Worst inequality in East Asia

23 10 2022

In a report on poverty and farming in Thailand, the World Bank has some interesting things to say:

  • Poverty has fallen over three decades, except that “[f]rom 2015 and onwards [the year after the last military coup], Thailand’s progress in poverty reduction slowed, with poverty increasing in the years 2016, 2018 and 2020.”
  • “The majority of the poor (79 percent) live in rural areas, mainly in agricultural households.”
  • With an income Gini coefficient of 43.3 percent in 2019, Thailand had the highest income inequality level in East Asia.
  • “The average income level of rural households in the Central region (excluding transfers) is over 60 percent higher than that of rural households in the North and Northeast…. In the South, it is about 50 percent higher than in the North and Northeast.”

The north and the northeast are, of course, seen as areas where pro-Thaksin parties get most support.

These data should not be a surprise. For all of its trumpeting of assistance to the poor, Gen Prayuth Chan-ocha’s economic policies have been designed to move wealth to the rich.





Rich get richer and …

18 08 2022

In case you missed it, the Bangkok Post has reported that “Listed firms’ profits hit all-time high.”

Second-quarter net profit of listed companies hit an all-time high of 320 billion baht, with energy, refining, banking and consumer goods sectors recording notable earnings, prompting analysts’ expectations that the whole-year profit could exceed one trillion baht.

According to data collected by Asia Plus Securities (ASPS), 645 listed companies reported their quarterly financial performances to the Stock Exchange of Thailand as of Aug 15. Those accounted to 87% of the overall capitalisation of the Thai bourse.

The total net profit hit the record of 320 billion baht in the quarter to June, an increase of 27.9% from the same period last year and 21.2% from 295 billion baht recorded in the previous quarter.

Meanwhile, the poor have suffered. Jobs have gone. Livelihoods destroyed.





Updated: Rich vs poor

9 07 2022

Forbes reports “the collective wealth of tycoons on the 2022 Forbes list of Thailand’s 50 richest fell nearly 6% to US$151 billion as compared to a year ago.”

The context is that the “benchmark SET Index declined just over 3% and the baht fell by nearly 12%, since fortunes were last measured a year ago.” It might be suggested that in baht terms, on average, the wealthiest saw their wealth rise.

Forbes states that the “top three richest remain unchanged from last year.”

At the top are the “Chearavanont brothers, whose wealth is down $3.7 billion, the biggest decline in dollar terms, to $26.5 billion.” At second place is “energy drink Red Bull’s sales continued to surge around the world, Chalerm Yoovidhya’s fortune, which he shares with family, got a $1.9 billion boost.” The family has a net worth of $26.4 billion. The Yoovidhya’s fugitive is not mentioned. At third is “Charoen Sirivadhanabhakdi, whose business empire includes Thai Beverage, retains the third spot with $11.2 billion, down $1.5 billion from last year.”

The full list is here. Of course, the king is missing from the list, but more on that in a later post.

For comparison during the COVID pandemic, look to recent Prachatai story reporting. A survey of people with a monthly income of less than 15,000 baht in 5 provinces “found that the financial impact in 2021 was greater than in 2020. The daily wage-earners and merchants saw their incomes decline the most in 2021, amounting to 36-39 percent from the pre-pandemic period. Employees in the service and construction sectors also lost 26-30 percent of their income.” The poor were found to spend 90% of their income on daily living expenses.

In other words, the rich continue to very well and they probably have increased the inequality gap.

Update: We did a bit of fiddling about with the figures in this Forbes list and those for previous years. Back in 2019, just before the pandemic, the richest 10 persons/families on the Forbes list had combined wealth of just under $90 billion. In 2022, the top ten are worth just over $101 billion. While the pandemic may have slowed the growth of their wealth, the wealthiest Thais are still doing very well.





Royals, capitalists, and inequality

28 01 2021

An op-ed at both Asia Sentinel and Eurasia Review, titled “Hierarchy, Power And Inequality In Thailand,” and published a few days ago, there’s a useful, short account of the country’s oligarchy. We reproduce the interesting bits:

Although Thailand is one of the region’s wealthiest states and has been cited as a success story of modernization and development, the gap between rich and poor is widening. Thailand is placed in the world’s top inequitable countries, in terms of wealth and income distribution.

According to a recent Credit Suisse study, one percent of the population holds 66.9 percent of the nation’s wealth, with 36 percent of equity held by only 500 people. According to the World Bank, poverty has grown from 7.21 percent in 2015 to 9.85 percent in 2018.

