RICH, MIDDLE CLASS AND POOR IN THAILAND

RICH IN THAILAND

The counties with the most billionaires in 1996 were: 1) the United States (129); 2) Germany (53); 3) Japan (37); 4) Hong Kong (14); 5) Thailand (12); 6) France (11) and 7) Mexico and Indonesia (10 each). By 2013, Thailand wasn’t even in the top 25. It ranked 10th in Asia, tied with Singapore, with 10 billionaires.

Charoen Sirivadhanabhakdi was Thailand’s richest person in 2006, with a net worth of $3.4 billion. He owns Thai Beverage, Thailand’s largest brewer and the producer of Chang beer and Mekhong whiskey. His wealth in 2005 was estimated at $3 billion.Thai Beverage has been a sponsor of Everton, an English Premier League soccer team. On his ranking today, See Below.

Thailand’s Richest According to Forbes

1) Dhanin Chearavanont & family: $9 billion as of August 2012: Age 73, married with 5 children; Source of Wealth: Food; Residence: Bangkok, Thailand; Heads agribusiness conglomerate Charoen Pokphand Group, which father founded as small Bangkok seed shop. Over the past year the stock price of the world’s third-biggest operator of 7-Eleven stores, CP ALL, grew 27 percent; his food producers Charoen Pokphand Foods and PT Charoen Pokphand also fared well. Shares fortune with three brothers. [Source: Tatiana Serafin, Forbes, August 29, 2012]

2) Chirathivat family: $6.9 billion. Descendants of Central Group's founder, Tiang Chirathivat, including families of his 3 wives and 25 children,share fortune largely derived from ownership of Central Retail and 60 percent stake in listed developer Central Pattana, whose stock price is up 35 percent over the past year. Developing an impressive luxury hotel and shopping mall complex called Central Embassy. Invest in China, Burma and Italy.

3) Charoen Sirivadhanabhakdi: $6.8 billion. Age: 68, married with 5 children. Source of Wealth: Drinks, self-made; Residence: Bangkok, Thailand. His Thai Bev has been aggressively bidding for Asia Pacific Breweries (Tiger beer) against Heineken, which likewise has an existing stake and is trying to expand into Asian markets to counter weak European consumer demand. Over the past few months, Thai Bev acquired a 26 percent stake, in dominant APB holder Fraser and Neave. Meanwhile, Charoen's son-in-law said he would purchase F&N's direct holding.

4) Yoovidhya Family: $5.4 billion. Source of Wealth: Drinks, self-made; Residence: Bangkok, Thailand. Patriarch Chaleo passed away in March 2012, leaving heirs a vast estate based on his 49 percent stake in iconic drinks brand Red Bull as well as interests in hospitals, real estate and sports teams. Several of his 11 children are involved in the business: Son Saravoot is a managing director at Red Bull Thailand; son Jiravat looks after hospital and real estate interests; son Sakchai is also a property developer.

5) Krit Ratanarak: $3.1 billion. Age: 66, divorced, 1 child. Source of Wealth: Media, real estate. Runs his family's Bangkok Broadcasting & TV, which operates market leader, Channel 7. Family also has property interests as well as stakes in Bank of Ayudhya (stock price up over 30 percent) and Siam City Cement. Shares fortune with family, including mom, son, 5 sisters. *His individual shareholding in family fortune, made FORBES billionaires list for the first time enabled him to join the FORBES billionaires [...] more

6) Chamnong Bhirombhakdi & family: $2.4 billion. Married with 3 children. Source of Wealth: Drinks. Chairman of Boon Rawd Brewery, country's oldest, founded by late father. Sells Singha, Thai, Leo beer brands, which are gaining market share vis-à-vis No. 3 Charoen?s ThaiBev; also shills soda water, iced green tea. Shares fortune with families of 2 late brothers. Sponsors Premier League teams Manchester United and Chelsea

7) Vichai Maleenont & family: $1.8 billion. Eight children, Source of Wealth: Media. Lady Gaga concert helped boost fortunes of BEC World, Thailand's largest media group, which he cofounded. Revenues from shows and concerts up as well as ads rates; as a result company stock price increased 33 percent over the past year. Remains chairman and CEO but transferred shares to his children. Son Prasan is COO.

8) Aloke Lohia: $1.6 billion. Age: 54, married, three children. Source of Wealth: Polyester; Residence: Bangkok, Thailand. His integrated polyester company Indorama Ventures suffering from low prices in Asia; stock down 19 percent over the past year. Son of successful Indian entrepreneur took company public in Thailand in 2010. * Has lived in Thailand for over 20 years; now a Permanent Resident

9) Prasert Prasarttong-Osoth: $1.2 billion. Age: 79, married, 5 children. Source of Wealth: Hospitals. Former surgeon becomes a billionaire as share price of Bangkok Dusit Medical Services, the hospital group he cofounded (with Pongsak Viddayakorn, No. 27), rises more than 50 percent for the second straight year on higher revenues and profits based on booming medical tourism trade. His Bangkok Airways, run by son, Pruttipong, is slated for an IPO in early 2013.

