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A recently released report from the World Bank shows how the number of people below the poverty line has increased from 5 to 7,2 percent in the past 9,8 years. The share of the national income of the 40% of the lowest incomes decreased.
I present here the main conclusions of the World Bank report covering the period up to and including 2018. The italic part is my explanation, additions and opinion.
What Thailand has done right
Thailand has done well in recent decades in certain aspects of the well-being of its population compared to other Southeast Asian countries. This concerns access to health care, clean water, electricity and primary education. Between 1980 and 2018, the number of people below the poverty line fell from 65% to 9,8%. In Bangkok, that percentage fell from 24,7 in 1988 to 1,4 in 2018.
The poverty line in Thailand is 2.920 baht per month.
The increase in poverty in recent years
Between 2015 and 2018, the percentage of people below the poverty line increased from 7,2 to 9,8 percent, while the absolute number of poor people below that line increased from 4,9 to 6,7 million. The increase in poverty occurred in all regions and in 61 of the 77 provinces, but was greater in the Deep South.
There are high figures for the number of people below the poverty line in the following provinces:
- Mae Hong Son 49%
- patani 39%
- Kalasin 31%
- Narathiwat 30%
- Branch 29%
- Chainat 27%
- Sa Kae 27%
Unsurprisingly, poverty is highest among households that have to make a living from agriculture, disadvantaged regions and provinces and among the low-skilled. Pupils all over Thailand do not have equal access to good education.
The reasons for increasing poverty
The World Bank cites the disappointing economic growth (between 2 and 3 percent) as an important reason. Income and other earnings are stagnating. They also mention flooding and drought as factors that have affected the income of farmers in particular.
In the past, there was an increase in poverty during the economic crises of 1998, 2000 and 2008 and additionally in 2016 and 2018. Other Southeast Asian countries did not see an increase in poverty since 2000.
Other Southeast Asian countries have experienced growth of 5-7 percent in recent decades.
Income inequality has increased
Thailand has long been a country with one of the largest inequalities in income (and wealth) in the world. This inequality has widened in recent years: the lowest earning 40% declined while the higher incomes improved. This despite the government's support measures for low earners. This reduction was visible in salaries as well as in incomes of farmers and business people.
The situation has most likely worsened since 2018.
How further?
The World Bank report finds it especially important to build a better safety net for vulnerable groups such as the elderly, the disabled, the disabled and in the event of natural disasters. Thailand needs to pay more attention to the backward areas, especially where education is concerned.
The great inequality in income and property will have to be combated. This can be done by levying more taxes on higher incomes and property. Now only about 20% of gross national income goes to the state. This should be increased and benefit the poorer regions and vulnerable groups. Start with a good old-age pension and more social provisions for the disabled and the disabled. The informal sector of the economy will also have to participate in this.
The World Bank report:
Point-by-point explanation of poverty and inequality in Thailand;
Interesting infographics about poverty and inequality in Thailand, distribution across regions and provinces for a quick and easy overview
www.worldbank.org/en/news/infographic/2020/03/03/tackling-poverty-and-inequality-in-thailand
An article from The Nation (2017): Poor are getting poorer since the 2014 coup, also called a 'Coup for the Rich':
www.nationthailand.com/national/30331972
About this blogger
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Born in 1944 in Delfzijl as the son of a simple shopkeeper. Studied in Groningen and Curacao. Worked as a doctor in Tanzania for three years, then as a general practitioner in Vlaardingen. A few years before my retirement I married a Thai lady, we had a son who speaks three languages well.
Lived in Thailand for almost 20 years, first in Chiang Kham (Phayao province) then in Chiang Mai where I liked to bother all kinds of Thai with all kinds of questions. Followed Thai extracurricular education after which a diploma of primary school and three years of secondary school. Did a lot of volunteer work. Interested in the Thai language, history and culture. Have been living in the Netherlands for 5 years now together with my son and often with his Thai girlfriend.
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I understand the writer very well in this story because no one is waiting for poverty, but a number of caveats.
“The great inequality in income and property will have to be combated. This can be done by levying more taxes on higher incomes and property. Now only about 20% of gross national income goes to the state. This should be increased and benefit the poorer regions and vulnerable groups. Start with a good old-age pension and more social provisions for the disabled and the disabled. The informal sector of the economy will also have to participate in this.”
