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Thailand after the fall by Richard W. Hughes

• •  Screkkkkkkk  • •

AM 100: Hello there. Welcome to AM 100, Bangkok's 24-hour traffic watch. Go ahead.

Caller: Uh, Sawatdee krup. Sombat here. Right now I'm, uh, sitting on Sukhumvit Road, Soi 47. Uh, not really going anywhere, just sitting here. Traffic jam.

AM 100 [enthusiastically]: Oh, thank you so much, Khun Sombat. Listen up, everyone, traffic is jammed on Sukhumvit Road. So let's all try to avoid it, okay dearies? Now we go to our Eye-in-the-Sky, Khun Narong. Are you there, Narong?

Helicopter: Hello, Khun Amporn. We are now directly above Pratunam market, things are looking pretty grim down there. Suggest that all listeners avoid the Pratunam area…

 

Readers, bear with me. This column has little to do with gems. For those who haven't yet heard, let's recap the news. Thailand's economy is dead. Gone. Stuffed in a bottle and sent out to sea. Yes, she was good. She was great. But now she's gone and we have woken up with a massive, $200-billion dollar hangover. The only things left to remind us of what once was are the empty shells of our Gem Towers, the lipstick on our collars and the scent of cheap perfume that hangs in the air like a fart at church.

Where shall we start? It makes no difference. In Thailand, the beginning, middle and end all lead to the same place – corruption. Yes, the "C" word. We thought we could get away with it, we talked ourselves into it, we believed our own half-baked notion that the C-word didn't matter, we believed that come-one, come-all bullshit lick about how there was enough dough to satisfy even Pop 'N Fresh. But now the Pillsbury Dough Boy's here, he's appeared, Mr. One-liner in the fresh. And he has spoken – we're done.

Natty Bread

Thailand's economic bubble first inflated in the mid-1980s. The yeast came from three separate sources. First was natural resources. The country was rich in a number of areas, including timber, precious stones and fisheries. Second was tourism. Tourists flocked to Thailand to take advantage of some of the world's finest beaches and friendliest people. Finally was Japan. In the mid-1980s, Japan's rising trade deficit with the US forced Japan to move production offshore. Much of Japan's industrial largesse floated south to Thailand. Indeed, during the 1985–1995 period, Thailand's combination of high interest rates and low labor costs made it a magnet for foreign investment, with the local economy leading the world in growth. This vast inflow of foreign dough produced a collective rise in the country's Levi's as cash-rich residents went on buying spree that would have done Imelda Marcos proud. The bleeding edge of Thailand's economic growth was the property sector.

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AM 100: Hello there. Welcome to AM 100, Bangkok's 24-hour traffic watch. Go ahead.

Caller: Uh, Sawatdee krup. Boonchu here. Right now I'm, uh, sitting on Sathorn Road. Things are pretty slow. Traffic jam.

AM 100 [gushing]: Thank you, Khun Boonchu. Listen up, everyone, traffic is jammed on Sathorn Road. So everybody try to avoid it, right? Now we go to our Eye-in-the-Sky, Khun Narong. Narong?

Helicopter: Yes, Khun Amporn. We are now above Sanam Luang and it's bad. Real baaadddd. Please everybody, get away, stay away from the Sanam Luang area…

AM 100:Now Narong, that's enough…

Easy come, easy a-go-go

Residents in hyper-inflated economies typically turn to property to safeguard their money and this happened in Bangkok in a big, big way, with even lowly noodle nawobs morphing overnight into property princes. Asset inflation coursed through the rest of Thailand's economy like the drug-rich blood in a smack-shooting junkie. But rather than pump the money into improving infrastructure or education, the landed gentry (many of whom pay little tax) rushed out to buy expensive knickknacks, foreign imports with their new-found wealth. Two-thousand dollar bottles of French wine, solid-gold Rolex wristwatches, biscuit-sized diamond baubles, Italian sports cars and, lest we forget, that icon of Thai wealth, the Mercedes Benz. All these and more became ubiquitous sights in the Big Mango.

After a decade of hyper-expansion, this failure to make good use of the new wealth produced the opposite effect. Rising Thai wages priced the country out of the low-end labor markets for products like textiles and gem cutting, while the general neglect of education at the lower levels of society meant that the minimum-wage serfs didn't have the training to tackle more sophisticated work.

