Bridging disparity still an elusive goal

Worawan Chandoevwit

If reducing inequality is the Thai state’s goal for national development, then this promise has turned empty. And it’s official. According to the National Economic and Social Development Council (NESDC), Thailand’s central planning agency, income inequality in Thailand has not improved over the past 30 years. In fact, it was red faces all round when Credit Suisse, a global financial services company, declared Thailand the most unequal country in the world last year.

The statistics speak volumes about the country’s persistent income gap.

In 1988, the average income per person per month was 1,100 baht. A decade later, it increased threefold to 3,400 baht in 2000. The average monthly income jumped another threefold to 9,400 baht in 2017, reports the NESDC. But don’t rush to celebrate these numbers yet.

Despite the rising income, the Gini coefficient, a statistical index to gauge economic inequality, shows Thailand’s disparity has not improved much.

Let’s take a look. The Gini index of income inequality was 0.487 in 1988. Despite the threefold monthly income increase in 2000, income inequality actually increased to 0.522 and only dropped slightly to 0.453 in 2017.

In short, although the net income of the populace has increased, the gap between the richest and the low and middle-income groups remains relatively the same.

How bad is the disparity in Thailand? According to Credit Suisse, the richest 5% in Thailand control 80% of the nation’s wealth. The remaining 20% is shared among 95% of the populace. Most certainly, a large number of people do not own any assets at all.

This severe and persistent income disparity should be a cause for concern. The greater the gap, the deeper the public resentment against an unfair system that favours the rich and robs the poor of equal opportunity. Systemic discrimination and lack of bargaining power often lead to political instability.

The income gap also entails a problem of health disparity as money leads to unequal access to healthcare and determines different qualities of healthcare services. But money is not the only factor limiting one’s ability to maintain good health and realise one’s potential.

Other discriminatory factors are social and cultural. But their impacts are real and significant. For example, gender, age, marital status, education, birth privilege, occupation, disabilities, language, social hierarchy, and place of residence.

To bridge the health disparity, putting money in citizens’ pockets is not enough.

Lots of research by the Thailand Development Research Institute highlights the impact of these social and cultural factors on health problems in Thailand that need to be addressed.

For example, the number of suicides among the 50-59 age group steadily rose from 500 in 2008 to 750 in 2017. In the past decade, the rate of suicide among this pre-retirement age group was the highest compared to other groups. Is the stress that comes with a downturn in life the reason for them taking their own lives?

Research also shows the number of elderly killed in car accidents rose threefold in just one decade from 1,000 in 2008 to 3,000 in 2017.

Meanwhile, the maternal mortality ratio in the South was three times higher than in Bangkok, as shown in a 2014 study.

It’s clear. While the government must have more effective policies to bridge income disparities to prevent political resentment, it must also address other social and cultural factors such as age, gender, region and occupation that hurt vulnerable groups and stop preventable deaths.

The health disparity caused by occupations is evident in the healthcare double standards for government officials and the general public.

For the treatment of the same illness, statistics show that retired government officials, given their special privileges under the state healthcare scheme, spend double as much money compared to patients under the universal healthcare system. As a result, those retired government officials live three years longer than those with the same illnesses under the universal healthcare system.

Interestingly, marital status also plays a role in the happiness gap. Research findings show divorced or separated couples have less life satisfaction than single and married people.

It has become increasingly evident that disparity is linked to life dissatisfaction as discussed in the book The Origins of Happiness  by Andrew E Clark, Sarah Fleche, Richard Layard, Nattavudh Pawdthavee, and George Ward.

Their book discussed the “Easterlin paradox”, which states that people are happier with more income; but over time their happiness may not increase as a country’s income continues growing.

The authors explain that gross disparity may be the reason for this decline in happiness. People may have more income, but when compared to others in society, they are still stuck in the same social and economic hierarchy without a chance of catching up. So they feel frustrated and resentful.

Happiness, therefore, does not always increase with more income because a persistent economic disparity affects people physically and mentally.

For sure, we cannot make people equal 100 per cent, but we can certainly help reduce the many facets of inequalities as individuals or as members of communities, society, or civic groups.

Actions range from donating time and money, to opening our hearts and minds to respect others as equals, to conduct social enterprises to help the underprivileged.

Real change, however, primarily relies on state agencies’ commitment to bridging the gap.

State authorities must create strong financial mechanisms to achieve equal distribution of income to help the 95% of the population who hold only 5% of the national wealth. In addition, the government must ensure that education, public health, employment, communications, and community development are equally accessible to all groups of people.

That’s not all. There must also be special measures to help especially vulnerable groups such as people with disabilities, displaced people, ethnic minorities, and the poorest of the poor.

Without many life opportunities and little education, these disadvantaged people who often are from broken families are routinely forced to do high-risk and low-paid jobs that no one wants to do.

When sick, they don’t know where to go for medical help. When in trouble, they have no one to turn to. These vulnerable groups of people are trapped in a vicious cycle of poverty and hardship, illness and perpetual stress.

A just society must give extra protection to these vulnerable and disadvantaged groups of people. They should receive extra assistance so they have a chance to rise above poverty instead of being forever trapped at the lowest rung of society.

Apart from strong financial mechanisms to bridge the income gap, the country must seriously tackle myriad forms of discrimination that perpetuate inequalities. Vulnerable groups must also receive an extra push to rise above poverty and hardship.

Unless this happens, it will be difficult for Thailand to avoid the notoriety of being the world’s most unequal country.

Worawan Chandoevwit, PhD, is an Associate Professor at the Faculty of Economics, Khon Kaen University, and an adviser for the Thailand Development Research Institute.

First Published: Bangkok post on Wednesday, July 10, 2019