Thai Economist Calls For Urgent Reduction In Income Inequity

[webfact]

Economist calls for urgent reduction in income inequity

Empowering poorer people through fair income redistribution and an efficient social welfare system is the only feasible way for Thailand to ensure political stability and reduce social conflicts, a noted economist said yesterday.

Somkiat Tangkitvanich, vice president of the state think-tank Thailand Development Research Institute (TDRI), said the country's increasingly high degree of social inequity over the past two decades has resulted in the severe political conflicts witnessed over the past few years.

"Thailand has never seen democracy take hold for a long period. Thai society has a high degree of inequity and the major cause is poverty," Somkiat said. "Rich people evade taxes and most of the taxes collected come from salaried people. There is inequality in social and economic opportunities.

"The government makes the situation worse by allowing some groups of people, especially the rich, to benefit from the unfair policies. … Inequity in the areas of economy, society and education has adverse impacts on the country's democratic development in the long run," he added.

Somkiat was giving an address on "Economic Inequality and Democracy" as part of events held to mark the 37th anniversary of the October uprising of 1973 at the October 14 Memorial.

He said that without fair income distribution, an uprising similar to the one in 1973 could happen again and would lead to large-scale social changes as it did following that event.

"If we have no income distribution, our only option is to be undemocratic. If we want to remain a democracy, there will always be pressure for income distribution. In any democracy, people who decide the future of society and the country's policies are in the middle while poorer people want to get fair income distribution," he said.

He said one part of society, particularly the elite, do not want income distribution because they will stand to lose. And they opt for suppressing the lower classes to prevent democracy from taking roots. This happened in South Africa during the apartheid period and in Thailand during the lynching of university students in October 1976.

Somkiat said income distribution could be done in two ways - with populist policies or without such policies while focusing on empowering people in the long term.

However, he warned that the option with populist policies brought allegations of corruption against politicians in power, which in 2006 led to the coup that toppled the government of Thaksin Shinawatra. He said repeated coups also occurred in Latin American countries where populist policies were adopted.

"The remaining choice is to return to a basic welfare system. If Thailand opts for this option. I think all of us should help to ensure this system can be established. A welfare system and income distribution is the only remaining option to help stabilise politics and reduce social conflicts. It is the choice with the lowest cost for the ruling class," Somkiat said.

He also suggested a 10-point guideline for efforts to make Thailand a welfare society in order to reduce social and economic inequality and bring about sustainable democracy.

Among the proposals, he said, there should be fairer conditions for tax-deductible costs; the tax base should be expanded to people capable of paying taxes; government spending should be kept at a reasonable level; corruption should be reduced; and political rules must be amended to encourage participation of people with lower income.

-- The Nation 2010-10-15

[nong38]

Its the same all over the world, the rich get richer and the poor are still poor. If this problem can be adressed then a lot of the problems will go away but it will take conviction and time.

A start can be made by assessing what the poorer parts of the kingdom dont have and what they want. Hospitals, transport,communication, welfare benefits etc. Then it needs prioritizing and quick fixes need to be identified and dealt with, The poor need to see things are happening. This is a good time as the government seem to have a fair bit of cash to play with,so lets see some action because this will start to make the nation one.

The rich must accept that they will have to contribute to this too, none of this will be easy but someone needs to take this on and advance the Thai peoples quality of life. Is this for you Mr Abisit or will you let the forces of darkness make idle promises?

[craigt3365]

Seems this problem is typical all over Asia...especially in China....

[Thai at Heart]

I believe that if the people of this country simply paid the taxes that are on the books, the government budget would be in a very significant surplus.

Funny how the Democrats of Thailand are closer to the Republicans of the US. Of course, you couldn't be named the Republicans in Thailand.

Edited October 15, 2010 by Thai at Heart

[mjnaus]

Seems this problem is typical all over Asia...especially in China....

Try "all over the world" instead. Ever looked closely at the gap between rich and poor in the US? Prepared to be amazed...

[Pib]

You can make economic/income stats say most anything you want. Take a look at below wikepedia article talking about the income equality among nations.

Be sure to compare Thailand, the US, and the UK in the article/stats....ain't a big difference in the stats by country. What does that mean?. Does it mean US/UK are as worst off as Thailand, or Thailand is as well off as the US/UK. Or, maybe you can structure income stats to say most anything unless a lot of underlying, country-specific factors are somehow worked into the stats to make them a little more meaningful. But with this being said, "Yes, Virginia, there is a BIG income gap between the many rich and many poor in Thailand with the middle income group "slowly" growing in size."

http://en.wikipedia.org/wiki/List_of_countries_by_income_equality

[craigt3365]

Seems this problem is typical all over Asia...especially in China....

