BUREAUCRACY, LOCAL GOVERNMENT, PATRON-CLIENT RELATIONS, AND WELFARE IN THAILAND

LOCAL GOVERNMENT IN THAILAND

Local government is based on the principles of decentralization and self-government when certain legal conditions are met. Under the 1997 constitution, elected local assemblies and elected or appointed local administrative committees were allowed four-year terms. Central government officials could not serve as local officials. Bangkok is a provincial-level entity with an elected governor and the legislative Metropolitan Administration Council. Supervision of provincial and local government takes place through the Department of Local Administration of the Ministry of Interior. However, as a result of the September 2006 military coup, Bangkok and the provinces came under the direct control of the supreme commander of the armed forces and the national police. [Source: Library of Congress, 2007~]

Local government comprised both regular territorial administrative units and self-governing bodies. Local autonomy was limited, however, by the high degree of centralization of power. The Ministry of Interior controlled the policy, personnel, and finances of the local units at the provincial and district levels. Field officials from the ministry as well as other central ministries constituted the majority of administrators at local levels. ~

In 1987 there were seventy-three provinces (changwat), including the metropolitan area of Bangkok, which had provincial status. The provinces were grouped into nine regions for administrative purposes. As of 1984 (the latest year for which information was available in 1987), the provinces were divided into 642 districts (amphoe), 78 subdistricts (king amphoe), 7,236 communes (tambon), 55,746 villages (muban), 123 municipalities (tesaban), and 729 sanitation districts (sukhaphiban). [Library of Congress, 1987]

Administrative Divisions in Thailand

Local divisions: 76 provinces (changwat), including Bangkok Municipality. The provinces are in turn divided into 795 districts ( amphoe ), 81 subdistricts ( king amphoe), 7,255 rural administrative subdistricts (tambon ), and 69,866 villages (muban ). Each tambon is composed several numbered villages or hamlets (muban). Tambon generally range in size from 1,400 to 7,000 people.

The 76 provinces (changwat, singular and plural) in Thailand are: Amnat Charoen, Ang Thong, Bueng Kan, Buriram, Chachoengsao, Chai Nat, Chaiyaphum, Chanthaburi, Chiang Mai, Chiang Rai, Chon Buri, Chumphon, Kalasin, Kamphaeng Phet, Kanchanaburi, Khon Kaen, Krabi, Krung Thep Mahanakhon (Bangkok), Lampang, Lamphun, Loei, Lop Buri, Mae Hong Son, Maha Sarakham, Mukdahan, Nakhon Nayok, Nakhon Pathom, Nakhon Phanom, Nakhon Ratchasima, Nakhon Sawan, Nakhon Si Thammarat, Nan, Narathiwat, Nong Bua Lamphu, Nong Khai, Nonthaburi, Pathum Thani, Pattani, Phangnga, Phatthalung, Phayao, Phetchabun, Phetchaburi, Phichit, Phitsanulok, Phra Nakhon Si Ayutthaya, Phrae, Phuket, Prachin Buri, Prachuap Khiri Khan, Ranong, Ratchaburi, Rayong, Roi Et, Sa Kaeo, Sakon Nakhon, Samut Prakan, Samut Sakhon, Samut Songkhram, Sara Buri, Satun, Sing Buri, Sisaket, Songkhla, Sukhothai, Suphan Buri, Surat Thani, Surin, Tak, Trang, Trat, Ubon Ratchathani, Udon Thani, Uthai Thani, Uttaradit, Yala, Yasothon

Muangs and the Saktina System

Some local governance practices and administration methods have their root in ancient and historical times. During the first millennium A.D., before the emergence of formal states governed by Tai-speaking elites, these people lived in scattered villages drawn together into muang, or principalities. Each muang was governed by a chao, or lord, who ruled by virtue of personal qualities and a network of patron-client relationships. Often the constituent villages of a muang would band together to defend their lands from more powerful neighboring peoples, such as the Chinese and Vietnamese.

By fusing Hindu and Confucian ideas with Thai interpretations, King Trailok (1448-88) developed the saktina system of political, social and hierarchal organization that lasted until the 20th century and still exerts an influence today. King Trailok realized that land ownership was the key behind wealth and power and set up the system in which no person posed a threat to the monarchy and the only way they could increase their land holdings or wealth was through royal patronage.

