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Narrowing income gap will take time

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Bangkok Post

1 Jun 2010

 

Opinion by Atiya Achakulwisut

 

 

Let's set some records straight. It's not true that the political conflicts in Thailand are mainly the fight between the rich and the poor. Contrary to the Third World image some people may have of Thailand, the country has done well in terms of poverty eradication.

 

[color:red]In 2006, the number of people living below the poverty line was about 4% of the population in the urban areas and 12% in the rural sector.[/color]

 

It is true that Thailand is one of the most unequal societies in the world. As noted by Pasuk Phongpaichit, the income gap between the richest 20% and the poorest 20% in Thailand is 13 to 15 times, compared to 6 to 8 times in Europe and North America. As for wealth distribution, the disparity between the top 20% and the bottom 20% is 70 times.

 

Stark and brutal as these inequalities may be, they do not necessarily lead to social unrest - that is another untruth. There are a host of factors - some endemic to the system, others artificially created for specific purposes - that gave birth to the red shirt movement and fed its continuous growth. For Ms Pasuk, a complex mix brews in this crucible. The growth in income per head has given rise to complex needs - political aspirations and expectations - against the shifting of positions among interest groups in society, with some poised to gain from the changes and others digging deep to preserve whatever benefits they viewed as theirs to have and to defend.

 

Somchai Jitsuchon, a research director at Thailand Development Research Institute (TDRI), cautioned two years ago that the Thai public should be worried about the inequality trend "because it is the best fodder for social unrest". Inequality breeds a sense of injustice. What's worse in our country's case is that the injustice has been preserved - barriers to wealth were made, rules enacted, that favour people who control capital or have power. It's the feeling that the inequality can be perennial that is hard to put up with, which could prompt the disenfranchised to revolt.

 

It's true that only the what-caused-all-this part is already long and complicated and difficult to fit into 10-second sexy sound bites. It must be conceivably difficult for people who go about their life in civilised London or Atlanta and have hardly had any sighting of military personnel in the streets in broad daylight (except on TV), to understand the psyche of people who live in the shadow of the past 18 coups. It's not true that we shouldn't try.

 

It's true that members of the elite and middle class should have been made to pay higher and more taxes so that the state has more resources to finance a more comprehensive welfare scheme - social security, pension fund, education access - which will serve as a social safety net while lessening the rich-poor gap. It's true that these social-equalising efforts will take huge political will and a long time to implement.

 

[color:red]It's not true that the inequality problem will be easily and quickly solved by a change of government, as the red shirt leaders seemed to suggest.[/color]

 

[color:red]It's not true either that Thailand would rid itself of the inequality problem and become a completely egalitarian society if the rich, the traditional elite or so-called amataya in red shirt terminology is toppled. Capitalism dictates that there will always be competition and there will be those who win over others and those who lose out. There is no such thing as a completely equal society. Even the red shirts have leaders.[/color]

 

It's true that the wound is still fresh from the political conflict and Thailand remains far from being reconciled - any expression otherwise is just wishful thinking.

 

It is reported in fact that members of the red shirt cadre who were forced to leave Ratchaprasong empty-handed are organising a series of political seminars to disseminate their political ideology and recruit more supporters. It will be admirable if the courses are about democracy and the need to cooperate and push for those equalising steps to make Thailand a more equal society. It will be worrisome if the fora remain narrowly focused on the quick fix - of having an uprising, of toppling the government and going on a rampage against those perceived to be from the oppressive class.

 

It's true that all the reforms mentioned, of the tax system, pensions, education and social security, won't make attention-grabbing presentations, VDO clips or TV news. It's true they won't sound very rousing on a protest stage. But these unpopular measures are necessary if we are to become a more equal society. They probably constitute our only way. Anything less than this is but a political ponzi scheme.

 

 

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Lies Lies Lies - ThaiHome said the Rich Poor gap was not that high

 

 

I quoted the CIA Fact book statistics. Do you actually know the difference between a fact and an opinion? You really seem to struggle with that.

TH

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Nah - just if you say the same thing often enough you hope people believe you, oddly many are smarter than that :)

 

Missed this letter last week. Looks like others agree with me that the numbers quoted were inaccurate and did not support the most unequal society comment.

