The common sense path to 'life satisfaction'

Despite the absence of much improvement in political and economic terms, why are these people more comfortable, healthier or happier than in the past? It’s an interesting question with even more interesting answers.  

To complete the survey, the research centre asked respondents in developed and developing economies this question: Here is a ladder, the “ladder of life”. Let’s suppose the top rung of the ladder represents the best possible life for you and the bottom rung the worst. On which step of the ladder do you feel you personally stand at the present time?

Thirty-six per cent of respondents in Thailand said they stand at the seventh rung or higher. Among 24 surveyed emerging countries, that assessment was low compared to 64 per cent in Vietnam, 58 in Indonesia, 56 in Malaysia and 38 in the Philippines.

In 2007 the percentages in Malaysia and Indonesia were just 36 and 23, respectively. (Thailand was not included in that survey.) 

The research showed that national income continues to be closely linked to personal life satisfaction at the country level. That said, it could mean most people are happier when they have more money in their pocket. 

It is not surprising that all governments are geared toward boosting economic growth. Thai governments are no exception. Though legitimacy crises and reforms are the main agenda items for the incumbent junta, its leader, Prayut Chan-o-cha, has also painted a rosy financial picture, saying economic growth this year would be 3.5-4.5 per cent, compared to below 1 per cent last year.

However, the Pew Research Centre cautioned that the increase in life satisfaction due to national income has begun to level off among richer countries. So, while South Africans (49 per cent) are richer and considerably happier than Ghanaians (25), they are nearly as satisfied as the much wealthier French (51).

So then what are other factors that drive life satisfaction?

Since 1971 Bhutan has rejected GDP as the only way to measure progress. Gross national happiness (GNH) was instead introduced to gauge the spiritual, physical, social and environmental health of its citizens and natural environment. 

In this regard the Thai think tank, the National Economic and Social Development Board (NESDB), also developed a new indicator, the “Green and Happiness Index” (GHI), to evaluate performance in national development. Its principles were included in the 11th development plan. More discussion has followed, with the latest round taking place in September. The results will be incorporated in the five-year 12th development plan to be implemented in 2017.

From 156 economies included in the United Nations-sponsored World Happiness Report 2013, Thailand ranked 36th in terms of “happiness witnessed” from 2010-2012. Compared to 2005-2007, the level of happiness rose by half a point on the zero-to-10 scale, to 6.371.

Is it safe to say Thais are happier thanks to these GHI principles? Certainly it should not be attributed to the “happiness” song played every hour through the Army’s radio station, FM 104.5MHz!

Over the years the NESDB has come up with more research results. Aside from quarterly economic performance, it regularly releases updates on social aspects that could define the level of wellbeing, like household debt. Before the financial crisis in 1997, we believed that debt equated credibility. Debt can “buy us” convenience, but the loans aren’t free. Any convenience is lost if the borrower is unable to finance the debt.

Freedom from debt should be our primary aim to achieve true happiness. Borrowing can increase our wealth, but we need to be prepared for possible downsides. To promote financial literacy, the Bank of Thailand has come up with the “savings planner”, a document for recording your monthly income and all expenses, ranging from food, lottery tickets, transport and allowance to parents to medical expenses. At the end of the year, the sums indicate which expenses can be trimmed the following year.

Then comes a big question: how much we should save? When is “enough” enough?

The Stock Exchange of Thailand has offered a formula to gauge our financial health: Preferable net wealth = age x annual income x 10 per cent. You list all assets, ranging from cash, saving deposits and gold to houses. From this you deduct all liabilities, such as mortgage and hire-purchase loans. 

At age 35, “A” earns Bt45,000 monthly. With assets of Bt2 million minus Bt1.58 million in liabilities, his net wealth is only about Bt400,000 – much below the “preferable level” of Bt1.8 million. It’s not beyond the imagination that, should an emergency arise, he’ll need to borrow more money – and might end up struggling to survive.

If “A” and the majority of Thais can turn this situation around, I’m convinced that more people would be better off. And then, satisfied with our own lot in life, we can turn to help others. As a society, Thailand would see its ranking on the upswing.