Under the saktina system each landowner was given a number which corresponded to the amount of land he owned. This number was called saktina , literally “power of the fields.” Top officials, the Chao Phya , held a grading of 10,000 and were allowed to own up to 4,000 acres of land. Peasants on the other hand had a grading of only 20 and were not allowed to own more than 10 acres (eight is regarded as enough to support of family of six).

A man’s first wife held half the saktina points as her husband. A minor wife held one quarter. Slave’s held nothing but if a female slave of the landowner gave birth to child she attained the same status of a minor wife. People were taxed, punished and compensated in relation to their saktina. Economic and social life were bound to the system. For example, if a group of people met with a slightly smaller group of people, the smaller group would wai to the larger group. The saktina didn’t adapt very well to modern commerce and international trade and was abolished, along with slavery in 1905 under King Chulalongkorn.

Patron-Client System in Thailand

Cutting across rural and national strata is the system of patron- client relationships that ties specific households or individuals together as long as both patron and client sees benefits in the arrangement. In many respects, the dynamics of political and economic life are comprehensible only in terms of patron-client relations. [Source: Library of Congress, 1987]

The patron and client relationship is more significant in the daily life of many Thai than differences in status. This link between two specific persons requires the client to render services and other kinds of support in return for protection, the use of the patron's influence on the client's behalf, and occasional favors or financial aid. The basic pattern is old, but the relationship has evolved from a social one with economic overtones to one in which economic transactions and political support are more important.

At the village level, it is not necessary to be rich to have a client, although a wealthy family was likely to have more than one client. It is possible for an ordinary peasant (although not a landless one) to provide limited benefits to someone less fortunate in return for certain services. Often such a relationship is arranged between kin. In the modern era, however, it is the wealthy villager who can provide benefits and expect, even demand, certain services from his client.

In principle, a patron-client relationship lasts only so long as both parties gained something from it, and the relationship could be broken at the option of either. Often, however, the client has few alternatives and remains in the relationship in the hope of eliciting more benefits than had hitherto been forthcoming. To the extent, however, that prestige and power accrues to the person (or family) who can retain a large number of clients, the patron is motivated to provide benefits to those dependent on him.

The patron-client relationship also links villagers and persons at other levels of the social, political, and economic orders: leading figures in the village, themselves patrons of others in the rural community, became clients of officials, politicians, or traders at the district or provincial levels. In such cases, clientship might reinforce the status of the rich villager who can, at least occasionally, call on his patron at a higher level for benefits that he might in turn use to bind his own clients to him. Just the fact that the rich villager is known to have a powerful patron outside the village could enhance his status.

Impact of the Patron-Client System on Thai Society

Most observers agreed that the patron-client relationship is pervasive in Thai society, not only at the village level but throughout the military and the bureaucracy. There is less agreement on its links to a class system and the degree to which the relationship was typically marked by social ties of affection and concern as opposed to a clearly calculated assessment of relative economic or political advantage. [Source: Library of Congress, 1987]

Militating against solidarity, particularly at the upper and middle levels, is the continuing competition for political power and the access to economic opportunities and resources that flowed from such power. People competing for high-level positions in the military, the bureaucracy, or within the economy are engaged in a complex and shifting pattern of patron-client relationships. In this system, all but the individuals at the highest and lowest ends of a chain of such relationships are simultaneously patrons to one or more others and clients to someone above them. A developing career is likely to put a person at different places in the chain at various stages.

Given the fluctuations in the fortunes of individuals (to which the patron-client system contributes), patrons and clients, particularly at the higher levels, have to make judgments as to the benefits accruing to them from their relationship. Moreover, a client has to assess present and potential sources of power and the extent to which their support and services are reciprocated by the current or alternative patrons. It is not uncommon in this system for both patrons and clients to shift allegiances. Patrons often have several clients, but there are no real bonds between the clients of a single patron.

