No more poverty in four years?

 14 mar 05

Among the many, many promises dished out during the recent election campaign, one in particular stands out. This is how Thaksin himself phrased it: “I will bring the Thai people out of poverty. Four years ahead, there will be no poor people. Won’t that be neat?”

Thaksin has been talking about ridding Thailand of poverty since 2001, and has set deadlines before. But this new target of four years is dramatic. In part, he has tied his political legacy to this one achievement. That’s very noble, and Chang Noi wishes him every success. But what are his chances?

Actually, quite good. When Thaksin says he will get rid of poverty, he means the numbers reckoned to be below a “poverty line” of a certain level of income. This statistic is estimated by a national sample survey. It’s a very rough calculation because poverty and prosperity are not only a matter of income. But at least this line is an internationally accepted definition, and gives Thaksin a target.

According to the latest figures collected about one year ago, there were 7.5 million people or 12 percent of the population still below the line.

As the economy improves, more people escape poverty, without the government having to do anything special. Over recent years, for every one percent rate of growth of GDP, the percentage in poverty has dropped by roughly 0.38 percent.

Judging from other promises made during the election, Thaksin thinks the economy will grow around 6 percent over his second term. If so, the percentage left in poverty should drop by 6 x 0.38 = 2.28 percent of population each year, or by around 1.5 million people. So over five years (the past year since the last estimate, plus the four years of this government), poverty would drop by 7.5 million people. On that basis, Thaksin would not have to do anything to make history.

In truth, it is likely to be more difficult than that. As the numbers remaining in poverty get fewer and fewer, so it becomes less and less easy to help them through economic growth alone. Economic growth overcomes poverty by creating more jobs and raising incomes. But there are some people who are too detached from the economy to benefit in this simple way. They don’t have the education, skills, capability and assets to take advantage.

So the correlation between economic growth and poverty reduction gets “stickier”. Over the past two years, the drop in poverty for every 1 percent growth in GDP has fallen from 0.38 to 0.27 percent. On that basis, five years of growth at 6 percent would still leave 2.5 million people below the poverty line. But things could get stickier and stickier year by year, so even that may be too optimistic.

International agencies like the World Bank believe growth is the best remedy for poverty, but also recognise that some forms of poverty demand different solutions. People with no land, little education, disabilities, huge families, remote residence, don’t feel the tug of economic growth. These agencies recommend “targeted” approaches which identify these “persistently poor” groups and deliver special assistance. But in practice, countries have found this approach much more difficult than it sounds in theory. Mostly this is because bureaucratic agencies tend to be ineffective at best and corrupt at worst.

This makes Thaksin’s approach important because it is innovative. He invited the poor to identify themselves by coming forward and requesting assistance. Of course, there is no guarantee that all these people really are “the poor.” But it gave government the chance to hear what people themselves think are their problems.

Now he is sending “poverty caravans” around the country to meet “the poor” and help them with debt restructuring, job training, employment schemes, and so on.

However effective this approach is, Thaksin will not reduce the statistic of those below the poverty line to zero. Even in very rich countries, there are still some in poverty. If he could come close, it would still be a great achievement. But there is one possible pitfall and one major barrier.

Because Thaksin has given this promise so much political prominence, he may be too anxious to succeed. He could be tempted to deliver short-term assistance which looks pretty for the day he declares victory, but would not be a sustainable solution. This is especially risky given that his approach depends a lot on handouts (short term) rather than strengthening people’s rights (more long term). Even worse, someone could be tempted to massage the figures to make the boss look good. NESDB is the agency which analyses the survey figures. Ever since NESDB announced that the tsunami would increase Thailand’s growth rate this year, we have no reason to take any of its numbers seriously.

The one major barrier to his chances is the south. The three southern provinces with Muslim-majority populations are one of the poorest regions in the country. In 2000, the proportion below the poverty line there was three times the national average, and higher even than the famously poor northeast. In the past, the far south was not so poor  compared to the rest of the country. It has fallen further and further behind over recent years, largely because of systematic neglect by the central government. This fact suggests one reason why many people in this region are not sure whether they want to be part of Thailand: they don’t feel they are getting a fair deal.

Thaksin has inherited the central mindset which helped to deepen this region’s poverty. His whole approach to the southern problem is based not on sympathy but on punishment. A year ago, he saw massive economic aid as one solution. But recently, he has thought about using systematic deprivation as a weapon.

Thaksin said he would die happy if he had abolished poverty from Thailand. He has to start in the far south.