วันจันทร์ที่ 5 มีนาคม พ.ศ. 2555

Reforming Thailand to Become a Welfare State (research summary)


                  โดย วรรณพงษ์  ดุรงคเวโรจน์
             It is the fact that there are vast differences in living standards around Thailand. In some regions, most people can get up invigorated in the morning and have a delicious breakfast together with their family while in other regions, most people have to get up early, rush to their paddy fields and get some fatigued after working hard the whole day. Can we reduce this gap between the rich and the poor in Thailand? Most of the developed countries such as Norway, France, Australia are welfare states whose governments provide many benefits to citizens, for example, social security pension, cash, health and education services that enable individuals to have more ability to access the basic needs of life. Thus, Thailand should be reformed to become a welfare state because it would eradicate extreme poverty, improve the well-being and standard of living of our citizens, and contribute to economic growth.
                The first obvious benefit of reforming Thailand to become a welfare state is that it would eradicate extreme poverty. There are several statistic data affirming that poverty rate has been declined in welfare state. The Nordic countries including Norway, Sweden, Iceland, Finland, and Denmark have an apparent reduction in poverty rate after reforming to welfare state. For example, Norway’s poverty rate has been declined from 9.2% of its population in 1960 to 3.7% of its population in 1991. Also, there are many statistic indicators showing that these indicators continually decline such as crime rate, mortality rate. For instance, crime rate in Finland declined from 4.8% in 1980 to 1.5% in 2005. Moreover, inequality has been declined after reforming that welfare could narrow the disparity between the poor and the rich and also emphasize the distribution of income because when the poor have more social welfare, they can raise their social status which means that their material living standards are improved. The poor will also earn more income which can lead to more consumption of their desired commodities and also there choices are extended. For example, supposed my mother gives me more money, I can buy more goods I want. So, the social problem – poverty – will be more or less solved when reforming to welfare state.
                Welfare state would also improve the well-being and standard of living of citizens. It enhances the economic variables which are the indicators of prosperity such as Gross National Product (GDP). Individuals have more income per month so it contributes to an increase in per capita Gross National Income (GNI) – it is economic variable as well. Furthermore, it boosts the domestic consumption, production and also investment. For instance, when the labors get welfare, their physical and mental capabilities are improved and they can work more that in turn increases their output produced. In general, tax is government revenue that it is levied on income and consumption in term of VAT. So, when people have more income, they buy more and they is required to pay more tax which means that the government tax revenue will increase. Government can spend this increased revenue to finance other projects or transfer it back to the poor. Moreover, it enhances the non-economic variables which are the indicators of quality of life of citizens such as literacy rate, infant mortality rate. Thus, literacy rate in Thailand tends to increase because the welfare state provides not only cash but also services to individuals such as free health care, free tuition of primary and secondary school. For example, government has to provide schools for children in rural areas and subsidize their cost of schooling not only fee but also uniform, textbook and so on. In addition, life expectancy would be longer due to an improved level of living and health care would be served more to citizens provided by government. Additionally, the unemployment insurance makes sure that labor will be protected as the unemployment insurance is a mutual funds that give labor a cash when he or she layoffs or be fired. So, it guarantees the uncertain labor’s status.
                Reforming to a welfare state would contribute to economic growth. It benefits the economic development as we have more productivity of labor due or labor’s improved health and education. They can work longer and produce more output. So, we can produce more goods to sell in the market and it will raise the Gross Domestic Product (GDP). Also, welfare helps improve the whole economic system in our country by fulfilling or completing the conditions in every market including labor market, goods and services market, and money market. Besides, our economic system would be sustainable. We have an effective human capital because when we invest in human capital through health and education projects, Thai people have a better education, health and social status. Also, the use of natural resources would be developed because we learn how to maximize method of use through education and we know what the best way to do, to implement, and to live. Additionally, the high technology would be used to expand the production system in factory as we have more knowledge about our economy and we can purchase the advanced technology from industrialized countries such as Germany, Japan. Hence, when we can use high technological process, our production progress develops and grows faster than the past and in turn contributes to economic growth as well. Then, our nation wealth would distribute more to citizens. When the disparities between the rich and the poor are narrowed, the political conflict or social chaos would be reduced or eliminated. We would live together happier. We have to sacrifice our work time to protest about social inequalities if nation’s wealth is unevenly distributed.
                As you can see, it is quite useful to reform Thailand to become a welfare state. The elimination of penury is able to take place in our country. Also, people’s prosperity, happiness and living standard could be ameliorated. Lastly and more importantly, our economy would be in the path of economic growth and in turn benefits everyone.
