Saturday April 4, 2020
Home Lead Story Poverty and I...

Poverty and Inequality Rising Rapidly in Thailand: Report

Poverty, Inequality in Thailand on the Rise, World Bank Says

0
//
Thailand
"Taking the Pulse of Poverty and Inequality in Thailand," launched last week, says the country's poverty rate jumped from 7.2% to 9.8% between 2015 and 2018, adding nearly 2 million new people to the ranks of the poor. Pixabay

By Zsombor Peter

Thailand’s poverty rate has been rising in recent years despite steady, if slow, overall economic growth, a new World Bank report says, widening the gap between rich and poor in Southeast Asia’s second-largest economy.

“Taking the Pulse of Poverty and Inequality in Thailand,” launched last week, says the country’s poverty rate jumped from 7.2% to 9.8% between 2015 and 2018, adding nearly 2 million new people to the ranks of the poor. Inequality, as measured by household consumption, also spiked in 2016 for the first time in four years and has eased little since.

Analysts see a direct link between those figures and the results of last year’s general elections, Thailand’s first since a 2014 military coup led by then-General Prayut Chan-ocha, now the country’s prime minister.

Pheu Thai, a party tied to former Prime Minister Thaksin Shinawatra, won the second most votes and the largest share of seats in the popularly elected House of Representatives, the lower house of the National Assembly,  with strong support from some of the country’s poorest provinces in the North and Northeast.

A junta-appointed Senate and Election Commission finally tipped the contest to form a majority government in Prayut’s favor, but the numbers echoed the lasting disaffection of the country’s poor.

“Plummeting incomes were clearly a major factor in the opposition’s strong showing in the 2019 general election. That is why Pheu Thai did so well — especially given  that rural farmers and also urban households continue to be attracted by the populism of Thaksin,” said Paul Chambers, a political analyst and lecturer at Thailand’s Naresuan University.

Thaksin was first elected prime minister in 2001, after the shock of the Asian financial crisis of the late 1990s, and reelected four years later only to be kicked out of office by a military coup in 2006. The telecoms tycoon now lives abroad, avoiding a 2008 corruption conviction that he disputes. However, the subsidies, cash transfers and other populist policies he pushed have left him and his proxies with a loyal following among the farmers of Thailand’s rural North and Northeast, who feel left behind by an urban elite cloistered mostly in the capital, Bangkok.

Thailand
The World Bank said many of Thailand’s poverty spikes coincided with regional or global financial crises or with drought but added that periods of political instability also tend to depress consumption and investment, which can drive incomes down and poverty rates up. Pixabay

“That is partly why Thaksin was able to rise in the early 2000s, because of grievances over this disproportionate allocation of resources,” said Harrison Cheng, an associate director with consulting firm Control Risks who follows Thailand.

He said the concentration of wealth and power in Bangkok has continued under Prayut.

The World Bank report backs him up. It shows poverty hovering steadily at about 2% between 2015 and 2018 in Bangkok while rising everywhere else, nowhere more so than in the strife-torn South. Riven by a Muslim insurgency, the South became the country’s poorest region in 2017, only just edging out the Northeast with a poverty rate of about 12%. The South again topped the Northeast in 2018 with a poverty rate just over 14%.

The report ascribes the latest rises in poverty and inequality to droughts, slow economic growth and falling incomes among both rural farmers and urban businesses.

The bank says Thailand has now seen four such spikes since 2000, more than any of the other nine Association of Southeast Asian Nations countries.

The report’s author, Judy Yang, attributes that, at least in part, to slow wage growth during the period, slower than in any of the bloc’s other large economies.

“If you are a household, what really pulls you out of poverty is getting a better-paying job, getting more income, getting labor market income,” she said.

What also sets Thailand apart is its political turmoil. The coup-prone country has seen four swings between military and civilian rule since 2006, governments cut short by controversial court orders and several rounds of mass protests, some of them deadly.

The World Bank said many of Thailand’s poverty spikes coincided with regional or global financial crises or with drought but added that periods of political instability also tend to depress consumption and investment, which can drive incomes down and poverty rates up.

Cheng, of Control Risks, said his conversations with clients confirm that Thailand’s volatile politics have kept many potential investors at bay, holding the economy back.

“A lot of the investors are staying away and taking a wait-and-see approach for a long, long time now,” he said.

Thailand
A man begs for money in central Bangkok, Thailand. VOA

“If they are not in Thailand already, they will be thinking very seriously about whether they should do so because what if there’s a change in government again? What if there are massive street protests like in 2013, 2014? Are you going to repeat the 2010 Bangkok standoff between the Red Shirts and the military?” he added, referring to Thaksin supporters by their color-coded apparel of choice.

Cheng said the constant and sudden turnover in governments has also fostered a habit of short-term policy prescriptions on poverty and inequality that have done more to soothe the symptoms than cure the causes.

Chambers and Cheng agreed that if the latest bout of bad numbers gets worse, Prayut’s problems will also be increased by swelling ranks of not just the poor but also of disenchanted voters.

The World Bank report proffers poverty and inequality figures only up to 2018 but adds that “trends beyond this year are not optimistic, given continued low economic growth rates and stagnant wages.”

Another severe drought devastated farmers last year as the country’s gross domestic product growth rank sank to 2.4%, its lowest since 2014. GDP forecasts for 2020 are even worse, owing much to the novel corona virus outbreak, which has hit the country’s important tourism sector hard.

Also Read- Mount Everest Spring Climbing to be Cancelled: Expedition Operators

To counter those blows, Prayut’s government has ramped up and introduced new social welfare programs for the poorest households and last week approved a stimulus package expected to pump some $12.6 billion into the economy.