It has probably grown further with the impact of the virus.  The article then moves on to the oligarchs:

While more Thais are struggling to make ends meet, sections of Thailand’s elite class have been increasing their wealth. A survey by Money and Banking Magazine with the Faculty of Commerce and Accountancy at Chulalongkorn University using Stock Exchange of Thailand (SET) data, found that Charoen Sirivadhanabhakdi, the founder of Thai Beverage and chairman of the TCC Group, Vonnarat Tangkaravakoon, chairman of TOA Paints, and Khunying Wanna Sirivadhanabhakdi, chairperson of Sangsom Group and Beerthip Brewery, had actually increased their wealth during the pandemic.

Notice that three are mentioned but it is only two families. The discussion adds:

Thailand is economically dominated and ruled by a small close-knit elite composed of the monarchy, the military, and a small number of families who control Thailand’s major businesses. This small group is interrelated through family ties, intermarriage and long-held relationships.

Don’t for a moment think this is something recent. Back in 2011, PPT posted on “maps” of elements of the ruling class going back to the early 1950s. For us, what has changed is eerily reminiscent of the destruction of symbols of 1932. The ruling class has been re-sculpted to be royalist.

From 1932, the People’s Party and the regimes that followed, at least until World War 2, had altered the nature of the ruling class by limiting the monarchy and the princes.

It was the ninth reign that changed this. One of Bhumibol’s great successes was in rebuilding the monarchy’s enormous wealth. Forget all the propaganda about royal projects and a frugal king. He was a determined acquirer of wealth. He did this in alliance with the military and selected Sino-Thai capitalists. It is that arrangement which produced the oligarchy of today. Some of the names have changed, but there’s continuity too.

Of course, many of the top generals did exceptionally well. A much-neglected and very detailed doctoral dissertation by David Morell, “Power and Parliament in Thailand: The Futile Challenge, 1968-1971” has lots of data, including claims about the wealth and economic connections of the top generals who were also ministers. Here’s a taste:

Thailand has long been a highly unequal society, and the palace, the military and the connected capitalists will fight tooth-and-nail to protect the inequality that allows them to suck the wealth from the country. That also means controlling politics. As the op-ed has it:

Right-wing political groups with monarchist ideologies developed, representing the elite. The elite classes were boosted with ethnic Chinese business families, civil leadership developed at both provincial and local levels, and military personnel. Nationalism and monarchy became more important than democracy, a doctrine which has been espoused to maintain the establishment grip on power beyond question. This espoused cultural-political concept of ‘Thainess’ totally encapsulates the need to maintain status quo of the position of the elite within politics and society.





Prayuth’s poverty regime

17 11 2020

A story in the Bangkok Post reports that Jinanggoon Rojananan, deputy-secretary general of the National Economic and Social Development Council (NESDC), “11.4 million households are at risk of falling into poverty from the economic crisis caused by the pandemic, with the unemployment rate rising…”.

Today, there “are 637,000 households dependent on public and private financial assistance” with 467,000 of them reporting lower incomes today. These “households work in sectors that are more prone to job losses such as tourism or self-employment.” Jinanggoon claims that poverty fell between 2018 and 2019.

That poverty is claimed to have decreased between 2018 and 2019 may not be a huge surprise as the junta poured money into “buying” votes through all kinds of programs it once lambasted as “populist” or as “policy corruption.” But Jinanggoon seems to be warning of a dire downturn in 2020.

But the story of the Gen Prayuth Chan-ocha regime over several years needs to be told. Back in March, the World Bank reported:

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 in 2018 was widespread – occurring in all regions and in 61 out of 77 provinces. In the Central and Northeast, 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.

In suggesting why these increases in poverty have occurred, the World Bank states:

The population at the bottom 40 percent of the income distribution is not sharing as well in prosperity, and in the recent period of 2015-2017, consumption and income growth in this bottom 40 percent were negative. The reversal in trend among this bottom 40 during this period is related to declines in all forms of labor incomes, including a stagnation in wage growth and declines in farm and business incomes.

The full report can be downloaded as a PDF. For an academic discussion of this report and its implications, another PDF is available.

Meanwhile, some of the filthy rich are doing well, with CP having a massive rise in profits.





(Some) winners and (lots of) losers

8 06 2020

The South China Morning Post reports on what looks like an ever-increasing gap between the filthy rich and the rest. It begins:

On a roadside in a mixed Bangkok neighbourhood stands a shiny metal box – a “Pantry of Sharing” – where the haves in one of the world’s least equal countries can leave food for the have-nots, the ranks of whom are bulging as the coronavirus lays waste to the Thai economy.

