World Bank executive says inequality declining in Thailand
The gap between rich and poor has been steadily narrowing in Thailand with low-income earners making more gains than the wealthy in recent years – although inequality is still high, the World Bank’s executive director for Southeast Asia said last week.
“In Thailand, (inequality) has been declining. It is still high but the poor have been gaining more than the rich, and this is the most striking feature of economic and social development in Thailand and in the sub-region,” said Ulrich Zachau during an interview with the Bangkok Post upon the completion of his five-year term overseeing the region for the World Bank.
The number of people living in extreme poverty in the Asia-Pacific region fell by 920 million between 1990 and 2013, according to estimates by the Bank. Rapid growth in income among the poor, along with low unemployment, public transfers, structural transformations and public investment all contributed to the decline, Bank reports have said.
Inequality has been an economic, social and political problem in Thailand as well as other countries in the region during the past two decades. Disparities between classes and different areas of the Kingdom contributed to the political polarization that led to bouts of political and civil unrest from 2006 through 2014.
The government of Prime Minister Prayut Chan-o-cha has made reducing inequality an essential theme of its economic policies for the country. According to the World Bank, those policies are starting to bear fruit.
“These achievements in terms of economic growth have brought benefits for many, many people. Not only for the rich,” Zachau said.
Zacau, who hails from Germany and holds a Ph.D. in economics from Oxford University, said the dynamic growth of Southeast Asia has been extraordinary and sets the region apart from most others in the world.
“You’ll see that in the numbers where the economic growth rate and per capita income growth rate are higher in this region than elsewhere, and this is true across South Asia and the sub-region of Southeast Asia,’’ Zachau said.
“It is also striking how much this economic growth has begun to translate into an effective reduction in poverty and improvements in the wellbeing of many people across the region,’’ he said.
Zachau cautioned, however, that countries are still facing many challenges, and continuing inequality remains high on the list. He urged each country to develop solutions that are tailored to their particular situations and circumstances.