Thailand Is Not Ready To Start A Welfare State

[webfact]

EDITORIAL

Thailand is not ready to start a welfare state

By The Nation

The govt must be wary of continuing with populist policies to secure support; we simply can't afford it.

As the lame-duck session of the US Congress kicked off this week, legislators are facing a dilemma on how to turn around the economy and cut the national debt at the same time. The dilemma is reflected in the nationwide debate over a series of measures proposed by President Barack Obama's bi-partisan commission on reducing the national deficit.

While top economists such as former Federal Reserve chairman Alan Greenspan agree with the urgent need to cut the deficit, which has risen to an alarming level, some prominent House members such as Democrat Nancy Pelosi describe the draft proposals as "unacceptable".

The proposed measures, in spite of the imperative, are politically unpopular. Americans are finding it difficult to swallow the bitter pill of US$4 trillion spending cuts to reduce the deficit by 2020. The administration proposes cutting public spending, eliminating tax breaks and raising the social security retirement age, as suggested by the commission.

The current debate in the US can tell the Thai government something about the necessity of withstanding political pressure in order put the fiscal position on sound a foundation. The bi-partisan commission, co-chaired by former senator Alan Simpson and former Clinton White House chief of staff Erskine Bowles, has suggested a series of measures such as a progressive social security system, new taxes and spending moratoriums. But these measures will certainly be unpopular if the public perceives them as a means to decrease the social benefits they are otherwise entitled to.

America is not a welfare state, but the debate over social welfare benefits is a critical issue in the nation's politics. Healthcare reform and the retirement age issues receive strong public attention because they directly affect the well-being of the people.

Most people in most countries would prefer to have the government guarantee their well-being as best it can. But in reality, most governments cannot find sufficient revenue to cover all the costs of universal healthcare and a welfare safety net. Some developed countries can provide better welfare benefits to their people than others because they finance the social security system by imposing high tax rates that bring in substantial revenue. However, tax increases are highly sensitive and politically difficult to implement. Some governments thus resort to financing social security benefits at the expense of their fiscal stability.

The Thai government has recently toyed with populist policies to win support from ordinary people. Measures have included monetary handouts to senior citizens and for infants, and the provision of free public transportation to the needy on a permanent basis.

The current government may easily forget the fact that once the public enjoys and gets used to these benefits, future governments will find it difficult to discontinue them during times of economic difficulty.

Thailand is far from able to brag about being a wealthy or even a sustainable growing nation. Thus, it is not realistic for the government to follow a generous state welfare system as implemented by some European nations that have an affluent middle-class with a large tax base. In addition, the efficiency of social welfare benefits does not solely depend on the amount of money spent, but also on whether that money is spent wisely.

As the next general election approaches, we should not be surprised to hear more politicians making promises about extra freebies for voters, especially among the lower-income population. Thailand's economic performance is still subject to risk factors arising from the global recession, so the Abhisit government must be careful not to endanger the nation's fiscal stability. The government should closely monitor its budget deficit to ensure that it does not leave future generations paying for its own indiscretion.

Even though the government claims it has the money to increase welfare benefits, including freebies that could be deemed unnecessary, what will happen when the next government faces pressure to cut spending? When people become addicted to handouts, their complaints are loud when they are forcibly weaned off them.

-- The Nation 2010-11-19

[Siam Simon]

Thailand will be ready to start a welfare state when the bunch of uglies who have carved up the show between themselves for the past god-knows-how many years either start looking beyond the end of their noses or are forced into addressing said utterly daft carve-up of the country's pie.

[mca]

Thailand will be ready to start a welfare state when the bunch of uglies who have carved up the show between themselves for the past god-knows-how many years either start looking beyond the end of their noses or are forced into addressing said utterly daft carve-up of the country's pie.

Preferably from the end of a noose with a sign " I'm Corrupt And Betrayed My Country And My Countrymen " hanging round their necks.