Suntaree Komin wrote in Psychology of the Thai People: Values and Behavioral Patterns : Many writers have tried to use the concept of patronage or “entourage”—a system which involved a tightly bonded patron-client group— to understand Thai social structure as a whole and to explain the observed phenomena of personal connections, cliques, power group, or Phak phuak (or ‘partisan entourage’ syndrome) as a factor in achieving and maintaining bureaucratic or political power, or even connections of bribery and corruptions. Thai Value Survey data indicates that the practice of the “patronage” or “entourage system is not the norm. It reveals that the majority (54 percent and 52.3 percent) of the national sample disagreed that “one should love and favour one’s Phak phuak more than other people”. Only 19.2 percent agreed to favour Phak phuak, with 26.8 percent said it depended. In fact, to love and help one’s friends is a common worldview of the rural community life, where villagers cooperate and help one another, at times of harvest, at social cultural occasions like Tham khwan ceremony or Buat naak ceremony (ordain the novice), or in extending loans of money to one another, and assisting each other in times of crisis, etc. However, on the whole, this Phak phuak orientation is not a majority. There were more who disagreed than agree, even in the rural peasant group. This seems to indicate a loose bond if it does apply. [Source: Suntaree Komin, Psychology of the Thai People: Values and Behavioral Patterns , National Institute of Development Administration (NIDA), Bangkok 1991]

Development of the Thai Social System

The rural areas, where most Thai live, have been affected by change for many decades, especially since the mid-nineteenth century, when the impact of European economic and political activity was first felt. The full effects of change started to become manifest in the 1930s. Among the factors reflecting and creating change in local social patterns was the coup of 1932, which brought military and bureaucratic elites into power and extended the power of the central government more effectively than before into rural areas. More important in its cumulative effect, however, was the rapid growth of the population and the consequent shortage of land, which led to the development of occupations outside agriculture and the emergence of a rural and small-town bourgeoisie. [Source: Library of Congress]

At the national level, society was stratified at the beginning of the twentieth century into three classes—kin of the reigning king and his immediate predecessors, government officials (often nobles granted their particular status by the king), and, by far the largest group, the peasantry. These classes comprised a social system in which those who had political power and status also had prestige and access to wealth. Buddhist monks had a special status outside this system. Also outside the system were the Chinese, who were largely laborers and small traders in the early twentieth century.

As the twentieth century progressed, the government bureaucracy proliferated. A growing number in the higher ranks had their origins outside the hereditary nobility, as did the upper ranks of the expanding armed forces. By the 1960s, the military and the bureaucracy included persons from several levels of the social and economic hierarchy. Directly or indirectly, the military and bureaucratic elites disposed of power and economic resources, the latter often in combination with those Chinese who controlled the major business enterprises of Thailand. Hereditary nobles retained high status, but they no longer wielded power and did not match some of the members of the military oligarchy in wealth. Monkhood remained a source of special status and was an avenue of social mobility for persons of rural origin with talent and a willingness to give part or all of their lives to the sangha; but monkhood was less and less attractive to urbanites or to those who had access to other avenues to power, wealth, and status. After World War II, an incipient urban middle class and an urban proletariat also emerged, particularly in Bangkok, partly in response to a commercial and tourist boom generated by the presence of large numbers of foreigners, particularly Americans.

Still outside the social system, in the sense that their direct access to political power was restricted and that their sense of a worthwhile career differed from that of most Thai, were the Chinese. Members of other non-Thai ethnic groups could occasionally make a place for themselves in the middle or upper reaches of Thai society by assimilating Thai culture. The Chinese were less able to do so until the 1960s and 1970s, when they began to move into the upper bureaucracy in larger numbers.

Province and District Level Governments in Thailand

The provinces are under a governor (phuwarachakan), who is assisted by one or more deputy governors, an assistant governor, and officials from various central ministries, which, except for the Ministry of Foreign Affairs, maintains field staffs in the provinces and districts. The governor supervises the overall administration of the province, maintains law and order, and coordinated the work of ministerial field staffs. These field officials carry out the policies and programs of their respective ministries as line administrators and also serve as technical advisers to the governor. Although these officials are responsible to the governor in theory, in practice they report to their own ministries in Bangkok and maintain communication with other province-level and district-level field staffs. [Library of Congress, 1987*]

The governor also is responsible for district and municipal administration, presiding over a provincial council composed of senior officials from the central ministries. The council, which serves in an advisory capacity, meets once a month to transmit central government directives to the district administrators. Apart from the council, an elected provincial assembly exercises limited legislative oversight over provincial affairs. *

District administration is under the charge of a district officer (nai amphor), who is appointed by the minister of interior and reported to the provincial governor. Larger districts can be divided into two or more subdistricts, each under an assistant district officer. The district or the subdistrict is usually the only point of contact between the central authority and the populace; the central government had no appointed civil service officials below this level. *