                The problem of poverty is one the most crucial social issue that persists in Thailand for a long time. The gap between the business elite in Bangkok metropolis and the farmer in rural areas is large. The reason may be that in the past we have the bureaucratic system that divides people into several classes. We have inferior people and superior people. Although, we have slave emancipation in period of King Chulalonglongkorn, Rama V, the social in nowadays is not different from the past but now we use money to judge and classify people. Suwit Mesinsee, Sasin institute, Chulalongkorn University said that Thailand has large income inequalities between the top quintile and the bottom quintile. The top people including manager of firm, employer hold the 69% nation’s wealth while the bottom people including farmer, labor hold only 1% of nation’s wealth. Moreover, the uneven distribution is not only income but also education, health, opportunity, political voice, and the rights of man that could lead to the conflict or social chaos, for example, the mob to protest about the low price of agriculture output or crime rate – when people have no money and our society is materialism that attracts robber to snatch it. Furthermore, Thailand is aging society that there are more than 8 million people whose age is over 60 years old as 11% of all our population. Soaring to aging society is needed for government to pay attention about them because 40% of old people in Thailand still work and 90% of them are informal worker which means that they do not get any social welfare except the 500 baht a month which is inadequate to live in this world today.
                We can deny that every countries want economic growth which means that we want growth in Gross National Product (GDP) or real per capita income. Although Thailand is in the path of economic growth, it is only dimension about the overall income on average increase. It does not mean the poor in rural areas have more opportunities to access the basic needs of life. Increased income may stem from the top quintile and this nation’s wealth is concentrated on the rich rather than the poor. However, if we consider the U.N. measurement - Human Development Index (HDI) which there are the three dimensions including longevity (Life expectancy), Knowledge (Adult literacy and educational enrollment), and standard of living (GDP at PPP), Thailand HDI 2011 is 0.682 higher than 2010 0.680. It is very low when we compare with developed countries, for example, Norway’s HDI is 0.943 and Australia’s HDI is 0.929. Even though HDI does not show about the social unrest and there are some faults but it indicates that our country is less developed and also grows slower than those developed countries. Also, if we consider the Thailand poverty line in 2010 is 1,678 baht per month that increases from 1,586 in 2009. There are 5.1 million people live below this poverty line as 7.75% of overall population in Thailand while the average income of Thai population is 12,510 baht per month. This difference emphasizes that the general people spend 12,510 a month that they can afford goods and services desired while the 5.1 million people have to spend only 55.93 baht a day to survive. This income inequality lead to the Gini Coefficient Index that measure the proportion of national wealth that is distributed proportion of population. In 2010, Gini Index in Thailand is 0.48. It is higher than the acceptable rate at 0.4 and it’s relatively high when comparing with developed countries, for example, Sweden’s Gini Index is 0.230. If we roughly consider about average income and Gini Index, we found that we have a better situation than the past. But if we consider the other indicators such as crime rate in Thailand, it is crucial. Crimes in Thailand in 2010 are 551,100 people that higher than in 2009 which crimes are 516,700 people. Also, the Warm-family Index is declined from 63.18 in 2011 to 63.08 in 2010.
                According to these problems, researcher would like to know about the ways to reform Thailand to become a welfare state so as to implement the social problems and also the structure of tax system, education system, health system. Furthermore, the demand for social welfare is beneficial for policy makers to consider and get relevant to their strategies. Researcher believe that welfare state can solve the chronic problem in Thai society including the penury, the income inequalities, different social status, crime rate and also enhances and restore Thai economy to grow steadily and prepare the path to be a developed countries in the coming future. In conclusion, researcher view welfare state as a stable mechanism defending Thai citizens, society, economy from economic crisis in the future.
4. Purposes of the study
            4.1 To analyze the structure of Thailand’s welfare including education system, health system, and tax system and also the situation of penury in Thailand.
                4.2 To find the social demand for social welfare and the statement of existing social welfare problem.
                4.3 To find the ways for Thailand to become a welfare state.
                4.4 To propose the ways to develop Thai citizen’s living standard.
5. Research Methods
            There are two methods of study. Firstly, researcher uses the secondary data to analyze the situation of poverty and structure of social welfare in Thailand. Researcher uses several sources of data sought in library and internet and then compares the data each other so as to derive the unbiased information. The data collected consists of the tax system, education system, health system, national income per capita,  Gross National Product (GDP), Gross National Income (GNP), poverty rate, poverty line, numbers of  the poor whose income lie below the national poverty line (threshold), Gini Coefficient, Human Development Index (HDI), Warm-family index, crime rate and the social welfare in Thailand and also the statistic data in other countries, for example, Finland, Norway, Germany, France and so on. Most of the Thailand’s data is in term of statistic data from the Thailand Development Research Institute (TDRI) and the National Statistic Office of Thailand (NSO).
