Did Thaksin close the gap between rich and poor?

The Nation in an editorial entitled “Do they know what they are fighting for?”. The opening:

Class war and the inequities of political power have effectively become the trademark sound bytes from the leaders of the red-shirt movement. Like most political sloganeering, their words and speeches are catchy and may bear some truth. But these don’t sum up the entire conflict or its nature.
…
What started off as a personal political dispute between Thaksin Shinawatra and the so-called yellow shirts led by his friend-turned-foe and media tycoon, Sondhi Limthongkul, has evolved into a stalemate political crisis.

But drawing a dividing line that cuts through these movements is virtually impossible. To say that the conflict is between the Bangkok rich and the rural poor is misleading. There are rich and poor in both camps, and Thaksin’s background and track record represents his business interests, not the rural poor. The yellow shirts include unionists in their rank and file, and both camps include former communists and right-wing royalists.

Thaksin made good because of his connections to the so-called ammart (traditional elite), the very people his red camp is now condemning. Besides representing the business class, his populist policies during his terms in office did virtually nothing in terms of capacity building or bridging the gap between the rich and poor.

BP: No dividing line between the reds and the yellows? Really?? Do the reds want an unelected and appointed elite to run the country? No. The yellows do.

Yes, there are certainly some people with money in the red camp, but would it really be incorrect to say the majority of people nationwide who would identify themselves as red shirts are the rural and urban poor as well as those in the lower middle classes (those who earn under 15,000 Baht a month)? From 2000-2004, poverty dropped from 21% to 11% and agricultural incomes rose by 40%, higher than the rise in any other forms of income (see page 14 of the same World Bank report mentioned in the that post).

Will also copy the below from this post on the Gini Coefficient for the 1996-2004 period (the Gini coefficient is a measure of inequality of income distribution or inequality of wealth distribution which 0 meaning perfect equality):

Between 1996-2000, the inequality in income distribution increased, but decreased between 2000-2004 – Thaksin didn’t come to power until the beginning of 2001. Interestingly, you can see that between 2000-2004 the reduction in the North, Northeast, and the South was comparatively greater than in the Central region whereas in Bangkok it was unchanged. Interestingly, one can see reasons why both the people in the North and the Northeast perceived things got better from them under Thaksin and that is because they did. In the North, between 1996-2000 the rise in income inequality was relatively high compared with the rest of the country so many might have felt left out. Despite the gain between 2000-2004, the level of income inequality was still greater in 2004 than what it was in 1996 before the economic crisis.

BP: Now, having said that and at the time of that post in early 2007 these were the only figures available then. Yesterday’s Bangkok Post had the below chart on income inequality:

Source: Bangkok Post

BP: Actually, when saw these figures they looked a little weird given how much farm incomes had increased under Thaksin so downloaded the figures from the NESDB website and put them in a chart below. BP should note that the % change is from 2001-2006 when Thaksin was in power and NOT from 1995-2006 as per the Bangkok Post:

Source: You can find the figures from this RAR file from the NESDB website but if you want to play around with the data you can do so Google Docs

BP: The Northeast per capita annual income hardly goes up between 1995 until 2000, but from 2001-2006 it rises by 47% which is slightly above the national average.

Didn’t add them to the chart, but for 1995-2001 the % increase for the total/entire Thailand is16.23%, for the Northeast is 3.35%, for the North is 8.19%, for the South is 2.04%, for the East is 26.74%, for the West is 13.55%, for Central is 42.06%, and for Bangkok is 15.89%.

Now, certainly one can argue that things should have gotten better under Thaksin and Thailand still has a wide gap between the rich and the poor, but if you compare Thaksin’s time in power versus the 5-6 years before that then you can see the poor did benefit.

NOTE: Of course, you have the separate question on whether Thaksin should receive all the credit for any economic gains between 2001-2006 and how much the Chuan II government of 1997-2000 should get credit, but that is something which cannot be answered easily. The political reality is also that those who benefited will credit the government who was in power at the time for any gains. Then, of course there was also the economic crisis in 1997, but as you can see from the above figures those in the the North and the Northeast did not do as well between 1995-2001 as they compared with 2001-2006.

fall

Damn you for hard facts and figures…
A respectable Thai media demand only rumor and hearsay!