The district officer's duties as overseer of the laws and policies of the central government are extensive. He supervises the collection of taxes, keeps basic registers and vital statistics, registers schoolchildren and aliens, administers local elections at the commune and village levels, and coordinates the activities of field officials from Bangkok. Additionally, the district officer convenes monthly meetings of the headmen of the communes and villages to inform them of government policies and instruct them on the implementation of these policies. As the chief magistrate of the district, he also is responsible for arbitration in land disputes; many villagers referred these disputes to the district officer rather than to a regular court. *

Commune and Village Level Government in Thailand

The commune is the next level below the district. An average of nine contiguous, natural villages are grouped into one commune, whose residents elect a headman (kamnan) from among the village headmen (phuyaibun) within the commune. The commune chief is not a regular government official, but because of his semiofficial status, he is confirmed in office by the provincial governor. He also is entitled to wear an official uniform and receive a monthly stipend. Assisted by a small locally recruited staff, the kamnan records vital statistics, helps the district officer collect taxes, supervises the work of village headmen, and submits periodic reports to the district officer. [Library of Congress *]

Below the commune level is the village government. Each village elects a headman, who generally serves as the middleman between villagers and the district administration. The headman's other duties include attending meetings at the district headquarters, keeping village records, arbitrating minor civil disputes, and serving as village peace officer. Generally the headman serves five years or longer and received a monthly stipend. In the 1980s, the importance of a village headman seemed to be declining as the authority of the central government expanded steadily through the provincial and local administrations. *

Municipality and City Government in Thailand

Municipalities in Thailand include Bangkok, seventy-two cities serving as provincial capitals, and some large district towns. According to the 1980 census, municipalities had a combined population of 7.6 million, or about 17 percent of the national total. The municipalities consisted of communes, towns, and cities, depending on population. Municipal residents elected mayors and twelve to twenty-four municipal assemblymen; the assemblymen chose two to four councillors from among their number, who together with the mayors made up executive councils. [Library of Congress, 1987*]

In theory, the municipal authorities are self-governing, but in practice municipal government is an administrative arm of the central and provincial authorities. The Ministry of Interior has effective control over municipal affairs through the provincial administration, which has the authority to dissolve municipal assemblies and executive councils. Moreover, such key officials as the municipal clerk and section chiefs are recruited, assigned, and retired by the ministry, which also has the power to control and supervise the fiscal affairs of the perennially deficit-ridden municipalities. *

The governor of Bangkok is one of the most powerful and prestigious positions in Thailand. Until 1985 Bangkok's governor and assemblymen were appointed by the central government. In November of that year, however, for the first time an election was held as part of the constitutionally mandated effort to nurture local self-government . Chamlong Srimuang, a former major general running as an independent, won the governorship by a landslide. *

At the next lower level of local government, every district has at least one sanitation district committee, usually in the district capital. This committee's purpose is to provide services such as refuse collection, water and sewage facilities, recreation, and road maintenance. The committee is run by exofficio members headed by the district officer. Like municipalities, the sanitation districts are financially and administratively dependent on the government, notably the district administration. *

Bureaucracy of Thailand

Administrative power is the hands of the administrative branch (the national bureaucracy) which is formally under the control of the Prime Minister and the Cabinet. The administrative branch, or the administration, administers public policy and enforces the laws, which is the administration or the government. It is made of civil servants and led by political officials who are publicly elected to serve as the prime minister and cabinet members. Civil service personnel implement and carry policies and enforce the laws. [Source: Thailand Foreign Office, The Government Public Relations Department]

The main ministerial positions are for: agriculture; commerce; communications; defense; education; finance; foreign affairs; industry; interior; justice; public health; science, technology, and energy; and university affairs. The heads of these ministries (except for justice; science, technology, and energy; and university affairs) are aided by one or more cabinet-rank deputy ministers. Each ministry is divided into departments, divisions, and sections. Traditionally, the ministries of defense, interior, and finance have been regarded as the most desirable by aspiring politicians and generals. In the 1980s, the ministries of agriculture and cooperatives, industry, and communications grew in stature as the economic value of resources steadily increased. [Library of Congress]

The main powers and duties of public administration and the national bureaucracy are: 1) Setting policies for public administration and carrying out the tasks in accordance with the policies; 2) Maintaining law and order, enabling people to enjoy safety in their lives and property, and to lead their lives in peace; 3) Supervising permanent officials to ensure that they effectively implement policies; 4) Issuing resolutions for various government units to observe in their implementation.

