Chuck Bao
9/14/2009, 09:55 PM
Okay, I know that the vast majority of you don’t give a flip about Thailand. Still, this is pretty interesting that the leading think-tank in the country, the Thai Development Research Institute (TDRI), sponsored by the Asian Development Bank and the World Bank, thinks Thailand should become a welfare state.
What does that mean?
I’m not sure. It is pretty clear that they are railing against politicians, politicians’ close association with the large corporate and politicians’ tendency to spend money that the state doesn’t have.
I am guessing that they are effectively attacking democracy, but they can’t do that directly without being heavily criticized.
That is why I am posting this. I am guessing that they think politicians are the cause of the problem. They think that people cannot be trusted to elect responsible politicians.
The cure is a welfare state that takes out the populism and still provides for the people. They want bureaucrats and the social elite to run the country.
As a stock market analyst, this is getting to me. I am busy trying to do damage control.
This talk of the social elite running the country is fanning the flames of major social discord in Thailand. The Red Shirts are planning a major rally this weekend to mark the anniversary of the 2006 coup. The Abhisit government cabinet will likely evoke the Internal Security Act today to counter a supposedly peaceful rally.
I am sure that this all sounds very strange to Americans, but I am not so sure that similar trend could be seen in other countries in the world. I have posted before that there is a real threat to democracy.
Anyway, this is the Nation newspaper article on the TDRI seminar and published report, again sponsored by the World Bank.
http://www.nationmultimedia.com/search/read.php?newsid=30112104&keyword=Welfare+State
Think-tank calls for welfare state
By TDRI’s ‘survival strategy’ research finds disparities in income and assets are major
Published on September 13, 2009
The country's leading think-tank has proposed a "survival strategy" - an exit from the current economic and political distress by transforming the country into a welfare state that would help bridge opportunity and income disparity.
They believed this would address the root causes of the current political conflicts that have pushed the country to the brink.
The Thailand Development Research Institute led by TDRI chairman Dr Nipon Poapongsakorn said the institute's research had found that disparities in income and assets was the main cause of the ongoing political conflicts that could spiral into a crisis.
He said the way out of the political crisis is to reform the economy by creating a welfare state that would help close the gap between the rich and the poor, and thus reduce social and political conflicts.
The research findings showed that the richest had 69 times more assets than the poorest. In addition to 10 per cent of the poorest people, about half the country's population lacked job security.
The current market economic system fails to bridge economic inequality and the state also adds salt to injuries for failing to provide equal opportunity for everyone to access financial credit, knowledge, natural resources because the state represents a large business conglomerate that monopolises businesses. Only a handful group of politicians and businessmen access to business privileges and benefit from the monopoly. The current tax structure does not help reduce assets and wealth concentration.
Wealth concentration has a significant correlation to political power as the country has seen business tycoons enter political arena.
Not only does political power protect business interests and concessions. Being politicians in power means they can write regulations to expand their own political and economic base and make rules that penalise business rivals. This makes business of politicians distort the market economy. This is the case especially in a country that lacks political stability.
"The more assets they have the more the motivation for the businessmen to come to power," Nipon said.
Nipon also quoted a research by Dr Somkiat Tangkitvanich, which found that in 2004, companies run by Shinawatra family provide 141 per cent better return than other companies.
The research also found that companies having connections with ministers enjoy 18.5 per cent higher profit than other companies.
The economics presented the research at a seminar organised by the Thai Journalist Association and the King Prachadhipok's Institute at a Bangkok hotel.
He said a welfare state was the answer because the system could bring sustainable democracy.
While the market economy failed to provide economic equality, extreme populist policies may trigger a coup or revolt by the rich because they would be hardest hit.
Two economic crises in 13 years have made populism popular and every party is forced to adopt the policies. However populist policies bring about great public debt and a lack of fiscal transparency.
A welfare state also helps the middle-to-lower class manage their "risk" caused by fluctuating income, unexpected expenses since they do not have enough savings and liquidity or financial resource to turn to for help in times of financial troubles.
The country also has a group of people that the state and NGOs cannot extend a helping hand to such as the disabled, the homeless and the elderly if the country is still run under the current economic system, Nipon said.
Meanwhile, the Nation newspaper, which had been the best news source in Thailand, appears to be on board with ditching democracy in favor of a welfare state, but they aren’t fully on board with huge deficit spending. Now, that is funny. Someone should think again about the World Bank and their minions. Who heads the World Bank?
http://www.nationmultimedia.com/2009/09/14/opinion/opinion_30112137.php
EDITORIAL
Idea of a welfare state is worth exploring
By The Nation
Published on September 14, 2009
Improvement in the current social structure is called for and could help avoid political chaos Over the weekend, the Thailand Development Research Institute (TDRI) released a comprehensive report at a conference held by the King Prajadhipok Institute on how Thailand might transform itself into a welfare state. The TDRI believes that a welfare-state strategy would help improve social equity and strengthen the democratic foundation of Thailand.
