On this day in 2011….Head to Chiang Rai for Laos #Otdi2011

06/01/2011 – Heading to Chiang Rai for boat to Laos

scooterWoke up and decided on a good stiff English breakfast at a small Irish bar. I missed a good night by the sounds of things. Ben had got up, and with a load of others from Little Bird went to some lively part of town for some Reggae. Trust me to accidentally end up in the red light district. We sat and watched England claim the Ashes over the Aussies with our breakfast and fresh orange juice. Most of the menus in the restaurants here have little stickers covering the original price, with the new price written over it. Evidence of the recent inflation over the years due to recent transformation to a prime backpackers destination. I used to wonder how Chomp bars and Space Invaders could maintain their cover price of 10p for so long, defying the annual rate of inflation. I never did a dissertation at University as part of my economics degree, but had I done, this would be my topic of interest. I’m sure I could stretch my investigation to 10,000 words. My conclusion: By mass-producing the wrappers with the 10p value on it, the confectionary company is able to significantly cut its costs through economies of scale. Considering all factors remain the same (i.e. demand), this saving per wrapper, only needs to exceed the additional annual costs incurred through inflation. Hence, if they face a 2% increase in costs (electricity, rent of factory etc), they only need to ensure the savings from mass productions outweigh this. Also, everybody knows them as being the 10p snack and so any price rise will cut their USP, affecting demand. I believe they’re now 15p. That’s a 50% increase.

This area has clearly experienced a classic case of demand-pull inflation, as more holidaymakers have entered the region, demand has been greater for local produce and in turn this has forced the price upwards. Holidaymakers. I don’t think I’ve ever been a “Holidaymaker”. I’ve been on holidays with Holiday-Makers (my Mum and Dad) on all-inclusive holiday packages to the Canaries and the Mediterranean, but I can’t really say any of my Ryanair flights to Eastern Europe, joining the hordes of teenagers to the Greek party islands, bumming around the United States or my annual jaunts to some Europe’s music festivals justifies my existence as a holiday maker in the conventional sense. I don’t really get the term if I’m to be honest, but I guess honeymooners and families’ spring to mind. The ones unlike money savvy backpackers so common here, don’t care for challenging the first price listed by your average Thai market vender. This insensitivity towards price has no doubt had a bearing the rapid increase of prices here.

One skill that I was going to have to hone over the next 4 months was the art of haggling and bartering. It’s not something I like doing, haggling with people in borderline poverty over a couple of pence on a pair of sandals or a jungle trek just doesn’t sit comfortably with me. If I don’t do it with the ticket controller at Kingsbury tube station over the extortionate price of my Oyster card, why would I do it here in Asia? My feelings about this probably stem from Human Punk by John King whereby the protagonist recounts the first wave of backpackers to Asia in the late 1980’s that he comes across during his time working in a bar in Hong Kong.

Not only is it in my interest to learn this art, but in the interests of future travellers to these parts, as well as the locals. For it is vital in maintaining sustainable pricing and costs of living for both visitors and citizens. It’s all well and good being prepared to purchase goods at a higher price than the market value due to your higher purchasing power, but the knock on effects can be severely detrimental – and I’m not just talking about stickers on menu prices either.

As soon as too many people show they are willing and able to buy a product above the floor price that the seller is willing and able to sell at, over time this new price becomes the minimum a seller will sell at, hence setting a new floor price. The increase in prices, and increased profit as a result, now makes the plot of his market space that bit more lucrative as more streets sellers now want to enter the market to take advantage of the abnormal profits. So now, with demand for market spaces vastly outweighing supply, the land owner will now increase the rent of the space. Sooner rather than later, the extra cost reduces the abnormal profits that were being made. In order to make normal profit, the streets seller must increase his prices furthermore to compensate for the increase in land costs. Whereas the extra demand from an increase of tourists results in demand pull inflation, this here is an example of cost push. This pattern is replicated in the market as a whole, as cost of living for all continues to increase.

As a result, not only is it more expensive for travellers, but also, for the locals. Many of which would not have seen their incomes increase in line with increase in cost of living, unless of course they worked in the tourism industry. One solution, is for ethical businesses in these poorer countries to operate a two-tier pricing strategy, whereby the higher costs are passed onto “foreigners” through affordable, yet slightly higher prices, allowing “locals” to benefit from lower prices. However with profit potential, the opportunity cost of serving a “local” can become high, as businesses realise they could sell the same produce to a “foreigner” and benefit a greater profit margin. Again, the locals with lower purchasing power are priced out of the market.

Haggling on price is a way to maintain sustainable wages and costs. But haggle down to what you see as fair, as in doing so you will artificially enforce a reasonable two-tier pricing strategy. Also, tipping for good service helps too.

Although of course nobody wants to go on holiday with moneysavingexpert.com Martin Lewis. But in fact, I’ve noticed in post-credit crunch Britain, it appears quite trendy to have budget constraints. Most of the senior guys I know from working in the City, make quite a show of their new austerity measures from downsizing from Parsons Green to Shepherds Bush to Pret tuna and sweet corn baguettes to home made sandwiches. Believe it or not, this still a show of vanity, as by indicating how bad they are in the bad times, they are also subtly insinuating how good they were doing in the good times. The fact they were doing so well then, when their wages were aligned to the boom, indicates how pivotal they were as wealth creators. And how well they’ll do once again when the economy returns to strength. I bet these guys get a kick out of thinking people compare them to large investment banks – “just like Lehman’s, that guy thought he was too big to fail”. I’m pretty sure they’re no less well-off now then they were 5 years ago. It’s these same people who tell you over coffee on a Monday morning “man, I had a great weekend, although my bank manager won’t be too happy”. As if the manager of the Natwest branch in Epping is really going to notice the extravagant cash withdrawals made by a bloke who probably doesn’t earn a great deal more than the national average.