[Roadman]

Then policies should be targeted at building that middle class, they are the ones who bring the stability in all walks of life. But that also requires a change of leadership and method from within the ranks of Isaan. The learnth are there within the provincial cities, universities and for example the fields of the Arts. Target the middle class building into the Isaan cities. But that would be like waving at a Red Khwai

[Siam Simon]

Then policies should be targeted at building that middle class, they are the ones who bring the stability in all walks of life. But that also requires a change of leadership and method from within the ranks of Isaan. The learnth are there within the provincial cities, universities and for example the fields of the Arts. Target the middle class building into the Isaan cities. But that would be like waving at a Red Khwai

You're right once the patronising element is removed from your opinion. Fact is, Thaksin was the first to deliver a little bit. Fact is, Abhisit is the first to try to deliver with honest intentions. We can only hope that he can win this and other tussles with his ugly patrons. That's the only credible future for the country.

[SomTumTiger]

There is a large difference between a US senior who is getting 800 dollars a month, and a Thai senior who is getting 500 baht. I am pretty sure they can afford that

[Roadman]

Then policies should be targeted at building that middle class, they are the ones who bring the stability in all walks of life. But that also requires a change of leadership and method from within the ranks of Isaan. The learnth are there within the provincial cities, universities and for example the fields of the Arts. Target the middle class building into the Isaan cities. But that would be like waving at a Red Khwai

You're right once the patronising element is removed from your opinion. Fact is, Thaksin was the first to deliver a little bit. Fact is, Abhisit is the first to try to deliver with honest intentions. We can only hope that he can win this and other tussles with his ugly patrons. That's the only credible future for the country.

Patronising? No poking with a stick Agree with your opinion thou. He is the brightest hope that Thailand has seen for a long time.

[TAWP]

No country can afford a welfare state since it depends on the population and economy growing continuously...something that just isn't possible.

[bushwacker]

No country can afford a welfare state since it depends on the population and economy growing continuously...something that just isn't possible.

I completely agree. If you make things like medical free then people will use it much more than necessary. If they have to pay for it or pay some part of it then they try to limit their usage. Medical is killing countries like Canada because it is basically free.

[asiawatcher]

The minute you give incentives NOT to work, the system fails. Look at the West. Crimes go up, underage social issue arise, the gap widens and the esteem of those with no work becomes swept under the carpet. Thai's have reasonably good work ethic. They will buy between 4 of them even the smallest goods like fruits and sell them at 400% profit even if on 20 Baht outlay and make 100 Baht. If they got a hand out they would not need to work. I am not saying no social reform but put it in medical or some housing assistance - it does not have to be fancy!

In my own country 16 year-olds would walk into Social Security and say their parents did not understand them. They were given rental allowance, unemployment benefits, and then 4 of them would pool their rent money - go get a waterfront or beach house and pick up glasses in the pubs Saturdays and Sundays and still take home the same money weekly as a 40 hour worker with only having to work 2 days! Within 6 months they were on their back, doing drugs and inevitably, the occasional death.

Yes social security works great (sic - no pun intended). I am here in Thailand, no benefits, no superannuation, no free medical and am still better off than being in my own country. Thailand don't follow the stupidity of the West. Do your own thing.

Edited November 19, 2010 by asiawatcher

[philhal2]

I look around the world we live in and see the bubble slowly bursting for the welfare states and the so called Democracies ,. The parasite level of people on freebies is growing to the point where no one wants to work . The fiscal mess is almost insurmountable and still the fools think that it can continue on . Thailand and other countries are looked down on by these same fools , but I respect the Asian culture and the people who work so hard to live . They usually dont have major issues and problems until the Foriegners interfere and want to impose their particular cultures on these lovely people . I dont see a problem with being poor and living on what you earn from real work and making your own way .'

I hear about pollution , drugs , prostitution , crime and all the other issues , But I dont see real help coming forth to solve the problems . I just see people who live on welfare whining like dogs when they dont get a free bone , and all this is in the democratic , financially stuffed , welfare states .

I work , pay taxes , employ people and grow more angry every day with the number of parasites myself and others have to support . This is where the money comes from , Not the government , not the bank CEO or Microsoft and I havent seen a money tree in ages .

