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High defence spending at expense of welfare hit

May 24. 2017
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By WICHIT CHAITRONG
THE NATION

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THE CONTROVERSIAL submarine deal has sparked public debate about the way the Defence Ministry spends tax money on military hardware and other national-security projects. Many question whether such projects should take priority over education, public healthcare or promoting the welfare of poor people.

 

Since the coup in 2014, the budget allocated to the Defence Ministry has increased substantially. For the fiscal 2015 national budget, the first fully controlled by the junta, the Defence Ministry budget jumped to Bt192.9 billion from Bt184.7 billion the year before. The defence budget was again raised substantially to Bt203.7 billion in fiscal 2016 and Bt221.7 billion for 2017.

Somchai Jitsuchon, research director at the Thailand Research Development Institute, said the priority should be solving the wide income gap between the rich and the poor. Over the past three years, the junta-backed government has not put enough effort or resources into dealing with the issue, he said.

According to the National Economic and Social Development Board, income disparity remains severe in Thailand. The top 10 per cent of earners got 35 per cent of total income in 2015, while the bottom 10 per cent got only 1.58 per cent. Meanwhile, the top 10 per cent own 60 per cent of the country’s land while the bottom 40 per cent own only 1.2 per cent.

Low-income groups also cannot access high-quality education and healthcare services.

“Priority should be given to creating life opportunities for the poor,” Somchai said.

The Education Ministry often gets the biggest share of the annual budget, but highly talented teachers are hard to find, as most of them teach at elite schools in Bangkok. Moreover, a typical school does not have adequate educational materials to facilitate effective learning, so pupils end up in rote learning, which delivers poor performance in mathematics and science.

Supachai Panitchpakdi, former chief of the World Trade Organisation, said Thailand should gain bargaining regional power by offering assistance to neighbouring countries. He praised the Neighbouring Countries Development Cooperation Agency, which over the past 12 years has granted soft loans to support infrastructure projects in seven countries.

He expressed concern that Thailand and, even more so, richer countries were preoccupied with an arms race.

Sakon Waran-yuwattana, dean of Thammasat University’s faculty of economics, said he was worried about the benefits of arms purchases, since such hardware bought in the past at high cost often was unusable. “This is because there is no independent auditor supervising or evaluating the outcomes of [defence] spending. Other ministries also face a similar issue,” he lamented.

Auditor-General Pisit Leelavachiropas, however, has tried to defend the purchase of a Chinese-made submarine, saying the Chinese government guaranteed that it would function properly.

Other key concerns are future obligations made by the Defence Ministry. For example, under the 2017 fiscal budget, total future obligations are worth Bt105.5 billion including the Bt13.5-billion submarine deal, on which instalments will be paid until 2023. The first payment of Bt700 million is to be paid in the 2017 fiscal year.

The junta now is drafting the fiscal 2018 national budget, with initial plans to allocate Bt222.4 billion to the Defence Ministry, accounting for 7.7 per cent of the total Bt2.9-trillion government outlay. And future obligations made by the Defence Ministry are also expected in the 2018 budget, which could cripple the next government’s ability to reallocate public funds for investment and welfare for low-income groups.

Spending on national security may not directly boost the economy or social development, but it has an indirect positive impact, as investors may gain confidence if the country is free of political violence, Somchai said.

However, activists have argued that the junta has violated human rights by putting many people in jail on the grounds of having different political views, particularly on issues allegedly related to lese majeste. So political stability might be recognised by foreign investors as only short-term, and could make them reluctant to do business in Thailand.

 

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