First, there is already a progressive rate but do the same as the richest people and give yourself 1 baht salary. Sounds nice, but this is a nice saving on tax and in the meantime a nice consultancy fee factor is going abroad and those are costs. The net gains the country nothing.
Second, the middle class suckers will become the cash cow. We know the dissatisfaction of dairy cows, caught in a mortgage and a certainty but certainly not satisfied. Hard work and stress is what awaits you.
Thirdly; start with a good retirement pension. The question is what is good. In Thailand it is already good if the children give 2000 baht per month to the parents per child.
Meanwhile, the informal sector also has to contribute as if they were drowning in money.
I really understand the problem, but with the fixed data available, what does the writer suggest outside of vague elitist talk itself?
Should the legislation be amended to allow farmers to sell rice abroad via the Internet without restrictions? It seems to me that this is a small solution at a detailed level that can make a difference.
You are not addressing the point of possession.
A large part of that property consists of real estate and that is precisely what is not put in a foreign bank account.
Introduce a progressive tax for that.
One that taxes the entire property, and not cut up pieces of land.
So it is possible.
Give a reason why property should be taxed?
Many farmers have a free house but hardly any income, so go ahead and start taxing. How weird can you make it?
Here too it is elitist talk without even mentioning an example on which specific points can make a difference.
Please come up with a real example..applies not only to you but to the movement you feel called to.
Small example about high taxes.
In the United States in 1960 you paid 90% tax on taxable income over $400.000. That is now only 50%. Billionaires complain that they pay less tax than their domestic help.
As far as ownership is concerned, I won't go into too much detail. People acquire property through their own efforts, of course, but often also through social factors such as infrastructure and education. I believe that they should contribute from their (increase in) wealth to society as a whole from which they benefit. A high tax on large inheritances, for example, would be good.
Of course you don't tax low incomes and assets.
A high tax on inheritances is just ridiculous. The government has resources to tax labor and that is more than enough. Savers think about the future, but it is at odds with the pattern desired by a government to mainly spend.
Coincidentally, there is now a virus crisis. Those who have saved can survive this blow financially, so what's wrong with being responsible and then absorbing the blow yourself without the government having to step in?
If a saver dies, it is an insult to the person who died.
And this one more. You can see in the list above how much poverty differs between regions and provinces. In Mae Hong Son 49% (!!) of the people are below the poverty line, in Bangkok only 1.4%. That has to change: more money to the periphery.
There is something to answer for everything. A third of the population lives in Isaan and when I see that only 1 province is grouped under the poor there, I establish a fact. Everyone can see it daily in Bangkok because millions of Isan work and live in Bangkok and have made this city cave and just like the foreigners with family in Isan, these Isaners support their own relatives there. Look, I think it is a logical explanation that only 1 province in the "poor" Isaan is mentioned, apparently it is even poorer elsewhere. Time for those Mae Hong Sonnetjes to pack their suitcases and move to the richer regions, for example. Think of the province of Rayong where many non-Thai work and this is one of the richest province of Thailand or ditto Autthaya, because closer to the northerners. There is plenty of work, there are buses and why millions of Isaners go far away and the northerners don't….
minor adjustment: “… made this city great…”
You can try to explain why it is in all kinds of studies, but there is only one reason: the 2% absolutely do not want to share.
And maybe the abnormal defense budget also contributes to it.
If there is anyone who can give me one example of a country with a military regime where everything is going well economically for everyone, I would like to hear it.
I live in the deep south and have been told that the rubber price crash caused by the inferior Isan rubber quality is largely to blame for the poor economic situation of the poor Muslim farmers here. In the past, the newest cars drove around and incomes were among the top in Thailand. Now it is unemployment and, as a result, poverty trumps.
No wonder the Islamic insurgents are gaining support. The number of bombings is expected to increase again here.
Wow, heard that the rubber price crash is due to the inferior rubber from the Isaan.
Do you really believe that yourself?
Isn't it possible that too many rubber trees are just being planted? Just look around.
Too much supply lowers the price, same with casava, the poor farmers look at each other and plant all the same.
Poverty among those who once drove around in nice cars is usually caused by a completely wrong way of handling money. Not easy.
It's not just the farmers.
Small example, in our neighborhood someone has started with those BBQ fish in the salt. Ran storm, daily more than 100 fish a Thb 100. Now 6 months later still 100 fish daily, only divided over 4 stalls.
If they see that a certain trade is going well, you will have 5 competitors in the same street in no time.