Try "all over the world" instead. Ever looked closely at the gap between rich and poor in the US? Prepared to be amazed...

For sure...my wife was amazed when she first lived in the US. As her only reference point was TV, I am sure she thought all the streets were paved with gold...then she went to Walmart...shocked for sure. Where my Mom lives is out in the middle of nowhere and there are LOTS of really poor folks living there...all on welfare...most doing meth...

[canuck1941]

This professor has laid out the choice for Thailand. His remarks about how the upper class can save itself with income redistriburtion are encouraging, for without it civil unrest is inevitable and stability leading to growth of wealth in the kingdom is impossible.

[hansfromwales]

why do people think redistribution works? hasnt worked so far, not for the lack of trying.

americans are the last hope of the world and even its on shaky ground w the nigeriannightmare leeding the way.

get the govt out of the way and i bet issan would prosper, and if it doesnt maybe people will move to greener pastures!

[hansfromwales]

Seems this problem is typical all over Asia...especially in China....

Try "all over the world" instead. Ever looked closely at the gap between rich and poor in the US? Prepared to be amazed...

For sure...my wife was amazed when she first lived in the US. As her only reference point was TV, I am sure she thought all the streets were paved with gold...then she went to Walmart...shocked for sure. Where my Mom lives is out in the middle of nowhere and there are LOTS of really poor folks living there...all on welfare...most doing meth...

but osa poor r considerably quite wealthy compared to los issanites! the poor of the world would be thrilled to be poor in usa!

[hansfromwales]

This professor has laid out the choice for Thailand. His remarks about how the upper class can save itself with income redistriburtion are encouraging, for without it civil unrest is inevitable and stability leading to growth of wealth in the kingdom is impossible.

what?

how is elite gonna prosper by having peasents get closer to them? socialism just kills ambition. everyone is worse off.

[craigt3365]

Seems this problem is typical all over Asia...especially in China....

Try "all over the world" instead. Ever looked closely at the gap between rich and poor in the US? Prepared to be amazed...

For sure...my wife was amazed when she first lived in the US. As her only reference point was TV, I am sure she thought all the streets were paved with gold...then she went to Walmart...shocked for sure. Where my Mom lives is out in the middle of nowhere and there are LOTS of really poor folks living there...all on welfare...most doing meth...

but osa poor r considerably quite wealthy compared to los issanites! the poor of the world would be thrilled to be poor in usa!

Wifey's point was interesting. If you are poor in the USA, you have no land...thus...can not feed yourself and have to rely on government handouts. If you are poor in Issan, usually, you have land or your family does. You can farm, get mushrooms from the jungle, fish from the local ponds, and survive...barely...but you can survive without any handouts. Interesting difference...

[hammered]

Creating more opportunity for the poor is at least as important. They need to have access to the same quality of education as the wealthier have. Also creating a fairer employment field would help where things like alumni, family connnection, status, skin colour and good lookc dont come into it. Also realistic opportunity for funding for good business ideas would be a bonus. Certainly a move away from the peasants love dancing in the fields making a pittance while the local lord makes all the profit on their produce is needed, as are attitudes that dark skin equals idiocy and that peasants are only there to work as slaves in the riches factories or to head to exotic foreign climes to work as slaves and send rmittances home for family to buy motorcycles and phones from the rich business owners. The whole playing field needs levelling or uprisings are quite likley and not ones led or fomented by some egomaniacal mass human rights abuser but by popular demand.

Just dishing out extra pay or money is a short term fix without the more important structural, societal and attitude changes they wont achieve much long term

[chantorn]

How?

Tax the rich, and give to the poor?

[rubl]

This professor has laid out the choice for Thailand. His remarks about how the upper class can save itself with income redistriburtion are encouraging, for without it civil unrest is inevitable and stability leading to growth of wealth in the kingdom is impossible.

If history has taught us one thing it's that the rich and powerful need some encouragement to let go and participate in redistribution. Keep reminding them of the other 'options'.

[givenall]

Its the same all over the world, the rich get richer and the poor are still poor. If this problem can be adressed then a lot of the problems will go away but it will take conviction and time.

A start can be made by assessing what the poorer parts of the kingdom dont have and what they want. Hospitals, transport,communication, welfare benefits etc. Then it needs prioritizing and quick fixes need to be identified and dealt with, The poor need to see things are happening. This is a good time as the government seem to have a fair bit of cash to play with,so lets see some action because this will start to make the nation one.