The Thai bureaucracy has a reputation like most bureaucracies everywhere of being inefficient and bogged down by red tape. The new constitution of 1997 tried to reduce the power of the bureaucracy through the use of public hearings. In the early 2000s,Thaksin tried to make the bureaucracy more efficient by eliminating red trade and making bureaucrats more responsive to his orders. He initiated policies that put a premium on doing things quickly with an emphasis evaluation and getting results. Under Thaksin, bureaucrats that failed to perform were purged or forced to resign while those that performed well were promoted just as they would be if they worked for a company.

Levels of bureaucracy in Thailand: 1) Central administration, comprising ministries, departments, and other government units; 2) Regional administration, comprising 75 provinces, with the exception of Bangkok Metropolis, and divided into amphoe (districts) and king amphoe (minor districts), tambon (subdistricts), and mu ban (villages), with a provincial governor as the chief at the provincial level, and a district chief at district level; 3) Local administration, for populous communities, in the form of provincial administrative organizations, tambon administrative organizations, municipalities, and two special local administrations: Bangkok Metropolitan Administration and Pattaya City.

Budget: revenues: $66.21 billion. Expenditures: $71.35 billion (2011 est.). Taxes and other revenues: 19.5 percent of GDP (2011 est.), country comparison to the world: 169. Budget surplus (+) or deficit (-): -1.5 percent of GDP (2011 est.), country comparison to the world: 69. Public debt: 44.9 percent of GDP (2011 est.), country comparison to the world: 71; 43.1 percent of GDP (2010 est.). In 2005 Thailand’s central government budget was estimated at US$35.2 billion. The budget was essentially in balance, with a small surplus of around US$467 million. [Source: CIA World Factbook, Library of Congress]

Bureaucrats and the Civil Service in Thailand

A civil service career is widely regarded as a desirable route to financial security, social status, and power in Thailand. As a result, despite the universal complaint about the inadequacy of government salaries, and despite many well-paid jobs becoming available in the commercial and industrial sectors, the civil service continues to attract talented young men and women. [Library of Congress, 1987*]

Personnel administration is in theory centralized under the Civil Service Commission, which reports to the prime minister. In actuality the commission's functions are limited to standardization, general guidance, coordination, and record keeping. Recruitment, assignment, promotion, and discipline are handled by each ministry and other public entities. After 1975 government service was divided into eleven position classifications. The top five grades (seven through eleven) were "special grade officers"--the elite of the civilian wing of the bureaucracy. Entry level for college graduates was grade two, and, for those with master's degrees, grade three. Ordinarily, the district officer was either grade five or six, and the district section head was grade three. The provincial governor, deputy governors, and assistant governors were special grade officials, as were mid- to top-level managerial officers of the central ministries. Provincial section chiefs were grade four. *

An informative study by Thai political scientist Likhit Dhiravegin revealed that as of 1977 the Ministry of Interior had the largest bloc of special and first grade officials (29 percent and 26 percent, respectively) because of its role as the backbone of the country's far-flung administrative system. This study indicated that the administrative service continued to be elitist, dominated by families of government officials and businessmen. In 1977, although these families accounted for only 10 percent (1 percent and 9 percent, respectively) of the national population, they claimed 41 percent and 33 percent, respectively, of the special grade category and 31 percent and 27 percent, respectively, of the first grade category. This meant that these families produced a combined total of 74 percent of the special grade officers and 58 percent of the first grade functionaries. *

Geographically, a strong bias favored the Center (including Bangkok), which had 32 percent of the total population but had 68 percent and 63 percent, respectively, of the special and first grade officers assigned there; Bangkok alone had 39 percent and 33 percent of these two categories. In terms of male-female ratio, of the special grade and first grade officers, only 11 percent and 23 percent, respectively, were women. Many of the female officers were in the ministries of university affairs, education, and public health. Likhit pointed out that, insignificant as it might seem, the number of women in managerial positions was impressively high when compared with other Asian countries.*

In terms of education, about 93 percent and 77 percent of the civil servants in the special and first grade categories, respectively, had college educations, which compared favorably with other Asian countries such as Japan, the Republic of Korea (South Korea), Singapore, and Burma. The Likhit study also showed that 33 percent and 20 percent of the elite categories had foreign training, the United States accounting for 71 percent and 78 percent and Britain for 11 percent and 9 percent. The BritishUnited States connection was attributable to Thailand's close relationship with Britain before World War II and with the United States since that time.*