Heard them say that even the famous 7/11 participates in this, if a franchise entrepreneur is doing well with his 7/11 branch, there will be a branch of 7/11 next to or even next to it in no time.
Moderator: Please keep discussion in Thailand
It is not good for the Thai farmers, too much rain too much rain and prices on the international market. Intermediaries who make dubious agreements skim off the income of farmers and renovators.
Travels and rubber and wood are the main sources of income in Thailand. Tourism is a good addition.
Shouldn't it be;
too little rain
questionable agreements
Rice and rubber
Tourism
It is and always will be…The rich never have enough!!!
Lionel.
Jan Ponsteen, I think you forget about growing sugar cane, which is also an important source of income. Only the last year also poorly paid, 600 baht for a ton, while before that it was 1200 baht for a ton, plus the long drought period has also caused the incomes from the sugar cane to fall sharply. And now with the virus, you can forget about the income from tourism.
Pretty simple explanation for MHS and the border regions: it's those hill tribes who don't have a nail to scratch their ass. And many of them are not or half or unclear Thai (at least according to the official rules) and are not even counted. Although those Karen know very well to sneak back and forth between 2 countries.
Incidentally, you can get that blue-flag card, which immediately labels you as a pauper (free bus and train, shopping every month) if you receive just a little less than the official minimum wage (so say just under 300 bt ./day). And have virtually no property - so that all those poor rice / rubber / whatever farmers lose weight.
I think it is clear, when corruption reacts, the country is not served.
They don't know farmers here with advice or information. Costs money…!!!
I believe that all of Isaan lives below the poverty line. Unfortunately, there are many entrepreneurs who take their own lives because they see no way out... Sad to hear this government.
Farmers help with advice and information, very well intended, they must also want to listen and change. Here in Prasat Surin I have already shown a lot and tried to help them.
As an example, you should look at how people fiddle with eucalyptus. If the trunks are debarked, that is excellent building material, light and strong, also neat. I have often given the example, yet they leave the bark in place. Just look around, stubbornness and unwillingness to change, look at each other, then poverty will persist. They help each other to stay poor, also with the use of alcohol.
@ Hugo : “Helping farmers with advice or information is something they don't know here. Costs money…!!!”
Not right Hugo. You will find agricultural information centres, breeding stations and other agricultural advice institutions in the smallest corners of the country. Financing advice and facilities were available through BAAC (Taukausau bank) down to the smallest moo job.
Unfortunately for the farmers, this advice and support leads to increasing dependence on (multinational) distributors of seeds and chemicals. It results in increasing contractual dependence on all sorts of "intermediaries" such as rice mills and sugar factories.
The farmers always get the risks of all those promising new crops and production techniques pushed through “dirty smart contracts”. Whenever things go wrong (because of drought, floods, diseases, plagues, changing world markets, etc…) the mortgage rate on their land increases to the benefit of the banks.
The wealthy families who are major shareholders in the banks thus acquire more and more land with each new agricultural crisis. Every time a farmer can't keep his pants up, they cash in.
There is a system behind which the wealthy families increasingly own more property and a new form of feudal de facto "serfdom" towards the rural population. It leads to hopeless poverty, dissatisfaction and social polarization. It is suppressed with a hard military (putchen and juntas) and legal hand (lawfare) every time the dissatisfied victims of this system stir in the street. Even the voices of legitimate elected representatives in parliament denouncing this are being stifled.
Oh yes, that army of agricultural advisors and advisers and all of them in uniform receive a salary from taxpayers' money. In addition, many of them recommend products (seeds, pesticides, fertilizers, etc…) machines and techniques that give them a nice percentage in their pocket.
Farmers are not risk averse at all. Traditionally, they take risks. The weather is changeable and sometimes causes their cultivation to fail. They learned to live with that. It would be better if they were more risk-averse to the novelty of contracts. But they keep hoping that a new cultivation or technique will lead them to the golden grail. Unfortunately, that is rarely the case.
I consider myself a privileged observer, not an actor. The Thais themselves determine the future of their country (or is it the Chinese in the meantime? :-)), we certainly don't farrang. It would be foolishness and pride to think we could do that.
That's right, Mark, excellent response. Farmers are losing more and more property rights to land. Inequality is high in Thailand, and the highest in land ownership. There are indeed agricultural extension centers in every region. When I once asked for advice about a disease in our mango orchard 20 years ago, he said: come back tomorrow with a bottle of whiskey and I'll tell you what to do. The farmers are being milked out.