Rich thrive as the poor suffer
published : 24 Aug 2012 at 00:00
newspaper section: News
Numbers don't lie. And what the numbers show about disparity in Thailand is indeed appalling with grave political consequences.
When 80% of land in the country is in the hands of only 10% of land owners, what hope does the country have of pulling itself out of the political abyss without land reform?
When the richest 20% own more than half of the value of all household assets, and when stocks are owned by only a handful of powerful business families, such stark disparities will also continue to make democracy vulnerable.
These grim numbers are from a recent study by Duangmanee Laovakul, assistant professor in economics at Thammasat University. Her study on the concentration of wealth in Thailand looks at land ownership, household assets and share holdings in the Stock Exchange of Thailand. And the results are disconcerting.
The economist used an indicator called the Gini index to measure the disparity. In the range of 0 to 1, the closer the index is to 1, the greater the disparity. On land ownership, the national disparity is .941, meaning the country is mired in a deep, deep problem with land ownership inequity.
For juristic persons, the biggest land owner has more than 2.8 million rai, the study found. For individuals, the top 20% own an average of 62.5 rai, which is 729 times higher than the lowest 20% who own an average of less than one rai.
The news is equally bad for household assets which include houses, lands, cars and cash worth about 18 trillion baht. The richest 20% own more than half of these assets. Only a 1% tax on these assets could raise 180 billion baht to help the poor through social welfare programmes, Ms Duangmanee suggested.
The findings from the stock exchange similarly show an extremely high concentration of wealth where the biggest chunks of the most valuable shares belong to only a small number of business families.
A progressive tax on assets and land would be an effective tool to bridge the gap, yet it is of little use to pin reform hopes on parliamentary initiatives because MPs and senators are big landlords themselves, Ms Duangmanee said.
Again the numbers do not lie. According to their declared assets with the National Anti-Corruption Commission, the MPs own 27,035 rai combined, worth more than 15.7 billion baht, according to MPs' own estimates. The real market value is believed to be much higher. Also, the numbers do not include the land that might have been put under other people's names.
The message is clear from these statistics. It is a matter of urgency for Thailand to effect land reform and impose a progressive tax on assets and land to effect equitable distribution of resources and to avoid more political instability.
The Yingluck Shinawatra government, in particular, must pay heed to Ms Duangmanee's study because it came to power through the underdogs' fury against disparity and double standards. The grim disparity statistics should serve as a stern reminder that when the cause of mass fury has not yet been defused, a political time bomb is still ticking away, waiting to explode.