The TDRI is quite concerned about the growing tendency towards economic populism. The Thaksin government began this trend by offering handouts to the poor. Subsequent governments, including the current Abhisit government, have followed suit.
The populist policies, in which the state aims to pump money into the grassroots, might win votes for politicians but in the long run they are not sustainable. Evidence does not support an assumption that populist policies help improve income distribution.
Much worse, populist policies will end up increasing public-sector debt, which leads to an economic crisis like many South American countries have experienced. But populist policies are like an addictive drug. Once everybody tries it, it is difficult to let go.
The TDRI has instead proposed a welfare-state strategy as an alternative to populist handouts. This would help address the root cause of the current political conflict and social inequity. Dr Nipon Poapongsakorn, head of TDRI, believes that if the disparities in income and assets are not tackled, Thailand could plunge into yet another political crisis. The TDRI has gone to great lengths to propose that a welfare state would help close the gap between rich and poor, and thus reduce social and political conflicts.
The research findings showed that the richest had 69 times more assets than the poorest.
In addition to 10 per cent of the poorest people, about half the country's population, lacks job security. The current market economic system fails to bridge inequality.
The state also adds salt to the injuries by failing to provide equal opportunity to everyone to access financial credit, knowledge, natural resources because the state represents a large business conglomerate that monopolises businesses.
Only a handful of politicians and businessmen access the business privileges and benefit from the monopoly.
The current tax structure does not help reduce concentration of assets and wealth in the hands of a few. Concentration of wealth has a significant correlation to political power as the country has seen business tycoons enter the political arena.
The TDRI believes without equal economic opportunities and social equity, chances of Thailand developing a democratic system will diminish. At present, the social structure of Thailand is very vulnerable. Most of the poor and middle-class do not enjoy job security. The elderly are also vulnerable to being left out and become poorer when they get older. The Thai society is inching towards an ageing society. Most of the Thai workers do not have social-security coverage.
The elements of a welfare state are that all Thais must have basic protection and rights and get appropriate assistance when they are in trouble. Yet Thailand's spending on welfare is very low. About Bt252 billion, or 2.8 per cent, of the gross domestic product is being allocated to welfare, compared with 20-31 per cent in countries belonging to the Organisation for Economic Cooperation and Development.
We support the concept of a welfare state. But further discussion is needed over how we can finance the welfare state. Most developed countries, with strong welfare protection, are facing unsustainable public debt.
Once the welfare state is adopted, it is difficult to stop the skyrocketing |cost, which does not match tax revenue. We should move in this direction cautiously.
What does that mean?
I’m not sure. It is pretty clear that they are railing against politicians, politicians’ close association with the large corporate and politicians’ tendency to spend money that the state doesn’t have.
I am guessing that they are effectively attacking democracy, but they can’t do that directly without being heavily criticized.
That is why I am posting this. I am guessing that they think politicians are the cause of the problem. They think that people cannot be trusted to elect responsible politicians.
The cure is a welfare state that takes out the populism and still provides for the people. They want bureaucrats and the social elite to run the country.
As a stock market analyst, this is getting to me. I am busy trying to do damage control.
This talk of the social elite running the country is fanning the flames of major social discord in Thailand. The Red Shirts are planning a major rally this weekend to mark the anniversary of the 2006 coup. The Abhisit government cabinet will likely evoke the Internal Security Act today to counter a supposedly peaceful rally.
I am sure that this all sounds very strange to Americans, but I am not so sure that similar trend could be seen in other countries in the world. I have posted before that there is a real threat to democracy.
Anyway, this is the Nation newspaper article on the TDRI seminar and published report, again sponsored by the World Bank.
http://www.nationmultimedia.com/search/read.php?newsid=30112104&keyword=Welfare+State
Think-tank calls for welfare state
By TDRI’s ‘survival strategy’ research finds disparities in income and assets are major
Published on September 13, 2009
The country's leading think-tank has proposed a "survival strategy" - an exit from the current economic and political distress by transforming the country into a welfare state that would help bridge opportunity and income disparity.
They believed this would address the root causes of the current political conflicts that have pushed the country to the brink.
The Thailand Development Research Institute led by TDRI chairman Dr Nipon Poapongsakorn said the institute's research had found that disparities in income and assets was the main cause of the ongoing political conflicts that could spiral into a crisis.
He said the way out of the political crisis is to reform the economy by creating a welfare state that would help close the gap between the rich and the poor, and thus reduce social and political conflicts.
The research findings showed that the richest had 69 times more assets than the poorest. In addition to 10 per cent of the poorest people, about half the country's population lacked job security.
The current market economic system fails to bridge economic inequality and the state also adds salt to injuries for failing to provide equal opportunity for everyone to access financial credit, knowledge, natural resources because the state represents a large business conglomerate that monopolises businesses. Only a handful group of politicians and businessmen access to business privileges and benefit from the monopoly. The current tax structure does not help reduce assets and wealth concentration.