Of course, it is the “maids from the grand mansions” who deliver the scraps for the “pantries.”

The report highlights that stark realities of wealth and poverty in Thailand. There’s research on this, showing how well the big families have done in recent years.

Now, already struggling, the virus and the mix of technocratic and authoritarian measures to control it and the population “is pushing Thailand’s poor deeper into penury.” The report notes that “[t]here are millions of newly unemployed…”.

As the report observes, it is “not just the poor who are facing ruin. Middle-class workers are losing their office jobs, and small and medium-sized enterprises (SMEs) are bleeding cash, with knock-on effects on mortgage, car and school payments.”

Looking at economic data, the report suggests that the economic decline is worse than during the 1997 crisis. It quotes academic Pavida Pananond who says that the hardest hit in the virus crisis “are the low and middle classes…”. She adds: “This crisis will further widen Thailand’s inequality.”

(We wonder if Pavida looked at 1997 data. Back then, the fact is that even the World Bank counted 1 million Thais falling into poverty and the top 20% saw their wealth increase through the crisis, although official Ginis declined, suggesting that the “middle class” suffered.)

The article continues:

Thailand is a country of extremes. Its king is one of the world’s richest monarchs while business monopolies with deep political connections have carved extraordinary wealth for family empires spanning from beer and duty-free to shopping malls.

The country has 57 billionaires, according to the 2020 Hurun Global Rich List, the ninth most in the world with a combined wealth of US$135 billion – more than Singapore, Japan or France.

Only China and India boast more billionaires in Asia, according to the list by the Shanghai-based publishers.

It’s raining money

Commenting on Gen Prayuth Chan-ocha’s “unprecedented plea for the tycoons’ help to float the economy and head off potential discontent…”, Pavida observes the quid pro quo: “Prayuth’s appeal for help “offers these tycoons direct opportunities to do favours for the government…”. She adds: “These tycoons know better than most what political favour can do for their businesses.”

But, as the report notes (as PPT has too), “most  the billionaires have so far offered little…”. Their “advice” has been self-serving and their funds limited and often building their own enterprises.

It goes on to observe that CP’s patriarch Dhanin Chearavanont, ignoring galloping unemployment asked for an open door for “foreign expertise.” He said, “Thailand needs around five million world-class talents to teach and lead Thais…. Give them Thai nationality to incentivise these great brains…”. We assume he means Chinese “talent.”

Forget fake  “Thai-ness” and “contributing to Thai society.” Dhanin wants more for his family and companies. His position is little different from that exhibited by the rest of the filthy rich.





Helping themselves

7 05 2020

In another of the uncritical reports vigorously polishing the posteriors of the filthy rich, it is reported that the Chirathivat family’s Central Group, best known for its hotels and retail stores, is reported to have “ approved 2.3 billion baht to boost the sustainable grass-roots economy…”.

There’s a bit of a theme going on among the rich, seeing a win-win in cheering the monarchy, royal projects, sufficiency economy and the like while portraying a concern for farmers.

But in this, at least based on the reporting, it seems Central is helping itself as well, allocating “1.5 billion baht to buy products directly from growers and community enterprises, including farm produce and SME products, for sale in stores …”. Cheeky accounting here because we aren’t told how much it already buys in this way. At the same time, two-thirds of its “giving” is shoveling goods into its stores for sale, presumably at a profit.

Of course, Central trumpets this as “support [for] 25,000 farmer households in 42 provinces.”

They say that their “contribution” is a response to the letter from Prime Minister Gen Prayuth Chano-cha.

Meanwhile, the rich seem to be finding ways to make the poor feel even more insignificant and unimportant. According to one report, the well-heeled can get gourmet take-out delivered by a butler in a black sedan.

As the report observes, “the super-rich have not forgone luxury during a pandemic which has locked the country down, crushed the economy and left millions unemployed.” It continues:

Thailand is one of the most unequal nations in the world and the chasm between rich and poor is widening as the coronavirus eviscerates jobs, leaving 22 million registering for a government cash hand-out.

Hundreds line up daily for food donations across Bangkok, a grim sign of an economic contraction forecast at more than 6% this year — the worst since the Asian financial crisis in 1997.

It concludes:

For rich Bangkokians the pandemic has brought the inconvenience of restricted movement — with an overnight curfew still in place despite some businesses reopening — but no end to the lifestyle of plenty.

Perhaps the claim of allocating millions to Gen Prayuth’s recovery (non)plan is a kind of insurance in case the poor, unemployed lower classes get uppity.

