Tuesday, October 22, 2019

Govt launches two-pronged attack on inequality

Dec 18. 2018
Prime Minister’s Office Minister Kobsak Pootrakul
Prime Minister’s Office Minister Kobsak Pootrakul
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By Kas Chanwanpen,
Wichit Chaitrong
The Nation

7,469 Viewed

Experts express doubts over new agency set up to tackle poverty under 20 year national plan.

WITH poverty still plaguing society despite Bt800 billion pouring into the grass-roots economy, the Cabinet yesterday agreed to set up an office to mobilise resources and agencies to combat the problem, said Prime Minister’s Office Minister Kobsak Pootrakul. 

The office will be under the National Economics and Social Development Board (NESDB) and comprise two committees – for policy and for implementation, he said.

The prime minister would head the policy committee, Kobsak added.

“The establishment of the office and the committees will be an important turning point in the fight against social disparity and poverty,” he said. “The issue has long been discussed but never came to fruition. Now we have set a goal to tackle it over 20 years under the national strategy.”

The committee was authorised to lay out strategies, policies, guidelines, action plans and their implementation for those tasked with tackling inequality and poverty in the country, he said.

Inequality has dominated national debate recently after reports by international and domestic institutes indicated that a tiny rich elite controlled most of Thailand’s wealth. 

Most unequal country: Credit Suisse report

According to the Credit Suisse Global Wealth Report 2018, published in October, Thailand is the world’s most unequal country, since the richest 1 per cent own 66.9 per cent of the country’s wealth. The government claimed the report was based on outdated and inaccurate figures. Kobsak claimed that the number of Thais in poverty had fallen from 34.1 million in 1991 to 6.2 million. 

NESDB, the government planner, reported that the situation had improved as the number of people under the poverty line – with monthly incomes below Bt2,686 – was 5.3 million last year, down from 5.8 million in 2016. The reduction in poverty was due to economic growth and government welfare policies including cash handouts, the agency said.

The Finance Ministry said yesterday that the government social welfare programme has reached 14.5 million citizens, 8.3 million of whom earn less than Bt30,000 per annum. 

Despite this, disparity of incomes and assets remain a big problem, Kobsak conceded. “Inequality remains high, therefore we need mechanisms to take care of the matter,” he said.

With such mechanisms, the government would be able to effectively utilise the Bt800 billion budget allocated for the poor, he said.

‘Super-rich will remain super-rich’ 

Somchai Jitsuchon, research director at the Thailand Development Research Institute (TDRI), said that the Cabinet’s solutions had the potential to narrow the income gap between middle-income and lower-income groups, but were unlikely to narrow the gap between the super-rich and the rest of the population.

Somchai said efforts to address the issue would depend largely on political will and decisive action by the premier as chair of the policy committee. 

It would also depend on effective coordination between ministers and senior officials of ministries. Outside experts should be also invited to consult on the key issues, he suggested.

He voiced doubt that minister Kobsak would take any action that would damage the interests of the super-rich, saying Kobsak had never discussed reforming the political structure which political scientists say is a major obstacle to wealth redistribution.

Somchai has proposed the government increase the welfare budgets from the current 7.8 per cent of gross domestic product to 10 per cent – a boost of Bt350 billion.

He also advised raising the value-added tax rate from the current 7 per cent. The military budget should be cut in order to increase more welfare budgets, he added.

Kobsak said the 11 government agencies which take care of social welfare will today sign an agreement at Government House to join hands in the effort to fight social inequality and poverty. 

Under the theme “Happiness for all: A state welfare”, they will also host an exhibition to show how the people would benefit from the government’s measures.

 

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