Thailand’s inequality of opportunitiesBy Bangkok Pundit Nov 02, 2009 12:52PM UTC
Little by very little, more people accept that this intense division is not caused by one man but a massively unequal distribution of wealth and power. Several worthy, middle-of-the-road institutions have found a new interest in the subject of economic and social inequality. These include the King Prajadhiphok Institute, Thailand Development Research Institute, and Thailand Research Fund.
The inequality in income in Thailand is much worse than it should be, given the relative success of the economy over the past generation. A simple way to measure income inequality is to estimate the gap between the top fifth and bottom fifth of the population. In countries like Sweden and Japan, where people value the advantages of living in a relatively equal society, the difference is 3 to 5 times. In Europe and North America, it’s 5 to 8 times. Among Thailand’s Asian neighbours, it’s 9 to 12 times. In Thailand, it’s 13 to 15 times. Almost all the countries worse than Thailand are African states with civil wars or Latin American states with endemic populist movements. The risks are very clear.
BP: Chang Noi then points to various studies looking at this inequality noting that government spending in Thailand is often not directed at the poor. This paper notes that historical inequality in higher education opportunities (although it does note some changes between 2001-2003). Another study notes that the high subsidy that the government provides to university education is then used by well-off children and suggests the government reduce the subsidy:
This study makes use of findings from previous empirical research in that education is the most important factor explaining income inequality in Thailand. It has been demonstrated in this study that the main beneficiaries of university education are children from well-off families living in the urban areas. Having recognised this fact, the Thai government chooses to subsidise children from well-off families by help paying 70 percent of their tuition fees leaving many more children from poor families with little opportunity to go to universities
Others have looked at the increasing income inequality in Thailand – see this World Bank study from 1999 which concludes:
The results reveal that while education, access to formal credit markets, and remittances appear to be strong reducing factors of income inequality, the geographical concentration of income in Bangkok reinforces income inequality.
This ADB paper from 2002 suggests the answers are to:
This could be accomplished by expanding educational opportunities for lower-income students, investing in infrastructure in historically poor and disadvantaged areas, and providing fiscal and other incentives to encourage private sector investment in backward areas, among other things
BP: Now, some people will say, hey! Who cares if the ignorant Thaksin voters do not care about education for their children whereas we Bangkokians do and we all have the same schools. Well the problem with this is that schools in urban areas in Thailand are much better financed than for rural areas. This blog post summarises one book chapter on the issue:
Addressing anti-rural bias need not be merely populist. Education policy would be a great place to start, as made clear in an analysis by Thai economist Sirilaksana Khoman.(1) All those uneducated rural Thais came through a public school system in which the lion’s share of fiscal resources, the best teachers, buildings and equipment were all devoted to the relatively small urban population. In Thailand, all public kindergarten schools are in urban areas, and enrollment in municipal schools in Bangkok is about equal to that for the entire rest of the country (the distribution of private schools is even more skewed toward urban areas). Fees for university education, as a percentage of costs, are much lower than for secondary and vocational schools– an imbalance that subsidizes education more for the urban middle class than for others. Overall education costs in Thailand, as a percentage of per capita income, are quite a bit higher than in comparable developing countries.
BP: One only needs to compare the facilities of the average public school in a rural area with a public school in Bangkok to know Bangkok schools and other urban schools are much better funded. Simply put, there is inequality of opportunities which the Thai state just reinforces.
btw, see previous post on inequality and poverty here.