According to the Likhit study, foreign influence was least evident in the ministries of interior, justice, and public health--ministries that had the largest number of locally trained civil service officials at the elite level. Most of the locally trained senior judges, public prosecutors, lawyers, district officers, and provincial governors were graduates of Thammasat University. In the 1980s, several other Thai universities were expected to have an increased share of graduates applying for government service. Civil service promotion was based on merit, but many observers believed that favoritism was an important factor in career advancement. A civil servant normally retired at age sixty. In 1980, however, the law was changed to permit extension of tenure up to age sixty-five in cases of extreme necessity for the benefit of the country. *

Taxes in Thailand

In view of the disappointing revenue level, a new tax package was instituted in 1984-85 to raise revenues, including an increase in the tax rates on interest earnings from 10 percent to 12.5 percent, a reduction in the standard deduction for self-employed persons, the introduction of an estate tax, the abolition of preferential rates for companies listed on the stock exchange, the abolition of tax exemptions for selected state enterprises, streamlined exemptions and deductions for business taxes, and other measures. The resulting gains in revenue were, however, partially offset by measures to simplify the personal and corporate tax system. No effort had been made to reduce legal exemptions and illegal evasions. The net revenue effect of the package was therefore negligible. [Library of Congress, 1987*]

Some experts concluded that a broader tax base, less complicated tax structure, and lower tax rates needed to be considered in the tax reform. Also, contributions and taxes paid by the state-owned enterprises should be increased because they had dropped from 41 percent of profit in the late 1970s to only 23 percent by the mid-1980s.

Budget: revenues: $66.21 billion. Expenditures: $71.35 billion (2011 est.). Taxes and other revenues: 19.5 percent of GDP (2011 est.), country comparison to the world: 169. [Source: CIA World Factbook]

The corporate tax rate in Thailand was reduced from 23 percent to 20 percent in 2013. This compares to 17 percent corporate tax rate in Singapore and 35.6 percent in Japan.

Welfare and Social Security in Thailand

Thailand has social welfare and social insurance systems. Social welfare involves welfare services aimed at the poor, persons with disabilities, children, the elderly, women, minority hill tribes, and other disadvantaged individuals. The social insurance system provides sickness, maternity, disability, death, dependent child, old age, and unemployment benefits. There also is a social security system for private-sector employees and medical security and pension systems for public-service employees, employees of national enterprises, and military personnel. [Source: Library of Congress, 2007]

Health and related social welfare services received an allocation of 10.3 percent of the total 1984 budget. Of this amount, about 50 percent was assigned to public health activities; the remainder went to social security and welfare, housing, and community services. [Source: Library of Congress, 1997]

According to a World Bank report: 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. [Source: World Bank]

Social Security in Thailand

Hiroaki Hayashida wrote in the Yomiuri Shimbun: “Thailand has a public pension program called the Social Security Fund. In most companies, both the employer and employee pay premiums equivalent to 3 percent of the employee's monthly salary into the fund. A further 1 percent is paid in by the government. Even self-employed people can join this fund. They pay a premium equivalent to 3 percent of their monthly salary and receive 1 percent from the government. However, not many self-employed people join this system. In the Thai economy, most self-employed people live hand-to-mouth. [Source: Hiroaki Hayashida, Yomiuri Shimbun, January 1, 2006=]

“Public officials have their own pension plan. Their 3 percent contribution is matched baht for baht by the government. However, only those employed after March 1997 can take out the policy. The Thai government is considering the introduction of a new pension system called the National Retirement Fund. The fund would pay employees 50 percent to 60 percent of their monthly salaries upon retirement.” =

"Thailand's pension system has much room for improvement, but the bigger problem is that the public is not very interested in saving money," said an official of Thailand's National Economic and Social Development Board. "It is necessary to build a financial system that encourages the public to make long-term deposits." As for the increasing number of senior citizens with no family, or no children willing to look after them, the official said, "Employment of senior citizens has to be promoted further, but it's more important than anything else to rediscover our respect for the elderly." =

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”

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.

Page Top

© 2008 Jeffrey Hays

Last updated May 2014

This site contains copyrighted material the use of which has not always been authorized by the copyright owner. Such material is made available in an effort to advance understanding of country or topic discussed in the article. This constitutes 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. If you are the copyright owner and would like this content removed from factsanddetails.com, please contact me.