Friday, August 23, 2019

Welfare for the needy is fine – if it’s secure

Jan 03. 2019
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By The Nation

1,787 Viewed

Modern technology could let Thailand take care of the underprivileged without fear of cheating

State welfare-cum-populist platforms are the norm for the upcoming general election in Thailand, so how best to evaluate these policies to ensure they are as efficient and effective as they can be?

First of all, they should be implemented using the newest technologies that make corruption much more difficult. For example, electronic payments and fund transfers with digital money trails should be used, along with chip-embedded welfare cards with 13-digit ID numbers and photos, and the distributed ledger system known as blockchain.

Of course, state subsidies, welfare funds and other forms of government handouts are nothing new. But previously they were prone to corrupt practices and massive inefficiency, so much so that a sizeable portion of taxpayers’ money never reached the intended recipients. Along the way, national and local politicians siphoned off money, using all means possible to avoid detection and criminal prosecution. In addition, previous schemes were mostly inefficient and failed to deliver sustainable results.

However, today's technologies are much better, so there can be significantly less corruption, if any, as well as greater efficiency and effectiveness in terms of long-term results. The ecosystem for more efficient and effective state-welfare schemes should be based on a verifiable computerised system with minimal human intervention. The country now has a huge database of low-income people – those with annual earnings under Bt8,300 per month, or less than Bt100,000 per year.

Nearly 14 million people in a total population of 69 million registered with the government based on that amount of yearly income to qualify for state welfare. Existing data show that as many as eight million Thais are probably well within the poverty line with an annual income of less than Bt30,000, or Bt2,500 per month. However, the specific data on the remaining six million whose annual incomes are reported between Bt30,001 and Bt100,000 are less clear in terms of their actual financial status and asset ownership. New criteria have been announced to specify the financial status and land ownership of these citizens to ensure they genuinely qualify for state assistance.

In any welfare scheme unscrupulous persons abound, so recipients should be vigorously verified before getting any taxpayer money. In addition, their financial status as well as asset ownership ought to be re-evaluated on a yearly basis to adjust for any significant changes. In this context, the challenge lies in the details of implementation and the management of financial resources needed to pay for the state-welfare schemes, which could serve as an efficient and reasonable way of wealth redistribution on a long-term basis.

Once funding and anti-corruption measures are properly in place, the country can expect a worthwhile welfare system that suit the needs of those who qualify and is consistent with the country’s capacity to finance the system on a long-term basis. In addition, an established and successful system is hopefully something that will deter potentially corrupt politicians from untoward interference, especially when such a system is tied in with the Revenue Code or other comparable and long-established mechanisms that are more or less transparent and accountable.

This will also help make shorter-term populist policies less attractive in the eyes of millions of low-income voters who’ve long been exploited by dishonest politicians.

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