The rich must accept that they will have to contribute to this too, none of this will be easy but someone needs to take this on and advance the Thai peoples quality of life. Is this for you Mr Abisit or will you let the forces of darkness make idle promises?

When will the people learn that this is a new world, with new and advances problems? The only way to succeed is through education. If any country want to reduce the classes, they need to invest in since and development education.

Giving away money to poor is a very temporary situation, and money will eventually runs out.

[tigermonkey]

Seems this problem is typical all over Asia...especially in China....

Everyone likes to dump on China -- we in Thailand would be fortunate to have such a government that is decisive, proactive and tries to assist the people. Whether you like the government of China or not ( and most do not, because they are 'communist' ) , and whether you consider Thailand to be more ' democratic' than China ( which is open to debate), you must face facts -- China takes action to assist the poor, reduce pollution, eliminate corruption, and assist the people in times of crisis ( such as the earthquake in Myanyang).

Yesterday, my mother -in-law went to pick up her 'pension' from the government -- a shameful sum of 500 baht for a senior over tha sge of 60 .

China has compulsory retirement at age 60 for men and 50 for women -- a single retiree receives the equivalent of 3500 baht each month ( still not a fortune) --- and does not need to queue up to get it.

[Pib]

Wifey's point was interesting. If you are poor in the USA, you have no land...thus...can not feed yourself and have to rely on government handouts. If you are poor in Issan, usually, you have land or your family does. You can farm, get mushrooms from the jungle, fish from the local ponds, and survive...barely...but you can survive without any handouts. Interesting difference...

But if Thailand had a welfare system that issued food stamps like they do in the U.S., I expect many poor farmers could and would stop going to the jungle and ponds to obtain food.

But with the number of really poor in Thailand, urban and country, a real welfare system would be VERY, VERY expensive for Thailand....and I expect it would open up a whole new horizon for corruption.

[rreddin]

How?

Tax the rich, and give to the poor?

You would know how if you had read the OP.

[craigt3365]

Creating more opportunity for the poor is at least as important. They need to have access to the same quality of education as the wealthier have. Also creating a fairer employment field would help where things like alumni, family connnection, status, skin colour and good lookc dont come into it. Also realistic opportunity for funding for good business ideas would be a bonus. Certainly a move away from the peasants love dancing in the fields making a pittance while the local lord makes all the profit on their produce is needed, as are attitudes that dark skin equals idiocy and that peasants are only there to work as slaves in the riches factories or to head to exotic foreign climes to work as slaves and send rmittances home for family to buy motorcycles and phones from the rich business owners. The whole playing field needs levelling or uprisings are quite likley and not ones led or fomented by some egomaniacal mass human rights abuser but by popular demand.

Just dishing out extra pay or money is a short term fix without the more important structural, societal and attitude changes they wont achieve much long term

That is what Thaksin tried before...hand out money by the bag full. But the latest study reported this week shows the income gap between the rich and the poor has not changed in a decade. So you are right on. Many things can be done to help with this gap, but handing out money...though politically astute...is not really the best approach.

Seems this problem is typical all over Asia...especially in China....

Everyone likes to dump on China -- we in Thailand would be fortunate to have such a government that is decisive, proactive and tries to assist the people. Whether you like the government of China or not ( and most do not, because they are 'communist' ) , and whether you consider Thailand to be more ' democratic' than China ( which is open to debate), you must face facts -- China takes action to assist the poor, reduce pollution, eliminate corruption, and assist the people in times of crisis ( such as the earthquake in Myanyang).

Yesterday, my mother -in-law went to pick up her 'pension' from the government -- a shameful sum of 500 baht for a senior over tha sge of 60 .

China has compulsory retirement at age 60 for men and 50 for women -- a single retiree receives the equivalent of 3500 baht each month ( still not a fortune) --- and does not need to queue up to get it.

Just listed to the BBC news on the radio. The latest report is the gap in China just widened between the rich and the poor and the government is now afraid of an uprising. Communism is not the problem with them, being open and honest is. Hu Jintao just made a speech and said corruption and inflation are the two biggest problems they are currently facing. You can ask all the homeless poor who lost their property in land grabs by the rich if they like their government. Plus, their environmental record is pretty bad. Just head to Beijing during one of those sand storms caused by destruction of grazing grounds near Mongolia...and poor use of water resources. Here is a quote off the internet:

-------------------------------------------------

Currently, China is losing about 3,600 km² of grassland every year to the growth of the Gobi Desert. This process of desertification is caused by deforestation, overgrazing by animals (not livestock), global warming, and the depletion of natural water resources.

