The Beaches Are Nice. The Inequality? Not So Much
WHY YOU SHOULD CARE
The future of Thai politics may depend on one rising problem: staggering inequality.
In 2012, Vorayuth Yoovidhya, the 27-year-old scion of Red Bull’s billionaire founder, sped through Bangkok’s streets in a Ferrari. According to police, he was going over 100 mph when he hit and killed a police sergeant, dragging the man more than 100 yards. Authorities followed a trail of brake fluid to Vorayuth’s home and found him drunk. In a politically contentious time — Thailand would see a coup two years later — it was a unifying issue for the public who wanted to see Vorayuth in a courtroom. Rich kids getting away with murder seemed an apt metaphor for Thai society.
Economic inequality has long been a rallying issue for political parties in Thailand. That includes recent campaigning in the election planned for later this month — the first held since 2014’s coup d’état, and one that’s already been postponed five times. Unfortunately for the ruling military junta, fixing inequality isn’t something it can boast about. Lurking behind Thailand’s idyllic beaches and peaceful temples are some troubling statistics.
In 2018, Thailand was the most unequal country in the world, with the richest 1 percent owning 67 percent of all wealth.
That’s according to an analysis by global investment firm Credit Suisse. In 2016, the same company ranked Russia and India ahead of Thailand — Thailand’s richest 1 percent then only owned 58 percent of the country’s wealth. Globally, the richest 1 percent now own 47.2 percent of the wealth, down slightly from 47.5 percent in 2016. In the U.S., it’s 35.3 percent. Thailand’s Gini index, a measure of inequality where zero percent equals total equality and 1 percent equals all the wealth owned by one person, was calculated in the report as 90.2 percent.
The Thai government was quick to dispute that. One official noted that this portion of the report only examined 40 countries and claimed its data was outdated. The country’s National Economic and Social Development Board claimed that inequality in the country has actually narrowed in the past 10 years, citing the World Bank’s Gini index for the country — down to 45.3 percent last year compared to 49.9 percent in 2007, although that calculation doesn’t include capital held by the rich.
It’s not surprising that Thailand’s government is on the defensive. In 2017, reporters noticed that the nation’s deputy prime minister, Prawit Wongsuwan, was wearing a high-end Richard Mille watch. Further investigation turned up several other luxury watches in his collection. Thai social media and commentators denounced the extravagance, deemed to be well beyond Prawit’s salary, while the politician claimed he’d borrowed the watches from a deceased friend. Prawit was investigated for corruption but acquitted in December of last year.
The inequality card has been used extensively by leading opposition parties, says Pavin Chachavalpongpun, a professor of Southeast Asian studies at Kyoto University and author of Reinventing Thailand: Thaksin and His Foreign Policy. “It will be the winning issue,” says Pavin. The Pheu Thai Party, the latest incarnation of the party founded by former Prime Minister Thaksin Shinawatra, has emphasized its populist economic policies in the poor northern reaches of the country, advancing policies to subsidize health care and loans while putting a hold on farmers’ debt. Politician and popular member of the party, Khunying Sudarat Keyuraphan, is a harsh critic of the government’s new welfare scheme — called the “poor people’s card” by Thais — as an ineffective approach to solving structural issues of inequality. And the Future Forward Party, new to Thai politics but considered able to disrupt the political landscape, has made progressive policies and inequality a focus — despite the founder being a billionaire automotive tycoon’s heir.
Thailand enjoyed a rather laissez-faire economic model during the second half of the 20th century, even as its neighbors — especially Laos, Cambodia and Vietnam — fought brutal wars in the name of class revolution. The ruling regime was never tolerant of radical leftist economic positions. A relatively small communist insurgency was crushed in the 1970s. In 1976, more than 100 left-wing student organizers at Thammasat University were massacred by police.
But at the same time, the country experienced a huge amount of economic growth. Thailand’s gross domestic product went from $88.4 billion in 1990 to more than $455 billion in 2017, largely due to its export-focused economy. Those gains weren’t evenly spread, though. The main driver of inequality in Thailand, according to Pasuk Phongpaichit of Chulalongkorn University, is that income flows mostly to urban dwellers, leaving those in the informal sector and farming behind. But the median wealth per adult is just $1,085, less than half the average in the Asia-Pacific region, according to the Credit Suisse report.
Thais seem especially concerned with their role in the economy nowadays, says Pavin. “I think the issue has been increasing in our consciousness,” he says. Now it’s up to the opposition to make the case that they can steer the country’s wealth in the right direction … though as of a couple of months ago, more than half of respondents to a poll said they were still undecided on whom to vote for.
Meanwhile, Red Bull heir Vorayuth never did end up in court. Thai police refused to issue a warrant for his arrest.