Thailand: Life after a booming economy meltdown

Thailand: Life after a booming economy meltdown

The consumerist culture that engulfed Thailand at the height
of an economic boom is fading. And as Johanna Son of Inter Press
Service writes, it took a serious economic crisis to make people
see sense.

BANGKOK: Huge banners and billboards announce sales of up to
70 percent off at Bangkok's many shopping malls, but the crowds
there have noticeably thinned out in recent months.

Shoppers take a little while longer before deciding to buy
items, while stores try to outdo one another in promotions to get
more customers. One gas station, for instance, distributed free
eggs to motorists for every $10 of fuel bought.

Sleek luxury cars from Audis to Mercedes Benzes can still be
seen along the city's often-clogged streets, but vehicle sales in
Southeast Asia's largest car market have started to drop for the
first time since it was liberalized in 1992.

Major vehicle assemblers have cut back on 1997 production
targets and industry officials say this year's sales are likely
to dip well below the target of 460,000 units -- down from 1996
vehicle sales of 589,000.

In the two months after the sharp devaluation of the Thai
currency in early July, consumers used to the pampered lifestyles
and adornments of this newly rich economy are hurting. Worse,
government officials and economic analysts agree the Thai economy
will remain in the doldrums for at least two to three years more.

At the height of an economic miracle that saw the country's
GDP growing by more than 8.0 percent annually since 1986, Thais
became quite big spenders, used to material comforts of life and
status symbols like cars, cellular phones and expensive flats.

"Many people here have gotten used to the luxurious lifestyle.
Maybe they're not as big spenders as people in Hong Kong or other
places, but the way they spend here is big," remarked one
newspaper editor.

Over the years the consumerist culture seeped into Thai
society amid an economic boom that seemed airtight, and its rich
and elite crowd copied extravagant lifestyles and displays of
wealth from the industrialized world.

Before the economy started going into a downturn last year,
very rich Thais would have the front grills of their vehicles
gold plated. Designer labels on clothing and other articles
became such a status symbol that high school students would rent
Louis Vuitton bags from enterprising souls in order to be seen
wearing them to school. Politicians, it was said, thought nothing
of giving away bottles of wine costing US$10,500 each.
Businessmen buying vehicles with their credit cards was not
uncommon.

But in just a matter of months, the Thai economy has melted
down, dashing its hopes of quickly joining the ranks of Asia's
tiger economies like South Korea, Singapore, Hong Kong and
Taiwan.

"Now I don't know whether we will be a tiger or a cat,"
remarked Anand Panyarachun, former prime minister and businessman
who has more than once been asked by the king to head the
government to restore stability in the wake of military coups.

"What the public has experienced is a sad tale of a once
robust and roaring economic tiger being transformed into
something resembling a junkyard dog being fed by sympathetic
passersby," analyst Sopon Onkgara wrote in the Nation newspaper.

To many people, the economic downturn came as a surprise
though signs of trouble had been around for some time. Confessed
Anand: "I was one who did not believe this (could happen),
because for the past four to five years the economy has been like
a soap bubble."

Much of the crisis was sparked by excessive and irresponsible
lending by financial institutions and property firms, resulting
in a mass of bad debt that drove the whole sector under and
required massive infusions of money by the government.

From a larger viewpoint, experts say Thailand's woes reflect
not just greed by financial firms riding the crest of a real
estate boom, but profligacy by the government, whose officials
authorized massive infrastructure projects often with little heed
to fiscal discipline. One critic went as far as to say the
economy is based on "greed, speculation, consumerism" and a 'buy
now, pay later' mentality. Thus, the crisis has triggered a round
of soul-searching among some Thais.

Some theorize that never having been colonized, Thailand may
have less wariness of things foreign, unlike some of its
neighbors, and has thus deeply imbibed the consumerist culture.
Some say they might have a greater propensity to copy elite
lifestyles from the outside world as the mark of success.

Others say there may yet be a good side to the country's
problems. "Maybe this is also good, because we can return to
normal and learn to live more simply," said Phochana
Chandrasanti, a writer and translator who dabbles in philosophy.
"We can go back to where we came from as human beings -- not as
economic people (who consume goods)."

Meantime, the country continues to reel from the effects of
the economic crunch. Unemployment is rising and experts say the
economy may post little or no growth for 1997, despite the
government's projections of 3 to 4 percent GDP growth.

In the coming years, Thai officials say they expect to see an
increase in mental stress caused by economic worries, a trend
observed also after the Mexican financial crisis of 1995. Reports
said hundreds of suicides occurred in the months of the Mexican
crisis, along with a rise in violent crime.

The mental health department said it would conduct a
nationwide survey, under which staff would interview 1,000 people
a week by phone to ask how they were doing -- and to give them an
outlet for stress.

-- IPS