, not like … poor and medium income Thai people. They are taking the hit full in the face (food, transportations costs, commodities etc.).
- Yes, I think also that the situation could favor Thaksin.
At one point (particularly if one special event happen) … he would be able to play the “I’m your savior” card.
He’s talended, he’s smart. He has the financial means. The masses would love him (and I mean even more than now).
Future looks bleak.
Everythings looks like … Europe in the 30′s.
ThaiCrisis: I was rather assuming that under such an environment even Thaksin’s mystic would fail gloriously. But you’re right, particularly if the one event happens he will be the savior again.
But I’m rather thinking that we’re all sliding slowly and steadily towards major confrontations. At the end of such a road you’ll not rarely find wars.
And regarding the 8.9% year-on-year CPI: The “real life” figure must be way in the double digits.
BangkokDan
The high inflation and economic difficulties are affecting pretty much everyone at pretty much every socio-economic status.
I’m not a bleeding heart by any means, but I know that I feel like a bit of a jerk when complaining about it affects me. I’m just cutting back on my admittedly lavish lifestyle.
Lots of poorer folks in Thailand and all around the world are having a much tougher time dealing with food and fuel price increases.
I’m not eating any less, and if I drive less it’s not because I can’t afford it … it’s because I don’t want to spend the money.
You have hit it right on the pumpkin Paul. You read the mind of many privileged foreigners here.
BangkokDan
We need to remember that CPI is an index. With a “basket” of items, with different weight.
Every country has its own basket … therefore to compare CPI from different countries is not very efficient …
Thai basket: http://thaicrisis.wordpress.com/2007/06/19/inflation-composition-of-the-basket/
Anyway, back to the topic: Inflation is a disaster for the poor.
- They pay more for their day-to-day (and compulsory) expenses
- What they pay is iin a much greater proportion compared to their income and much more than rich people
- And they loose their (small) savings …
Low & medium income people don’t use sophisticated financial tools … They keep their money in a “saving” account at the bank (with ridiculous interests paid).
So there is no doubt that the situation could become explosive in Thailand (like in many other Asian countries).
The govt is totally paralyzed by fear … The BOT is counting the flies … I mean no one has any proactive policy to seriously fight inflation.
At this point, I think they just go to the temple, light candles and pray for the oil prices to go back to 20 USD per barrel …
It’s a real shame.