-------------------------------------------------

All governments have their problems. The benefit China has is they can do what they want as their is no "opposition" party unlike in other countries...such as Thailand. Even though they fight, at least they are kept on their toes! China can, and does, whatever they want....

[craigt3365]

Wifey's point was interesting. If you are poor in the USA, you have no land...thus...can not feed yourself and have to rely on government handouts. If you are poor in Issan, usually, you have land or your family does. You can farm, get mushrooms from the jungle, fish from the local ponds, and survive...barely...but you can survive without any handouts. Interesting difference...

But if Thailand had a welfare system that issued food stamps like they do in the U.S., I expect many poor farmers could and would stop going to the jungle and ponds to obtain food.

But with the number of really poor in Thailand, urban and country, a real welfare system would be VERY, VERY expensive for Thailand....and I expect it would open up a whole new horizon for corruption.

I can see it now. Poor folks in the USA foraging for mushrooms in New York City's Central Park...fishing in the ponds...funny....

Thailand is kinda lucky the poor have alternatives if they can not work...and many seem happy to do just that! Or, they just try and catch a farang!

[padeakin]

Handouts tothe poor just encourages idleness.

Funding ofbusiness ideas encourages unfair competition and corruption.

Educationfor the poor is overrated, whilst I agree they should have equal opportunity, Idon’t believe I will make much difference, We would just have farmers thatcan speak a foreign language or do algebra or something.

It seems tome the solution is Tax the well off, or just to manage and regulate it better. Reducetax for low earners, to nil on the poorest in society. Improve the welfaresystem and education, but this needs to be carefully managed with no handouts, and in ways that givepeople incentive to work.

It has beensaid that this rich\poor gap is a problem worldwide – look at America. Well America is notthe rest of the world, and not a good example. Some countries have got it right: look at Germany,France, Cuba….. Australia?

[Robby nz]

Wonder if Khun Somkiat Tangkitvanich would like to start things off by donating half his income - bank ballance to the poor farmers.

After all the farmer produces food... what does an economist produce?

[Pib]

Wifey's point was interesting. If you are poor in the USA, you have no land...thus...can not feed yourself and have to rely on government handouts. If you are poor in Issan, usually, you have land or your family does. You can farm, get mushrooms from the jungle, fish from the local ponds, and survive...barely...but you can survive without any handouts. Interesting difference...

But if Thailand had a welfare system that issued food stamps like they do in the U.S., I expect many poor farmers could and would stop going to the jungle and ponds to obtain food.

But with the number of really poor in Thailand, urban and country, a real welfare system would be VERY, VERY expensive for Thailand....and I expect it would open up a whole new horizon for corruption.

I can see it now. Poor folks in the USA foraging for mushrooms in New York City's Central Park...fishing in the ponds...funny....

Thailand is kinda lucky the poor have alternatives if they can not work...and many seem happy to do just that! Or, they just try and catch a farang!

Some of the alternates for Bangkok poor is fishing in the canals and foraging in the roadway median strips. Sure looks like fishing and foraging opportunities in Thailand negate the need for any type of welfare system.

[craigt3365]

Handouts tothe poor just encourages idleness.

Funding ofbusiness ideas encourages unfair competition and corruption.

Educationfor the poor is overrated, whilst I agree they should have equal opportunity, Idon’t believe I will make much difference, We would just have farmers thatcan speak a foreign language or do algebra or something.

It seems tome the solution is Tax the well off, or just to manage and regulate it better. Reducetax for low earners, to nil on the poorest in society. Improve the welfaresystem and education, but this needs to be carefully managed with no handouts, and in ways that givepeople incentive to work.

It has beensaid that this rich\poor gap is a problem worldwide – look at America. Well America is notthe rest of the world, and not a good example. Some countries have got it right: look at Germany,France, Cuba….. Australia?

You started off good, and it all went downhill after that....way off the mark. Cuba? Have you ever been there? If you had, there is no way you would make that comment. But you are right on that the income gap in ALL developed countries is not improving...especially in the US. And for sure, I need more money!!!!!!!!!!!!!!

Here is an interesting comment:

A study by the World Institute for Development Economics Research at United Nations University reports that the richest 1% of adults alone owned 40% of global assets in the year 2000. The three richest people possess more financial assets than the lowest 48 nations, combined [2].

