Thailand ex-pat exodus

The numbers are shocking as to how many foreign owned companies have pulled up roots in Thailand. A number of reasons are cited, and all contribute to people from other countries who would like to call Thailand their new home, simply are forced to call their old home in their own country home once again.

Certainly the global economy has contributed to this exodus as similar departures from other countries are also being seen. But some of the reasons in Thailand are not economy driven, they are driven by lack of needed skills in Thailand, and Thailand making it increasingly difficult to have a business here with a double standard between Thai and foreign businesses. Thai businesses are treated with encouragement while foreign businesses are treated with discouragement with loads of extra requirements and paperwork to support it.

The numbers Connecting the Dots has come up with in our research is roughly 40% of foreign owned companies and small businesses have either pulled the plug on life support or have gone into hibernation. Although we only solicited one source for information, we feel comfortable that other sources would show nearly the same numbers. So as a disclaimer we may be off by 5% one way or another.

One of the non economic reasons that companies are leaving is a combination of lack of proper education, and the laid back attitude (don’t worry about it) inherent in Thai culture. The incentive to come to Thailand was cheap labor, but with cheap labor also comes the old ‘You get what you pay for.’ One such example was a software company from Australia who found to get the skill level they needed required paying wages equal to what they would have paid in Australia. So with the added expense to house a base in Thailand, the numbers simply said it does not work.

The ongoing battle between Thailand’s government and the convicted fugitive Thaksin Shinawatra has also lead to companies giving second and third thoughts about Thailand. Thaksin has been acting more like a warlord than a fugitive on the run as he continually attacks Thailand, and this sheds doubt on Thailand’s stability.

Thai landlords that rent to ex-pats are also suffering with occupancy between 50% and 60% in many places making it difficult to make the mortgage payments. Places like Pattaya are extremely hard hit as generally work for ex-pats in that part of Thailand is becoming more limited. Bangkok because of its huge 8 million population offers a little more stability in white collar work for ex-pats, but pickings are getting very lean for finding work.

This has translated into difficulties for international schools in filling their rosters. That has resulted in teaching positions being reduced further adding to the exodus.

With a dwindling population of foreign companies in Thailand, this will ultimately hurt Thailand’s economy as generally they pay better and treat their employees with western work schedules. Thai companies frequently offer between 2 and 4 days off per month, where non Thai companies reflect work times based on their home country standards.

A good litmus test of how well things are doing is by checking the local watering holes. Bars where people congregate after work tend to reflect the state of the economy. Some areas seem a bit more resistant than others. In general Soi Cowboy part of Bangkok’s naughty nightlife seems to be doing better than Pattaya as a whole. Pattaya is an entire city devoted to the naughty nightlife, but because of the population density and lack of tourists, it is suffering more than Soi Cowboy. Soi Cowboy is more of a locals location than a tourist location. Also the fact that sooner or later everyone visits Soi Cowboy makes it a bit more durable and not a truly accurate gage. After all the oldest profession is the oldest profession for a reason.

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