Another View on the Value of Retired Expats to Thailand

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#1 Another View on the Value of Retired Expats to Thailand

Postby fountainhall » Tue Nov 06, 2018 10:19 am

I suspect many members here look occasionally at the other chat rooms. Recently there has been an interesting discussion on sawatdeenetwork.com with one reference to the Thai military’s report that it has deported 100,000 overstayers. One regular contributor suggested that the average monthly spend of expats he knew was about Bt. 60,000. He then suggests that throwing 100,000 expats out of the country could mean as much as Bt. 6 billion being lost to the economy.

This was a small part of an argument that when the authorities find means to get rid of expats, the economy and society suffers to a much greater degree than perhaps the government imagines.

The sense of this argument is not that the 100,000 so far deported are regular expats. Surely most will be manual labourers, bar boys and girls and others here illegally from neighbouring countries. It is that by tightening the financial rules for retirement expats from western countries, the country will in future actually suffer as a result.

Another poster named kkjason made what I reckon is a very sensible and logical response. I believe it is worthy of a wider discussion and hope sawatdeenetwork.com will not mind my quoting it here.

This is completely wrong thinking. Most of the expats you are talking about think they have some kind of purchasing power here in Thailand, but they most certainly do not. The government, for example, receives no benefit from you or me, or probably anyone else on this forum being here. I think they actually appreciate that we are here, but to say that they are going to suffer some kind of loss because many are 'kicked' out is flawed thinking. For most of us, the government receives very little of our money. It goes into the hands of Thais who do not pay taxes - our landlords (I own my house, so we paid property tax once when we bought and no taxes ever again), bars that pay no VAT, food stalls that pay no VAT, we make no contributions to the social security fund, pay no income taxes, and the list goes on. Now, the ex-pats that work pay taxes, but as . . . points out, these are not the people that immigration is targeting.

So - where are all the Thais who depend on thousands of ex-pats for their money? They are going to actually get a job where they pay taxes! Thailand has one of the lowest unemployment rates anywhere in the world. There are real job openings in almost any city in this country. They simply would need to go and start working at a job where they actually contributed something to the economy. In fact, there are many economists that believe Thailand is operating on a false economy to begin with - more than half the country receives their money 'off the books'. By kicking all of the illegals (probably some of the people reading this forum are included in that), the country would probably actually receive an unintended financial benefit. Also - don't forget that legitimate tourists are more than welcome here. They come in droves, spend money every day for a week or two, and go home. Thailand embraces that and will continue to do so. Many of the expats I know of who live here are so cheap that they spend less money in a month than the average Western tourist spends in a night out on the town. Just look at some of the trip reports from our fellow forum members who come here a few times a year as a tourist . . . Now, they are putting a shit load of money into non-working Thai's pockets and will continue to do so. The rest of who live here - we spend a fraction of that and think we are somehow owed something.

We need to stop thinking that we are some kind of 'god' in the eyes of the Thai government. You mentioned you spent 80,000 baht a month . . . Well - good for you - but, that is a drop in the bucket compared to my Thai Neighbors. We have business people, stock investors, the president of a university, direct marketing professionals, and more who are earning many times what you do. Why are we so special? Do not think for a moment that my neighborhood is the exception. There are many just like it . . . Bangkok alone is filled with hundreds of thousands of Thai's who directly contribute to the Thai government in ways that we never even begin to approach. They would actually laugh at such a small amount that you mention here. There are over a thousand American expats in Bangkok alone who earn in excess of 300,000 baht a month. They pay taxes. These are the ones that actually contribute to the Thai economy and they will have no problem staying here. There are thousands more who live here on investment visa. They invest more than 10 million baht on a regular basis. How does that compare to your 80,000 baht? I am not harping on you necessarily - but this is an argument I hear from expats on a regular basis. We think we are so rich and that Thai officials are so poor, stupid, and idiotic. The opposite is actually true. Our money pales in comparison to what it takes to actually run this country, so why would they care about your 80,000 baht a month, 95% of which they probably never see anyway?

I don’t agree with all of the poster’s points. I believe there are more than a few on retirement visas do spend some money in more regular restaurants, in supermarkets, department stores, gas stations, public transport etc. I don’t know how much the airport authority has earned from the departure and arrival fees of my nearly 300 flights since I moved to Bangkok in 2001! And so on.

But I have rarely seen the crux of the above argument discussed.

https://sawatdeenetwork.com/v4/showthre ... iday-2-nov

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#2 Re: Another View on the Value of Retired Expats to Thailand

Postby Gaybutton » Tue Nov 06, 2018 10:57 am

I don't agree with any of those statements. He knows better than everyone else? I don't think so. If foreigners are not important to Thailand's economy, then why does Thailand make such an effort to attract foreigners coming for a holiday?

