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Extreme Inequality, Democratisation and Class Struggles in Thailand

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Extreme Inequality, Democratisation and Class Struggles in Thailand WID.WORLD Issue Brief 2019-1 March 2019 Extreme Inequality, DemocrATISATION AND Class Struggles IN Thailand Thanasak Jenmana & Amory Gethin OvERVIEW Thailand IS fiNALLY SET TO HAVE A GENERAL ELECTION ON 24 MarCH 2019 AFTER fiVE YEARS OF MILITARY GOVERNMENT AND A LONG PERIOD OF POLITICAL UNCERTAINTY. In THIS note, WE ARGUE THAT A MAIN SOURCE OF POLITICAL INSTABILITY IS BROUGHT BY Thai- land’s EXTREME LEVELS OF income, WEALTH AND REGIONAL inequalities, AS WELL AS BY THE RISING POLITICISATION OF CLASS CONflICTS AROUND REDISTRIBUTIVE ISSUES WHICH FOLLOWED THE Asian Financial Crisis. New HISTORICAL SERIES ON INEQUALITY IN Thailand POINT TO VERY HIGH LEVELS OF in- COME CONCENTRation. In 2016, TOP 10% EARNERS RECEIVED MORE THAN HALF OF THE NATIONAL income, WHICH IS HIGHER THAN WHAT CAN BE OBSERVED IN MOST WORLD Regions. The SOCIAL POLICIES IMPLEMENTED BY SUCCESSIVE DEMOCRATIC GOVern- MENTS SINCE THE 2000s HAVE BEEN SUCCESSFUL AT PROMOTING A FAIRER DISTRIBUTION OF LABOUR earnings. Inequalities REMAIN high, HOWEVER, DUE TO THE STRONG con- CENTRATION OF WEALTH AND CAPITAL incomes, WHICH ARE NOT ADDRESSED BY EXISTING fiSCAL policies. The post-1997 PARTY POLITICS SUCCESSFULLY PUT AN END TO A LONG PERIOD OF RISING INCOME disparities, BUT Thailand REMAINS ONE OF THE MOST UNEQUAL SOCIETIES IN THE WORLD TODAY. Most IMPORTANTLY, CLASS CLEAVAGES CAN BE SEEN IN VOTING BEHAVIOURS AND PARTY IDENTIfication, BUT NOT SO IN TERMS OF PREFERENCE FOR democ- RACY AND POLITICAL ideologies. As A Result, THE CLASS struggles, BOTH IN THE STREETS AND IN THE VOTING booths, ARE NOT A STRUGGLE FOR DEMOCRATIC PRocesses. They ARE RATHER CONflICTS OPPOSING THE ESTABLISHED MIDDLE CLASS AND elites, WHO LOST THEIR RELATIVE ECONOMIC AND POLITICAL POWER, TO THE POOR AND THE EMERGING MIDDLE CLASS WHO HAVE BENEfiTED FROM A NEW AND FAIRER ECONOMIC ERA AND PUT STRONG VALUES ON GENERAL elections. Media enquiries: [email protected]. WORLD INEQUALITY LAB Introduction Thailand: ONE OF THE MOST UNEQUAL ECONOMIES IN THE world? After EIGHT YEARS SINCE THE LAST election, fiVE YEARS OF mili- TARY RULE LED BY RETIRED ArmY GenerAL PrAYUTH Chan-Ocha, How EXTREME IS INCOME INEQUALITY IN Thailand? There AND MULTIPLE postponements, Thailand IS fiNALLY SET TO IS A CONSENSUS AMONGST RESEARCHERS THAT Thai ECONOMIC HAVE A GENERAL ELECTION ON March 24 THAT WOULD DECIDE INEQUALITY HAD WORSENED RAPIDLY SINCE AT LEAST THE 1960s WHO WILL PERHAPS SIT IN POWER FOR THE NEXT FOUR Years. TO AND UP UNTIL THE 1990s. HoweVER, THERE IS STILL ACADEMIC BE sure, THIS GENERAL ELECTION IS NOT ENTIRELY DEMOCRatic: CONTROVERSY ON HOW IT HAS EVOLVED SINCE THE mid-1990s FOR instance, THERE IS A POTENTIALITY OF AN ‘outsider’ PRIME AND THE Asian Financial Crisis. In A RECENT STUDY, Jenmana MINISTER. The 2017 constitution, Thailand’s 20th, WAS (2018) HAS BEEN ABLE TO TRACK VERY PRECISELY THE EVolu- ALMOST ENTIRELY WRITTEN BY THE MILITARY, AND WILL GRANT Ex- TION OF PERSONAL INCOME INEQUALITY IN Thailand BETWEEN CLUSIVE POWER TO THE