Is the Thai state pampering Bangkok too much?
"It's the economy, stupid," Bill Clinton once said. I am convinced that the current political conflict also, perhaps most, has to do with the economy, especially with regard to the distribution of wealth across the country.
Income inequality in Thailand is one of the highest in the world. Moreover, this income inequality is strongly regionally linked. Would it be acceptable if the province of Groningen were 4 times as poor as the province of South Holland? I do not think so. Something must be done about this in Thailand.
Suthep's supporters complain that too much government money ('our hard-earned money') goes to the outlying regions. The outlying regions complain that they are being neglected by 'Bangkok'. Who's right? Let's take a look at the following chart of government spending relative to population and gross national product ("GDP").
- De rode columns indicate how much the said region contributed to it gross national product.
- De green columns show what percentage of the population lives in each region
- De yellow Finally, the columns show what percentage of the state expenditure to that region.
(The 'Central' region includes the provinces north of Bangkok (such as Ayutthaya) but also south-east (such as Chonburi and Rayong) and south-west of Bangkok.
The most striking thing is that Bangkok It receives 72 percent of the state's expenditure while it contains only 17 percent of the Thai population. Now each capital will receive more money per inhabitant, but this is a very large amount. Bangkok receives more than 4 times as much state money per inhabitant as it is 'entitled' to if you look at the population.
What a difference with especially the Isaan, where 34 percent of the Thai population lives, but which is only allowed to take 6 percent from the state basket. A resident in the Isan receives 5 times less than the state treasury to which it is 'entitled' per inhabitant. One person from Bangkok receives per inhabitant 20 time as much from the treasury as a resident of Isaan!
The other provinces are in between.
There are those who say it is fair that if Bangkok generates the most tax revenues, they should also benefit proportionally the most. I think that's an unfortunate argument. The inhabitants of South Holland pay on average more tax than the inhabitants of Lutjebroek; should we then demolish the general facilities of Lutjebroek, such as schools and infrastructure?
Now that huge difference between Bangkok and the Isaan should not surprise us. The Isaan has always been the stepchild of Thailand, a wing region to which Bangkok has paid little attention until recently. That also explains the many uprisings against Bangkok from the Isan. So there is little new under the sun.
If Thailand takes the fate of Thais then politicians will have to do the following. Taxes must be raised, they are now only 16 percent of the gross national product, which must go to 25 to 30 percent. VAT, excise duties and income tax must be increased slightly; and above all there should be a tax on wealth and capital gains plus an environmental tax, to name but a few. As a middle-income country, Thailand is ready for that. Then there must be a redistribution of wealth. This is possible through a reasonable old-age provision, facilities for the disabled and income support for the poorest.
A clear statement and story with which I can only wholeheartedly agree. Unfortunately, seeing it implemented in practice will not happen soon... Of course you don't realize these kinds of changes overnight, you roll them out slowly, but I don't see that happening anytime soon either. It would be wonderful if, after political reforms, small steps were taken in this direction to put the interest of the people more and more central/first little by little. Then a few more years pass…
Yes and then we farang in that picture also have to pay tax on our world income, after all we live in Thailand and after deregistration in NL etc. we no longer pay tax there. Or am I seeing this wrong?
I'm willing to pay tax in TH, but then I also want the right to
A: full-fledged citizenship, including through e.g
1- abolition of the immigration annual subscription,
2- idem of the 3-month address check,
3- introduction of a visa policy for, among other things, long stay,
4- including municipal active and passive voting rights,
5- participation in public participation procedures, plus
B: full, open and equal participation in society, including by
6- freely obtaining a work permit,
7- direct access to volunteering,
8- right of enterprise,
9- direct exemption from the obligation to be confronted each time with the more than triple ticket payment system,
just to name a few. If not, no tax! I am only allowed to stay for one year at a time, I always have to prove that I meet the conditions for an annual extension, and I already pay for that annual extension. Let TH take farang in his arms first, then only tolerate it as a tourist, and tolerate it as a pensionadum. If I really become a resident of the country, then it's a different story!
(completely forgotten, and last but not least:) 10- right of ownership of land when buying real estate.
Such a “long stay visa” is called a residence permit or residence permit. In Thailand, this is the Perminant Residence Permit (which can also serve as a path towards naturalization as a Thai). I assume you are familiar with both, both are unfortunately not easy to obtain. For the rest I agree with you, if you are given duties then there must be rights in return and vice versa. After all, life is give and take (and hopefully a lot of fun and laughter with others).
The Residence Permit is also subject to restrictions:
1- only 100 persons per year can apply
2- unmarried people are excluded
3- have 200 thousand ready
4- an RP does not release you from the 3 month address check
This is my first comment to post here on the blog. I think that the position is based on a typical PVDA/SP/GL starting point, namely the makeable society. This principle does not apply to economics. Money sticks to money. So far, no country in the world has succeeded in breaking this rule. Large companies and individuals with a lot of money try to stay as close as possible, for fear that they might miss a trend and lose money. Redistribution of money works the same as our Dutch development aid, it does not work.
What the Thai government should do first is to standardize education in agricultural areas so that companies can have well-qualified employees in the future. The next step is to build a modern infrastructure across the country. If that is done, incentives can help. And yes, that takes a whole generation, so 20 years.
I totally agree with Paul. The education in the agricultural areas is really bad
computing
My compliments to the clear explanation of the situation by Mr Tino Kuis. Totally agree.
Dear Tina,
You can also interpret the graphs differently.
I really thought that the big payer/loser is the Central region. And not Isan.
The Central region contributes four times more at 44%, but receives only 7%.
Isaan only contributes 11% and gets almost the same: 6%.