10) Vanich Chaiyawan & family. $1.16 billion. Married, 8 children. Source of Wealth: Insurance, drinks. Chairs Thai Life, nation's second-largest life insurance company; its 40,000 agents are driving double digit premium growth. Together with sons Chai &Vinyu, daughter Weena own stakes in Singaporelisted brewer & distiller, Thai Beverage founded by Charoen Sirivadhanabhakdi (No. 3).

Chaleo Yoovidhya and Red Bull

Red Bull energy drink was invented in Thailand. Its creator Chaleo Yoovidhya died in March 2012 . The family was ranked fourth richest in the country this year by Forbes magazine with a net worth of $5.4 billion. The Yoovidhya family own a wide range of businesses, including shares in the energy drink brand, hospitals, real estate and the sole authorized importer of Ferrari cars in Thailand.

In his obituary, David Segal wrote in the New York Times: Chaleo Yoovidhya earned billions by creating and marketing Red Bull, the energy drink that has added a caffeinated jolt to countless all-nighters and parties. With little formal education, Mr. Chaleo founded a small pharmaceutical company, TC Pharmaceutical Industries, in the early ’60s. He started producing antibiotics but later turned to concocting a beverage that was loaded with caffeine, as well as an amino acid called taurine and a carbohydrate called glucuronolactone. [Source: David Segal, New York Times, March 18, 2012]

Christened Krathing Daeng — “red bull” in Thai — it was marketed to laborers and truckers in need of a boost. The drink, along with its many imitators, became the unofficial beverage of the expansion that turned Thailand into one of Asia’s so-called tiger cub economies in the ’80s. Krathing Daeng’s path to international phenomenon began when Dietrich Mateschitz, a sales representative for the German household products company Blendax, found Asian pharmacies peddling a variety of syrups as potent pick-me-ups and discovered that they cured the jet lag he experienced on his frequent flights around the world. He got in touch with Mr. Chaleo, one of Blendax’s Asian licensees, and soon the two had a partnership that would bring Red Bull to the rest of the world. According to an article in Forbes, each man put up $500,000, and each took a 49 percent stake, with the last 2 percent going to Mr. Chaleo’s son Chalerm.

It was Mr. Mateschitz who came up with the slogan “Red Bull gives you wings,” and for a drink with more than double the amount of caffeine found in Coca-Cola, the name was apt. With its distinctive silver can, Red Bull was embraced by students who needed to stay alert into the wee hours, and by carousers who wanted to perk up while they imbibed. Mixologists, amateur and professional alike, dreamed up a slew of new cocktails, like the Vod-Bomb: Red Bull and vodka.

There were tales about the dangers of this combination, including a 2007 article in the British newspaper The Daily Mail with the headline “Mixing vodka and Red Bull can be deadly, warn experts.” Such articles, as well as the occasional ban in European countries, only added to Red Bull’s cachet with its fans, which tend to be young and male. An aura of danger was part of the brand. The company’s Web site contains videos of stunts like a man back-flipping off the Tower Bridge in London.

Red Bull long eschewed traditional media outlets, like television, and focused on sponsoring student parties, sporting events and athletes, with a special emphasis on the stars of extreme sports. The strategy worked. In January 2011, the privately held company reported that it had sold 4.2 billion cans of Red Bull, generating revenue of $5.1 billion. It claimed a 70 percent share of the energy drink market. Forbes estimated Mr. Chaleo’s wealth at $5 billion and ranked him the 205th-richest man in the world.

In terms of personality, Chaleo Yoovidhya was the opposite of the adrenalized fun his drink inspired. He was reclusive and, according to one of his sons, had not given an interview in 30 years. He was born in central Thailand, the son of a poor Chinese family. His parents reportedly sold fruit and ducks, and among his early jobs was a stint as a bus conductor. “I never heard words like ‘difficult’ or ‘impossible’ from my father,” his son Saravudh said in a video recorded for a series to be posted next month on the Web site of The Nation, the Thai newspaper. “He dedicated his life to his work and never complained that he was tired. He really enjoyed work and sometimes carried on until 1 or 2 a.m.”

His death was reported by the state broadcaster MCOT, which cited the Thai Beverage Industry Association. The Nation, a Thai newspaper, reported that he was 90, while several other news media outlets in Thailand said he was 88. Forbes recently put his age at 80. Information on survivors was incomplete. He was said to have been married twice and to have 11 children.

