Bangkok Post

Poverty slide can be arrested

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Covid-19 will have faded as an immediate threat in a few years. Yet its effect will last longer. Government­s across the world, including Thailand, will face huge challenges in trying to finance the economic recovery programme that will be needed when countries get back on their feet. The latest United Nations Developmen­t Programme (UNDP) report on poverty warns that five billion people, from 70 out of 109 developing nations, suffer from multidimen­sional poverty problems such as income loss and poor education and health care opportunit­ies, inadequate food, job opportunit­ies and a decent environmen­t.

The UNDP survey, released last week, says Thailand fares the worst among Asean countries in the poverty survey under its so-called Multidimen­sional Poverty Index (MPI).

The MPI survey started collecting data in 2019 from 70 developing nations by using MPI. It treats poverty in various dimensions, rather than sticking with the traditiona­l yardstick of income per household. The MPI looks at poverty in 10 areas and gives scores accordingl­y. Apart from income, other indices are access to health care, education, good nutrition, social justice and standard of living, for instance.

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

Thailand did better in past surveys. In 2015/2016 and 2012, the index was 0.003 and 0.005 respective­ly.

The takeaway for Thai policymake­rs is that money might not be only answer for reducing poverty. In the category of income, Thailand drew a higher score — 0.5 percent.

But the country was scored lower in other areas. For instance, it fared worse in the number of schooling years and access to healthy and clean food.

The survey raises big questions. Does the government’s poverty eradicatio­n policy work? To be fair, Thai government­s have being waging war against poverty for half a century and allocated massive budgets.

The first poverty eradicatio­n effort started in 1975 under the first popular elected civilian government of prime minister MR Kukrit Pramoj. MR Kukrit launched the first anti-poverty scheme, known as ngeun bhan, or the “diversion fund”.

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

Another popular poverty alleviatio­n policy was the “One Million Baht Village Fund” developed in 2000 under former PM Thaksin Shinawatra; this scheme is a revolving loan for villagers to use as business start-up seed money.

Both schemes might differ in the detail but share the same approach of injecting cash and creating jobs to help Thais climb above the poverty line.

PM Prayut Chan-o-cha’s poverty reduction scheme is not much different. The state welfare cards launched in 2018 transferre­d cash to 14 million low-income people.

Cash handouts and jobs are essential for every poverty alleviatio­n effort but the effect is not sustainabl­e.

Over the last 30 years, Thailand’s relative poverty rate declined from 65 per cent in 1988 to 9.85 per cent in 2018. Extreme poverty rates, measured by the World Bank as those living below $1.90 (60 baht) per day, are virtually zero.

But poverty has been on the rise again during last few years. It jumped from 7.2% to 9.8% between 2015 and 2018, according to World Bank’s report last year. Thailand has the fourth highest wealth inequality rate in the world at 90.2%, meaning there is a huge disparity between the richest and poorest.

Needless to say, the Covid-19 pandemic will rub salt into the wound. For years to come, government­s will face a tough task in solving poverty because conditions will get worse and more complex — compounded by an ageing society, digital disruption, and climate change that will hit the agricultur­e sector in particular.

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

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