I see a massive problem in countries where the welfare is considered to be a lifelong entitlement and it is your right even if you never contributed to the system that provides it . I see a big problem where drug use is almost normal and is paid for via welfare and criminal activities . I see a bigger problem where those in Government and big business rape the finances of a Nation and think they earn it for a very dismal performance and a complete non benefit to the National interest . The financial crisis is only real for those living beyond their means , individuals or Nations alike . yes I live in Australia and it is becoming the biggest parasitical culture on the planet , everything is for free except if your working middle class, Teens dont work , they live on drugs , sex and get paid by us , they get handouts for having babies , underage as well , they get free housing , they get paid for never having worked , they get allowances for anything and everything , They arent worth feeding , because they have never contributed and neither have most of their parents . Maybe the Grandparents did !!! Does this give a parasite rights ????

Leave Asian people alone and let them work out what they can afford . They don't need advice from people who can't even manage a household budget let alone a national economy .

Edited November 19, 2010 by philhal2

[jayjay0]

The minute you give incentives NOT to work, the system fails. Look at the West. Crimes go up, underage social issue arise, the gap widens and the esteem of those with no work becomes swept under the carpet. Thai's have reasonably good work ethic. They will buy between 4 of them even the smallest goods like fruits and sell them at 400% profit even if on 20 Baht outlay and make 100 Baht. If they got a hand out they would not need to work. I am not saying no social reform but put it in medical or some housing assistance - it does not have to be fancy!

In my own country 16 year-olds would walk into Social Security and say their parents did not understand them. They were given rental allowance, unemployment benefits, and then 4 of them would pool their rent money - go get a waterfront or beach house and pick up glasses in the pubs Saturdays and Sundays and still take home the same money weekly as a 40 hour worker with only having to work 2 days! Within 6 months they were on their back, doing drugs and inevitably, the occasional death.

Yes social security works great (sic - no pun intended). I am here in Thailand, no benefits, no superannuation, no free medical and am still better off than being in my own country. Thailand don't follow the stupidity of the West. Do your own thing.

Not sure what country you live in. Sounds good to me. Unfortunately I am to old for that. In my country (America) I am getting Social Security. It amounts to $366 a month USA. The streets have people living on them because they can not afford housing. What country are you in that gives kids enough money to rent beach side homes even if there is four of them pooling there money. Sounds like utopia to me. Why did you leave such a grand place.

My case is not the norm it is a fact for me and only me. My brothers and sisters receive far more than that but none of them receive enough to live on the beach.

Thailand may not be ready for a socialist state but there is certainly room for improvement. thank God , Buddha or whatever you want we have a decent man at the head.

[anterian]

As an interesting aside, when Britain first introduced the National Health Service, the hospitals were innundated with requests for haemarroid operations, everyone wanted their 'piles" removed.

[Lancelot]

There is a large difference between a US senior who is getting 800 dollars a month, and a Thai senior who is getting 500 baht. I am pretty sure they can afford that

I agree. Transfer payments are not all bad and help to spur domestic demand.

[thaiedward]

Thanks to all for your interesting and elucidating posts. Speaking as a Yank who's in the process of expatriating to the LOS (many obstacles exist), I find encouragement within your essays.

It's been my honor to have met several Thai Hi-So's and the next fellow on my short-list will be the Minister of Education.

It is my hope that Thai persons know, understand and own their country in an independent fashion; not as feudal serfs.

Education is the key...rote-learning, not the answer.

Regards

[SomTumTiger]

Thanks to all for your interesting and elucidating posts. Speaking as a Yank who's in the process of expatriating to the LOS (many obstacles exist), I find encouragement within your essays.

It's been my honor to have met several Thai Hi-So's and the next fellow on my short-list will be the Minister of Education.

It is my hope that Thai persons know, understand and own their country in an independent fashion; not as feudal serfs.

Education is the key...rote-learning, not the answer.

Regards

Try lecturing the Thais about your hope - they love that, especially the hi-so ones.

