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Thailand

Thai PM turns to billionaires as Covid-19 clobbers economy

Poverty on the rise as millions lose their jobs, particularly in key tourism, service and manufacturing sectors

UCA News reporter, Bangkok

UCA News reporter, Bangkok

Updated: April 20, 2020 05:45 AM GMT
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Thai PM turns to billionaires as Covid-19 clobbers economy

Millions of workers in Thailand's informal economy have lost their jobs due to Covid-19. (Photo: Dean Moriarty/Pixabay)

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As Thailand’s already spluttering economy has ground to a halt in the wake of the global Covid-19 pandemic, Prime Minister Prayut Chan-o-cha has said he will appeal to the country’s richest tycoons for help.

During a televised address on April 17, Prayut announced that he would seek assistance this week from Thailand’s 20 wealthiest billionaires to help ease the country’s financial woes.

“The first thing I will do next week is to send an open letter to the 20 richest people in Thailand to ask them to tell me, as they are respected elders of our society, how they will help us and how they will help Thailand more,” Prayut said.

The Thai prime minister, whose administration has been widely criticized for its handling of the economic fallout from the pandemic, did not explain the nature of the assistance he will be seeking.

A nationwide lockdown that has been put in place to slow the spread of the deadly coronavirus has dealt a blow to Thailand’s economy, especially affecting low-income earners.

Millions of Thais have lost their jobs in the past few weeks, particularly in the key tourism, service and manufacturing sectors.

A recently launched government scheme to give a monthly allowance of 5,000 baht (US$150) to newly jobless people with low incomes has become mired in controversy as the government appears to lack the finances, or the will, to provide all the necessary handouts.

A reported 27 million people in a country of 69 million have applied for the handout, but the vast majority of them have so far been refused on various grounds.

Wanton economic inequality has worsened the prospects of the country’s poorest citizens.

Thailand remains the world’s most unequal country with the richest 1 percent owning 66.9 percent of the nation’s wealth, according to data from last year.

The comparable figure in Russia, a country whose economy is dominated by oligarchs, was 57.1 percent, followed by Turkey at 54.4 percent and India at 51.5 percent.

Although Thailand has managed to reduce the rate of poverty from more than 65 percent in 1988 to under 10 percent in 2018, household incomes and domestic consumption have both been stagnating in recent years, according to the World Bank.

“This resulted in a reversal in the progress of poverty reduction in Thailand with the number of people living in poverty rising,” the World Bank says in a newly released report.

“Between 2015 and 2018, the poverty rate in Thailand increased from 7.2 percent to 9.8 percent, and the absolute number of people living in poverty rose from 4.85 million to more than 6.7 million.” 

The increase in poverty came just as a military junta, with Prayut at the helm, took charge after ousting a democratically elected government in 2014.

“The increase in poverty in 2018 was widespread — occurring in all regions and in 61 out of 77 provinces,” the World Bank report adds. “In the Central and Northeast regions, the number of poor increased by over half a million in each region during the same period. The conflict-affected South became the region with the highest poverty rate for the first time in 2017.”

Judy Yang, a World Bank economist who wrote the report, has called for a “more nuanced picture of inequity and a better understanding of vulnerability” in targeted government policies.

“Eliminating persistent pockets of poverty will require growth strategies that take into account short-run risk mitigation and long-run investment needs,” Yang said.

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