Thai opinion: Corporate generosity can help beat dangerous inequality

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STREETWISE
Corporate generosity can help beat dangerous inequality
Achara Deboonme

Last month, top political and business leaders gathered in Davos, Switzerland, for talks that could change the world.

BANGKOK: -- In line with this year's theme at the World Economic Forum (WEF) - "inequality and climate change" - Oxfam International released a shocking report. The anti-poverty charity found that by next year, 1 per cent of the world's population will own more wealth than the other 99 per cent.

The share of the world's wealth owned by the richest 1 per cent increased from 44 per cent in 2009 to 48 per cent in 2014, while the least well-off 80 per cent currently own just 5.5 per cent.

The findings made headlines. They were widely reported, alongside news of unfortunate events across the world - many of which stem from inequality.

Take the Charlie Hebdo Paris attack as an example. The assassins were French nationals apparently radicalised after becoming dissatisfied with the condition of their lives in France.

In the same week of the brutal shooting at the satirical magazine, Boko Haram, a political movement turned jihadist group, killed as many as 2,000 in and around the Nigerian town of Baga. Concentration of Nigeria's wealth among members of a small political elite, mainly in the Christian south of the country, played a role in that massacre .

Some Thai academics say our political crisis also stems from inequality. The Pheu Thai Party gained overwhelming support with policies that channelled more resources to the poor, which helped foster dissent among the middle class and the elite. Nobody is certain if the reform package, pushed through under martial law, will address the root of the problem - inequality.

These episodes have collided with growing debate on democracy and capitalism.

"Across rich and poor countries alike, this inequality is fuelling conflict, corroding democracies and damaging growth itself. ... The mounting consensus: left unchecked, economic inequality will set back the fight against poverty and threaten global stability," says one article on the WEF website.

The questions today are: Has borderless capitalism supported by Western-style democracy created all these mishaps in the world? And, if so, what can we do to change it?

I totally support one of the seven points proposed by Winnie Byanyima, executive director of Oxfam International. He suggested that countries should share the tax burden more fairly, shifting taxation from labour and consumption towards capital and wealth.

One thing that we can do is to devise a new tax system, to channel more money from the richest few to the poorest many.

Inheritance tax is a good start for Thailand, but that only generates revenue when assets are transferred. Plus, the revenue goes to the state and into the pool of money for numerous spending plans, including populist policies.

It would be good if we had a tax plan that redistributes wealth directly to more desirable projects. Would it be a good idea to levy a "redistributive tax" on listed and non-listed companies, as a percentage of their revenue?

The reality today is that most of Thailand's wealth is in the stock market, with market capitalisation of listed companies at Bt15 trillion at the end of 2014. That is pretty much the same as the country's domestic market size. In the first nine months of last year, performing listed companies reported aggregate net profits of Bt614 billion, an increase of 0.23 per cent from the same period last year. This is on top of Bt8.58 trillion in sales revenue, which went up by 6.10 per cent on year.

If a 1 per cent tax rate were applied, we would get Bt85.8 billion.

Where should the money go?

A panel could be set up, consisting of civil society and non-profit organisations. They could chart the spending mission and come up with a list of projects the money should go to.

"Bikes for Schoolchildren" in all remote areas, anyone? What about a small rice-milling machine for villages dependent on rice cultivation but whose residents live below the poverty line? What about nursing homes in provinces where the elderly population is above average and their income below average?

Then, when the basic needs are covered, we can move forward to "added-valued" projects like public libraries.

The money will keep flowing in thanks to the fact that companies tend to grow. Indeed, listed companies' earnings last year would have been higher but for the lingering impact of 2013's political conflict, according to Maybank Kim Eng Securities. These companies shouldn't mind contributing a little more, if it would help narrow the inequality gap and guarantee smooth business.

It's something worth trying.

The issue of inequality is often twisted by governments and vested interests who favour the status quo. This cynicism was satirised effectively last year in "The Purge", a Hollywood film in which the government allowed citizens one day a year in which they could commit any crime without facing consequences. This allowed people to discharge their pent-up frustration, thereby reducing the crime rate, the authorities said. But the truth was the government had failed the poor and had devised the purge as a means to cull them.

With all the power in its hands, the junta should address the core issue of inequality and consider putting tax measures that redistribute wealth on its reform agenda. I don't think it would face much opposition. Nobody would want inequality to breed more evil.

Source: http://www.nationmultimedia.com/opinion/Corporate-generosity-can-help-beat-dangerous-inequ-30253202.html


-- The Nation 2015-02-03

[noitom]

"Most of Thailand's wealth is in the stock market." And how! Ever take a look at Thai public company boards? You'll see that they are all family dominated businesses staffed by nepotism and military tokenism. Can you imagine the black, dark insider deals that occur regularly in the Thai stock market? Who in their right mind would ever invest in an opaque market like Thailand? Secondly, rich Thais are notoriously poor charitable givers. They stay shielded behind their walled fortresses and give virtually nothing back to their nation and poor. Asian charitable giving is abominable in general, but the Thais take the cake.

[shirtless]

Corporate generosity are 2 words that should never be in the same sentence,

[impulse]

Barring a little wealth redistribution, pitchforks and guillotines always worked in the past...

[kotsak]

Barring a little wealth redistribution, pitchforks and guillotines always worked in the past...

Where is Robespierre when you need him..

[kaorop]

A long time a ago a Thai told me this "Thais dont do nothin for nothing"

Has anyone here seen a Thai from wealth sponsor or support a poor kid who is has a talent that could lead to great things?

[Ozziepat]

What Thais need is not more "free" money forever. What they, and the country, need are better education, unfettered opportunity and encouragement to achieve. "Redistribution" is just repackaged Marxist socialist cant. Generosity is praiseworthy. Creeping government-enforced theft disguised as altruism and supported by emotional arguments is not.

[ikke]

A long time a ago a Thai told me this "Thais dont do nothin for nothing"

Has anyone here seen a Thai from wealth sponsor or support a poor kid who is has a talent that could lead to great things?

Why state that Thais don't do nothing for nothing, I see many go to school....

Edited February 3, 2015 by ikke

[Godders]

Here we go again. Throw the restive natives a few crumbs to keep them quiet. The tragedy is, it always works.

[Emster23]

Like asking the foxes to toss a few feathers to the chickens still alive.... "Oh please massa can I have that bone? Even though I am one that raised that cow, did all the work, oh please may I have something so I keep shut up and don't kill you and your family in the middle of the night?"

[razer]

Thai style corporate social responsibility (CSR) is to go on a day trip, spend 3 hours at some poor school then finish the day with a free dinner.

[rickirs]

Corporate "generosity" begins with its shareholders. They are under no mandate to be philanthropic.

If the government wants to fund social programs, it must impose mechanisms on corporations and the wealthy to generate revenues for such endevours. But that takes legislative commitment, executive supervision, and judicial enforcement. It must also take a public mandate which is nonexistent presently. Failure from day one.