economic bubble in thailand

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.

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

from - http://www.ruby-sapphire.com/da-thailand-after-fall.htm