JUNTA TO SELECT 250 SENATORS –each 2001 AND 2016 BY COMBINING SURVEys, DATA FROM adminis- 1 OF WHOM WILL HAVE A VOICE EQUAL TO THAT OF AN ELECTED TRATIVE TAX RETURNS AND DATA FROM NATIONAL accounts. His REPRESENTATIVE IN DECIDING WHO IS TO BE THE NEXT PREMIER. STUDY REVEALS THAT INCOME DISPARITIES IN Thailand REMAIN SUBSTANTIALLY HIGHER THAN WHAT HOUSEHOLD SURVEYS ALONE What IS CLEAR IS THAT THE RETURN OF MILITARY GOVERNMENTS IN suggest. Thailand IN 2006 AND 2014, DESPITE POPULAR SUPPORTS FOR STRONGER DEMOCRATIC INSTITUTIONS IN THE 1990s, IS THE Ex- In 2016, THE RICHEST 10% CITIZENS RECEIVED 53% ACT MANIFESTATION OF THE PARTY POLITICS THAT FOLLOWED THE OF Thailand’s NATIONAL income, WITH AVERAGE in- 1997 CONSTITUTION THAT WAS DEEMED MOST DEMOCRatic. COMES OF ABOUT $8,000, AND THE TOP 1% ALONE RECEIVED 20%, EARNING OVER $30,000 PER month. By MOBILISING high-quality DATA SOURCES FROM SURVEys, Meanwhile, THE BOTTOM HALF TAX RETURNS AND NATIONAL accounts, OUR RECENT WORKING OF THE POPULATION RECEIVED PAPER ON INCOME INEQUALITY IN Thailand FOUND THAT Thai Income INEQUALITY IN 13% OF NATIONAL INCOME AND inequalities, DESPITE HAVING MODERATELY DECREASED SINCE Thailand IS AMONGST THE EARNED ONLY $400 PER MONTH 2001, REMAIN AMONGST THE MOST PRONOUNCED IN THE world. HIGHEST IN THE world. ON AVERAGE (see TABLE1). 2 Mass POLITICAL MOBILISATIONS OF THE POOR IN THE POOREST In 2016, TOP 10% This MEANS THAT AN AVERAGE REGIONS OF THE COUNTRY CAME BY THE INTRODUCTION OF sys- EARNERS RECEIVED 53% PERSON IN THE BOTTOM 50% TEMATIC REDISTRIBUTIVE POLICIES FAVOURING THE low-income OF NATIONAL income. WOULD NEED TO WORK ALMOST Voters, AT THE EXPENSE OF THE MIDDLE AND UPPER classes. 4 MONTHS IN ORDER TO EARN This HEAVILY CONTRASTS THE UNEVEN DEVELOPMENT OF THE THE INCOME PER DAY OF THE RICHEST 1 percent, AND ONE Thai ECONOMY OF THE EARLIER ERas, WHICH HAD PRIMARILY MONTH TO EARN THE INCOME PER DAY OF THE RICHEST 10 per- BENEfiTED THE BUSINESS ELITES AND THE BangkOK area. cent. It ALSO means, PUT DIFFERENTLY, THAT A TOP 1% EARNER Declining INEQUALITIES IN Thailand HAVE CONCURRED WITH IN Thailand NEEDS TO USE ONLY ONE DAY OF HIS PERSONAL in- THE GRADUAL EMERGENCE OF STRONG POLITICAL DIVIDES be- COME TO HIRE FOR SEVERAL MONTHS A low-skilled WORKER ON TWEEN RURAL AND URBAN VOTERS and, MOST IMPORTANTLY, be- A full-time BASIS FOR HIS PERSONAL needs. TWEEN POORER AND RICHER Thai citizens. These NEW ten- Figure1 SHOWS THE EVOLUTION OF THE TOP 10 percent’s SIONS HAVE PARADOXICALLY NOT CONSOLIDATED THE ROLE OF NATIONAL INCOME SHARE OVER 2001-2016 IN COMPARISON ELECTED BODIES IN MEDIATING SOCIAL CONflicts. TheY HAVe, TO OTHER MAJOR economies. Although THERE IS SLIGHT re- ON THE CONTRARY, LED TO A BACKLASH AGAINST DEMOCRACY. 1Jenmana, Thanasak (2018), “DemocrATISATION AND THE Emer- GENCE OF Class Conflicts: Income Inequality IN Thailand, 2001-2016”, WID.WORLD WORKING PAPER n. 2018/15, Version: NoVEMBER 2018. 