Thailand 'stuck in middle-income trap'
Despite undergoing dramatic economic transformation, Thailand is caught in a middle-income trap due to persistent income inequality, low education quality and an oligarchic political structure, say academics.
"Inequality has not improved much in Thailand and it seems to be very persistent, suggesting a structural problem," said Pornthep Benyaapikul, a Thammasat University lecturer in economics, at a seminar titled "Middle-Income Trap: Economic Myth-Political Reality: Case Studies of Malaysia and Thailand".
The relationship between growth and equality is complementary, especially when the country's income reaches a certain level.
Wage inequality has been encouraged to support export-driven economic growth based on cheap labour, Mr Pornthep said.
In 2010, the poorest 10% of the population received about 2% of Thailand's wage income, he said.
Mr Pornthep said overall wage disbursement has reduced slightly over the past two decades, mainly affecting the lower half of the hierarchy.
Although the government has been investing enormously in education and increasing its quantity, the overall quality and unequal nature of education have become the main problems in the system, he said.
Thai students were among the poorest performers in the 2009 Programme for International Student Assessment, ranking 50th out of 65 countries in tests of reading, mathematics and science.
A centralised management of education and lack of skilled teachers are factors contributing to low education quality in Thailand, according to a research paper on Thailand's political economy dimension of a middle income trap.
There are also significant disparities in the country's education quality between each region where students from the Bangkok metropolitan area generally receive better education than their regional counterparts, it said.
Pasuk Phongpaichit, an emeritus professor in Chulalongkorn University's faculty of economics, said Thailand's oligarchic politics is the main obstacle hindering reforms of inequality
She reiterated the need to develop human resources in terms of education quality and research and development, while income distribution through tax reform is time-consuming but should be initiated soon.
The chance to see economic growth of 4% this year has lessened because of political tensions, but whether the protests will shave 1% off gross domestic product growth depends on how the situation is resolved, Prof Pasuk said.