Red Bull Heir Involved in Fatal Hit-and-Run Crash with his Ferrari

Newley Purnell wrote in The New Yorker, “Early on a Monday morning in September, 2012, Vorayuth Yoovidhya, an heir to Thailand’s Red Bull energy-drink fortune, allegedly sped down a Bangkok street in his silver Ferrari and crashed into a police officer on motorcycle patrol. The police officer died at the scene; Vorayuth, who is known as one of Thailand’s most prominent young princelings and goes by the nickname Boss, did not stop. He drove his battered sports car home, police said, dragging the officer’s body some distance along the way. When police detained the slight, baby-faced Vorayuth, he was photographed wearing a Christian Dior polo shirt, with a baseball cap pulled low to shield his downcast eyes, dollar signs along its brim. Vorayuth admitted to hitting the officer, but said the man had darted in front of his Ferrari. He was released on bail and has been free for the past year, but still faces a ten-year sentence. [Source: Newley Purnell, The New Yorker, September 12, 2013 +++]

In September 2012, ABC News reported: “An heir to the Red Bull energy drink fortune was arrested after he fatally hit a policeman with his Ferrari, dragging the officer’s body down a Bangkok street early in morning, police said. Vorayuth Yoovidhya, 27, admitted to investigators that he had been behind the wheel of his Ferrari when he struck the policeman, but claimed the officer had abruptly cut him off, the Associated Press reported. [Source: ABC News, September 4, 2012]

“Oil streaks stretching several blocks led police to a gated estate owned by the Red Bull family, local media reported. Once a family lawyer was present, police searched the grounds, where they found the damaged Ferrari, which was taken to the Thing Lor police station as evidence, the Bangkok Post reported. A log book keeping track of the family’s vehicles also indicated Yoovidhya had been behind the wheel at the time of the accident, despite the fact a household employee tried to take responsibility, the newspaper reported. Yoovidhya’s lawyer said his client was still in shock and that he was prepared to offer funeral expenses and compensation, the Bangkok Post reported. The 27-year-old faces charges of causing death by reckless driving and escaping an arrest. The car involved in the accident was valued at about 30 million baht ($1 million).” [Ibid]

In October 2012, AP reported: Vorayuth Yoovidhya “tested positively for cocaine in his blood, Thai authorities said Saturday. Police Lt. Akarawin Sukhonthawit said that while Vorayuth tested positively for the drug, it was not yet clear if he ingested it before the deadly Sept. 3 crash. Vorayuth was not taken into custody until several hours after the accident. Vorayuth’s family paid the officer's siblings 3 million baht ($97,000) to forestall a civil lawsuit. [Source: AP, October 20, 2012]

“The case has attracted attention because of the widespread public perception that the rich and well-connected in Thailand enjoy immunity from punishment for wrongdoing. Vorayuth missed a scheduled appearance Friday at a Bangkok police station. Police are seeking to determine if he had a legitimate reason for missing his appointment before taking further action, which could include revoking his 500,000 baht ($15,900) bail.” [Ibid]

In September 2013, The New Yorker reported: “Vorayuth’s alleged crime made headlines once more when he failed to appear for an indictment hearing in Bangkok. The reason: according to his lawyer, Vorayuth had fallen ill during a business trip to nearby Singapore, and was recuperating there on doctor’s orders. That meant that Vorayuth’s indictment was postponed for the sixth time; police now say they are seeking an arrest warrant.

Vorayuth is a grandson of Chaleo Yoovidhya, the self-made co-founder of the world’s most popular energy-drink company. The Yoovidhyas are worth $7.8 billion, making them Thailand’s fourth-richest family, according to Forbes. (Chaleo died in March of 2012, six months before the hit-and-run.).

Red Bull Heir and Inequality in Thailand

Vorayuth is a grandson of Chaleo Yoovidhya, the self-made co-founder of the world’s most popular energy-drink company. The Yoovidhyas are worth $7.8 billion, making them Thailand’s fourth-richest family, according to Forbes. (Chaleo died in March of 2012, six months before the hit-and-run.).

Newley Purnell wrote in The New Yorker, Critics have argued that Vorayuth’ case embodies “an all-too-common attitude among ultra-rich Thais who consider themselves exempt from the nation’s laws...Some argue that the family’s economic and political clout will insure Vorayuth is never adequately punished. “Any ordinary suspect would have been indicted long ago,” a well-known attorney told the Bangkok Post. Many Thais have taken to online forums and social media to complain about the impunity of the country’s wealthiest. Some have also pointed out that former Prime Minister Thaksin Shinawatra, a controversial billionaire who was overthrown in a 2006 military coup, has himself remained abroad for several years to avoid a corruption charge that he says is politically motivated. [Source: Newley Purnell, The New Yorker, September 12, 2013 \+/]

“Despite the global economic troubles of recent years, the wealth of the world’s richest families has continued to soar, according to a report released by UBS and the Singapore-based private-wealth consultancy Wealth-X. The richest residents of Thailand are doing particularly well: the report said that the total wealth of Thailand’s “ultra high net worth” individuals—those worth at least thirty million dollars—has increased nearly sixteen per cent in the past year, from ninety-five billion dollars to a hundred and ten billion dollars. That was the biggest gain among Southeast Asian countries. \+/

“The numbers are striking: Vorayuth’s family fortune is equal to about 2.1 per cent of Thailand’s 2012 gross domestic product. The combined wealth of Thailand’s top four families is equal to about twelve per cent of the country’s G.D.P. In a nation where the daily minimum wage was recently raised to roughly ten dollars and the average yearly income is five thousand two hundred and ten dollars, Vorayuth’s family reportedly paid more than ninety thousand dollars to the dead police officer’s siblings to prevent a civil lawsuit. And, as some commentators have noted, a Ferrari like the one Vorayuth was driving retails for at least several times that sum. \+/

