The rebellion of Thailand’s middle-income peasants

A reader has forwarded me a long and well-researched email (reproduced in full below) that is doing the rounds in anti-red shirt groups. The argument is nicely summarised in the first paragraph:

Here’s what you need to know about the rural have-nots of Thailand. They are the richest poor people in the Third World. And they owe none of their affluence to Thaksin Shinawatra.

Although I disagree with some of the article’s representations of rural livelihoods, there is much in this central argument that makes good sense.

Thailand’s rural population can, by and large, be regarded as a “middle income peasantry” in a middle-income country. Rapid economic growth since the 1960s has dramatically increased rural living standards. Rates of rural poverty have plummeted. The Thai government, like many others in developing countries, has moved from taxing the rural economy to subsidising it. This is evident in funding for credit, infrastructure, health, welfare and agriculture. Thaksin’s populism (and Abhisit’s imitation of it) was part of a long-term fiscal transformation in the way the Thai government deals with rural areas.

But does any of this make the red-shirt cause illegitimate? Of course not!

The red shirts use the language of poverty, serfdom and disadvantage as symbols of political mobilisation. Why shouldn’t they? In Australia, our politicians have turned “battlers” and “working families” into political icons as part of their pitch to the middle class, which is enjoying unprecedented affluence. In Thailand, as in any other country, political symbols need to be taken seriously, not literally.

So what do the symbols deployed by the red shirts refer to? Why are they resonating so effectively in the rural north and northeast? Why are they so alarming for the mall-dwellers of Bangkok?

The sociological basis of the red shirt’s appeal is not absolute poverty but relatively poverty. Although rural incomes have increased greatly over the past 50 years, urban incomes have increased even more. Thailand’s economic growth has compounded inequality, producing marked disparities in basic human development indicators between Bangkok (and its hinterland) and the rural northeast and north. The 2007 UNDP Human Development Report, despite its sufficiency economy nonsense, made this very clear.

Thailand’s current political crisis is a crisis of a middle-income country, not an underdeveloped one. It is a product of relative poverty (inequality) not absolute poverty. It is not a struggle on the part of the old rural poor for basic subsistence, it is a struggle on the part of the middle-income peasantry for political inclusion. The state has played an important role in raising rural living standards, so rural people are now, quite reasonably, demanding an equal say in how the state is managed.

Thaksin certainly cannot take the credit for the rural advances that have occurred in Thailand since the 1960s, but he did recognise rural aspirations for meaningful political and economic inclusion and backed this recognition with substantial reforms.

[Full text of the email I received today. UPDATE:  I have been informed that the author is Robert Woodrow, “a former editor of a weekly regional newsmagazine… now retired (who) reported on the politics and economics of Southeast Asia. He interviewed many political leaders during the years he was active, including several prime ministers of Thailand.”]

The Down-Trodden Rural Poor of Thailand: It’s not quite what you think

Here’s what you need to know about the rural have-nots of Thailand . They are the richest poor people in the Third World. And they owe none of their affluence to Thaksin Shinawatra.

Fugitive former Prime Minster Thaksin, a billionaire wanted in connection with corruption and tax-evasion on a staggeringly egregious scale, has done a remarkable job of convincing the world that he is the champion of the rural poor in Thailand, and that such prosperity as the farmer enjoys is in some way due to him. Yet all of “his” programs have been in place for decades. His well-financed public-relations machine merely invented catchy new terms for them.

In Europe and North America , farmers tend to be affluent. A comparison is therefore not at all meaningful. But take a village carpenter in Thailand ‘s northeast and compare him with a wood-worker in a small town in Iowa . To the American, the Thai seems impoverished, his house appalling basic, his expectations in life distressingly limited. But the Thai carpenter probably lives on family land rent-free, pays nothing to moderate the climate, produces his own vegetables, chickens, eggs and pork, and rides his own motor-cycle to his jobs. He’s seen the American lifestyle on TV, and it’s so far beyond the range of his experience, he doesn’t feel deprived or envious.

Every village in Thailand was on the electricity grid long before Thaksin came on the scene, and virtually every village family has a refrigerator, electric rice-cooker, TV, radio and a couple of oscillating fans. Almost all rural households have a motorcycle, though it may be old and battered. In every village several families own pickup trucks. Animals are no longer used for farm work except in extremely remote corners of the kingdom. If farmers don’t have a mini-tractor of their own, they rent or borrow one from a neighbor.

The “landless peasant” class exists, but is very small when compared with the Philippines , India and much of South America . The rich absentee farm landlord is almost unknown. Most farming families tend a small plot of land they own outright, mortgage-free (due to unscrupulous practices in the past, an outdated, paternalistic law prevents them putting up land as security with money-lenders, though they may borrow on anticipated harvests.) They sell a small cash crop through a co-operative. Their grown-up or adolescent children supplement the family income from jobs they hold in the cities.

Thailand, like the U.S. , has a fallen-through-the-cracks underclass. While statistics*, as everywhere, have to be taken with a large measure of scepticism, officially 10% of the population is below the poverty line (12% in the U.S. , 14% in Britain , 36% in Bangladesh ). Of course, that means the poverty line for Thailand and no international comparisons are invoked. Poverty doesn’t necessarily mean doing without TV or not being able to lean a beat-up old 100 c.c. Honda Dream by the door.