Whether farang expats are viewed as important to the Thai economy is a little different. While we might not be of much significant help to the Thai economy, we're certainly not hurting it. Despite that guy's opinion, we do contribute, and quite a lot too. During the course of a year, I'm contributing a hell of a lot more than the vast majority of holiday makers coming to Thailand for a week or two, and with far more diversity than tourists are likely to do. There's a lot more to Thailand's economy than hotels, bars, restaurants, souvenir shops, and tour buses. What else is the average tourist contributing to?

I think Thailand is absolutely right to be getting rid of immigration law violators and people in Thailand illegally, even if it does put a dent in the economy. Whether we agree with them or not, see the logic in them or not, Thailand has its immigration laws and nobody has a right to violate them.

Thailand will let foreigners with the means to support themselves properly stay under the retirement visa. We're lucky they let us stay at all, even if it does mean there will be no choice other than tying up 800,000 baht - nearly US$ 25,000. If that's what it takes, so be it and we'll have to live with it. We may not like it. I certainly don't. I can definitely think of better things to do with $25,000 than being forced to let it sit there in a bank account, but that could end up being the only way - either that or pack your bags.

I would not be surprised if Thailand really does make the 800,000 baht the only way they'll grant retirement visas. I can almost see the logic. It would prevent the liars and cheaters from being able to falsify their actual monthly incomes. There wouldn't be anything for them to falsify anymore. I think they would have a very difficult time coming up with 800,000 baht at all, much less letting it sit untouched in a Thai bank account for three months.

As Geezer puts it, "The day I don't like it here anymore, I know where the airport is."

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#3 Re: Another View on the Value of Retired Expats to Thailand

Postby fountainhall » Tue Nov 06, 2018 11:55 am

Gaybutton wrote:If foreigners are not important to Thailand's economy, then why does Thailand make such an effort to attract foreigners coming for a holiday?"

It was a long quote and I believe you have not seen the point the writer made about tourists -

don't forget that legitimate tourists are more than welcome here. They come in droves, spend money every day for a week or two, and go home. Thailand embraces that and will continue to do so

Looking at the official Ministry statistics, there were 35,381,210 tourists in 2017. I cannot find any statistic for average spend in 2017. In 2016 their average expenditure was Bt. 5,253 per day and the average stay was 9.5 days. According to CEIC data, total tourism revenues in 2017 was equal to US$54 billion.

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#4 Re: Another View on the Value of Retired Expats to Thailand

Postby Gaybutton » Tue Nov 06, 2018 12:19 pm

fountainhall wrote:It was a long quote and I believe you have not seen the point the writer made about tourists

I saw his point and my opinion of it is, in the words of the late Col. Sherman T. Potter, "Horse hockey."

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#5 Re: Another View on the Value of Retired Expats to Thailand

Postby fountainhall » Tue Nov 06, 2018 5:25 pm

I reckon the tourist analogy may be useful/important in the longer term. We know the government and the TAT have been concentrating more on higher-end tourism so that the average daily spend increases each year. With that market sector having already produced major annual gains, I think it is only reasonable to assume that Immigration is on the hunt not only for more income from expats but perhaps even a revamp of the retirement scheme.

I realise this is an assumption - but then haven't there been a lot of assumptions expressed here in recent weeks about the monthly payment scheme for retirees? I believe that some people who became married retirees at least before 1997 have only to show Bt. 400,000 in their account and this has been the case for decades. I do not know when the Bt. 800,000 amount came in but iit has certainly remained at that level since I got my visa. Inflation during that time will not be inconsiderable, plus, at least for most of us, we get more baht for our bucks now than before.

We also know that the two bodies have been plugging the Thailand Elite card as the way to retire in Thailand - at least in the UK. Since they brought in a firm of professional advisors, Henley & Partners, this once moribund programme introduced way back in Thaksin's first years as PM, the numbers have finally started to grow. From around 300 a year a couple or so years ago, the estimate for this year is 2,000. Retirees are one of the programme's two key global target markets. They presumably assume that potential retirees will think a Bt. 5 million lump sum for 5 years a good deal without bothering to check about the Bt. 800,000 per annum route. I already know two expats in Bangkok who have retired using the Thailand Elite card. One did not know about the 800,000 route. The other reckoned the benefits outweighed the extra cash.

The point in bringing this up is I don't think any of us know what is likely to happen in the future. And for those considering retirement in Thailand in a few years time, banking on a Bt. 800,000 annual lump sum may not remain ad infinitum. It is thus worth considering that a lot might change between now and then.