[thaiedward]

Thanks to all for your interesting and elucidating posts. Speaking as a Yank who's in the process of expatriating to the LOS (many obstacles exist), I find encouragement within your essays.

It's been my honor to have met several Thai Hi-So's and the next fellow on my short-list will be the Minister of Education.

It is my hope that Thai persons know, understand and own their country in an independent fashion; not as feudal serfs.

Education is the key...rote-learning, not the answer.

Regards

Try lecturing the Thais about your hope - they love that, especially the hi-so ones.

There is no argument from me, SST.

My hope is that the Hi-So's whom I meet will think they've thought-of-it themselves.

The Lo-So's whom I've met appear to like me, quite-a-bit.

And please to understand I am not lecturing (not yet, at least). If I were to establish a platform, its objective would be to instill self-respect within all peoples; most likely, a quite-impossible task inasmuch as self-respect is something one must collect on his own and give to himself as a sort of gift. Without self-respect, a person can respect nothing.

Let us not forget that some say: "Sarcasm is the Weapon of the Weak".

Regards

[rotary]

There is a large difference between a US senior who is getting 800 dollars a month, and a Thai senior who is getting 500 baht. I am pretty sure they can afford that

Did u ever hear of a "PONZI SCHEME". If private business does it they go to jail in the USA while if the govt in the USA does it they call it Social Security. There is not anything free. All this entitlement stuff is a mess in every country. Social security in the USA should be stopped for all new workers that enter the work force, but you would have to keep paying present folks until the system can be ended but its a mess.

[Felt 35]

The minute you give incentives NOT to work, the system fails. Look at the West. Crimes go up, underage social issue arise, the gap widens and the esteem of those with no work becomes swept under the carpet. Thai's have reasonably good work ethic. They will buy between 4 of them even the smallest goods like fruits and sell them at 400% profit even if on 20 Baht outlay and make 100 Baht. If they got a hand out they would not need to work. I am not saying no social reform but put it in medical or some housing assistance - it does not have to be fancy!

In my own country 16 year-olds would walk into Social Security and say their parents did not understand them. They were given rental allowance, unemployment benefits, and then 4 of them would pool their rent money - go get a waterfront or beach house and pick up glasses in the pubs Saturdays and Sundays and still take home the same money weekly as a 40 hour worker with only having to work 2 days! Within 6 months they were on their back, doing drugs and inevitably, the occasional death.

Yes social security works great (sic - no pun intended). I am here in Thailand, no benefits, no superannuation, no free medical and am still better off than being in my own country. Thailand don't follow the stupidity of the West. Do your own thing.

So.. ..Asiawhatcher what are you going to live from when you retire at 62..

Savings…..Well if you not are born with a silver spoon in your mouth you really need to be good at it because to receive anything near what your home country pay in average to their retired will from you are 62 to 85 set your savings back with approximately 35 million Baht not included an annually pensions increase on 3.5 - 5%

What if one of your child’s are diagnosed with MS in his teens. Good looking young man, he is getting through high school and further higher education but his symptoms increase year after year, but with expensive medication, good help from parents and his own extreme will he get a job and he even climb the ladder up to manage that company all this in the light of having great difficulties with his illness which some days are so bad that he hardly can control his own body.

When he is 26 he don’t manage a full time job anymore but he keep going part-time and receive ½ social security. Before he is 30 he is not able to do regularly work, but take on different maintenance works the days he is able to work which is a plus on his meagre social security which is low due to his few years contributing to the pensions scheme.

Following your selfish theories a young man as above have no right to a life equal to others or do you mean a Thai in the same situation (I believe its thousands) should depend on the 30 Baht scheme or be born into a wealthy family?

[Odysseus221]

The minute you give incentives NOT to work, the system fails. Look at the West. Crimes go up, underage social issue arise, the gap widens and the esteem of those with no work becomes swept under the carpet. Thai's have reasonably good work ethic. They will buy between 4 of them even the smallest goods like fruits and sell them at 400% profit even if on 20 Baht outlay and make 100 Baht. If they got a hand out they would not need to work. I am not saying no social reform but put it in medical or some housing assistance - it does not have to be fancy!