An American having the average income of the bottom US decile is better-off than 2/3 of world population.

over 80 % of the world population lives on less than 10 US$/day. [7] ; over 50 % of the world population lives on less than 2 US$/day. UNREAL!!!!!!

[Felt 35]

Before anything change here the Thai Government will have to take a new course and embark on a number of democratic reforms aimed at flattening the income distribution, eliminating poverty, ensuring social services such as retirement, medical care, and disability benefits to all, and putting more of the capital into a kind of trust. To get to this it would include implementation of a high progressive income tax, higher tax on luxury goods, higher tax on property sales, special taxes on automobiles, tobacco, alcohol, cosmetic items, etc.

The new Thailand year 2060.

[inmysights]

This professor has laid out the choice for Thailand. His remarks about how the upper class can save itself with income redistriburtion are encouraging, for without it civil unrest is inevitable and stability leading to growth of wealth in the kingdom is impossible.

what?

how is elite gonna prosper by having peasents get closer to them? socialism just kills ambition. everyone is worse off.

How very wrong you are. The Tories (thieves) said the worse thing that was ever done was to educate the working class. How can you possibly better your lot from some rural homestead in Isaan as opposed say, to a middle/'high' class family with connections in Bangkok?

By the way, your term 'peasants' is very offensive and simply shows up your Daily Mail/Sun/Telegraph reader mindset.

Edited October 15, 2010 by inmysights

[ThaiRich]

Many of you aren't gonna like what I am gonna say. I believe the "average" Thai person has what he/she deserves. By this I mean. When they were in school did they listen to their teacher? Did they do their homework or did they just copy their friends? Now, I know the education system in Thailand leaves alot to be desired. BUT, there still has to be an effort on the student. I personally don't know any Thais that have a decent education, learned what they studied, that are poor. Maybe they aren't super rich, but their not poor either.

Have they saved money to start their own business? Or do they have a modern mobile phone (they don't even know how to use many of the functions)? Are they drinking every night. This is money that can be saved and in 3 to 4 years they would have enough to start their own business.

In my own community I watch whats going on. I see many of the poor famiies, the father is laying in a hammock in the front yard at 2 in the afternoon. If he is poor, why isn't he working? Making something? Doing something.?

As in everything in life I believe people get out of live what they put into it. When I first got to Thailand almost 6 and 1/2 years ago, when I seen all the poverty I was truely bothered by it. Now as I have been here longer and seen many things. It has no effect on me. Now, I am still concerned when I see a child who doesn't look as if they have had enough to eat or enough milk. But there is free milk at ALL schools. But I don't go buy milk and give it away any more. As most of these very poor childrens fathers are either drunk every night of sleeping all afternoon in a hammock.

A rule to live by. If you can't afford it don't buy it. If you can't afford to feed, educate and provide for a child, then don't have any.

[swerver]

Seems this problem is typical all over Asia...especially in China....

Try "all over the world" instead. Ever looked closely at the gap between rich and poor in the US? Prepared to be amazed...

The day capitalism is forced to tolerate non-capitalist societies in its midst and to acknowledge limits in its quest for domination, the day it is forced to recognize that its supply of raw material will not be endless, is the day when change will come. If there is any hope for the world at all, it does not live in climate-change conference rooms or in cities with tall buildings. It lives low down on the ground, with its arms around the people who go to battle every day to protect their forests, their mountains and their rivers, because they know that the forests, the mountains and the rivers protect them.

The first step towards reimagining a world that has now gone terribly wrong would be to stop the annihilation of those who have a different imagination – an imagination that is outside of capitalism as well as communism, an imagination that has an altogether different understanding of what constitutes happiness and fulfillment. To gain this philosophical space, it is necessary to concede some physical space for the survival of those who may look like the keepers of our past, but who may really be the guides to our future. To do this, we have to ask our rulers: Can you leave the water in the rivers? The trees in the forest? Can you leave the minerals in the mountain? If they say they cannot, then perhaps they should stop preaching morality to the victims of their wars.

[Pui]

I believe that if the people of this country simply paid the taxes that are on the books, the government budget would be in a very significant surplus.

Funny how the Democrats of Thailand are closer to the Republicans of the US. Of course, you couldn't be named the Republicans in Thailand.

Yes but simply paying taxes doesn't help. I worked for a company that paid taxes and when I went to the tax office in Bangkok there are more Mercedes and BMW than I've ever seen in one place.

Criminals are winning and the poor masses are badly effected. If they complain, bad things happen.

Its very difficult to address corruption in a society where complaining is seen as being worse than illegal activity.