“Given all this, one might read the Vorayuth episode, and the response to it, as a symbol of a growing gulf between Thailand’s wealthy and poor. (The Times described the case, in a headline, as a “Reflection of Inequality in Thailand.”) It may come as a surprise to learn that the evidence shows just the opposite: inequality is shrinking in Thailand. There is still a significant divide between rich and poor in this nation of sixty-seven million—as is the case in many countries around the world—and Thailand lags behind some of its regional peers in terms of income distribution. One measure of inequality that economists analyze is the Gini index, in which zero represents perfect equality and a hundred reflects perfect inequality. Thailand’s Gini index was thirty-nine in 2010, according to World Bank data, making it less equal than Laos, Indonesia, Cambodia, and Vietnam, but more equal than Malaysia and the Philippines. But Thailand’s level of inequality has fallen over the past couple of decades, not risen: the Gini coefficient of thirty-nine is down from forty-three in 2000. That’s because Thailand’s steady economic growth since it emerged from the Asian financial crisis has helped reduce poverty throughout the country. In other words, the rich have been getting richer, especially in recent years, but so have many other Thais. \+/

“Over the weekend, protesters in Brazil took to the streets once again—a smaller-scale reprise of the massive June protests—to voice their anger that politicians and the rich seem to get special treatment. In Brazil, as in Thailand, inequality has actually declined in recent years; some have suggested that the growing middle class has meant Brazilians feel more emboldened to speak out against inequality when they might have stayed quiet in the past. Decreasing inequality, in other words, means more protests against the inequality that exists. Could something like this be playing into ordinary Thais’ response to the Vorayuth incident? \+/

“Perhaps, in addition to a newly empowered Thai middle class, citizens simply have more tools at their disposal now to voice their displeasure with wayward young scions who seem to get away with their misdeeds. Had the hit-and-run taken place before the advent of the Web, it may well have been mentioned in newspapers and discussed around dinner tables. But now, with message boards and Facebook, among other outlets, their dissent is easier to quantify, and the narrative of a princeling, a silver Ferrari, and a dead policeman becomes all the more vivid.” \+/

Middle Class in Thailand

One of the greatest changes in society following World War II was the emergence of a middle group that included affluent bureaucrats, medium-scale entrepreneurs, educated professionals, and small shopkeepers. The lower class included steadily employed wage workers and unskilled laborers who worked intermittently, if at all. Those in the middle and lower groups had not traditionally constituted self-conscious classes; those categories were relatively new and just beginning to develop common interests. Labor unions, for example, hopelessly divided over political differences in the past, made active attempts to unite on a number of issues, such as basic health and social benefits, in their negotiations with the government and the private sector. [Source: Library of Congress]

According to the Library of Congress: “An occupationally heterogeneous middle class emerged in the years after World War II, especially after 1960. Its members were diverse with respect to their control over wealth, their social status, and their access to power. The simplest distinction within this amorphous category was based partially on income and partially on occupation, but subcategories thus drawn were rather mixed. The wealthier segment of this middle class (for convenience, the upper middle class) consisted of bureaucrats and military men at middle levels (including higher provincial officials), salaried administrative and managerial workers in private enterprise, middle-level businessmen, provincial notables and landlords living in provincial towns, and professionals. A much larger group, the petty bourgeoisie, comprised those who provided a range of services, largely in Bangkok, to the ruling class, the upper middle class, and to tourists and other foreigners. Often this petty bourgeoisie consisted of small-scale independent businessmen, some of them shop owners, others furnishing their services contractually. Some were salaried clerical staff. Both upper and lower segments of this middle category include many Chinese as well as Thai. [Ibid]

Steady economic growth since the 1960s has helped the Thai middle class of entrepreneurs, business people , professionals and white collar workers expand and become a significant slice of the Thai population. By some measures they have grown from 15 percent of the workforce in 1960 to 34 percent in 2000. If anything the pace has picked up in recent years. In 1990, only 9 percent of Thai households had a monthly income of 15,000 baht (about $500) or more. By 2004 this figure had risen 29 percent. [Source: takashi Shiraishi, Yomiuri Shimbun, April 2006]

The Thai middle class is concentrated mainly in Bangkok and other urban areas. About 60 percent were born in Bangkok, where they received a relatively high level of education. They have few connections with the relatively poorly-educated rural masses. [Ibid]

In recent decades middle class Thai society has become more modernized, globalized and liberal. Many people live in air-conditioned apartments, have jobs tied to the global economy and smoke Western cigarettes and drink Western wines. For a while British-made Dunhill cigarettes were the most sought after brand of smokes among the movers and shakers in Thailand. Some made enough to take annual ski trip to Europe and send their kids to universities in the United States.