 





Patronage and ideas sclerosis

22 04 2020

Readers will be over the moon to learn that Gen Prayuth Chan-ocha’s request for help from Thailand’s filthy rich billionaires has received a positive response:

Thailand’s top business leaders are ready to help the government ease the crunch of the coronavirus crisis, and plan to offer their ideas to lift the country out of the economic quagmire.

There was much mutual back-slapping and self-congratulations:

Suphachai Chearavanont, chief executive of Charoen Pokphand (CP) Group, “hailed the prime minister’s gesture as a smart move.”

He compared Thailand’s wealthiest to ministries:

Each of the businesses is like one ministry. They are from the real sector and they are running their own micro economy. If they work under the government, the prime minister will automatically have twenty more ministries working for the administration….

A Bangkok Post editorial notes that Gen Prayuth “wanted the rich to do more to ease the suffering of the masses,” urging them “to propose tangible projects in writing by next week on how they can help more.”

The editorial proclaims: “Requesting the captains of industry to help the country during a crisis is not wrong.” It might be asked why he even has to do this.

One reason is that it is “natural” for those in a symbiotic relationship to rely on each other. Since at least the late 1950s, the relationship between the wealthiest capitalists and military rulers has been cosy and has resulted in massive exploitation of people and environment. The military has created a social order where the rich get richer and the very rich are bloated, with cash flowing to them from multiple state coffers, semi-monopolies and corrupt relationships.

A second reason is that the junta post-junta regime is bereft of talent and ideas. As worshippers at the fount of great wealth, that’s where they seek “ideas.” The trouble is that most of these Sino-Thai tycoons live in a cocoon of inter-married families, royalism, nepotism and exploitation and know little of the world of those of Comrade Gen Prayuth calls the “masses.”

In fact, he should have gone farther, asking that more people on the top of the national wealth pyramid pitch in.

The Post editorial states it “is indisputable that many business moguls have long reaped the benefits of crony capitalism. They have utilised greater resources in the country to create wealth, inevitably widening the inequality gap.”

Observing that “Thailand is among the 10 most unequal countries” in the world, it notes that those with great wealth “have enjoyed the advantages of the political patronage system.” (We recall when Jakrapob Penkair got into terrible lese majeste trouble for his description of Thailand’s patronage system.)

Yet the Post – it is owned and operated by tycoons – feels the need to defend the beneficiaries of the patronage system, saying the the huge income gap “does not necessarily mean that these billionaires are villains. They have contributed greatly to the country and the economy, created a large number of jobs and developed many social projects.”

They have created businesses that have made them hugely wealthy on the backs of poor farmers and workers. They have used some of this wealth to grease the wheels of bureaucracy and military, adding to their wealth. They have funded the monarchy, cementing a ruling class in power for decades.

When they “give,” they do so for reasons that grow their wealth and power.

It even gets into some fake history, declaring: “The Chinese ancestors of several billionaire dynasties successfully established business empires in Thailand without state support.” Which are they? We can’t think of any.

Many old books on Thailand’s capitalist class tell a different story (see, for example, Bankers and Bureaucrats (PDF), Capital Accumulation in Thailand, and even Chinese Society in Thailand: An Analytical History.

The Post reckons that asking the “super-rich” for help “does more good than harm.” There’s no evidence for this. The ideas they’ve come up with so far suggest idea sclerosis.

Has anyone looked at how much or how little tax these tycoons pay?





The rich win again

9 01 2020

PPT’s collective memory chugged into action after we read a headline at the Bangkok Post. Wichit Chantanusornsiri’s op-ed carried the title “Rich get richer, poor get the picture.” We had a vague notion that we’d heard that phrase before, and a bit of searching reminded us that it is a song by the Australian band Midnight Oil. The band has been activist, especially on environmental and indigenous issues.

Naturally enough, we were also reminded of the news about Australia’s bush fires. But it isn’t just Australia that is struggling with climate change and its impacts.

In Bangkok, as a result of severe drought and much reduced water flows in rivers, residents are facing increasingly salty tap water as sea water intrudes further up the low-flow river systems. Meanwhile, “rice fields there are already withering and the government has now banned farmers [north of Bangkok] who are growing off-season crops from using water from the Chao Phraya and Pasak rivers from Jan 20.” And then there’s the pollution: “Bangkok on Wednesday recorded the world’s third worst air quality on Air Visual, a popular app monitoring pollution, while City Hall is on high alert for a predicted rise in PM2.5 levels until the end of this week.”