Once-plentiful natural resources like timber, precious stones and fish were now long gone. Even tourism suffered, as Thailand's pristine beaches succumbed to pollution and over-development. Today many beaches have been destroyed, with more dead things lying along them than even next door in Cambodia's killing fields.

Like any victim of a pyramid scheme, all of this caught the man in the soi by total surprise. Thailand's dirty little secret was that most of the tremendous growth of the past decade was financed with foreign money.
 

While Thai people remain as friendly as ever, not even ridiculously high local interest rates could now keep the foreign money in place; as it faded, so did those famous smiles. The outflow began in 1996 – by 1997 it had turned into a torrent of repatriation as foreigners scrambled to get their money out before the entire place collapsed.

The three-shell game

Like any victim of a pyramid scheme, all of this caught the man in the soi by total surprise. Thailand's dirty little secret was that most of the tremendous growth of the past decade was financed with foreign money. Although even an imbecile could see that the country's problems were not being tackled in serious fashion, it was easy to overlook the gross mismanagement as long as the foreign bread stayed in place.

Compounding the problem were the country's political and business leaders, who made collective asses of themselves. Take Thailand's last two prime ministers. Newly crowned kings of the jungle, after the requisite electoral breast-beating and posturing, they promptly went out and slipped on the first banana peel in their path.

The political and business leadership has performed like collective bozos, anemic flat-chested Twiggys whose sole goal in life seems to be finding out just how much public money can be stuffed into their Liz Taylor-sized bras. I've got a little secret, boys – that ain't no Wonderbra. The cash shows. It's hanging out all over, with a trail from the public trough straight to your foreign bank accounts. You people make Ferdinand Marcos look like Mother Teresa.

While the economy was growing in leaps and bounds, corruption was tolerable to many people. This is no longer the case. Now that the scale of the graft is clearer, we the people realize we have been hung up to dry by our tits. Many will lose their jobs. Some may lose much more.

So long is the bullshit trail that many of us in the country have come full circle, actually beginning to believe our own blabber. Need a fer instance? Bangkok has now put up enough "gem towers" to put every dealer on the planet in their own luxury suite. We've got two diamond bourses in a city with only half a diamond trade. We put the world's tallest building into a rabbit-warren soi so tiny it makes a Moroccan medina look like a planned community. And all this in a city that can't organize two adjacent traffic lights green at the same time.

If I sound a bit pessimistic, it's only because I AM PESSIMISTIC!!! I AM VERY PESSIMISTIC!!! I am sick and tired of watching while every two-bit politician ever to slink down the soi bleeds the country dry while, at the same time, the typical businessman's only concern is whether or not teal is available for the trim of his private jet. And to be complete, let's not forget the military, who, when not plotting coups, are busy buying multi-billion baht aircraft carriers whose only use is as floating flood-relief stations.

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AM 100: Hello there. Welcome to AM 100, Bangkok's 24-hour traffic watch. Go ahead.

Caller: Dudette, this is Jake Watson here, but my friends call me Curl. Huntington Beach, Cali's home, but right now I'm, uh, trying to fight my way out of the Safari Bar on Patpong Road. Getting absolutely nowhere, things are awful gnarly. Let me tell ya, Betty, this is one major bummer, a bad ride all the way. I'm supposed to be in Sumatra on Saturday, and Nias in a week. Word has it that the west coast of Nias is Tube City…

AM 100 [enthusiastically]: Oh, thank you so much, Dude Curl. Listen up, everyone, traffic is jammed on Patpong Road, all the way down to Nias. So let's all try to avoid it, okay dearies? Now we go to our Eye-in-the-Sky, Khun Narong. Are you there, Narong?

Helicopter: Hello, Khun Amporn. We are now directly above Patpong Road, things are looking pretty, uh, pretty, uh, nasty down there. Wicked nasty. Suggest that all listeners get down there…

AM 100: Okay Narong, I said that's enough…!

Traffic-schmaffic

In putting the pieces back together, the first thing we must do is to take a hatchet to Bangkok's traffic problems. Let me frame the subject in terms that even a businessman can understand. Money. Big baht. Mucho moola. Bangkok's traffic problem is thought to cost the country somewhere around ten billion dollars a year. Yes, those are genuine Yankee greenbacks, not Burmese kyat. Ten billion in lost productivity from idling in cars, hospital expenses from pollution, etc. This is enough to feed all the chicks from Bangkok to Beijing and still have money left over for Brenda.