Right, enough of the lecturing, back to my self absorbed travel stories.

damage doneAfter brekkie, we headed to a book shop where I bought Damage Done which has long been part of the staple diet of backpackers to Asia. It tells the story of “12 years of hell in a Bangkok Prison” that Warren Fellows experienced after being caught trying to smuggle heroin out of Thailand in 1978. I had been eager to get my hands on it ever since being told about it at a family BBQ last summer by my cousin Jonathan who travelled out here about 10 years ago. Ben went for Dead Babies by Martin Amis, despite my efforts to try and persuade him to go for Amis’ other classic London Fields. The books here were extremely costly in relation to other daily expenses. One book costs the same as two nights in our hostel and a full English breakfast. At first I put it down to the high costs of importing them, but to be honest most are photocopied and manufactured here. Perhaps it’s because the locals can see how much we’re used to paying back home from looking at the cover price and adjust their prices accordingly. What’s also funny is that although the front and back covers are photocopied from the originals, there are often spelling mistakes within them. Maybe this is done intentionally in an effort to show that they are not photocopies and that they have just made one futile spelling mistake in publishing the book. But then surely that would lead to one questioning the likelihood of spelling mistakes in the book itself. I remember when I bought Scary Movie 2 off a street seller in Harrow town centre, the cover was the exact same as the original but on the back it had reviews from The Sun and Empire saying “The film feels musty and bogged down” and “Just the same old bad jokes from the first one recycled”. So whoever makes these front covers surely isn’t just photocopying from an original, as distributors would make sure these negative reviews aren’t present. They obviously aren’t worried about copyright infringement, so why not just photocopy an original?

templeWe dossed around on a moped inspecting the fine array of temples Chiang Mai has to offer during the day, while waiting for our pickup at 7pm to take us to Chiang Rai, where we would be spending a night before heading to the border of Laos in the morning. After each and every temple, careful to stay just long enough in each one to avoid insulting the monks by leaving too early, we would normally exchange some sort of intentional philistine remark in our best Lancashire accents such “load of old shite if you ask me” or “they all look the fookin’ same to me”. Of course such statements need to be carried out in a Northern dialect, as I think generally that’s the most appropriate one to convey a narrow minded approach to foreign culture. Of course in real life this is an unfair stereotype, but it just works better. It may also work with a cockney accent. Again, an unfair stereotype, but that’s life. That’s the TV age of The Royal Family and the legacy of Bernard Manning for you. I must say car parks for temples make for excellent places to hone your moped driving skills.

Come 7pm, we board the Chiang Rai-bound bus alongside a middle aged Aussie Man and an Israeli-Russian lad who had lived in Hendon Central selling toy planes and knew of the Claddagh Ring, another popular drinking hole in North-West London. He was now living in Bangkok running his own “business” and was making a trip to Laos to make a “special pick up” and laughed at the idea of tubing with his claims to be “too old and mature for that”. I fervently disagreed as he certainly wasn’t too old (probably not too much older than me), but more so as the comment surely must’ve conflicted with the ambitions of the middle aged Aussie Man , who was obviously hungry for some tubing. We drove around Chiang Mai for what seemed like ages and passed the same bridge over the city moat several times before we found our last passenger at a private house outside the city. Really nice posh area, looked like it could have been taken straight from Radlett in Hertfordshire, England. Here we picked up Ernie.

Ernie, from San Francisco, was a typical west coast modern guy, slightly camp but had a girlfriend back home, with ripped jeans and ring on his thumb which people only buy when they’ve been waiting in the queue in Topman. The ultimate pulse purchase alongside miniature badges and wristbands, the retail equivalent of Cadbury crème eggs. He was very friendly and made no delay in cracking open his bottle of wine with his pen knife, spraying the Aussie Man with the red stuff, who was now made even more uncomfortable following the ageist comment of the Israeli-Russian bloke earlier. We drove back to Chiang Mai as the driver needed some papers. It was only a short drive back, but Ernie had extracted enough information from all of us; He knew where and what I had studied and where I was from. He knew the destination the Israeli-Russian guy was taking. He was particularly interested in him and dates of his trip. I thought he was just being really friendly. We stopped at a travel agent where our truck driver said he would collect our details for tomorrow’s border control and while Ernie was inside giving his, the Israeli-Russian took us aside and warned us that Ernie was in fact undercover DEA. His suspicion had arisen from the fact he could not understand why somebody could have so many questions. At this moment, Ernie popped his head around the corner and asked the Israeli-Russian guy “your passport please….for security of course, they need it”. It couldn’t have been timed any better. The Israeli-Russian guy was getting very paranoid. We continued our drive and finally made it out of Chiang Mai and to a little service station out of town. Here we swapped over into mini buses and headed to our stopover in Chiang Rai.

hemanWe arrived in Chiang Rai around midnight and were allocated our rooms in this motel that most probably survived purely on the custom of those making this bordercross. Me and Ben obviously shared, but you should have seen the look on the Israeli-Russian guys face when Ernie suggested they share. The room was very bare except for he flamboyant bed sheets. Ever wondered what happened to your bed sheets with your favourite 1980’s cartoon characters on them? Well, I’ll tell you. They’re here, in a little crumbling budget motel in the middle of rural Northern Thailand. Before having a good laugh at what must be going through the Israeli-Russian guy’s head, we hit the hay and passed out instantly.

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