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Will Thailand Become More Dependent upon Retirees?

Transcript of the above video:

As the title of this video suggests, we are discussing retirees and whether or not the Thai economy will become increasingly dependent upon them. I have seen a lot out there in just the news here in Thailand especially in recent weeks, a lot of commentary on the future of the Thai economy. For example: "Is the retiree economy going to be what keeps things going?" versus I heard some people the other day talking about, I think it was on YouTube, whether or not the Backpacker economy will come back. For people that aren't aware, there really was a discrete economy, a layer of the tourism economy, very dependent on the backpackers. There were hostels, guest houses, restaurants, areas of town, Khao San Road most notably here in Bangkok, that was very focused on the Backpacker kind of paradigm, kind of traveler and we have definitely seen a lot fewer the numbers of those folks. I would say compared to the retirees. The retirees for one thing they have a Visa; they have their own Visa category which I think has a tremendous impact but is it is just backpacking is not as easy as it once was for lack of a better term. So the big question I have heard from many is: "Will Thailand become increasingly dependent on retirees?" 

Well I think the word dependent is probably where we need to kind of look. 17% of overall GDP prior to March 2020 when this response to COVID was promulgated and we saw all these lockdowns and shutdowns and quarantining, essentially tourism I hesitate to say evaporated but it fell by the wayside heavily. In the aftermath of that what are we left with? Well of course 17% of GDP, that is a big number and that being gone impacts a lot of folks. Thailand is not, and this I think is a misconception out there, that Thailand is wholly dependent on tourism. In my experience, that is not the case. We are making a video contemporaneously with this one where we discuss the Sophie's Choice Thailand has with respect to manufacturing and tourism because they bring in a great deal of Foreign Exchange from both, but gains in one sector can actually adversely impact the other sector, inadvertently. Nobody means for it to happen, it just is what it is. Not to go too deep into that but moving forward, I think retirees have always been a major component of that 17% of GDP. I think a lot of that GDP gets tabulated up effectively as tourism although they are not tourists. Retirees, especially on Non-immigrant O or O-A Retirement Visas are not in any real sense of the word actual tourists; they are retired expats basically is how I look at them, and they do live here. They are part of the more permanent economy for lack of a better term; I think of them as contributing in that 17%. Then the question becomes well how much did they contribute? It is sort of odd, over the years I think the retiree community is simultaneously if this makes sense, both overestimated and underestimated in their importance. I think that in a way, the community itself to some extent overestimates its own contribution, not even contribution, I don't think they see the bigger picture because expats you can end up living in your own bubble, I certainly do in many ways and you can fall out of being able to see the bigger picture. Thailand is a country that is filled with a lot more people than just retirees that retirees may see every day so there is one level of that. At the same time, I would have to imagine based on numbers that I have crunched in the past, probably one of the main streams of foreign currency revenue coming into Thailand presently in fact I would say it is probably number two under manufacturing, I could be wrong and don't hold me to that, I am simply speculating but just based on an educated guess I would think retirees presently probably the foreign exchange that they bring in just to live here and maintain their status here in Thailand is probably pretty heavy at least for the moment when you consider that there are virtually zero, not zero, there are numbers of tourists coming in but it is very low compared to the numbers we were dealing with in quarter one of 2020 and backward. 

Long story short, yeah I think the retirees especially right now, we need them. I think we need them all the time. I think they contribute to the economy but I think right now compared to most times, I have been down to Pattaya a few times over the past year and I think if there weren't retirees down there I think everybody almost, not trying to be facetious or snarky here, but I think they would almost close up shop in that town. I think the same could probably be said to some extent for parts of Hua Hin as well. So again, this is just one man's observation but yeah I think for the moment, retirees are a major blessing for Thailand and the Thai economy and I think they probably will be for some time to come. Frankly I hope everybody remembers this time frame years in the future especially if and when the tourism sector recovers and remembers it so that we remember that these folks are here thick and thin. Other than working expats which I would say is a much lower number overall of foreigners in Thailand, retirees and working expats we are going to be here. They are here when it is good and bad and even the working folks sometimes aren't going to be here when it gets bad but retirees for lack of a better term, their demography is more sticky. They stick to Thailand regardless of what is going on much more thoroughly than other demographic groups and hopefully we will remember that in years to come, hopefully when things improve markedly.