Disparity of Income in Thailand

Household income or consumption by percentage share: lowest 10 percent: 2.8 percent; highest 10 percent: 31.5 percent (2009 est.) Distribution of family income - Gini index: 53.6 (2009); country comparison to the world: 12. 42 (2002). [Source: CIA World Factbook]

Thailand had one of the highest income disparities in Asia in the 1990s. At that time the Asian countries with the greatest income disparity between rich and poor (determined by how many times more income the richest 20 percent of the population has than the poorest 20 percent) were: 1) Thailand (15.5); 2) Malaysia (11.7); 3) Singapore (9.6); 4) Hong Kong (8.7 percent)... compared to 9.0 in the U.S. and 32 in Brazil. Things have improved somewhat since then as income lvels of Thailand’s poor have risen and the middle class has expanded.

There is sharp divide in Thailand between the bright lights of Bangkok and rural masses, who live mostly in northern and northeastern Thailand. Incomes per person in Bangkok are three times the national average and more than nine times the average in Thailand’s impoverished Northeast. The sharp difference in income level and economic opportunity are also reflected in politics, with rural people being strong supporters of former Prime Minister Thaksin and his Thai Rak Thai party while the Bangkok elite and middle class support the Democratic Party. See History and Politics.

In April 2012, The Nation reported: The widening gap between the rich and poor in Thailand and other Asian countries has threatened the region's economic and social stability, according to the Asian Development Bank. Income divisions are rising markedly in the region, where the richest 1 per cent of households account for 6-8 per cent of total income. Close to 20 per cent of total income went to the wealthiest 5 per cent in most countries, according to the "Asian Development Outlook 2012" released by the ADB. [Source: Wichit Chaitrong, The Nation, April 13, 2012]

Asia's high growth has led to large reductions in poverty but it is accompanied by rising inequality in many countries. The Gini coefficient, a key measure of inequality... has leapt from 39 to 46 in the last two decades in Asia. Technological progress, globalisation and market-oriented reforms drove high growth in Asia. But they favoured capital over labour, skilled over unskilled workers and cities over areas, resulting in a widening gap of income, the report added. Thailand does worse on the issue than many countries in Asia. Its Gini coefficient is currently 42, said Luxom Attapich, the ADB's senior economist for Thailand. Inequality can weaken the basis for growth itself by undermining social cohesion, worsening the quality of governance and increasing pressure for inefficient populist policies, she said. [Ibid]

On income disparities in Thailand in the 1990s the World Bank reported: While the overall reduction in poverty during 1988-92 is encouraging, the increase in income inequality is less reassuring. Just as consistently as poverty fell, income distribution in all regions became more skewed. For the Kingdom as a whole, the Gini coefficient rose from 0.485 to 0.536; the ratio of income received by the richest fifth of the population to that received by the poorest fifth increased from 12 to 15; and, the relative income share of the richest tenth of the population to that of the poorest tenth rose from about 21 to 28. [Source: World Bank]

One reason for concern about this increase in income inequality is its negative impact on poverty reduction. Had inequality not risen, the reduction in poverty during 1988-92 would have been even greater. The sharp decrease in poverty that occurred despite the distributional shift only shows the strength of the effect of income growth. This increase in inequality also distinguishes Thailand from its middle-income neighbors in East Asia, and if inequality were to continue rising, it could hamper the prospects for sustained medium-term growth.

Among the various components of income, wages and salaries and entrepreneurial income contributed most to higher inequality. Although wage earnings, unlike entrepreneurial income, were distributed more equally, their overall effect was disequalizing because the expansion of formal-sector employment occurred more among better-off households. The increase in inequality was also not uniform across the Kingdom. Wider income differentials between households in different locations (both rural/urban and by region) accounted significantly for the increase in overall income inequality. Hence, differences between regions became more prominent as sources of higher inequality.

Poverty and the Poor in Thailand

Population below poverty line: 8.1 percent (2009 est.). [Source: CIA World Factbook]

According to a report released by the World Bank in the early 1990s: Thailand's longer-term record in poverty reduction until the end of the 1980s had been impressive. Poverty incidence had fallen from over 57 percent in the early-1960s to about 22 percent in 1988. And significant complementary gains had been made in most social indicators including infant mortality, primary school completion, and life expectancy. Despite this secular improvement, there were concerns because the reduction in poverty had slowed during the 1980s with the number of poor actually rising between 1981 and 1988. This slowing pace of poverty reduction, especially in the poorest regions, raised concerns that the link between poverty reduction and economic growth had weakened. [Source: World Bank]

“Analysis of data from the Socio-Economic Surveys (SES) show that the slowdown in poverty reduction during the 1981-88 was a temporary lull in the longer-term decline of poverty in Thailand. Using official poverty lines, poverty incidence fell sharply during 1988-92 from over 22 percent to about 13 percent. The dramatic reduction in the number of poor was matched by declines also in the depth and severity of poverty. [Ibid]

Although the reduction in poverty incidence and its severity occurred across the country, the decline was not uniform across regions. By 1992, while poverty incidence was very low in and around Bangkok (just over 1 percent), more than a fifth of the population in the Northeast and a seventh of those in the North remained poor. The most distinctive characteristic of the poor in Thailand, therefore, remains where they live. In 1992, over three-quarters of the poor lived in the Northeast and the North, significantly more than the population shares of these regions. The other notable locational feature is the concentration of poverty in rural areas. Almost 85 percent of the poor lived in rural areas in 1992, and this proportion had risen since 1988.