In my own country 16 year-olds would walk into Social Security and say their parents did not understand them. They were given rental allowance, unemployment benefits, and then 4 of them would pool their rent money - go get a waterfront or beach house and pick up glasses in the pubs Saturdays and Sundays and still take home the same money weekly as a 40 hour worker with only having to work 2 days! Within 6 months they were on their back, doing drugs and inevitably, the occasional death.

Yes social security works great (sic - no pun intended). I am here in Thailand, no benefits, no superannuation, no free medical and am still better off than being in my own country. Thailand don't follow the stupidity of the West. Do your own thing.

So.. ..Asiawhatcher what are you going to live from when you retire at 62..

Savings…..Well if you not are born with a silver spoon in your mouth you really need to be good at it because to receive anything near what your home country pay in average to their retired will from you are 62 to 85 set your savings back with approximately 35 million Baht not included an annually pensions increase on 3.5 - 5%

What if one of your child’s are diagnosed with MS in his teens. Good looking young man, he is getting through high school and further higher education but his symptoms increase year after year, but with expensive medication, good help from parents and his own extreme will he get a job and he even climb the ladder up to manage that company all this in the light of having great difficulties with his illness which some days are so bad that he hardly can control his own body.

When he is 26 he don’t manage a full time job anymore but he keep going part-time and receive ½ social security. Before he is 30 he is not able to do regularly work, but take on different maintenance works the days he is able to work which is a plus on his meagre social security which is low due to his few years contributing to the pensions scheme.

Following your selfish theories a young man as above have no right to a life equal to others or do you mean a Thai in the same situation (I believe its thousands) should depend on the 30 Baht scheme or be born into a wealthy family?

[Odysseus221]

My father being a farmer in NH, USA and a Harvard educated man, I had a glimpse of his mentality which is a self sufficient mind-set highlighting frugality and responsibility. Traveling upcountry in Thailand and witnessing subsistence farming, it isn't too much different. Most have homes, however humble, food and so forth which is better than many many other countries and on par with rural standards in the US. Let's be reasonable here. People may need some government aid but definitely not a welfare state. Big mistake will create catastrophe in 50 years for sure. Demands never cease and it is a political vehicle for radicalism.

[bangon04]

I thought Thailand already had a functioning welfare system - the Therevada Sangha corporation collects tithes from as many people as possible, both poor and rich, (and on a largely volountary contribution basis) then redistributes a small proportion of this wealth as charity. The system has worked without complaint for many years. The majority of the wealth is ploughed back into infrastructure development, like more temples etc. The richer the area, the more facilities to make it easy to contribute are provided. And let us not forget that this system has the full trust and support of the majority of the people, unlike the government of the day.

[TAWP]

And please to understand I am not lecturing (not yet, at least). If I were to establish a platform, its objective would be to instill self-respect within all peoples; most likely, a quite-impossible task inasmuch as self-respect is something one must collect on his own and give to himself as a sort of gift. Without self-respect, a person can respect nothing.

I love newcomers with their fresh hope of making a change and the inevitable crash into reality after some year...

[elcent]

what about sharing the 100 billion plus from the money lost due to corruption (per year) and spend it for welfare and cut down on corruption? A 80% cut is realistically possible. Things would surely change. It just needs to be done and not talked about. Servere punishments for politicians and public figures and not just move them to inactive posts.

Possible?

Theoretically - Yes

Practically - Yes, but that needs the population to join in and to make pressure.

There's no excuse for not to do it? Everything is available and when used the right way, possible. Thais don't need another round of apologists and elitists to support their licit corrupt mechanism they have installed themselves for themselves and nothing for the people and the nation.

That it is possible to cut down on corruption is already proven by the arrest of Saxena. Why stop there?

Edited November 19, 2010 by elcent

[Siam Simon]

what about sharing the 100 billion plus from the money lost due to corruption (per year) and spend it for welfare and cut down on corruption? A 80% cut is realistically possible. Things would surely change. It just needs to be done and not talked about. Servere punishments for politicians and public figures and not just move them to inactive posts.