2These NUMBERS ARE REPRESENTED IN 2017 dollars, IN PURCHASING POWER PARITY terms. WID.WORLD Issue Brief 2019-1 1 WORLD INEQUALITY LAB Figure 1. Income INEQUALITY IN Thailand IN COMPARATIVE PERSPECTIVe: TOP10% share, 2000-2016 60 55 50 45 40 35 30 2000 2002 2004 2006 2008 2010 2012 2014 2016 Thailand Brazil Russia United States China Europe SourCE: Jenmana, T. (2018), ‘DemocrATISATION AND THE Emergence OF Class Conflict: Income Inequality IN Thailand, 2001-2016’ AND WORLD Inequality Database. All SERIES CAN BE DOWNLOADED FROM http: //wid.world. DUCTION OF INEQUALITY OVER THE period, Thailand REMAINS fiGURES SHOULD BE INTERPRETED WITH caution, GIVEN THE LOW ONE OF THE MOST UNEQUAL SOCIETIES IN THE world. Between QUALITY OF DATA SOURCES AVAILABLE TO MEASURE wealth, THEY 2001 AND 2016, THE Thai RICHEST 10 PERCENT RESIDENTS ARE SUGGESTIVE OF THE EXTREME LEVELS OF SOCIAL AND eco- EARNED MORE THAN HALF OF THE NATIONAL INCOME EVERY YEAR. NOMIC INEQUALITIES THAT Thailand IS FACING TODAY. This IS SIGNIfiCANTLY HIGHER THAN WHAT CAN BE OBSERVED IN MAJOR WORLD regions, INCLUDING Europe, China, THE United The POLITICS OF Thailand’s UNEVEN States OR Russia. LEVELS OF INCOME INEQUALITY IN Thailand DEVELOPMENT SINCE THE 1960s TODAY ARE IN FACT CLOSER TO THOSE OBSERVED IN Brazil, A COUNTRY WHICH IS well-known FOR ITS EXTREME INEQUALITY The LEVELS OF INCOME INEQUALITY VISIBLE TODAY IN Thailand LEGACY. It IS ALL THE MORE STRIKING THAT INCOME DISPARITIES ARE THE RESULT OF A long-run POLITICAL AND ECONOMIC pro- CAN REMAIN SO HIGH IN A COUNTRY WITH SUCH A SMALL popu- CESS WHICH has, UNTIL RECENTLY, PRIMARILY BENEfiTED TO LATION (less THAN 70 MILLION IN Thailand VERSUS MORE THAN TOP INCOMES LIVING IN URBAN AREAS AND IN PARTICULAR IN 200 MILLION IN Brazil). Bangkok. The MILITARY GOVERNMENTS OF THE post-war ERa, Thailand IS NOT ONLY ONE OF THE MOST UNEQUAL COUNTRIES IN ESPECIALLY BETWEEN THE 1960s UP UNTIL THE 1980s, WERE THE WORLD IN TERMS OF income. It IS also, ACCORDING TO THE HIGHLY SUCCESSFUL IN IMPLEMENTING MACROECONOMIC poli- CrEDIT´ Suisse, ONE OF THE COUNTRIES WHERE THE CONCENTRa- CIES TO CONTINUOUSLY FUEL THE ECONOMIC growth. With THE TION OF WEALTH IS THE HIGHEST IN THE world.3 While SUCH HELP OF globalisation, US fiNANCIAL aid, GROWING manufac- TURING AND BANKING industries, AND FOREIGN DIRECT INVest- 3The COUNTRY WHERE WEALTH INEQUALITY IS THE highest, ACCORDING TO ment, ECONOMIC GROWTH BETWEEN THE SIXTIES UP TO THE THE RECENTLY PUBLISHED 2018 Global WEALTH Report OF THE CrEDIT´ Suisse. WID.WORLD Issue Brief 2019-1 2 WORLD INEQUALITY LAB TABLE 1. Thresholds, AVERages, AND NATIONAL INCOME SHARES IN Thailand, 2016 Threshold (monthly) AVERAGE INCOME (monthly) Income GROUPS Number OF ADULTS 2017 Thai Baht 2017 Dollar PPP 2017 Thai Baht 2017 Dollar PPP Income SHARE FULL POPULATION 51,954,056 0.00 0.00 18,660.62 1,521.12 100% Bottom 50% 25,977,028 0.00 0.00 4,940.92 402.76 13.24% Middle 40% 20,781,622 8,613.06 702.09 15,707.17 1,280.37 33.67% TOP 10% 5,195,406 37,782.93 3,079.88 99,072.33 8,075.90 53.09% incl. TOP 1% 519,541 161,489.22 13,163.82 377,426.42 30,765.97 20.23% TOP 0.1% 51,954 609,716.13 49,701.11 1,426,473.58 116,279.22 7.64% TOP 0.01% 5,195 2,150,996.33 175,338.80 5,668,244.08 462,047.80 3.04% TOP 0.001% 520 8,679,363.33 707,499.66 24,329,050.75 1,983,186.37 1.30% SourCE: Jenmana, T. (2018), ‘DemocrATISATION AND THE Emergence OF Class Conflict: Income Inequality IN Thailand, 2001-2016’. All DATA SERIES CAN BE DOWNLOADED FROM http:/wid.world.
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