Educational attainment is a second attribute that differed significantly between the poor and non-poor. While about 85 percent of household heads in 1992 had a primary education or less, almost all the poor were in this category. Occupational status of the household head also differed between the poor and non-poor: almost three-quarters of the heads of poor households in 1992 were involved in agriculture, compared to half those in the overall population. The link between poverty and agriculture is further illustrated by the relationship between the household's socioeconomic status and income level. While about a third of the population in 1992 was in households that owned and operated land, almost 58 percent of the poor were in such households. The poor also differ from the non-poor in terms of certain aspects of demographic structure. Poor households are larger — on average, they have almost one additional person — and have higher dependency ratios than the non-poor.

Two demographic features, however, that do not appear to distinguish poor and non-poor households are age of the household head and gender. With regard to age, the structure of poor households is almost the same as that for the non-poor with the only emerging exception being that a larger proportion of poor households are headed by individuals over 60. The association between gender and poverty is even weaker. The proportion of poor households headed by women is roughly the same as that for the non-poor. This finding contrasts with that in many other developing countries where female-headed households are over-represented among the poor.

Rural Poor

In its country profile on Thailand written in the late 1980s, the Library of Congress reported: “Rural peasants still comprised the majority of the population. They were, however, much more differentiated than in the past. The peasantry could be defined in terms of its desire for or ownership of land or other agricultural resources, such as teak forests. The issue of landlessness in the central plain arose in the early twentieth century but was soon resolved by the opening of previously untilled areas in the northern part of the country. [Source: Library of Congress]

As a result of rapid population growth in the 1960s and 1970s, international competition in a number of Thailand's traditional agro-economic industries, and migration to the city, landlessness was again on the rise in the 1980s. The number of rural Thai remained large and continued to increase. As Thailand's economy continued to grow in the service areas of banking and tourism, more young adults were attracted to city jobs, thus reducing the ability of families to continue labor-intensive rice farming. At the same time, land increased in value, and absentee landlords bought up small family farms because there were no legally enforceable limits on the amount of land that could be acquired.

Poverty in Northeast Thailand

The Northeast is the most populated and poorest of Thailand’s four regions. It is home to a third of Thailand’s 67 million people. The culture and language are strongly influenced by their Khmer and Lao counterparts, Most of its people are Isan (Lao) speakers. The Isan have their own styles of music and are regarded as the best silk weavers in Thailands. Many are subsistence farmers or poor workers for sugar growers, who are either heavily in debt or barely get by. Many have been forced into debt by corrupt village headman, working in cahoots with wealthy landowners, using unscrupulous methods.

About 80 percent of Isaan people farmers or farm workers. Many are employed by sugar cane barons and motorbike is regarded as a symbol of wealth. Incomes, education levels and health standards are lower than elsewhere in the country. Thais from outside the region tend to regard those from the Northeast as slow, backward and ignorant. It has traditionally been ignored by national-level politics. Many of the migrants to Bangkok are Northeasterners who have come there in search of opportunities. With wages in Bangkok being 12 times higher than those in the Northeast it is no surprise that one out of every six Thais works there is from the Northeast. Many are young people, both men and women that engage in menial or physical labor-related jobs and send money back home. “Most Isaan people have very little education, so they get the dirty jobs (housemaid and construction work) that no one else wants to do. They’ve become the driving force that keeps things moving,” the Isan cartoonist Padung Kraisri told The Star.

Philip Golingai wrote in The Star, “The people's poverty is also compounded by a high birth rate. And their plight gets more difficult with each generation, as a family owns only one or two rai (1,600 sq m) of rice field to distribute among numerous children, explained Padung. So, like Noo Hin, when the children get older they have to migrate to bigger towns, especially Bangkok, to earn money. And in general, Bangkokians have a negative perception of northeasterners such as most bargirls are from Isaan. [Source: Philip Golingai, The Star, March 24, 2007]

Children were discovered in the Northeastern village of Baan Bor that subsisted almost entirely on two types of dirt: baked clay and in luang, soft layers of earth that are produced by termite-infested wood. There are also stories about families in the Northeast who are proud their daughters working as prostitutes in Bangkok because of material possessions such as televisions, DVD players and refrigerators, plus new concrete houses, that there money has allowed them to buy.

Urban Poor in Thailand

On the streets of Bangkok are Cambodian beggars, homeless children and zonked-out amphetamine addicts. Squatters set up shacks along canals and rivers. In some places they have thrown so much rubbish it the waterways that the trash blocks their flow, slowing run off and increasing flooding. Some young people in the slums are heavily into drugs. Many start with glue sniffing and turn to amphetamines.