Possible?

Theoretically - Yes

Practically - Yes, but that needs the population to join in and to make pressure.

There's no excuse for not to do it? Everything is available and when used the right way, possible. Thais don't need another round of apologists and elitists to support their licit corrupt mechanism they have installed themselves for themselves and nothing for the people and the nation.

That it is possible to cut down on corruption is already proven by the arrest of Saxena. Why stop there?

And another major issue is why such a wealthy country is paying it's regional middle classes such low wages? Whilst no sane person in any country would expect the top dogs to give all their wealth away to those below them in the heirarchy, Thailand has an absurdly top-heavy financial structure at the moment. Address this, and a feasible welfare state could be set up. As things currently stand, I would say that the country's wealthy owe the middle and working classes big time on payback for services rendered.

[SkyHigh]

See how Socialism works in EU & US.

No thank you.

[bbradsby]

Thanks to all for your interesting and elucidating posts. Speaking as a Yank who's in the process of expatriating to the LOS (many obstacles exist), I find encouragement within your essays.

It's been my honor to have met several Thai Hi-So's and the next fellow on my short-list will be the Minister of Education.

It is my hope that Thai persons know, understand and own their country in an independent fashion; not as feudal serfs.

Education is the key...rote-learning, not the answer.

Regards

The term "feudal serfs" in your post got my attention since IMHO the US is headed that way in terms of wealth & quality education distribution. So I did a little research as to the wealth portion of the equation. Per a University of California study:

"In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.7%. Table 1 and Figure 1 present further details drawn from the careful work of economist Edward N. Wolff at New York University (2010)."

The study goes on to say that The Great Recession has only exascerbated this chasm. These numbers, and the trending, are a recipe for social unrest, and those at the bottom will always understand, intuitively and in their day-to-day activities, when the house has the game rigged against them.

Edited November 20, 2010 by bbradsby

[geriatrickid]

No country can afford a welfare state since it depends on the population and economy growing continuously...something that just isn't possible.

How about thinking big picture? Thailand faces a growing labour shortage and a growing problem with elder care. If the state could assist with some social services such as geriatric day care, child day care and even an improved health care delivery system, the economy would benefit as it would allow more Thai workers to participate more fully in the labour force. This would of course require a proper tax assessment and collection capability first as the services have to be paid for and right now the people who should be paying taxes are not.

[Pi Sek]

I think it's very difficult to implement a welfare state to any degree at all until the working population in its entirety start declaring incomes and paying taxes on them. OK, office workers, hotel employees, those in the freight business, etc all pay their taxes but I don't know any farmers, bar girls or building contractors who do.

Tax everyone who is employed - this would obviously require wages to go up - and fine any employees and employers HEAVILY (financially and with the threat of detentional and company closure) found to be in violation. This will massively raise national income through both consumer expenditure and government-sector investment (they've got more tax revenue to spend); although it's debatable whether the harsher regulations would encourage foreign companies to invest here on grounds of stability or they would discourage investment due to higher labour costs.

This would of course require all those at the top to openly declare assets and incomes, and be taxed on them - so is politically very difficult to do. Can you imagine Abhisit telling Jatuporn (or even the local police for that matter) that the state requires him to declare how much he earns (from both his salary and "elsewhere"), how much he has and that he must pay a certain percentage of ALL of his earnings every month? What are the odds that he would be told: 1) **** off; 2) I have nothing and I get 15,000 Baht per month; 3) I'll take to the streets with my hired thugs if you implement this law, and I'll bring every other corrupt politican and their resources with me?

And then, who's going to do the checks? Police? Some other corrupt organisation? It's just asking to made into some kind of protection racket. Can you imagine what a tax inspector would be offered if he went to a Pattaya girlie bar asking for income slips for all the staff?

[sirchai]

There is a large difference between a US senior who is getting 800 dollars a month, and a Thai senior who is getting 500 baht. I am pretty sure they can afford that

What's your point???? :jap:

Edited November 20, 2010 by sirchai