The World Bank recommends that authorities continue to strengthen the country’s safety net and create better jobs for low-income earners in the short term. In the longer term, it says giving all children equal access to health and education opportunities would be the best way to make future generations more prosperous and more equal. (VOA)

Next Story

COVID-19: The Worst Global Crisis

A world in perpetual change - Is COVID-19 the worst?

0
COVID-19
Humankind is now facing a global crisis, which is COVID-19. Pixabay

BY PRADIP BAIJAL

Humankind is now facing a global crisis. Perhaps the biggest crisis of our generation. The decisions people and governments take in the next few weeks will probably shape the world for years to come. They will shape not just our healthcare systems but also our economy, politics and culture. We must act quickly and decisively. We should also take into account the long-term consequences of our actions. When choosing between alternatives, we should ask ourselves not only how to overcome the immediate threat, but also what kind of world we will inhabit once the storm passes. Yes, the storm will pass, humankind will survive, most of us will still be alive e but we will inhabit a different world.

Looking at the period AD, It was a static world till 1830. Nothing changed, the world GDP and inter-country GDP too, remained static. In a period not impacted by colonial rule, massive trade and new technologies, India and China dominated the world. They dominated because they had the maximum primary resources, which attracted exploitative trade from the west and also colonial rule.

Please follow NewsGram on Instagram to get updates on the latest news

We entered a new phase of rapid changes thereafter, also with the onset of first industrial revolution in the UK and Europe in 1760, and the second in the US in 1900. First and second industrial revolution changed everything, particularly the countries where the new technologies were discovered, and used. The UK grew from 1 per cent to 5 per cent of world’s GDP, and the US from 6 per cent to 35 per cent in 100 years, after having remained static for ages (particularly after 1 AD). India and China fell from 50 per cent to 5 per cent in about 100 years from 1860 to 1970.

COVID-19
COVID-19 and the new tariff agreement between China and the US has turned every thing on its head. Pixabay

Now comes a miraculous reversal in 1970 (I have explained in detail in my book, “Containing the China Onslaught”).

Both countries started new policies after being independent, used the IR 3.0 technologies and India and China came back to 30 per cent of world’s GDP in 2010, in just about 40 years, without the help of any indigenous technology.

What helped these poor countries was globalization, as predicted by Bhagwati (In Defence of Globalisation), and the connected world described by many, and particularly explained well in Parag Khanna’s “Connectography”). Globalisation helped the ideas and technologies flow to the backward areas, and the connected world facilitated easy transmission.

IR 3.0 technologies were only useful, if they were made available to the whole world. The post 1950 period belonged to IR 3.0. It was also in US interest to help China (so they were convinced by Deng to Nixon and seven US Presidents, may be through deception, after their post 1980 collaboration).

Please follow NewsGram on Facebook to get updates on the latest news

We now move to IR 4.0, machines interacting with machines and 5.0, machines talking to men etc. and robots, which are also based on communication technologies, and the trend should continue.

But suddenly and from nowhere, has appeared Covid-19, bringing in another BC and AC (before and after COVID-19, after before and after China/Communication technologies), and also Trump and Xi, all unpredictable, and we do not know where they would all take us.

Trump’s tariff measures against China, are bringing in unpredictable anti-globalisation, and a technology war against China. China was merrily producing most of world’s demand in many sectors, and to facilitate their movement, had launched BRI. But now with the resistance of USA and many other countries like India and Japan (for BRI), none is sure where these products would land, and at what price, and how they would be impacted by anti-globalisation forces..

Due to amendments in Politburo’s rules of 2015, Xi was anticipated to rule, almost forever, with Chinese Aambassador brimming with confidence in US that China was so powerful that no one could touch, and a US ambassador-designate to India also saying that China was so powerful that they had to be smothered with kindness, to convince them to change. So now Xi’s future is uncertain, and there is opposition. Maslovian forces are also catching up with leaders like Deng’s son recognized as pro-democracy.

COVID-19 and the new tariff agreement between China and the US has turned every thing on its head. Suddenly where is the powerful China now that it has signed an unfavourable tariff agreement with the US, and perhaps COVID-19/maslovian forces have added: “Anger inside China is growing. There stands not an emperor in his new clothes but a clown who is stripped of his clothes but still wants to be an emperor.”

COVID-19
Most economist still believe that despite reverses in COVID-19, China, India and the US will rule the world in 2050. Pixabay

Please follow NewsGram on Twitter to get updates on the latest news

“Atleast 175,000 people left Wuhan just on that day when Wuhan outbreak happened. The departures from Wuhan accelerated over the next three weeks. About 7 million people left in January, before travel was restricted.”

And we have the 2020 Presidential elections in the US, almost fighting a US-China war. Where has the support of seven US Presidents after Nixon, to China vanished now. We will soon know the results, but the world has changed and the new world would never be the same again. We do not know whether this would mean growth to India with its digital DNA or whether Covid will bring unanticipated reversals like the reversals of 1830/19501970/1980 described earlier, and this time impacted by COVID-19, the biggest unanticipated change of only a few weeks.

Or maybe, the world would go with, “But most economist still believe that despite reverses in COVID-19, China, India and the US will rule the world in 2050:

Also Read- Avoid Usage of Alcohol and Tobacco Amid Lockdown: Health Ministry

“Lindsey Galloway BBC, 23 March 2020: Brexit, coronavirus, and trade tiffs may be making economic headwinds, but despite immediate challenges, the world economy is projected to keep growing at a rapid pace over the next few decades. In fact, by 2050, the global market is projected to double its current size, even as the UN forecasts the world’s population will only grow by a modest 26 per cent.”

All new technologies lead to faster changes/disruptions. Admittedly, IR 4.0 and 5.0 will help those who implement fast/efficiently. Where would COVID-19 take the competing countries, only the next few weeks will tell?. (IANS)