But Wichit’s not talking about the environment. Rather, he’s interested in the new land and building tax law. The new tax is mainly meant to impact the “super rich people who have owned land in amounts so vast that they would have to spend a good part of their life if they wanted to walk around every plot of their land.” This is essentially the first new tax in Thailand since 1992.

Wichit points out that:

the now-dissolved National Legislative Assembly (NLA), appointed by the now-defunct National Council for Peace and Order [the military junta], … passed the new property tax law, [and] watered down the rates recommended by the Finance Ministry and instead set more lenient applicable rates for the new tax regime that will mainly affect the rich (many of whom have served in parliament).

He explains:

In effect, this law will make the rich pay less than what they should do if the ministry’s proposed rates were adopted. For example, the NLA increased the appraisal value ceiling set on residential land and buildings, defined as principal homes, eligible for tax exemption to 50 million baht from the proposed ceiling of 20 million baht.

That means 99.96% of principal homeowners will enjoy such tax exemption because there are only about 10,000 people who own homes with an appraised value of more than 50 million baht.

While the op-ed loses focus, the point that the super rich have loopholes and got a better deal than they should have is clear enough. Of course, rewarding the rich in this way is standard practice for Thailand. The rich are indeed getting richer. We can’t imagine the king being asked for his full tax dues…. Meanwhile, the average Thai struggles on relatively low salaries, with little saving, a rudimentary welfare system and a rapidly deteriorating environment of choking air and water like fish sauce.

Midnight Oil’s lyrics do seem highly relevant, covering class, environment, war:





Obscene inequality

21 04 2019

Agence France-Presse has an interesting report on the fabulously wealthy in Thailand. It begins by noting that Thailand “has 50 billionaires – ninth in global rankings – [while] 14.5 million people live on welfare…”.

It adds that wealth – or inequality – was “a hot election issue this year…”. In fact, PPT can’t think of an election this century where the inequality of wealth has not been an issue. Thailand has long been at the top of Southeast Asia’s inequality rankings, going back to when estimates were first made in the early 1960s.

The hook for the AFP story is the absurdity of the ridiculously rich playing and watching polo that witnesses “teams of jodhpur-clad Argentines and moneyed Asians gallop onto the flawless field in Chonburi as spectators spill from a pavilion – glasses of champagne in hand – for the final chukka.”

The so-called sport of kings is obscenely expensive limited to royals and the obscenely rich. We have mentioned it in a couple of posts. As well as the King Power Srivaddhanaprabha family others in jodhpurs include naturalized billionaire Harald Link. Polo allows Thailand’s hugely wealthy to hobnob globally with royals and the obscenely rich. That includes the British royals, Brian Xu, of Shanghai Marco Stationery and Sultan Abdullah Sultan Ahmad Shah now the Malaysian king.

The article notes that Thailand is home to polo because “royalty, wealth and elite networks are cross-hatched into the social fabric.”

Interestingly, the article cites Kobsak Pootrakool of the junta’s  Phalang Pracharath Party, lamenting the huge inequality in the country. He states that “[t]he top 20 per cent own 80 per cent of wealth…”. He should know as most of the very wealthy support his side of politics.

It’s actually even more skewed that that. The Credit Suisse Global Wealth Report had 1% of the richest Thais controlling 66.9% of the country’s wealth in 2018. And that probably doesn’t include a calculation for the obscenely rich monarch.

In contrast, as the report observes, “[m]ore than 14.5 million Thais qualify for welfare, with most of them earning less than US$1,000 a year.”

The report also notes that a feature of Thailand’s politics is the military coup, usually “with the support of much of the Bangkok-based elite, who underpin the kingdom’s sharp hierarchy and bristle at economic and political challenges from below.”

It is wryly observed that “[c]ash … cascades down family-run businesses, whose monopolies are inoculated against competition by friends and family in politics and generous tax breaks, while generals sit on company boards.”

The military’s task is to ensure the poor do not rise. When they have, it has jailed, beaten and murdered them.

Future Forward’s Thanathorn Juangroongruangkit, himself a scion of huge wealth, declares: “Inequality won’t be solved … unless that clot of power and money is removed,” warning that inequality is “a threat to stability in the country.”

We doubt that many in the polo set and their hi-so brethren care much at all, recognizing that their wealth depends on the state’s largess and the capacity to exploit workers at will and destroy the environment.

That allows the obscenely wealthy to party obscenely, collect palatial condominiums and super cars by the score, travel the world and buy a “justice” denied the poor.








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