Bonnwara Sumano & Suttipong Kanakanorn
The threat of digitally disruptive technologies has caused many people to grow concerned as they fret about disappearing jobs due to greater automation and advanced technology replacing humans on factory floors, in offices and elsewhere. But such technology can also work wonders to improve the country’s welfare delivery system. Better yet, it can be designed to help prevent fraud and corruption.
There are two major problems in the welfare delivery system. Firstly, there is a loophole in identifying welfare recipients, which can open the window to graft. This was evidenced in a number of cases involving centres aimed at assisting and protecting the destitute under the Social Development and Human Security Ministry. The first such case was exposed earlier this year by a Mara Sarakham University student working as an intern at a centre in Khon Kaen.
The centres were set up nationwide to help the impoverished receive state payments of up to 3,000 baht in cash, which are issued three times a year. During her internship, the student and her colleagues were ordered to write fake signatures on the receipts for the money. It was understood that the cash did not get to the destitute but into officials’ own pockets for their personal use.
The ministry subsequently announced it would shift the method of payment from cash to bank account transfers. This, however, may not be enough to close the loophole if we look into another embezzlement case involving the Sema Phatthana Chiwit Fund under the Education Ministry, which offers scholarships to girls at risk of becoming victims of prostitution.
The fund directly transfers the scholarships into the eligible students’ bank accounts. But many students did not receive the money as a high-ranking official who served as assistant to the secretariat of the fund committee was found to have secretly used 22 bank accounts registered in the names of her relatives and friends. Over the space of a decade, the official stole a whopping 88 million baht from the fund.
The second problem with our welfare system is its efficiency, or lack thereof. While the government seems to regard bank transfers as more convenient with less room for corruption creeping in compared to the use of cash, this may not really be the case.
According to the World Bank’s The Little Data Book on Financial Inclusion 2018, some 81% of Thai people hold accounts with financial institutions. This means nearly 20% of the Thai population, or roughly 13 million people, will not have access to state welfare that is delivered through these institutions.
Some basic requirements for opening a bank account may explain why a significant number of people still lack access to this service. One requirement is that they must show up in person to start an account, which could prove a major obstacle for people who have difficulty with mobility such as the elderly and disabled, as well as those living in remote areas. Another requirement is that they produce an identification document, which is an issue for homeless people and those whose nationality still needs to be legally verified. Such requirements effectively lock these people out of the system even though they are among the most in need of help.
The good news is there are at least three technologies that can be adopted to improve our current welfare delivery system, namely digital IDs, e-money and blockchain.
The use of digital IDs is now being studied by the Digital Economy and Society Ministry as a way to verify the eligibility of fund recipients, with or without regular ID cards. This has many advantages over conventional ID cards including the possibility of tracing their usage and updating information so the authority will know immediately when a person changes status and is no longer eligible for state welfare.
E-money, when linked to digital IDs, is a system for recipients with or without a bank account as the money will be transferred through their mobile phone or other devices. All digital IDs and transaction histories can then be stored on a blockchain to keep a permanent and immutable record in a way that preempts fraud.
People with both a bank account and an ID card can receive state-issued welfare through existing channels like PromptPay. ID card holders who do not have a bank account may be issued with digital IDs and receive welfare via e-money. The government can create digital IDs using various factors such as face- or voice-recognition software for those who do not have ID cards or bank accounts, and pay them using e-money.
With this proposed mechanism, the government can provide welfare directly to targeted groups and prevent the abuse of welfare funds. Big data and AI can also be employed to detect any irregularities in the system.
After setting up the proper privacy protection, the public can even help monitor transaction sand be offered rewards as an incentive if fraud is detected, using smart contracts and e-money.
First published in Bangkok Post, on June 13, 2018.