Saturday, September 1, 2007

Was Rising Income Equality to Blame for Thailand's Coup?

Note: this post now has updates (bottom).

Recently The Economist ran a story that looked at the growth in inequality in Asia. This chart caught my eye, because it showed that from the 1990s to the 2000s, Thailand bucked the trend: among the nations of Asia, Thailand had made great progress in reversing income inequality.

That this is one legacy of the policies of deposed Thai Prime Minister Thaksin, there can be little doubt.

I wonder whether the trend also might help to explain why certain segments of Thai society strongly supported the coup d'etat. I have long suspected this. Perhaps noticing that the poor were quickly "catching up," there was some level of resentment on the part of better educated, middle class Thais.

For example, it did not escape this foreigner's attention that the salary of a university-educated civil servant or teacher is not that much higher than that of an almost illiterate Bangkok taxi driver from the countryside.

Whereas the situation of poor Thais generally improved, the relative income level of educated, middle-class appeared not to have increased to the same extent (particularly after the economic crash of 1997). From the perspective of the better educated, this situation did not seem fair.

The coup of September 19, 2006 appeared to have had the overwhelming support of middle-class Thais. The nature of Thailand's growing economic equality might go a long way toward explaining the strength of that support. Namely, the -- largely unspoken -- perception that the poor were doing better at the expense of "their betters."

Update #1: Bangkok Pundit (BP) has posted a response to the controversy this post seems to have generated in the discussion section of his blog about whether inequality actually decreased that much under Thaksin. One of his readers, R&W, wrote:
I think the idea that "income gaps" were closing is grade A BS. It's another fabrication by apologists for the crook [Thaksin].
Among other illuminating charts and tables, Pundit presents a chart from the World Bank that looks at inequality within Thailand by region. After I have had a chance to look over this data more closely, I intend to write a follow-up post on this issue.

Update #2: Blogger R&W takes issue with points raised in this post. He questions whether Thaksin should be given much of the credit for reducing poverty, pointing to a World Bank report. BP responds to R&W here. (One of R&W's arguments is that the Thaksin-era data could be bogus.* I find BP's response to this concern most persuasive: "If Thaksin manipulated the figures, why doesn't the current government tell us the real figures, they have now had 11 months.")

* R&W disputes how I characterize his argument here, responding on the comments page of BP's blog:"I wanted to say that I didn't suggest the data was "bogus" as in totally fake, as quoted by you in your blog. I suggested it could be highly inaccurate and that Thaksin or other figures would be very liberal with such data." For the record, R&W wrote: "Did Thaksin or other governments perform their own research? If so, can we accept they [. . .] may have been liberal with their data collation?"

Update #3: My new post points to an overlooked piece of strong evidence that the poverty reduction during Thaksin's tenure was more remarkable than his critics suggest. See Under Thaksin, Thailand's poverty fell at historic clip, despite relatively sluggish economy. Also, check out what BP has to say about Thaksin, Poverty and Household Debt. His post raises an interesting question: Was improving the ability of poor Thais to accumulate debt "poverty alleviation" by another name?

Update #4: I just posted "Zen and the meaning of poor people's debt in Thaksin's Thailand" which ties together the ideas and content mentioned in Update #3.