Now let me explain why we will not take a hatchet to Bangkok's traffic problems. Corruption. Graft. The C-word again, rearing it's ugly mug like a cheap whore at your brother's wedding. We won't tackle this thing that is killing us all because we and our public servants play with the traffic problem like a cat batting around an injured mouse.

Instead of developing a single rail-based mass transit system, we will come up with three different, mutually incompatible systems, because the squeeze from three contractors is greater than one. Instead of limiting the number of automobiles by increasing taxation, we will lower the tax on cars because we own the dealerships. Instead of reducing pollution by removing two-stroke motorcycles (who produce the majority of Bangkok smog) from the roads, we will continue their manufacture, again because we own the dealerships. Instead of building skyscrapers along the main roads, we put them deep in the sois where the land is cheaper, regardless of whether or not the roads or infrastructure can support them. And instead of supporting mass transit, we will protest when the government decides to build a subway station in front of our home, because it might produce dust. And you know how we in Bangkok hate dust.

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AM 100: Hi! And a big welcome from AM 100, Bangkok's 24-hour traffic watch! Go ahead.

Caller: Er, Sawatdee krup. Appichart here. Right now I'm, er, uh, at the intersection of Wireless and Sathorn Roads. The cop hasn't changed the light in three hours, but he's workin' real hard, wavin' his hands around like some kinda magician. Sure wish he'd change the light, though…

AM 100 [gushing]: Thank you, Khun Appichart! Listen up, everyone, traffic is jammed at the Wireless-Sathorn intersection. So let's take an alternative route, okay? Now we go to our Eye-in-the-Sky, Khun Narong. Narong?

Helicopter: Uh, yes, Khun Amporn. We are now above the Bang Na-Trat highway. I don't have words for what I see. Please everybody, get away, stay awa…

AM 100: Narong! We'll get right back to you…

 

Start the presses!

Part of Thailand's problem is the endemic censorship of the press. Often this is self-censorship, particularly in the trade press. Big businessmen run hand-in-blissful-hand with the military, who collectively own virtually all of the media and see to it that nary a discouraging word is heard. The watchdog role of the press is thus curtailed, since a dog will hardly bark at its own master, even if that very same master is robbing the house.

We in the press must share the blame. Where has the leadership role been? It certainly hasn't come from the press, which is too busy editorializing on stuff like Australian bigots to worry about what's happening at home.

Bangkok's newspapers must stand up and be counted. If they spent half the effort worrying about the traffic and pollution problems that they do preaching about the dangers of drugs, the problem would have been history long ago.

We don't just need articles and editorials about abuse of power and the steady poisoning of Bangkok's population, we need them every damned day. Try this: Put at least three articles about pollution and traffic problems on the front page every single day. Plus a front-page editorial. Send your reporters to ask the powers-that-be what they are doing to combat the problem every single day. Make it clear that you will continue this campaign until some serious action is taken. We are dying!!! Can't you get that through your thick skulls?

I am so mad I want to scream. I've had enough of this chickenshit behavior. Now it's time to pay the piper. We can no longer pretend that corruption is okay because everyone is collectively being raised up to prosperity. The dream is over, the bubble has burst. Everyone is wet.

HELLLLOOOOO, IS ANYBODY HOMMMEEEEE?????? Are we all so collectively brain dead that we cannot see that we are steadily being poisoned? Every goddamned one of us in this city has the equivalent of a pack-a-day nicotine habit. Are we all so far gone that we cannot see that we are steadily being robbed by our leaders? How much more of this are we going to take?

We are that mouse. Whack! Do we have to wait until our children can only communicate in emphysemic bleats before we take action? Whack! Until even the sun can't cut through the smoke? Whack! Until the only things we have left to hand over to our children are a few 55-story grave stones and the picture of a tree? DO WE?? Whack! Huh? Whack! DOO WWWEEEE????

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AM 100: Hi! And a big welcome from AM 100, Bangkok's 24-hour traffic watch! Go ahead.

