Poverty, inequality and national unity

Recently there has been some interesting discussion on New Mandala about the impacts of the Thaksin government on poverty alleviation. One interesting figure to emerge from the discussion is the World Bank’s finding that poverty in Thailand declined significantly during the tenure of the Thaksin government. The November 2006 Economic Monitor states:

Cross country comparisons from 2000-2005 show that Thailand has achieved remarkable success in reducing the number of people who live under US$1 per day. Head count ratio of those living in extreme poverty (less than 1993 PPP US$1 a day) in Thailand dropped from 5.2 million people in 2000 to 1.7 million people in 2005… This represents a 67 percent decrease in poverty headcount, compared to an average of 42 percent decline in the East Asian region. This is mainly the result of the wages per person in the agriculture sector which has risen by 5 percent per year since 2001,compared to non-farm wages which has risen at 2 percent per year. In addition, unemployment in agricultural sector had dropped by more than 70 percent from 2001 to 2005. These have greatly help reduced poverty in Thailand as over 80 percent of the poor in Thailand are engaged in agricultural activities

Of course, it is clear that this was a trend well established before Thaksin came to power but it is an important finding that encourages some modification of the imagery of populist profligacy and corrupt mismanagement that many commentators associate with his government. Clearly regional economic trends have also been important in contributing to Thailand’s success, though the World Bank report indicates that Thailand’s poverty reduction performance is significantly better than other countries in the region (p. 21). To what extent the specific policies of the Thaksin government contributed to this relatively good regional performance will, hopefully, be the subject of ongoing research and informed debate. How Thaksin’s performance rates in international (rather than regional) terms also warrants further discussion. In 2002 Thailand rated 61 on the Human Development Index international ranking but by 2006 it had slipped to 74. What underlies this relative decline? To what extent have Thaksin’s policies contributed?

There are many other interesting data provided in the World Bank report. Three issues are worth highlighting.

  • Poverty is unevenly distributed, concentrated in the northeast and, to a lesser extent, the north and also the most southern provinces (p. 20)
  • Despite the high incidence of poverty in the northeast, its per capita share of government spending is well below the national average and about 60% of the level in the central region (excluding Bangkok!). The second lowest level of per capita government spending is in the north (p. 22). So, despite Thaksin’s alleged populist spending in his electoral heartlands, the level of government support in the northeast in particular is significantly lower than that received by residents of the more accessible central, eastern and western regions.
  • Consumption expenditure by the Thailand’s richest 20% (some of whom are now eager advocates for sufficiency economy) increased by 28% between 2000 and 2004 while Thailand’s poorest experienced an increase in consumption of only 18%. In other words, poverty reduction was accompanied by an increase in inequality (a continuation of another longer term trend).

Each of these points highlights dimensions of Thailand’s inequality. In the current political environment there is a lot of talk about the importance of national unity, much of it seemingly based around rather vague notions of political virtue and economic restraint. But where does Thailand’s persistent problem of socio-economic inequality fit within this moral discourse? To what extent does the ideology of national unity draw attention away from the persistent, and increasing, gap between the rural poor and the urban rich? And how likely it is that future initiatives aimed at some redistribution of economic benefits will be targeted as divisive and populist? In brief, to what extent does an ideological emphasis on unity contribute to the maintenance of both the political and economic status quo?