The cold chill of inequality
The ranking of Thailand as the country with the world’s third-largest wealth gap in Credit Suisse’s 2016 Global Wealth Report serves as a chilling reminder of the country’s decades-old divide. The richest 1% of Thais now own 58% of the nation’s wealth.
This fact should be another wake-up call for the state to realise that pragmatic and proactive measures are needed to bridge the growing income disparity, and for the rich to realise they can do more to make the economy inclusive.
Even though Thailand has made impressive progress in terms of economic growth and poverty reduction over the past four decades, the gap between the rich and the poor has become larger. The number of poor, for example, decreased from 34.1 million in 1989 to 7.4 million in 2013. But income disparity increased considerably during the same period.
Disparity is a structural problem. It has been mainly driven by public policies, laws and systems that enable the elite to reap more benefits from rapid economic growth, thus fostering the income divide. The government has spent billions of baht to address the issue in a shortsighted way rather than tackling the problem at its roots.
Similar to its predecessors, the current government has pledged to reduce income inequality and included it in the four-year 12th national economic and social development plan endorsed earlier this year.
The plan is part of the regime’s wider 20-year national development strategy which has not involved meaningful input from the public. The road ahead from now until 2020 is less promising for tacking income disparity.
With political power to be further concentrated in the hands of selected individuals rather than elected offices under the new constitution, social and political disparities will persist. It remains to be seen how the implementation of the plan will make meaningful and concrete changes.
Deputy Prime Minister Somkid Jatusripitak delivered a government pledge to spur economic growth. But critics say the regime only prioritises industries and investors.
At the very least, the state should strive to redistribute opportunities and necessary resources to the poor and the underprivileged and help them climb the economic ladder.
Making education affordable can make a difference. Thailand’s investment in education has been concentrated in urban areas. Low-income families thus find it financially difficult to have their children enrolled in higher education.
Meanwhile, informal workers, who have been excluded from the state’s welfare system, could be better off if they get help that focuses on skills improvement and access to salaried employment.
As start-ups are likely to be the most dynamic and innovative force driving economic growth, the government should make it easier for Thais to become entrepreneurs. Limited access to loans from commercial banks has dashed the hopes of many aspiring entrepreneurs. The government should be developing micro-financing facilities that make access to lending possible for small entrepreneurs
The wealthiest 1% of Thais, along with corporations and large businesses, can do their own part to narrow the income gap. Under Thailand’s low-wage, high-profit industrial promotion, the poor live pay cheque to pay cheque.
Millions of those who work at the bottom end of the economy rarely have a chance to pursue more promising career prospects. Companies who hire these unskilled and lowskilled workers should at least provide them opportunities to grow and ensure fairer wages and decent working conditions.
Ultra-rich Thais can also give back a share of their wealth to society. Thailand lacks philanthropists like Bill and Melinda Gates, who are willing to redistribute a portion of their fortunes for the public’s benefit.
The super wealthy can begin by transitioning away from traditional public-relations activities such as one-off donations and small charity programmes.
Without these and other concerted efforts, the poor will remain poor.