Bangkok slums are comprised of ramshackle dwellings with corrugated iron roofs, separated by narrow paths full of garbage, stagnant water, dog droppings. Drug dealers and addicts are much in evidence. But even in some of Bangkok's worst slums people keep their makeshift homes clean and have their shoes neatly lined up outside the house. Even the worst slums are wired with electricity.

One slum dweller told National Geographic's Noel Grove: "My husband and I make about 3,000 baht a month, and it is not enough to leave this place." When asked if there was much crime in the slum, the woman replied, No, there was little steal, and they people were much more concerned about fires in their homes. "People here help one another," another woman said. "If someone has no food one day, others share. It makes life bearable."

Prateep Ungsongtham Hata is an urban activist who sometimes is referred as the "slum angel." In the poorest neighborhoods of Bangkok and other cities she has set up schools and drug and health education program with a staff made up primarily of slum dwellers. "My parents were fishermen on the coast and lost everything in a storm, so they moved here in search of an opportunity," she told Grove. "Growing up I worked on the docks to pay for my education and become a teacher. I thought I wanted to leave and teach rich people's children. But when I looked at slum children and knew how difficult their lives were, I had to do something to help."

Urban Victims Under Father Joe Maier’s Watch

On Father Joe Maier, a Catholic priest in the Klong Toey slum of Bangkok, and some the victims under his care, John M. Glionna wrote in the Los Angeles Times: “Like a proud parent, Father Joe Maier dotes on his children — such as the young beggar boy whose dad got him high on paint thinner and gave him broken bottles to cut his arms so he'd look more pathetic to passing motorists. And the sexually abused triplets — the girls' mother was dying of AIDS, their father in jail, their grandfather a drunk. Maier paid the old man two cases of whiskey to rescue the trio.” [Source: John M. Glionna, Los Angeles Times, October 2, 2006. For More on Father Joe Maier, See Below]

“The ruddy-faced 66-year-old Roman Catholic priest smiles at a girl laboring over math homework, her oval face strained in concentration. He recently bought the solemn 16-year-old from her drug-addled mother, who needed cash for gambling debts. He paid 1,000 baht, or about $26. The child, he says, is priceless. "She came very near to being sold into the sex trade," says Maier, a Seattle-area native. "Instead, she's going to school for the first time in her life. She's now a very happy girl." [Ibid]

“The abused beggar boy and triplets are thriving under his care as well. To most, they are Thailand's throwaway youths. But for the priest known affectionately here as Father Joe, they are family. "You try to give a kid a chance to be human for a while," Maier says. "You shoot them like an arrow into the wind and you hope for the best. You want to show them that for one bright, shining moment of their lives there was a Camelot called childhood." [Ibid]

“Despite the successes, Klong Toey takes its toll. One boy with AIDS suffering from tuberculosis died days after arriving at Mercy Center."It's hard to see a child die before anyone was kind to them," Maier says, "to say goodbye to a kid who never knew friendship." But Maier knows each child must confront death in his or her own way. He recalls his promise to one young AIDS victim that he would be at her deathbed. "Yet she didn't want me there," he says. "It's tough to die. It's tougher to do it when you have somebody there who doesn't want you to die. So she waited until I was gone. I was upset when I learned that. Then I got my head together and said, 'You arrogant SOB. That girl had to do things her way.' " [Ibid]

“Suddenly, Maier's cellphone rings with bad news from Klong Toey. A teenage girl living at Mercy Center has been gang-raped at a nearby ghetto school -- for the second time. Maier is told the girl giggled as the boys took their turn with her. "Is this self-loathing? How do you protect a girl like this?" he says with a sigh. "We try to protect these children day and night. But we just can't be there every second." So why does he stay? Why does he continue to do battle in a Bangkok slum, in a war he often does not win? "Why go?" he counters. "By fate or the grace of God, I ended up here. After all these years, I have an obligation to stay. "And anyway, where would I go? Who would want me?" [Ibid]

Poverty Reduction Strategies in the 1990s

According to the World Bank: “Rapid growth in Thailand during 1988-92 contributed to substantial and widespread reductions in the incidence and severity of poverty. In particular, economic growth has benefited workers in the formal and informal sectors. Real labor earnings rose on average and their distribution both across individual workers and households has become less unequal. However, wages and salaries have contributed to aggregate income inequality for two reasons. With structural change, formal-sector employment has grown rapidly, thereby increasing the share of wages in total incomes. And, these increased formal-sector jobs have not been allocated equitably across households. Therefore, the emphasis for policy should be on removing the main supply-side constraint to participation in wage employment, which remains the lack of adequate education for almost half the population that who leave school without a junior secondary education. Expanding access to secondary education for those from poorer households and in lagging regions not only would help sustain growth, but would also promote equity across income groups and regions. In contrast, direct wage or employment regulation of labor markets in order to achieve redistributional goals is likely to be ineffective and could hurt the poor by slowing the growth of formal-sector employment.[Source: World Bank]

To improve the efficiency and effectiveness of safety net programs, the main schemes by which the poor are to be assisted should be delineated and clear poverty-oriented goals for these should be articulated. Budgetary resources for these programs should be allocated across districts and provinces to those where the levels and severity of poverty are the greatest. Specific design changes in programs are also needed to improve their efficiency in targeting the poor and enhancing their effectiveness in raising the welfare of the target groups. Finally, it is necessary that systematic and periodic evaluations of these anti-poverty programs be undertaken so that those that are ineffective can be discontinued while more promising initiatives could be expanded and funded more generously.