Caller: Er, Sawatdee krup. Park here. Right now I'm, er, uh, parked on Silom Road, in front of one of those empty skyscrapers. Haven't moved in thirty minutes. Whole street is one big parking lot.

AM 100 [gushing]: Thank you, Khun Park! Listen up, everyone, Park is parked on Silom Road, which is all jammed up. So let's take an alternative route, okay? Now we go to our Eye-in-the-Sky, Khun Narong. Narong?

Helicopter: Amporn, baby, this charade's gotta end. It doesn't matter where we are, who we are or how rich we are. The whole bloody city is the same. It's a disaster area, a toxic waste dump, a vast open-air sewer. God, somebody, anybody, please hit the delete key. Bangkok doesn't need a 24-hour-a-day traffic station, it needs cleaning, cleansing, ethnic cleansing, political cleansing, total clean-up, a clean sweep. The whole place is one big human rights violation – what we really need is a goddamned UN war crimes tribunal!!!! String up the whole bunch.

Ha! But I don't care. You think we care? Ha! My crew and I don't fly around checking the traffic, a fool's errand if ever there was. No, we are doing like everybody else in this town, getting ours for ourselves. We sold the helicopter to the Cambodians several months ago and with that money, and our fuel stipend we've been living the high life in Tahiti.

AM 100: Narong, you dog, ya! I sold all the office furniture and computers and now I'm in Bora Bora. Let's do lunch…

 


Postscript: crystal-balling Thailand's future

The above was written in Bangkok in the Summer of 1997, amidst the descent of much plaster, as Thailand's economy came down around my ears. Just a few edits were included to bring us up to date.

It is said that history can teach us everything. In my wildest moments, I still pray to the big lava lamp that this is true, but must confess to the following doubts: A friend had a buddy who was a history major at an English university. After studying the weight of human experience over the past five or so millennia, he concluded that history has taught humans nothing. Thus he killed himself. Who am I to argue with that?

But, since I also fancy myself a study of human history, and, of course, since I'm not quite ready to place revolver to temple, I guess it does no harm to read the tea leaves for Thailand's future. So, as they say on television, let's just do it.

In the near term, a hard rain's gonna fall in Thailand. The times they are a changin' and nothing that Bobby Zimmerman can say will make a damn bit of difference. Layoffs have already begun; I expect that this will continue over the next two years. The amount of Bangkok's empty office space is now such that insects are moving into the cheaper units. It will be some time before mammals replace them.

In the near term, a hard rain's gonna fall in Thailand… But my money for the long term (and my heart) is definitely with the human spirit and the wonderful people of Thailand. A smile costs nothing to produce, but its value is more than silver, more than gold, more than even rubies.

As for the rock and metal trade, I expect to see a move by manufacturers to India, Sri Lanka and China (due to lower labor costs) and resulting discounting in Thailand. Much of this has already begun. Burma is the wild card in this equation. With her raw materials and cheap labor, she could play a major role in the future gem and jewelry trade, but given the myopic views of the current ruling military leadership, who are hell-bent on keeping all to themselves, it seems only a revolution will produce change. So we'll call Burma the joker. Outside the gem arena, look for Burmese heroin production and timber exports to increase, as the military tries to prop up its overstressed economy in the face of decreased investments from Malaysia, Thailand, Singapore, Korea and other East Asian economies.

Where does Thailand go from here? The country is definitely at a crossroads. A continuation of the past policies of widespread corruption will see a shift of business to lower-priced labor markets like India, Sri Lanka, Bangladesh and China, and this certainly includes the gem and jewelry trades. After all, if you have to manufacture in a corrupt, poorly educated environment, why not choose a place with the lowest labor costs? But if Thailand can seriously tackle the high-level business and political corruption, which has produced the current crisis, the future is very bright indeed.

In the short term, I put my money on the inability of Thailand's corrupt politicians and businessmen to change. But my money for the long term (and my heart) is definitely with the human spirit and the wonderful people of Thailand. A smile costs nothing to produce, but its value is more than silver, more than gold, more than even rubies. And no people on this planet produce better smiles than the residents of Thailand. So, as they say on television, just do it!

 

dingbat   

 

Author's Afterword

This article was published in the Accredited Gemologist Association's Cornerstone (Winter, 1997, pp. 1, 3–6).

See also Death of the Thai Ruby

 

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Page updated 7 March, 2013

dingbat