Striving for income equality and wealth distribution is primarily a political matter. TH could do a lot with relevant legislation, for example, to improve the income generation of farmers. But see how they make a mess of it. No legislation to promote it, but all kinds of measures to exacerbate the poor situation of the farmers. In highly developed countries such as the Netherlands, income distribution is not getting off the ground due to political decision-making. In 2013, neighboring countries of NL were even talking about the introduction of a minimum wage (Germany) or its level (Belgium). How should this work in TH then? Not only the Isan does not benefit from the GNP, see the contribution of the Center: 44% contribution against 7% receipts. In short, I think the statement could be stronger: BKK is not only pampered, BKK is fully favored!
Even shorter: Thailand is Bangkok's wing region
I believe the graphs, but the explanation and the conclusions absolutely do not. I have a number of, I think good, reasons for this:
1. As a researcher, I know how difficult it is (even in a country like the Netherlands with fairly transparent government expenditure) to calculate national expenditure for a specific region. Tried to do that myself for the province of Drenthe and that was quite a job;
2. knows from experience that a large part of the accounting in government agencies in Thailand is still done with pen and paper and not with accounting packages and a computer. I think there are large margins of error in the figures;
3. if the figures were really correct, the rice subsidies from the past Thaksin, Abhisit and Yingluck governments would have made absolutely no difference in the north and northeast. That means that Prime Minister Yingluck lied in her speech last week. Feed for the anti-corruption commission;
4. the figures are the official figures while part of the money finds its way privately or through corruption. I'm almost certain that would paint a different picture of the amount of money the North and Northeast have gotten;
5. the term government spending is not defined nor HOW is it determined which region benefits from the government spending. I cannot escape the impression that particular (or perhaps exclusively) attention has been paid to who pays the bill and where that authority is located. A few questions that come to my mind while reading the article are:
– is the entire budget of the Ministry of Foreign Affairs (from which Thailand's embassies abroad are paid) allocated to Bangkok because the ministry is located there?
– ditto for the ministry responsible for waterworks in this country, the ministry of transportation (all railway expenditures only for the benefit of Bangkok?), the ministry of defence, state expenditure on airports, tourism, hospital care, education (the charge the costs of the tablets to Bangkok because the ministry is there?);
– will all the costs of universities (buildings, salaries) in Bangkok be borne by Bangkok, while many students from outside Bangkok also study there?
In short: “how to lie with statistics”………………..
Let me also play methodologist in the social sciences.
Of course, there are details in the data that are questionable.
The question you raise but do not answer, unlike in an English insinuation, is this: Are your objections so weighty and well founded as to distort the picture and contradict the conclusion?
If so, I would like to see your image and conclusion justified on this blog.
Dear Chris,
I thought the same and wanted to write a piece just like you.
I first looked up the publication from which Tino obtained his information:
http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/06/20/000333038_20120620014639/Rendered/PDF/674860ESW0P1180019006020120RB0EDITS.pdf
The operation of LAOs (Local Administration Organizations) is discussed extensively in this report. I have not yet been able to read the report in its entirety and have therefore suspended my judgment on this subject for the time being.
@Dear Alex You will be served at your beck and call here.
That is indeed where the graph comes from, dear Eugenio. Also look at the very different spending on education and health care between Bangkok and Isan (and the rest of the regions).
In addition, Thailand hardly has a leveling tax system. Only 16 percent of state revenue comes from income taxes. The tax burden therefore rests relatively more heavily on lower incomes. See:
…..taxation is not only low, but it may
also add marginally to inequality by
weighing more heavily on the poor
than the rich…….. Pasuk Phongpaichit, East Asia Forum, Oct.-Dec. 2011
Dear Tina,
If this report correctly reflects the situation in Thailand. Which I am currently inclined to believe. Then we can also ask ourselves whether, due to the enormous "colonial" advantage of Bangkok in the past, this city has not grown too large compared to the cities in the rest of the country. In the case of a regionally more equal functioning Thailand, a city like Khon Kaen, for example, would have many more inhabitants and would play a much more important role.
(But that's a topic for a possible future discussion)
I read @Tino Kuis's posting as an indication of how the different regions are treated stepchildishly, or as it is said in Brabant: they are hanging by the back door. Anyway: as soon as you drive out of BKK you will see poverty and backwardness approaching you, whichever direction you choose. The graphs may not indicate the correct reality, but they do confirm the everyday picture.
best Soi
IF, IF that were the case: why then are the political parties outside Bangkok having such a problem with changing the electoral system in which 375 out of 500 parliamentarians are elected on the basis of their region? Would the regions thus have much more influence on parliament (and state expenditure) than in a system in which the one-man-one-vote system would apply with lists of candidates that are the same throughout the country?
Why did a former PM, from a region outside Bangkok and a member of a small coalition party, once say: not co-ruling is dying? Under his rule, two new hospitals and a football stadium were built in his electoral region…..
Dear Chris, it is unknown to me to what extent there are/were plans for full proportional representation according to the system as we know it in NL. But the one man one vote system is also possible within an electoral district system, and that too has variants, see the situation in Belgium, or France or the US, for example. A regional majority does not immediately mean a parliamentary majority. In addition, I have the firm idea that it could just be that the TH 'regional' parliamentarians are rather listening to the leader of the mob, according to the principle: whose bread one eats,…. For me, the question is whether proportional representation is really wanted? One man, more vote: I've heard that variant too. I thought of the Democrats.
One should not look at the population numbers but at what the region contributes to the GDP and then, as already mentioned, it is the central region that is most disadvantaged.
And if you see what the region contributes per capita to GDP, the North East is even strongly favored.
But my dear Henry, if you are a resident of Isan, with 34% of the Thai population and you only get a 6% GNP allocation, while you contribute 11% to that GNP, are you biased? ? Or are you condemned to progressive poverty?