NESDB denies nation worst for inequality

Report based on ‘estimates’, old data

The National Economic and Social Development Board (NESDB) has refuted a report claiming Thailand has the worst inequality in the world.

Citing the World Bank’s Gini coefficient index, Danucha Phichayanan, deputy secretary-general of the NESDB, said Thailand’s inequality situation has improved over time and it was not the world’s worst.

In 2015, the country ranked 40th out of 67 countries on the World Bank’s Gini index, while in 2013 it was ranked 46th out of 73 nations, he said.

The Gini coefficient, sometimes called the Gini index, or Gini ratio, is a measure of statistical dispersion intended to represent income or wealth distribution among the population of a country. It is most commonly used used as measurement of inequality.

Mr Danucha was responding to a report by Banyong Pongpanich, a former member of the State Enterprise Policy Commission, on his Facebook page, claiming that Thailand has overtaken Russia and India as the most unequal country in the latest survey by the World Bank.

Mr Banyong expressed concern about the trend. Two years ago, Thailand ranked as the third most unequal country, after Russia and India.

“In 2016, the richest 1% of Thais (500,000 people) owned 58.0% of the country’s wealth. In 2018, they controlled 66.9%, overtaking their peers in Russia whose wealth share fell from 78% to 57.1%,” he wrote.

The richest in Turkey also did well this year even though the economy was bad. “The wealthiest people there control 54.1% of the wealth in the country, outstripping second-ranked India, which fell to fourth from 58.4% to 51.5% this year,” he wrote.

Apart from these four, there are no other countries in the world where the richest 1% controlled more than half of their country’s wealth.

The most equal countries were Belgium, where the top 1% had 20.1% of the wealth, followed by Australia at 22.4%.

At the other end of the scale, the poorest 10% of Thais owned 0% of the wealth. Mr Banyong noted that if debts were taken into consideration, their net worth might be negative.

Meanwhile, 50% of the poorest Thais (25 million people) had 1.7% of the country’s wealth while 70% (35 million) controlled 5%.

Mr Banyong, however, admitted in his post that the CS Global Wealth Report 2018 did not correspond with the World Bank’s information on wealth distribution and inequality.

Mr Danucha said the World Bank’s Gini index has long been regarded as the standard international indicator of inequality adopted by all 110 member countries.

Over a period of 10 years, Thailand’s distribution of both income and spending has improved significantly, he said.

In 2007, the country’s income distribution index in the Gini index stood at 0.499, while last year the income distribution index was 0.435, he said.

Thailand’s spending distribution index was 0.364 last year compared with 0.398 in 2007, he added.

The overall Gini index in certain developed countries such as Britain and US were last year 0.33 and 0.41 respectively, he said.

This means the inequality situation in Thailand is not much different from those of these developed nations, he said.

As for the CS Global Wealth Report 2018, he said, it was mainly based on “rough” estimation of the wealth distribution of surveyed countries because only 35 countries out of 168 could provide their complete wealth distribution data and most of the 35 countries are developed nations.

Thailand was among 133 countries in the report whose income distribution and wealth ownership were only roughly estimated as the actual data was not available, he said.

Still, the estimation of Thailand’s income distribution and wealth ownership in this report was based on information reported in 2006.