Can Tourism Box out Other Industries?
In economics, there is something called "Dutch Disease." It is an idea that a commodity boom lead to a huge surge in inward investment and the resulting increase in demand of the local currency makes the currency so expensive that it practically kills off all other industries that depend on international markets for survival. The death of other exporting industries than set off a chain of destruction that wreck havoc on the entire economic system, to the point that only the commodity-producers and their related industries survive as viable portions of the economy.
While the term is only applicable for commodities at the moment due to the enormous demands for them in the international market, and the relatively straightforward risk-benefit analyses of investing in them, the author somehow feels that he found an alternative possibility for the Disease's applicability as he walked down the central streets of Bangkok at night. As they have been in the recent past, these streets are filled with ladies of the night wooing the endless throng of foreigners with too much money and leisure to burn. The demand for pleasure seems insatiable.
Indeed, Thailand has been one of those countries where mass international tourism has been strategically pioneered as a pillar industry for the overall economy. With Bangkok consistently being the most foreigner-visited cities in the world, a plethora of service industries, ranging from restaurants to brothels, popped up to be exclusively supported the constant flow of tourists from around the world. This has not changed even with the reported crackdown on immoral behaviors since the military came to power a few months ago.
And it seems that the tourist industry here, just like commodities would in the classic Dutch Disease scenario, is slowly boxing out all the other productive industries, at least in a systematic visual fashion. One is the easy money that seem to come along with those who invest in tourist establishments, despite enormous competitions there inevitably be. But more importantly, the idea of doing something productive is just so difficult when there are masses of people partying itself right next to the office building where you type away on a laptop.
The author can personally attest to this point. On this first visit of his to the local company office, situated in the heart of Bangkok's commercial district, it is hard not to notice all the activities going around when night falls. Two red-light districts are within five-minute walks from the building, and interesting personalities, from hawkers selling bootleg porn flicks to outright street hookers, occupy every inch of the available sidewalk. Honestly, if a young man is unattached, energetic, and only in town for a short period of time, it would be hard to not be distracted by all of such sights.
But the productivity of long-term residents may be just as negatively impacted as it would for their short-term counterparts. Their dismay from constantly being exposed to the endless displays of pleasure around them will take tolls on their perception of Thailand as a country. A person can only party for so long, no matter how party-hardened the person professes to be. Unfortunately, these people cannot see Bangkok as capable of giving the spaces and the opportunities to take a rest from constant exposure to entertainment.
So these jaded people will leave, long before they can get enough experiences in their respective jobs to become as productive as they can potentially be. Without the needed human capital, it is hard to see how companies can function in any sustainable fashion. Unfortunately, many of the so-called "knowledge industries," as the author's would profess to be, cannot easily replace their employees without major disruptions in the same way go-go bars can replace their girls. The industries, then, will have to eventually follow in the footsteps of their ex-employees.
Sure, tourism is a comprehensive idea that employ large numbers of people, much due to the wide range of services and products tourists would purchase. The whole host of industries sponsored by flows of tourism would then mask the departure of industries that have little or nothing to do with tourists. But given the volatility of tourist numbers, just like commodity prices, exclusive dependence on it would be extremely unwise and dangerous for the overall economy. As Dutch Disease is impacting commodity producers, tourism-focused countries like Thailand will fill the pinch sooner or later.
While the term is only applicable for commodities at the moment due to the enormous demands for them in the international market, and the relatively straightforward risk-benefit analyses of investing in them, the author somehow feels that he found an alternative possibility for the Disease's applicability as he walked down the central streets of Bangkok at night. As they have been in the recent past, these streets are filled with ladies of the night wooing the endless throng of foreigners with too much money and leisure to burn. The demand for pleasure seems insatiable.
Indeed, Thailand has been one of those countries where mass international tourism has been strategically pioneered as a pillar industry for the overall economy. With Bangkok consistently being the most foreigner-visited cities in the world, a plethora of service industries, ranging from restaurants to brothels, popped up to be exclusively supported the constant flow of tourists from around the world. This has not changed even with the reported crackdown on immoral behaviors since the military came to power a few months ago.
And it seems that the tourist industry here, just like commodities would in the classic Dutch Disease scenario, is slowly boxing out all the other productive industries, at least in a systematic visual fashion. One is the easy money that seem to come along with those who invest in tourist establishments, despite enormous competitions there inevitably be. But more importantly, the idea of doing something productive is just so difficult when there are masses of people partying itself right next to the office building where you type away on a laptop.
The author can personally attest to this point. On this first visit of his to the local company office, situated in the heart of Bangkok's commercial district, it is hard not to notice all the activities going around when night falls. Two red-light districts are within five-minute walks from the building, and interesting personalities, from hawkers selling bootleg porn flicks to outright street hookers, occupy every inch of the available sidewalk. Honestly, if a young man is unattached, energetic, and only in town for a short period of time, it would be hard to not be distracted by all of such sights.
But the productivity of long-term residents may be just as negatively impacted as it would for their short-term counterparts. Their dismay from constantly being exposed to the endless displays of pleasure around them will take tolls on their perception of Thailand as a country. A person can only party for so long, no matter how party-hardened the person professes to be. Unfortunately, these people cannot see Bangkok as capable of giving the spaces and the opportunities to take a rest from constant exposure to entertainment.
So these jaded people will leave, long before they can get enough experiences in their respective jobs to become as productive as they can potentially be. Without the needed human capital, it is hard to see how companies can function in any sustainable fashion. Unfortunately, many of the so-called "knowledge industries," as the author's would profess to be, cannot easily replace their employees without major disruptions in the same way go-go bars can replace their girls. The industries, then, will have to eventually follow in the footsteps of their ex-employees.
Sure, tourism is a comprehensive idea that employ large numbers of people, much due to the wide range of services and products tourists would purchase. The whole host of industries sponsored by flows of tourism would then mask the departure of industries that have little or nothing to do with tourists. But given the volatility of tourist numbers, just like commodity prices, exclusive dependence on it would be extremely unwise and dangerous for the overall economy. As Dutch Disease is impacting commodity producers, tourism-focused countries like Thailand will fill the pinch sooner or later.
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