The slide in poverty can be stopped

Covid-19 will be gone as an immediate threat in a few years. However, its effect will last longer. Governments around the world, including Thailand, will face enormous challenges in trying to fund the economic stimulus package that will be needed when countries get back on their feet.

The latest United Nations Development Program (UNDP) Poverty Report warns that five billion people, from 70 of the 109 developing countries, suffer from multidimensional poverty issues such as loss of income and poor job opportunities. education and health care, inadequate nutrition, employment opportunities and a decent environment.

The UNDP survey, released last week, found Thailand to be the worst ASEAN country in the poverty survey according to its Multidimensional Poverty Index (MPI).

The MPI survey started collecting data in 2019 from 70 developing countries using MPI. It deals with poverty in various dimensions, rather than sticking to the traditional yardstick of income per household. The MPI examines poverty in 10 areas and assigns scores accordingly. Besides income, other indices are access to health care, education, good nutrition, social justice and standard of living, for example.

The survey shows that Thailand’s MPI is 0.002, the lowest among countries in the Association of Southeast Asian Nations. Our neighbors have better scores: Myanmar (0.176), Cambodia (0.170) and Lao People’s Democratic Republic (0.108); while countries with a similar economic profile also score better: the Philippines (0.024), Vietnam (0.019) and Indonesia (0.014). Thailand’s score is also lower than the East Asia and Pacific region (0.023).

Thailand has done better in previous surveys. In 2015/2016 and 2012, the index was 0.003 and 0.005 respectively.

The takeaway for Thai policymakers is that money may not be the only answer to poverty reduction. In the income category, Thailand scored higher – 0.5%.

But the country was rated lower in other areas. For example, the number of years in school and access to healthy, clean food has been worse.

The investigation raises big questions. Is the government’s poverty eradication policy working? To be fair, Thai governments have been waging a war on poverty for half a century and have allocated massive budgets.

The first poverty eradication effort began in 1975 under the first popular elected civilian government of Prime Minister Mr. R. Kukrit Pramoj. Mr Kukrit launched the first anti-poverty program, known as the ngeun bhan, or the “diversion fund”.

The fund spent 2.5 billion baht, a huge sum at the time, to hire rural residents to do public service works such as digging waterways, canals or water catchment reservoirs; repairing public property and installing utility poles.

Another popular poverty reduction policy was the “Million Baht Village Fund” developed in 2000 under former Prime Minister Thaksin Shinawatra; this program is a revolving loan that villagers can use as seed money to start a business.

The two programs may differ in details, but share the same approach of injecting money and creating jobs to help Thais rise above the poverty line.

Prime Minister Prayut Chan-o-cha’s poverty reduction agenda is not much different. Social assistance cards launched in 2018 transferred money to 14 million low-income people.

Cash donations and jobs are essential for any poverty reduction effort, but the effect is not sustainable.

Over the past 30 years, Thailand’s relative poverty rate has fallen from 65% in 1988 to 9.85% in 2018. Extreme poverty rates, measured by the World Bank as those living on less than 1 , 90 dollars (60 baht) per day, is practically zero.

But poverty has increased again in recent years. It fell from 7.2% to 9.8% between 2015 and 2018, according to last year’s World Bank report. Thailand has the fourth highest wealth inequality rate in the world at 90.2%, which means there is a huge disparity between the richest and the poorest.

Needless to say, the Covid-19 pandemic will put salt in the wound.

For years to come, governments will face a difficult task in solving poverty as conditions worsen and become more complex – made worse by an aging society, digital disruptions and climate change that will affect the agricultural sector in particular.

Battling public debt, the government must work smarter and be more creative to tackle the problem. The government can increase wealth by simply enforcing the law and public policies to eradicate air pollution, reduce toxic residues in food, make education more equitable, and make decent health care accessible to all. It’s a start, at least.

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