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#6 Re: Another View on the Value of Retired Expats to Thailand

Postby Gaybutton » Tue Nov 06, 2018 5:59 pm

fountainhall wrote:We know the government and the TAT have been concentrating more on higher-end tourism so that the average daily spend increases each year.

I agree. And I believe that is among the reasons, if not the reason, why immigration chose now to be the time when they decided to change the norm about the embassy letters.

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#7 Re: Another View on the Value of Retired Expats to Thailand

Postby gera » Tue Nov 06, 2018 6:57 pm

fountainhall wrote: they presumably assume that potential retirees will think a Bt. 5 million lump sum for 5 years a good deal


Is not it 500 000 baht for 5 years?

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#8 Re: Another View on the Value of Retired Expats to Thailand

Postby gera » Tue Nov 06, 2018 7:13 pm

Current powers put all eggs in one basket:China. Be it tourism growth, export growth, infrastructure investment. It may backfire spectacularly. With current slow down in Chinese economy we already observe decline in Thai exports, tourist arrivals. Chinese typically offer draconian conditions for their infrastructure loans which allow corrupted rulers to line their pockets but put tremendous pressure on economy (not accidentally Mahatir pulled the plug on Chinese infrastructure projects in Malaysia as unsustainable). On top of that Chinese tend to buy up local real estate in unsustainable levels (many countries put explicit barriers on that like New Zealand as recent example) and Thailand is a prominent example in this respect.

Expats offer a stable and mostly independent of China steady income to Thai economy. Thus, current crackdown is shortsighted, to put it mildly.

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#9 Re: Another View on the Value of Retired Expats to Thailand

Postby fountainhall » Wed Nov 07, 2018 9:58 am

gera wrote:Is not it 500 000 baht for 5 years?

My apologies. I have spoken to one of my friends who purchased the Thai Elite basic Easy Access card. It is indeed a fee of Bt. 500,000 for 5 years. Or you can pay Bt, 1 million for 10 years and Bt. 2 million for 20 years.

Potentially this could be of benefit for some retirees for it avoids the need to have Bt. 800,000 in a savings account for 90 days prior to each annual retirement visa renewal. After getting the card there is absolutely no income requirement over the 5 or more years. The other benefits include Thai Elite doing your 90 day reporting for you (of use more to Bangkok residents, I assume) and limousine service plus buggies and fast track at the airport up to 24 times in each calendar year. The latter is of less use to older retirees as those over 70 already have the right to use Fast Track but without buggies. Having a limousine waiting can certainly be a benefit. When I returned to BKK last Sunday the taxi queues were humungous and I waited in considerable heat for more than 30 minutes. Elite members also have the use of a special departure lounge at the airport.

If you opt for the more expensive cards, you also get other benefits including 50% off annual health checks. At Bumrungrad Hospital in Bangkok that would save around Bt, 12,000 a year at present rates.

The negative of the Elite card is that the cost is non refundable. So on each card Bt. 100,000 a year is lost. For a frequent traveller, that is effectively reduced considerably if you travel internationally a lot each year with greater benefits for those putting down more cash.

The friend I spoke to says he finds the benefits extremely useful. Throughout the period of the Elite card, every time he enters he effectively gets a one year stay.

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#10 Re: Another View on the Value of Retired Expats to Thailand

Postby fountainhall » Wed Nov 07, 2018 10:02 am

gera wrote:Expats offer a stable and mostly independent of China steady income to Thai economy. Thus, current crackdown is shortsighted, to put it mildly.

Are you really referring just to retirees? If so, there is surely no way that “steady income” is of any real interest to the Thai government, the more so if it is in comparison to even a reduced number of Chinese tourists.

The total number of expats from the USA and the UK living here in 2010 was 126,000 (and this includes all children over age 5). Even assuming that number is now 150,000, it is reasonable to assume at least half are here on work visas. So the government is probably left with around 75,000 retirees.

The number of Chinese tourists has risen exponentially in recent years – from 6,641,772 in 2014 to 9,119,941 in 2017. The average Chinese spends around Bt. 5,000 per visit daily. That’s probably in the region of three times that of a retired expat presently here.

This year was seeing record numbers until the Phuket boat tragedy in July when up to 600,000 Chinese tourists immediately cancelled. That certainly represented a major revenue loss. Yet the numbers have since rebounded.

A drop in Chinese tourists has happened before and the sector again rebounded. Between 2013 and 2014 there was a drop from 7,282,266 to 6,641,772. It then rebounded in 2015 by over 1.2 million.

Given that Asia remains the main destination for Chinese tourists and outbound tourism is increasing annually in huge numbers, I have zero doubt that Chinese will continue to visit Thailand in regularly increasing numbers. Their contribution may vary but will be absolutely humongous in comparison to that of western retirees.


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