Wealth concentration has a significant correlation to political power as the country has seen business tycoons enter political arena.
Not only does political power protect business interests and concessions. Being politicians in power means they can write regulations to expand their own political and economic base and make rules that penalise business rivals. This makes business of politicians distort the market economy. This is the case especially in a country that lacks political stability.
"The more assets they have the more the motivation for the businessmen to come to power," Nipon said.
Nipon also quoted a research by Dr Somkiat Tangkitvanich, which found that in 2004, companies run by Shinawatra family provide 141 per cent better return than other companies.
The research also found that companies having connections with ministers enjoy 18.5 per cent higher profit than other companies.
The economics presented the research at a seminar organised by the Thai Journalist Association and the King Prachadhipok's Institute at a Bangkok hotel.
He said a welfare state was the answer because the system could bring sustainable democracy.
While the market economy failed to provide economic equality, extreme populist policies may trigger a coup or revolt by the rich because they would be hardest hit.
Two economic crises in 13 years have made populism popular and every party is forced to adopt the policies. However populist policies bring about great public debt and a lack of fiscal transparency.
A welfare state also helps the middle-to-lower class manage their "risk" caused by fluctuating income, unexpected expenses since they do not have enough savings and liquidity or financial resource to turn to for help in times of financial troubles.
The country also has a group of people that the state and NGOs cannot extend a helping hand to such as the disabled, the homeless and the elderly if the country is still run under the current economic system, Nipon said.
Meanwhile, the Nation newspaper, which had been the best news source in Thailand, appears to be on board with ditching democracy in favor of a welfare state, but they aren’t fully on board with huge deficit spending. Now, that is funny. Someone should think again about the World Bank and their minions. Who heads the World Bank?
http://www.nationmultimedia.com/2009/09/14/opinion/opinion_30112137.php
EDITORIAL
Idea of a welfare state is worth exploring
By The Nation
Published on September 14, 2009
Improvement in the current social structure is called for and could help avoid political chaos Over the weekend, the Thailand Development Research Institute (TDRI) released a comprehensive report at a conference held by the King Prajadhipok Institute on how Thailand might transform itself into a welfare state. The TDRI believes that a welfare-state strategy would help improve social equity and strengthen the democratic foundation of Thailand.
The TDRI is quite concerned about the growing tendency towards economic populism. The Thaksin government began this trend by offering handouts to the poor. Subsequent governments, including the current Abhisit government, have followed suit.
The populist policies, in which the state aims to pump money into the grassroots, might win votes for politicians but in the long run they are not sustainable. Evidence does not support an assumption that populist policies help improve income distribution.
Much worse, populist policies will end up increasing public-sector debt, which leads to an economic crisis like many South American countries have experienced. But populist policies are like an addictive drug. Once everybody tries it, it is difficult to let go.
The TDRI has instead proposed a welfare-state strategy as an alternative to populist handouts. This would help address the root cause of the current political conflict and social inequity. Dr Nipon Poapongsakorn, head of TDRI, believes that if the disparities in income and assets are not tackled, Thailand could plunge into yet another political crisis. The TDRI has gone to great lengths to propose that a welfare state would help close the gap between rich and poor, and thus reduce social and political conflicts.
The research findings showed that the richest had 69 times more assets than the poorest.
In addition to 10 per cent of the poorest people, about half the country's population, lacks job security. The current market economic system fails to bridge inequality.
The state also adds salt to the injuries by failing to provide equal opportunity to everyone to access financial credit, knowledge, natural resources because the state represents a large business conglomerate that monopolises businesses.
Only a handful of politicians and businessmen access the business privileges and benefit from the monopoly.
The current tax structure does not help reduce concentration of assets and wealth in the hands of a few. Concentration of wealth has a significant correlation to political power as the country has seen business tycoons enter the political arena.
The TDRI believes without equal economic opportunities and social equity, chances of Thailand developing a democratic system will diminish. At present, the social structure of Thailand is very vulnerable. Most of the poor and middle-class do not enjoy job security. The elderly are also vulnerable to being left out and become poorer when they get older. The Thai society is inching towards an ageing society. Most of the Thai workers do not have social-security coverage.
The elements of a welfare state are that all Thais must have basic protection and rights and get appropriate assistance when they are in trouble. Yet Thailand's spending on welfare is very low. About Bt252 billion, or 2.8 per cent, of the gross domestic product is being allocated to welfare, compared with 20-31 per cent in countries belonging to the Organisation for Economic Cooperation and Development.
We support the concept of a welfare state. But further discussion is needed over how we can finance the welfare state. Most developed countries, with strong welfare protection, are facing unsustainable public debt.
Once the welfare state is adopted, it is difficult to stop the skyrocketing |cost, which does not match tax revenue. We should move in this direction cautiously.