In December 2006, it was announced that students in remote villages—many without electricity—would be given $100 laptop computers. The plan called for 1 million of the MIT-designed computers to be given out.

Thaksin’s Help for the Poor

The populist polices of Prime Minister Thaksin Shinawatra (2001-2006) redistributed wealth to the rural poor his primarily supporters, namely through cheap health care, credit and gifts of milk and rice. He initiated a three-year support program for farmers and provided low-interest loaned to poor villages, His policies made him popular with the poor who had felt ignored in the past. This angered the military, the elite, royalists, the middle class and people living in the Bangkok area who felt he was sacrificing future growth.

After he became prime minister Thaksin quickly delivered on his promise of health care for only 30 bhat (less than $1).. He also helped the rural poor with a $2 billion Village Fund that gave $25,000 each to Thailand's 77,000 villages and small towns to fund low-cost loans to villagers. Local committees were allowed to lend money to villagers as they saw fit. Villages that had success with the program were allowed to upgrade the fund to a minibank in which they took in savings as well as gave out loans. Money was also dished out for infrastructure projects like roads and irrigation systems A three-year moratorium froze $1.6 billion in farm debt.

Thaksin proposed granting certificates of assets, including real estate and other possessions, to villagers which they could use as collateral for bank loans. Some villagers were given $4,000 concrete homes for which they paid $13 a month. Others got grants for school uniforms and textbooks. One woman in the impoverished northeast who increased her income 10-fold by growing organic mushrooms with a soft loan from the government told AP, “He took care of us poor people first and foremost . Before there was no one who looked out us.”

Some of the money was wisely invested and put to good use in starting up and expanding small businesses. Some was treated like a cookie jar to pay off debts and buy stuff that otherwise would have been bought with money earned from working. There reports of local leaders lacking the business skills to properly manage the money and people using the money to buy cell phones in places that didn’t have signals. There were also worries that much of the growth was fueled by artificially low interest rates and poorly-thought-out public spending and this could fuel inflation and leave people badly indebted if interest rates rose. Some described Thaksin’s economic policies as the“Thaitanic”

Father Joe Maier: “Father Teresa” of Bangkok

“Father Joe Maier, a Catholic priest, is the most well-known do-gooder in Bangkok, “John M. Glionna wrote in the Los Angeles Times: Dubbed by the press as “Father Teresa,” he has established 32 schools for poor children in the slums of Bangkok, a hospice for AIDS patients, shelters of homeless people and street children, legals centers and Grameen-style banks for the poor. . He was brought in Washington state and came to Thailand in 1967 as a young priest. At an early stage he decided that helping the poor was more important than saving souls. So far more than 60,000 poor children have passed through his schools. [Source: John M. Glionna, Los Angeles Times, October 2, 2006]

“Started as a one-room schoolhouse where he taught the children of pork slaughterhouse workers, the foundation operates 33 slum preschools serving 4,000 children daily — all on a $2-million annual budget he solicits from the Thai government as well as local and international donors. Maier is himself the product of a broken home — the son of an alcoholic father who deserted the family. Longing to see the world, the young priest arrived in Southeast Asia in 1967, landing in Klong Toey five years later. [Ibid]

“Each day, the Grateful Dead-loving priest makes his rounds. Sometimes profane, he often juggles three stories at once, regaling listeners in fluent Thai. He offers adults wai the traditional Thai greeting with pressed palms resembling a quick prayer. The children get a streetwise knuckle punch to show he's one of them. Maier has his favorites, such as the 35-year-old man with Down syndrome he found abandoned on the street years ago. Nicknamed Galong, or "bird without a nest," the man is the center's good-natured mascot. There's also the speechless teenage girl in a wheelchair who smiles as Maier leans in and touches her arm with parental tenderness. As for the babies with AIDS, he coddles them the most. [Ibid]

“Outside Mercy Center, Maier's gruff style with Thai politicians and others he blames for the problems in Klong Toey have earned him critics. The outspoken Catholic priest in a country of more than 60 million Buddhists often steps on toes, some say. Years ago, frustrated by the dearth of adequate housing in Klong Toey, Maier went back to school to earn a master's degree in public planning. Since then, his foundation has stepped in when the city government doesn't. After fires burned down swaths of the slum, Maier built 10,000 single-family homes that were far better than the old tin shacks. [Ibid]

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, Tourist Authority of Thailand, Thailand Foreign Office, The Government Public Relations Department, CIA World Factbook, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Global Viewpoint (Christian Science Monitor), Foreign Policy, Wikipedia, BBC, CNN, NBC News, Fox News and various books and other publications.

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© 2008 Jeffrey Hays

Last updated May 2014

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