The Bangkok Post
Nov 19, 2017
Deputy Prime Minister Somkid Jatusripitak has revealed his big ambition: poverty will be eradicated from Thailand next year. His statement on Thursday wowed the public, who wonder if it was just a tactic to manufacture feel-good news. Mr Somkid, who has been regarded as an economic czar since the days when he served in Thaksin Shinawatra’s government, did not go into detail about what he planned to do to achieve his ambitious goal, but it is apparent that he, along with the military regime, places high hopes on the Eastern Economic Corridor that will come into being next year, with the use of the draconian Section 44 to bypass key laws and regulations to enable the authorities to accelerate the project.
In Mr Somkid’s own words, 2018 will be Thailand’s turning point.
Of course, his attempt to address the problem of poverty is noble. The deputy prime minister, who joined the military regime under Gen Prayut Chan-o-cha in 2015, may feel he has the right to brag about Thailand’s economic performance, which has appeared to enjoy a turnaround this year.
In fact, the efforts of the military regime to revive the economy, which suffered a downturn after a decade of political turbulence and a depressed global market, deserve some recognition.
Some economic factors, such as exports and gross domestic product (GDP), have indeed improved, mainly as a result of heavy public spending with a series of state megaprojects, amid lack of confidence on the part of investors, and economic stimulus packages.
The Bank of Thailand recently raised its forecast for the country’s GDP growth rate to 3.8% this year, and the trend is expected to remain next year due to strong expansion.
But some academics have raised question about Mr Somkid’s ambition, especially when the improved figures seem not to reflect the quality of economic growth.
Prominent economist Decharut Sukkumnoed of Kasetsart University noted that, despite the apparent economic recovery, the number of poor people has increased, not decreased, since the military took office in 2014.
In other words, poverty has intensified, not eased, over the past three years.
According to Mr Decharut, the number of poor people, classified as those living under the poverty line of income of 2,920 baht a month, increased by almost one million, from 4.84 million in 2015 to 5.81 million in 2016, or a 20% increase. Of that number, more than half of the “new poor”, or 527,000, are those living in rural areas, while 436,000 are urban poor.
As is well realized, poverty in this country is a structural problem featuring a huge socioeconomic gap. Wealth has been concentrated in just a few rich families with strong connections to the elites.
While the economy has somewhat recovered, as shown by the figures, a large number of the poor find it tough to make ends meet. This attests to wider economic disparity, which is a social ill that needs to be corrected, not ignored.
On Nov 16, the Bank of Thailand admitted that it was still worried about persisting household debt despite the rebounding economy. It said the country’s household debt-to-GDP ratio was at 77-78%.
Handing cash giveaways to the poor, if anything, cannot eradicate poverty. Welfare cards that were issued to some 11 million low-income earners are just painkillers that will not lead to high-quality growth.
Not to mention that there are criticisms that as it tries to boost economic growth, while being complacent about those impressive figures, the military regime, on the other hand, does little to narrow the socioeconomic gap.
A prime example is an attempt to water down the land and property tax, which was originally designed by former finance minister Sommai Phasee as a mechanism to boost land distribution. If that is the case, a large amount of land will remain in the hands of the few, privileged rich people while the number of landless farmers is on the increase.
Another example is the way the regime regards the 30-baht universal healthcare scheme as a burden and looks for ways to decrease the budget in this area. This is a sad irony given that the regime has spent a fortune on military hardware.
The new water tax which is in the pipeline is also a big issue. Will it aggravate the rich-poor gap in this country?
Mr Somkid and his boss, Prime Minister Prayut, should know that unless the state fixes Thailand’s unfair economic structure, which is an uphill battle that requires strong political will, there will be more poor people on the streets.
What is needed is a major shift in the economic paradigm towards high-quality growth. Without that, Mr Somkid’s goal of eradicating poverty will be just an unfulfilled dream.
(https://www.bangkokpost.com/opinion/opinion/1363023/anti-poverty-drive-needs-political-will)
