Join the new world

Over the past month or so Thai politics has been disorderly, a battle of power between the old and the new has arisen and new law after new law has been rejected – some of which were a vital part of Thai tax reforms discussed in December. This article will hopefully provide insight into some of the problems facing the Thai economy today.

Natural resource

Thailand is unfortunate in that none of our regions have high resources (iron, wood, diamonds or grain). eRepublik is full of formula’s and put simply a primary industry that is not in a high region is doomed for failure. High/medium/low richness in the resource is factored into productivity such that in any region whereby the resource level is not high productivity is automatically lower and thus cannot be competitive on the global market.

Companies which promote the gathering skill based in Thailand are therefore uncompetitive, such that we need to ensure our workforce is skilled in other disciplines. Naïve, new players to eThailand cannot be expected to know any better than to take the highest paid job, consequently we must make sure that job offers for skill 0 using the gathering skill do not appear in eThailand. This will ensure that all new eThai babies have skills that are suited to Thailand that can best help our economy grow as the players skills develop.

Income tax in these regions is currently being increased substantially to discourage work in this sector and citizens are encouraged to develop their skills in manufacturing skills and not begin any companies that require workers who possess the gathering skill.

Poor efficiency

2 key issues are limiting productivity in eThailand at the moment. The first issue is that of low wellness employee’s. eThailand has almost daily training wars and the ways of using this to maintain a high wellness can be found in this recent article, http://www.erepublik.com/en/article/what-is-wellness-1-1135567/1/20.

The second issue is firms operating with a workforce significantly below that of maximum productivity, thus inherently inefficient. For every work below (or above) max productivity the output per worker will fall. Given a fixed wage for each worker this implies that goods could be made at a lower cost if the correct number of workers were employed. What is most concerning is that companies who are producing goods with only have workers are still able to hold the lowest offer in the eThai market place! This implies that if the firm was more efficient they could continue to profit at the rate they do now, but also lower the cost of goods to eThai players, improving welfare.

As stated above the poor efficiency means that manufactured goods (food, gifts, tickets and weapons) are more expensive than they need to be; this has several consequences:

1) Newer players can only afford lower quality food which affects their wellness and reduces productivity further.
2) Thai players with organisations abroad will purchase from overseas and foreign players will stop buying their goods from our market using their Thai based organisations.

Two issues arise from this; the first is lower tax revenues for the government. Indeed we all hate taxes, but MPP’s needed for training wars do not come cheap and additional funds are required to develop an organised military and help the country to develop. To fund all this expenditure we need competitive world prices. Furthermore, with people not buying from our market demand for THB has significantly fallen and the currency has depreciated. It now costs circa 20% more THB to buy 1 gold than a few weeks ago, but the adjustment in wages has not matched this. Real wages have therefore fallen which will act as a deterrent for potential citizens and reduce the purchasing power of existing eThai citizens.

Conclusions

It is vitally important that as a nation we specialise in manufactured goods and focus our attention to a limited number of companies operating at max productivity rather than many companies operating inefficiently. This can hopefully grow over time as demand for our cheaper goods will appreciate the THB and make Thai wages more attractive once more. Improved efficiency will also allow company owners to offer products to the market at a lower price, increase tax revenues and give the government more cash to improve the welfare of all eThai citizens