                Secondly, researcher uses the primary data from questionnaire to observe about the social demand for welfare. The research populations are 11,437. According to Taro Yamane, at confidence level 95% or alpha 0.05, there are 400 samples. Researcher use the stratified random sampling and accidental sampling to divide the samples into four groups including government officer, university routine officer, university casual officer and routine worker. Additionally, there are many statements including the current received social welfare, the satisfaction of existing social welfare within 5 years, demand for additional social welfare, demand for reforming Thailand to become a welfare state, opinion about the society such as inequalities, tax, the willingness to pay and the desired percentage of salary per month to sacrifice to government so as to provide more social welfare, social problem that respondent are facing now and also the demand for social welfare that respondent has to rank the most preferred social welfare. For research instruments, researcher uses several techniques including open ended question, close ended question through check – list, ranking question, and rating scale followed the Likert scale. The information was analyzed in or to find the statistic value including mean, median, mode, percentage, and test the relationship with Pearson’s chi-square test.


6. Results
            There are six fields of result. Firstly, from the study of Thailand’s tax structure, researcher found that Thailand’s tax structure is different from other developed country’s structure, for example, the U.S.’s tax structure heavily relies on individual income tax, ad valorem while Thailand’s tax structure heavily relies on value-added tax and corporate income tax. In fact, we should heavily impose the tax liability on income as individual income tax because it affirms the government revenue because most people have monthly salary. Furthermore, the exemption of Thailand’s tax structure is likely to coddle the upper- and high- income through insurance or investment in LTF and RMF. In 2010, there are 9 million people send the personal income tax return but the actual tax payers are only 2.3 million people because when the income was exempted, their income is less than ฿150,000 which means that they have not to pay tax in that year. If government does not want to face the problem of deficit, there are two possible ways. The first is to reduce the government expenditure. The latter is to raise their revenue through taxation. Individual income tax reform is required for Thai government to have enough income so as to finance the government outlay. Secondly, from the study of Thailand’s education structure, researcher found that the compulsory education in Thailand is 9 years that it is very low. Knowledge in grade 3 is useless when those children come to labor market. Education is one of the human capital that have direct befit accrue to learner and social benefit in term of positive externality. Thus, the compulsory education should be at least 15 years or grade 9. However, government can also develop an incentive-policy to encourage people to send their children to school rather than working, for example, government can subsidize the school tuition or special funds to family sent their children to primary and secondary school. Thirdly, from the study of Thailand’s health structure, researcher found that there is universal free health cover the whole population in Thailand. Everyone benefits this scheme and it is easier than using gold card in hospital. Citizens have not to do gold card but admit directly to any government general hospital or public hospital. However, government should provide every health care service to citizens without any exemption such as transplantation or mental problem. Also, government should have consider the elderly that can not conveniently go to hospital by sending doctor to cure them at home at least 2 time per years in order to check the health status of community. Fourthly, from the study of Thailand’s existing social welfare, researcher found that there are many social welfare provided by government now covered the eleven groups of people. For example, the low-cost housing project, the foster home for vagrant, trafficking, HIV person, elderly, tramp child and so on. However, it is inadequate because it is served to some province not all of regions in Thailand. For example, the impoverished-women organization that locates in only eight provinces. It is not covered throughout the country. The concept of social welfare is not deliberately care only the impoverished people but also the overall citizens so as to develop human capital meanwhile it is necessary to have a good performance in economic activity. Fifthly, from the study of Thailand’s poverty situation and income inequalities, researcher found that Thailand has a better situation in poverty rate because it steady declines very much. However, nowadays, there are 5.1 people spend less than ฿1,678 per month – it declines from 15 years ago that Thailand has 10.7 people spend less than ฿838 per month. Moreover, the Gini Index showing about the inequality in distribution of income declines a little from 0.52 in 1994 to 0.48 in 2010. However, even though the poor and income inequalities have a better scene but the Warm-family Index and Crime rate is worst. Warm-family Index declines from 66.28 in 2011 to 63.08 in 2010. Also, people who are crime increase from 304 people per hundred thousand people in 2001 to 551.1 people per hundred thousand people in 2010. Thus, we can say that our citizen’s living standard is better than the past due to decreased poverty and income inequalities but the social unrest is likely to be more severe as well. Sixthly, from observing through questionnaire, we found that samples 74.8% are moderately satisfied the social welfare provided by government within 5 years. Samples 96.3% want more social welfare from government and 95% want Thailand to become a welfare state. Samples 84.3% desire to pay more to help finance government expenditure for providing welfare and the 42.5% of agreed people with reforming desire to pay 5% of their income. Samples 71.5% are facing the standard of living problem such as poverty, inequalities and high cost of living. Also, samples 65.5% want in-cash benefit social welfare assistance from government. Consequently, this research is a good guideline for government to develop the policy so as to improve the citizen’s living standard and develop the country in the future.

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