TH

 

POST BAG Less unequal than others

Published: 3/06/2010 at 12:00 AM

Newspaper section: News

 

The commentary by Atiya Achakulwisut (Bangkok Post, June 1) was supposed to set some records straight regarding Thailand's inequalities. It partly did, concerning the origins of the current political conflict in Thailand, but totally missed the mark regarding the level of inequality in Thailand by spreading the idea that ''it is true that Thailand is one of the most unequal societies in the world''.

 

Her comments are based on supposedly irrefutable data apparently provided by Pasuk Phongpaichit (whose work I usually appreciate). Well, I don't know from which source Prof Pasuk got her data regarding income inequalities in Thailand and the rest of the world, but they just do not match the data of international and government agencies such as the UNDP or the CIA.

 

According to the UNDP's Human Development Report 2007-2008, the income gap between the richest 20% and the poorest 20% is 7.7 times in Thailand (not 13 to 15 times as stated in the commentary), to be compared with 21.8 times in Brazil, 12.4 times in Malaysia, 9,7 times in Singapore, 9.4 times in Hong Kong and 8.4 times in the USA.

 

Another indicator which is commonly used to measure income inequality is the Gini Coefficient (the lower the score, the lower the income inequality in a country). With this indicator, similar results can be observed. According to the UNDP report, Thailand has a Gini Coefficient of 42, to be compared with a score of 57 for Brazil, 49.2 for Malaysia, 42.5 for Singapore, 43.4 for Hong Kong and 40.8 for the USA.

 

I agree that Thailand, like any other society, should aim at reducing the income gap and that it will take time. However, let's set the record straight: Thailand is not one of the most unequal societies in the world (at least not in terms of income distribution) and income inequalities in Thailand are lower than those observed in the most developed nations of Southeast Asia and South America and similar to the ones observed in the most powerful (developed?) nation on earth, the United States.

 

Not so bad, after all. If only Thailand could get similar results in corruption studies.

 

CANDIDE

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According to the UNDP's Human Development Report 2007-2008, the income gap between the richest 20% and the poorest 20% is 7.7 times in Thailand (not 13 to 15 times as stated in the commentary), to be compared with 21.8 times in Brazil, 12.4 times in Malaysia, 9,7 times in Singapore, 9.4 times in Hong Kong and 8.4 times in the USA.

 

The figure of 13 to 15 times is between the richest and poorest 10% of the population, which is the indicator commonly used by the UNDP, not the 20%.

To be fair, that indicator does not tell much about a country's prosperity. The more a country is developing economically, the more the gap is likely to widen. Laos for instance shows 7 for the same indicator, but a bottom-income Laotian is far poorer than his Thai counterpart. In Singapore and Hong-Kong the figure is 18. So, if anything, the gap will go increasing as Thailand grows further, economically.

 

As it was mentioned already, Thailand doesn't suffer from income gap but from opportunity-gap. Policies addressing social issues (health-care, education and more generally human development) are not on par with what the country should be capable to do, considering it's positive economic dynamics.

 

Also, I don't think that those issues are directly the cause of the political mayhem, it's just amplifying it.

 

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The article specifically said 20% not 10%, but here are the both the 10% and 20% numbers that I have posted before.

 

I'm curious about the "opportunity gap" you speak of?

 

Like the adult education classes that allow any adult that is interested in getting what we would call a high school diploma?

 

Or the trade schools that are all over the rural areas and train people in many different skills?

 

Now I will agree that these skills will do little good in an area where just about the only industry in agriculture.

 

But that is root of the problem. People are going to have to leave the rural areas if they want to do better. This is the same thing that happened to every single industrialized nation in the world.

 

Now, if you are against industrialization or believe that taxes should be used by the government to redistribute wealth to subsistence farmers so they can continue this idyllic lifestyle, then there is little to discuss.

TH.

 

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I once had a taxi driver - those founts of wisdom - complain to me that almost all of the industry is in or near Bangkok. That is why the city has grown so much and so rapidly. He asked why more factories weren't built outside of Bangkok, which would provide work for the provinces and keep people at home. Good question. :dunno:

 

 

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Hi,

 

I agree. In most industries I'd say you are pretty much restricted to being in Bangkok.

 

I couldn't really see myself running an IT company from Khorat, Nakhon Sawan or any other provincial city, let alone from a smaller town.

 

I too would much prefer if businesses were a bit more spread out. Might even the population a bit as well, rather than largest city Bangkok with xx Million people, 2nd largest Khorat (?) with xxx thousand people.

 

Sanuk!

 

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