You are ruining the journalism standard!
patiwat

Phil, you don’t think that maybe, just maybe, a lot of Red Shirts think that Thaksin is also a “twat”, as you colorfully put it, but are against the corruption and threat to liberty of the yellow amart system?
andy

It should be pointed out that the figures BP quotes from the NESDB are actually Gross Provincial and Gross Domestic Product per Capita and NOT Household or Per Capita Income. Important difference as the former is a measure of economic output while the later is water people have to spend and save.

That said, Household Income data from the National Statistics Office (probably originally from the NESDB) show that between 2000 and 2006, HHINC grew at roughly 5% per year for BKK and the Central region, while all others (East, West, North, South, Northeast) grew around 8%, give or take a few 10ths of a %
Mr. King

Do we need a Referendum For A New Democracy?

Are you concerned about the future of democracy? Do you feel democracy is under attack by extreme greed in countries around the world? Are you sick and tired of: living in fear, corporate greed, growing police state, government for the rich, working more but having less?

Can we use both elections and random selection (in the way we select government officials) to rid democracy of undue influence by extreme wealth and wealth-dominated mass media campaigns?

The world’s first democracy (Athenian democracy, 600 B.C.) used both elections and random selection. Even Aristotle (the cofounder of Western thought) promoted the use random selection as the best way to protect democracy. The idea of randomly selecting (after screening) juries remains from Athenian democracy, but not randomly selecting (after screening) government officials. Why is it used only for individual justice and not also for social justice? Who wins from that? …the extremely wealthy?

What is the best way to combine elections and random selection to protect democracy in today’s world? Can we use elections as the way to screen candidates, and random selection as the way to do the final selection? Who wins from that? …the people?
Anonymous

Tuskin, was corrupt, but corruption is a way of life in Thailand, from the police who are suppose to serve and protect, to the businessman, who always want more to do the job they are getting paid to do, to the politics, I see it as at least Tuskin, did something for those who needed it most. I still see it as Tuskin was elected by the people, and until he has been ejected by the people he is still there PM
StanG

In the second table, North East was slightly above average, that’s one way of saying it, but it’s also 15% lower than the South, 30% lower than the East and 20% lower than the Central. Non-TRT regions appear to have done a lot better.

NESDB point was that the gap between Isan and the richer parts of the country can’t be breached by populist policies, they need old fashioned development, not handouts, not when people in the Central region make five times more.

On the first graphic, the improvement looks statistically, and more importantly, emotionally insignificant. No one can tell if over five years he gained 3% on a rich neighbor
who never let him in the house or showed his bank books.

When I earlier mentioned that rich did very well under Thaksin I meant people who benefited politically from his grip on power. That would mostly include bankrupt businesses that got 700 billion bailout, got listed on SET and saw their value increase by trillions, and that would also include ministers and their cronies benefiting from “policy corruption”. These groups have hundreds of millions of baht in assets and make some 1-5% of the population. Gini would compare then to the lowest 1-5% but not to the rest of the country. This particular table is probably top 20%, the rich diluted.
Phil

A lot of sense. But:
“Do the reds want an unelected and appointed elite to run the country? No. The yellows do.”

There’s a few yellows around our office (and active in the demos) and they all disagreed with that idea completely. It’s something that was seized on, and certainly shows where some of the Yellow leadership were at, but I don’t think was representative of the views of the demonstrators.

Most of our office yellows thought Sondhis was a twat as well. But were simply against what they saw as Thaksin’s corruption – that was their main issue.
Capers

Wow. Great work BP. If only The Nation and Post could be as comprehensive in their analyses. Sigh.
redandwhite

BP, your post here gave me a sense of Dejavu….
http://reallifethailand.blogspot.com/2007/09/debate-on-thaksin-income-gaps-and-pad.html
redandwhite

BP, your post here gave me a sense of dejavu..
http://reallifethailand.blogspot.com/2007/09/debate-on-thaksin-income-gaps-and-pad.html

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