Wednesday, September 8, 2010
Thailand still a land of bitter division
Thailand's economic figures look good, but we will remain a country of extreme wealth and poverty until our politicians develop a conscience
The benefits of the recent economic recovery are not being distributed to the majority of Thai people. An Assumption University poll released last Sunday shows that people who earn less than Bt10,000 per month have found their income decreasing. In short, income distribution is still a major challenge that the government must address.
The good economic figures this year have been founded largely on the vibrant export sector, but in the Assumption poll, respondents from 12 selected provinces said they had earned less compared to the previous quarter. Most said that their income barely covered their expenses. Two-thirds of them have no monthly savings at all.
The survey results give a more realistic picture of the Thai economy. The government has been excited at the economic growth figures but makes little effort to understand if this growth is actually meaningful to ordinary people. The Thai economic structure is still a failure, with the rich getting richer while the poor get poorer. As well as this, there is insufficient effort to foster contribution from the better-off sections of society to enable everyone to grow together. The massive budget earmarked to empower rural people is likely to be ill-spent.
Instead of superficial economic figures, the government should focus on providing educational and employment opportunities to the people who need them most, in order to ensure that long-term economic prosperity is attainable by all, especially for those in rural areas. If we cannot do this, an increasing number of people will continue to migrate to the big cities, exacerbating the problem of urban poverty.
Recently-released figures from the Finance Ministry reaffirm the size of the problem. Overall income distribution is now much worse than in 1992. The top 20 per cent of the richest people in Thailand account for 54 per cent of the country's combined revenue, while the poorest 20 per cent account for only 4.8 per cent of the country's total income.
Of Thailand's 64 million people, only 9 million submit tax payment forms to the Revenue Department. Of this number, only 2.3 million actually pay taxes, while the other 7 million are exempt from paying taxes because they receive tax benefits. Of the 2.3 million taxpayers, only 60,000 pay the highest progressive tax rate of 37 per cent.
These figures prove that only a small middle class is contributing to the welfare of the whole country. It is also worrying that Thailand is now ranked internationally as the 50th worst country in terms of income distribution.
These problems are unlikely to be solved if the Thai economy continues to follow this direction, where the people with good connections get all the opportunities, leaving the rest out in the cold. Thailand could easily move up from its shameful position on the worst income distribution list, but it's going to take great political will and sacrifice on the part of the wealthy to achieve this.
While the big cities have been growing, the rural areas have been largely ignored. Politicians in rural provinces don't care about sustainable, long-term initiatives to improve the well-being of their constituents. They think only of personal short-term gain when they should be developing their constituencies to make communities more self-reliant. These politicians are a burden on the state and the people. They aim only at seizing funds that will compensate them for money spent during the election season. They become richer while leaving their constituencies poorer and more dependent on handout money.
The Thai political crisis stems largely from this uneven income distribution and unfair access to opportunity, especially in education. Prime Minister Abhisit Vejjajiva has said many times that the government will bridge the gap to reconcile the division in the country. So far, no concrete action has been taken. What we have seen is the old vicious circle of massive spending approved for big projects in which a small group of businesses receive lucrative concessions. Development budgets are designated to rural areas but fall into the hands of corrupt politicians and officials. Little is being spent to enhance the strengths of the people of this country. The result is that many people leave their homes to do menial jobs in cities while also relying on government subsidies and welfare.
Political reform will never be successful unless this uneven wealth structure is corrected. The failure to distribute wealth and promote local strengths and competitiveness will only lead to future political conflict. Corrupt politicians should be ashamed of living in palatial houses in the rural provinces while many in their own constituencies are struggling with grinding daily poverty. A prosperous and sustainable society can only thrive if there is cooperation and fair access to education and economic opportunity. The Nation, Bangkok, editorial