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Government urged to help 1.2m desperately poor Thais

Aug 13. 2018
Thosaporn Sirisumphand
Thosaporn Sirisumphand
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By Wichit Chaitrong
The Nation

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Economic think-tank cites huge income gap between country’s rich and poor.

AT LEAST 1.2 million Thais are desperately poor and need urgent help from the government, the National Economic and Social Development Board (NESDB) said.

The national economic planning agency said it plans to prompt the government to assist people in the most serious financial distress as part of efforts to narrow the huge income gap between the country's rich and poor. 

“There are an estimated 1.2 million poor people who really need help from the government and the NESDB plans to propose that the government support this group first,” said Thosaporn Sirisumphand, the newly appointed secretary-general of the NESDB, which reports directly to the Office of the Prime Minister. 

He said that there are about 6 to 7 million people living under the poverty line, earning less than Bt30,000 a year, but a survey conducted by the Ministry of Social Development and Human Security found that 1.2 million people are in desperate need of support.

Funds could be allocated to support them in the 2020 fiscal year, he said. 

The NESDB will also set up a task force to look into income inequality and will create a policy lab which will advise the board on specific issues that need to be tackled first. Outside experts would be invited to join the lab, he said. 

Asked why the NESDB plans to target 1.2 million people while the Finance Ministry has provided funds to support 11.4 million people under the welfare card programme, he said that the board's figure is taken from a survey, while the Finance Ministry's number derives from a registration method, leading to a wide discrepancy.

Academics have questioned the Finance Ministry’s number and voiced concern that there are many “free riders”, people who get privileges from the economic development scheme and don't need further assistance from the government, while some who are in need might not be included. 

Thailand is among several countries suffering severely from income inequality. 

According to a study by Thammasat University’s economist Duangmanee Laovakul in 2013, the country’s top 20 land owners owned 80 per cent of the country’s total land, while the bottom 20 owned only 0.3 per cent of land. And among those having bank deposits, 0.1 per cent of bank accounts held 49 per cent of total bank deposits. 

Most of the poor are in the farming sector. Under the government’s 20-year Strategic Plan and Reforms plan, the 

government vows to support 25 million farmers - about 38 per cent of the country’s population. 

In a separate roundtable talk hosted by Krungthep Turakij, a sister newspaper of The Nation, Chao Kengchon, managing director at the Kasikorn Research Centre, said that many previous governments had failed to help farmers to have better lives. 

Farmers are at a disadvantage as they are at the upper stream of farm production, shouldering the highest risk, compared to middlemen traders and giant food producers. “Farmers buy lottery [tickets] all the time,” Chao said, comparing farmers' income to winning or losing a lottery. 

“The challenge is how to help them to move up the value chain that lowers their risk and increases their profits,” he said.

Agricultural cooperatives would be a best tool to help them take some of the risk out of growing crops or raising livestock, but so far they have not yet been able to successfully compete with private companies, he said. 

A possible solution might come from the sugar industry, which returns some profits back to farmers, although he was not sure if it could be applied to other crops. 

Pipat Luengnaruemitchai, assistant managing director and chief investment officer for wealth management at Phatra Securities, said that due to lower prices of farm products, economic activity in provincial areas has stood still. 

“Life in Bangkok is a sharp contrast, where luxury restaurants have been booked in advance for many months, but street food businesses are struggling. Low income earners are still cautious about their spending because they have not yet fully benefited from economic growth,” said Pipat. 

 One problem for the low-income group is that their wages do not increase much because the country imports foreign labour who pull down wages, staying a bit over Bt300 per day.

Rising oil prices during 2010-2011 also pushed up farm product prices but farm product prices have remained low this time, he said. 

Recent increases in farmers' income derived largely from the volume sold not from higher prices, he said. 

Somprawin Manprasert, chief economist at Bank of Ayudhya, said that agricultural reform should aim to reduce political intervention and let the market decide winners and losers. The government should create a social safety net for people adversely affected by the reform. 

Tim Leelahaphan, an economist at Standard Chartered Bank (Thailand), said it would take time to solve income inequality. Tourism in secondary provinces and the Eastern Economic Corridor project may boost the 0income of local people, he said.

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