Students to Analyze Ratchada’s Entertainment Complexes & Their Contribution t
Dr. Saul: Ratchada’s GNP Factor
It is our privilege to introduce columns by Dr. Saul Kruggerand, the renowned Ph.D. economist and native of South Africa, who will regularly share with us his wide research and hands-on experiences on Thai economic affairs.
In his introductory column “Dr. Saul,” as he is affectionately called by his students, will analyze Bangkok’s Ratchada district and the role its many large-scale “entertainment complexes” play in the overall Thai economy: “Ratchada’s Entertainment Complexes & Their Contribution to Thailand’s GNP.”
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Dr. Saul is himself a Yesbel Laureate with his Ph.D. from the prestigious London School of Economics LSE. Dr. Saul has worked with or along with the World Bank, IMF, Goldman Sachs, AIG Hedge Fund Division and George Soros. And now, without further introduction, here is Dr. Saul:
By Dr. Saul Kruggerand, Ph.D. Economist
Much has been spoken and written in regard to Bangkok’s Ratchada district and the role of its many large-scale entertainment complexes in the overall Thailand developing economy.
First, let us examine the mechanical steps that comprise a typical entertainment complex processing experience and the often heard complaints about the negative environmental impact generated by these large industrial-scale sites and their massive scale of processing.
Many of the entertainment complexes in the Ratchada district often have upwards of 700 to 1,000 rooms, each with their very own very large jacuzzi tub. After each client is “processed” by one of the entertainment complex’s 400 to 500 “service workers,” each jacuzzi tub is of course drained and because there are 700 to 1,000 of these tubs in just one entertainment complex, in order to operate in an environmentally responsible manner, the water is recycled through a sterilization and recycling system and, once the recycling is complete, the recycled water is then efficiently pumped back up to the rooms for the next client’s use in filling up the jacuzzi tub once again.
Now over the course of some months as all this water is repeatedly sterilized and recycled (approximately 10 times a day for each of the 700 to 1,000 rooms, that is, 70 times per week or 3,500 times per year), you can imagine, if you wish to set your mind to it, where this water has been, what fluids might have been repeatedly blended into it, what an array of microbes might have been introduced and what other extraneous matter it may have come to have contact with and what impact of all this might have on the environment.
But in this area, we can be assured and can set our minds at rest as there are many filters in the sterilization and recycling system and these filters are scrupulously maintained and inspected by a most diligent and highly trained Thai staff.
In the case of Ratchada’s largest such entertainment Complex, we can be further assured that a high-ranking member of the present Thai government, was, prior to joining the government, the Entertainment Complex’s executive manager, and the entertainment complex was conceived, brought to fruition, and is still owned by her family which maintains a very high standard of management oversight and control.
So you can be completely relaxed as to the level of management expertise and quality control that is applied in the environmental impact and recycling area. In fact, this particular entertainment complex recently completed an arduous ISO 9000 quality control certification process and has been awarded an ISO 9000 quality assurance certificate.
Whereas in normal quality control inspections, each aspect of the various processes are thoroughly tested for one complete cycle, in the case of this particular entertainment complex, each inspector insisted on laboriously testing every aspect of every single process a minimum of ten times, just to be absolutely certain that all the systems were functioning one hundred and ten percent as they should, with not even one square inch left uninspected.
Now, having dealt with the environmental impact and recycling areas, let us turn our attention to the economic impact of this particular entertainment complex.
The 50 story high, 5 star facility presently operates 24 hours per day 7 days per week, processing approximately 10,000 package tourists from mainland China per day … that’s 70,000 per week or 3.6 million package tourists from mainland China per year … which means that over the next ten years, about 36 million mainland Chinese tourists will be processed, unless they build a second tower of course which has been proposed under the present government’s economic stimulation package, with the Funds to be borrowed from mainland China at a favorable interest rate of five percent.
Calculate that the approximately 3.6 million clients per year will spend between gourmet dining, the excellent snooker room, the singer lounge/bar, the karaoke room, along with all of their whiskey and beer, and on average about 150 USD per “service worker” per client (on a range of 50 USD to 300 USD depending on the exact “classification” of the “service worker”) or to be cautious about 200 USD gross per client per visit multiplied by 3.6 million visits per year. This gives us a yearly “gross” (in the financial sense) of approximately 720 million USD per year for this one “Entertainment Complex” alone.
Now please do not let such large figures set your mind into sleep mode as there are more to come.
Let us further calculate that, in the Ratchada district alone (which is only one of many “entertainment” districts in Bangkok and Thailand as a whole), there are approximately 20 plus such large-scale entertainment complexes (along with the myriad thousands of smaller scale “entertainment venues”), then multiply our earlier “gross” by 20 and we arrive at a “total gross” for this one segment of the overall entertainment complex business of approximately 14.4 billion USD.
Now, mind you, we are speaking of the “gross” not the “net” as there are many expenses and costs, from the staff to the towels to the cleaning of each room after each “client” has departed to the orderly disposal of noxious fluids, to the various levels of high-ranking officials who have their own costs and expenses which must be met as set by custom, tradition and need.
Now this entire 14.40 billion USD is categorized in the economic sense as what is referred to as “net export of services income” (NESI) which represents a “pure” net gain to Thailand as the money is brought into Thailand from mainland China by mainland Chinese Tourists and nothing of actual value is being exported from Thailand, meaning that the entire benefit remains inside Thailand’s economy.
We can now move on to the “residual economic benefits” (REB) formula which is calculated by multiplying each U.S. dollar of NESI by 20 USD of other related economic activity (such as rent from the “service workers” for their rooms and apartments, food, clothing, beauty salons, the supply of tissue papers and protective latex devices from Thailand’s Muslim south, etc.) and we thus arrive at an “overall net benefit” (ONB) to Thailand’s GNP from this one entertainment district alone of about 290 Billion USD.
Now, some might argue that in addition to the potential environmental impact and financial impact, there are other negative consequences from having such an extreme concentration of so many large-scale entertainment complex processing centers in such a densely populated urban area in which there are also many schools, major medical centers, Buddhist temples as well as very large hotels and heavily populated apartment buildings.
But fortunately, Thailand is one of the world’s most “Buddhist” societies and its population is protected, reassured, relieved and relaxed by being taught and sincerely believing that “Desire is only an Illusion” and that, in fact, the entire array of entertainment complexes and their 24/7 processing activity is not actually “real.”
Thus, in conclusion, we can safely say that despite all of the risks and dangers involved, this economic pillar of society indeed provides a very “happy ending.”
(Disclaimer: The opinions expressed here represent the author’s and are entirely from his own experience. Furthermore, they do not necessarily reflect the views of the the people who live in the author’s hemisphere and the individual letters, words and punctuation marks involved had no option but to be placed into the story, and should not be held accountable for the author’s statement. Any spelling or grammatical errors are not the responsibility of the schools the author attended, the teachers the author was taught by, the regional governments who did or did not fund the author’s educational system, or anyone else involved in the author’s life.)
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