PROTECTING POOR THAI FAMILIES FROM ECONOMIC HARDSHIP

Thailand recently announced a plan to put into action a national social assistance programme for poor families. Such a programme can help reduce poverty significantly. It would also move Thailand into the growing ranks of middle-income countries, such as China, Malaysia, Brazil, Turkey and the Philippines, that provide the poor with a safety net.

This year’s 50-billion-baht fund for national social assistance includes cash allowances and other subsidies for poor families. For many poor families in Thailand, regular social assistance means their children being able to finish school or not going to bed hungry. For farmers, regular social assistance can help cushion the impact of natural disasters such as floods and droughts, which can wipe away a lifetime of savings.

Global evidence suggests that regular cash transfers can enable poor families to meet basic needs such as food, healthcare and education, and that they continue to work just as hard. Such studies have addressed concerns that cash transfers are mere handouts that encourage complacency. They have shown instead that a helping hand improves nutritional and educational outcomes, and the capacity of individuals and communities to cope with shocks, ultimately resulting in lower poverty and inequality.

But, according to the recently published World Bank Thailand Systematic Country Diagnostic, accurate targeting is the key. An effective and efficient social assistance programme consistently and reliably identifies those who need support the most.

Here is where the challenges set in. With work in the informal sector so prevalent in Thailand, verifying household incomes can be difficult. Experience from other countries can help.

Where self-declared income may not be a reliable indicator, other information such as land and vehicle ownership status, educational levels of adults, and presence of household members with disabilities can be useful. Different countries screen these non-income indicators in different ways. Some simply tally the other welfare indicators for each family, while others do a more complex calculation of how important each factor is in predicting if a family is poor.

Whatever the approach, countries often supplement such information with community-based validation to take advantage of local knowledge. Thailand is exploring such an approach, and has proposed using employment status and the size of homes as a means of assessing a family’s income.

Developing countries also use “social registries” to cross-check indicators of household welfare. These data platforms allow cross-checking of household welfare indicators, ranging from land and car ownership to social security participation, and are used by multiple public programmes as a common source of information.

The most comprehensive social registries include not only programme beneficiaries, but the larger population. Pakistan includes about 90% of its population in its social registry. The Philippines and Chile include 75% in their databases. Turkey cross-checks against 28 public databases to confirm the accuracy of information about families.

Multiple agencies refer to the social registries to determine eligibility for their programmes. In many countries, the registries serve many initiatives: some 80 programmes in Chile, over 50 in the Philippines and about 30 in Colombia, Pakistan and Brazil.

As Thailand starts the journey of building a database of low-income families, it is already helped by an important foundation: the national ID system. Thailand can build on this foundation and on the experience of other middle-income countries to develop a more reliable, efficient and uniform screening system of the population.

This is an exciting time for Thailand, as it seeks to establish a social protection system that is more suited to the needs and expectations of an uppermiddle-income country. The task is not a straightforward one. There will be competing pressures for public resources, challenges in programme design and delivery, and new needs for cross-agency coordination.

But that step in the right direction has been taken. Thailand has enabled the building of a social protection system that can better serve all its citizens and help the country towards its goal of further reducing poverty.