Unemployment in Thailand is 1.4% — among the lowest in the world. Here it has to be cautioned that employment statistics are notoriously unreliable. Even in advanced countries, economists cannot agree whether to include the under-employed and those not actively seeking work. But unskilled work, if not well-paid, is not hard to find. My Bangkok apartment building has had a “security guard wanted” sign out for weeks.

During the dry season, many farmers supplement their income with construction work in the cities. But some prefer to do without extra luxuries and live the slow-paced, well-fed rural life. Two or three years ago, I found it impossible for several weeks to find a plumber to put in a new bathroom. Many “peasants” have become self-employed entrepreneurs and done well for themselves. Thaksin’s policies had no discernible impact on the labor force.

There is no population pressure in Thailand , since each female, on average, gives birth to 1.6 children in her lifetime. That is well below replacement level, so the population will in time shrink unless immigration is vigorously promoted. Reduction in family size was achieved through education and the perceived economic benefits of smaller families, the same way it was reduced in Europe and Japan . This got started in the 1960s.

Wealth distribution in Thailand is no more extreme than in most industrialised countries. The poorest 10% of the people of Thailand own 2.6% of the nation’s wealth. The richest 10% own 33.7%. In the U.S. , the comparable figures are 2% and 30%, in the U.K. 2.1% and 28.5%. These statistics may not be wholly reliable, but distribution of wealth is unquestionably much more equitable than in China , India , Brazil or South Africa . Even isolated Thai villages, especially in the central plains, would seem very prosperous to rural Pakistanis and positively utopian to most Nigerians. Thaksin’s much-vaunted “village revolving development funds” financing local enterprise had their antecedents in the 1970s.

All main roads in Thailand are paved (close to First-World standards), and most secondary roads are surfaced, as are a good many of the tracks that lead into remote villages, even in the poorer north and northeast parts of the country. It was like this when Thaksin was still a bankrupt ex-cop.

There are slums in Bangkok , but you have to go out of your way to find them. Since almost everyone is employed, squatters on state land in the cities often live there by choice because it is rent-free. You certainly do not have to go out of your way to see red-light districts. Incomes from the sex industry (obviously denied to those lacking looks and personally) exceed factory wages fivefold or more. The blind and maimed can apply for state aid, but street begging is often more lucrative. One sets one’s own moral priorities.

There was care at government hospitals and health clinics long before Thaksin came along with his fancy $1 scheme. Treatment is not world-class but it is medical care nonetheless. People in need of operations get them for small fees, and if they have no money the charge is written off. No one is turned away from emergency rooms at government hospitals. Doctors who went through medical school on state scholarships owe as many years of modestly paid service in rural hospitals as they had in tuition.

Almost no Thais are unable read & write. Girls on average get 14 years of schooling and boys 13 years (note that girls are ahead). About 1.75 million post-secondary students (over 20% of their age group) are enrolled in universities (ranging from world-class to barely respectable), two-year colleges or vocational schools. Bright kids from poor families get government scholarships, so up-by-the-bootstraps success stories are so common as to be unremarkable. This high rate of upward social mobility goes back at least half a century.

Infant deaths per 1,000 live births in Thailand tallies 17, compared with 180 in Angola, 153 in Afghanistan and 6 in the U.S. Life-expectancy at birth is 73.1 years (78.1 in the U.S., 66.1 in Russia). HIV-positive people make up 1.4% of Thailand ‘s population (0.6% in the U.S. )

With a population of 66 million, Thailand has 62 million registered cellphones and 7 million landlines. Service is as reliable as it is in Europe . One-fourth of the people regularly use the Internet. Thaksin’s own company, which prospered prodigiously while he was prime minister, had one-third of the nation’s mobile-phone customers. He sold the firm to an investment arm of the Singapore government (and paid no income tax).

Thailandroutinely exports more than it imports. It is attractive for foreign direct investment. It therefore has enormous foreign reserves, and even though the country has few natural resources to sell abroad, its reserves, at $138 billion, are the 10th highest in the world. ( Britain has $56 billion, Australia $45 billion). This means plenty of capital for employment-creating new manufacturing jobs, which entice rural folk seeking work in cities. The Thai currency is so strong that even recent political troubles have not budged it.

Contrary to a widespread perception, the country’s main exports are not agricultural products, but cars & trucks, motorcycles & vehicle parts (made by foreign-owned subsidiary companies). Exported pick-up trucks, the biggest single-selling item, contain negligible imported parts. One Japanese manufacturer sources its world-wide production of one-ton pickups, including those sold in Japan , from its Thai factories. Machinery is another big export, as are components for computers and other electronic goods, textiles, garments & footwear, processed food and animal fodder. Way down the list of foreign-currency earners are rice, sugar and tourism.

Over the years the Thai government has routinely produced a trade surplus, a current-account surplus and (though not this year) a budget surplus.

Since 1960 (when Thaksin was 11) no “developing” country has exceeded Thailand in average annual per-capita GDP growth. The farmers are still poor by western standards, but they’ve had their share of this rising affluence, and they are better off than rural folk in any other nation on earth for which we reserve the term Third World .