Cash freebies not enough
'Nobody will be poor in Thailand by 2018" was the controversial pitch made in November 2017 by the then military government's economic tsar, Deputy Prime Minister Somkid Jatusripitak.
Sadly, this promise has remained a pipe dream because the number of poor people in the country has been rising -- not diminishing -- over the past five years.
A World Bank report released on Thursday showed that the rate of poverty in Thailand has risen to 9.8% from 7.2% between 2015 and 2018. As for absolute numbers, the number of people living in poverty has increased to more than 6.7 million from 4.85 million.
And the numbers don't lie.
Several media reports have reiterated the fact that poor and low-income people are finding it tougher and tougher to make ends meet, while thousands have found themselves without a job over the past few years.
Despite this harsh reality for 40% of Thailand's population, the previous and the current government, both led by Prime Minister Gen Prayut Chan-o-cha, has adopted the same-old policies of subsidies and helicopter money.
This is despite the fact that these approaches have proved ineffective and unsustainable in helping the poor move up the economic ladder.
In the wake of the Covid-19 outbreak, which has hit domestic tourism hard, the cabinet yesterday approved a new stimulus package potentially worth 100 billion baht. This package includes cash handouts, soft loans and other financial aid as well as tax benefits.
Under the package, 1,000 baht in cash will be given to low-income earners, farmers and freelancers every month for two months. This measure is much like previous ones that the two Prayut governments launched to stimulate the economy, such as one-off cash handouts and monthly allowances for the poor and the elderly.
These cash giveaways can neither have a lasting effect on economic growth nor lift the poverty rate. The cash handouts were far too tiny to really help people get by, especially since Thailand's household debt has risen to 79% of the GDP, the second highest in Asia.
The World Bank report also indicates that Thailand, as Southeast Asia's largest economy after Indonesia, has been lagging behind its regional peers, with 2019 growth being the weakest in five years. Thailand's growth has been a lot lower than other large economies in the developing East Asia and Pacific region, the report said.
Given these economic realities, it is time that the government reviewed whether it needs to do away with its same old economic measures when it comes to improving the lives of the poor and low-income earners.
Both governments under Gen Prayut have been criticised for failing to boost sustainable growth and tackle regulatory issues that mostly benefit big corporations and put small- and medium-sized businesses at a disadvantage.
While the poor become poorer and also increase in number, the rich are only becoming richer. The opposition and critics have recently pointed out that certain conglomerates appear to have grown in profits and power from state policies, concessions and contracts.
Of course, in certain circumstances, cash handouts can help the poor to better absorb shocks from an economic fallout, but this helicopter money strategy is not enough to pull them out of poverty.
The World Bank report should be seen as a cry for help for those at the bottom of the economy.
Instead of handing out bits of cash, the government should come up with practical measures that can generate higher incomes and more jobs for them.
Bangkok Post editorial column
These editorials represent Bangkok Post thoughts about current issues and situations.
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