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BANGKOK: Economic woes are nothing new to Thailand, where growth was already slowing prior to the global economic crisis. But a new study has shown that the Kingdom's poor, who make up a third of the population, may now be more vulnerable than before.
Thailand's economy has so far avoided a recession, despite a worldwide liquidity crisis and exports down by half from last year. That is sure to change, as export-driven Asian economies are hammered by a steep drop in demand.
The Kingdom's GDP is predicted to experience an estimated two per cent negative growth, with a million Thais possibly out of work.
Professor Ammar Siamwalla, Thailand Development and Research Institute, said: "We will not have a financial crisis, but our exports are heading strongly down. Obviously, it's very difficult to replace that demand, one for one. We will be badly affected. We are already badly affected."
Nearly 90 per cent of Thailand's poor live in the rural North and Northeast, where outreach has been unsatisfactory.
Officials said they lack sufficient data to identify poor households, and fluctuations in income mean that many Thais are in and out of poverty on a regular basis.
Last year saw the introduction of subsidised utilities and household goods but no food. Officials are admitting that they have missed their intended target.
Dr. Ekniti Nitithanprapas, Fiscal Policy Office, Ministry of Finance, said: "We just try to lower the ceiling of people who get benefits to just low income people. The measures in the previous ‘Six Month /Six Measures’ programmes target more than just vulnerable groups.
"Maybe rich people can get benefits off those measures, so we are trying to amend the measures to focus on vulnerable groups only."
International consensus is that direct cash transfers can make a positive difference in the lives of people who are struggling to stay afloat. These transfers can be long or short term and conditional based upon work or school attendance.
But to do that, the government will need to come up with a way to identify people at risk, and maintain a database of records, something that would require substantial funding and resources in these tight times.
Economists said one difference between the current economic crisis and 1997 is that the wealthy were the first to feel the pinch 12 years ago, but this time it is the opposite.
Thailand's lack of a social safety net bodes badly for the Kingdom's most vulnerable. But officials are hopeful that workable solutions such as the cash transfer idea can be found.
As one optimistically put it, it may be possible to turn this crisis into opportunity and start a national pension fund that would enact mandatory savings to ensure that future generations will not find themselves in a similar situation. - CNA/vm
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