[This is the text of the presentation by Pasuk Phongpaichit at the Thailand in Transition workshop held on 8 December 2009. The presentation by Thongchai Winichakul is available here.]

Thailand should be a much fairer society than it is today. I’m not suggesting that recent conflict is all about poor vs rich. It’s more complex than that. But if there are a lot of people who feel exploited, marginalized, disadvantaged; and a lot of other much more privileged people who fear the resentment of the exploited and marginalized, then there is little chance of a society with trust, cooperation, and peace.

We have known for sometime that the income distribution in Thailand is bad. Look at this comparison. Thailand is now one of the most unequal societies in terms of the income gap between the richest 20% and the poorest 20%. In countries, like Japan and Northern Europe which value equity, the gap is only 3 to 5 times. Elsewhere in Europe and N. America: 6 to 8 times. Among neighbors in Asia: 9-12 times. Thailand is in the range of 13-15 times.

Below Thailand there are only African states with civil wars, and Latin American countries with endemic populism.

What’s more, over the last thirty years, our distribution has been getting worse, while our neighbors have got better.

Recently we have got the first information on the distribution of wealth – assets like land, investments, and cash savings. The distribution is much, much worse than for income. The gap between the top 20% and the bottom 20% is 70 times.

It’s not only income and wealth. Power is also very unevenly distributed. A handful of wealthy people in high positions, esp. politicians, ministers, unscrupulous wealthy businessmen, high-ranking police and army men, can get away with almost anything: amassing their wealth by illegal means, using their influence to escape the law, and at the same time commanding respect from high society.

Inequity doesn’t inevitably lead to political instability. Why then is that happening now? Over the last generation, average real income per head increased three times. When people have more money, they have more complex needs, more aspirations, more knowledge, higher expectations. A generation ago, an ordinary villager used rain water for drinking, and thought nothing of it. Now that rainwater has become polluted, and the villager knows that cityfolk have piped water which is convenient and clean. So he wants it too. People are increasingly demanding fairer treatment, equal opportunities, better quality of public goods. People are increasingly aware that political participation and political agitation are effective strategies for improving their own lives. There’s no going back on this.

So the inequities underlying political are complex. There are the poor who have sensed the potential of politics for improving their position; the richer who fear losing long-enjoyed privileges; many ordinary people who resent the power (and corruption) of the bureaucracy; a growing provincial middle class that resents the excessive domination of Bangkok; and other divisions.

As a society we haven’t placed much value on equity or fairness. In the past we had a hierarchical society where everyone was supposed to know their place.

Then the urban society that has come to dominate over the last half-century has been shaped by the immigrant ethic of making good by hard work and personal achievement. People are wealthy because they worked hard. People are poor because they have been stupid or lazy. That’s the belief. And I think it helps to explain why we have talked about improving income and wealth distribution in our economic plans, but in practice have done nothing serious to achieve that goal.

I think the recent conflicts are part of growing up politically, and they have the potential to move us in a better direction. More people have begun to think about these structural problems and how we could change for the better. The political cost of inequity is becoming more obvious.

Two important bodies, the King Prajadhiphok Institute (KPI) and the Thailand Development Research Institute (TDRI) have even talked of moving Thailand towards a welfare state. This is a positive move and I am all for it. But this will take some time.

May be we have to start with something a little less ambitious. At least we need to create social awareness of the problem. Then we should try to create a consensus for a need to move towards a fairer society.

I like the word ‘fair.’ It’s not the same as ‘equal,’ and the idea of equality or an equal society gets many people frightened. A ‘fair society’ is one where the society’s members feel that the distribution of power and wealth is reasonable, acceptable. It’s a rather democratic concept. A famous writer recently talked about “a society where no-one is looked down upon, humiliated or marginalized.”

There are simple things that can be done quite easily and simply.

For example, reform taxation. At present the taxation system is too reliant on value-added and other indirect taxes, which fall heavily on the less well to do, but favor the rich, making the income gap worsen, and making the poor subsidizing the rich. We should make sure a greater proportion of government revenues come from direct taxes, on income, capital gain, property, and inheritance.

And then, increase and improve the public goods and services. If you’re rich and live in Bangkok you have good schools and hospitals. If you’re poor and in Mae Hong Son, you don’t. This is very obvious, and it’s not terribly difficult to solve.

For a start, we simply collect too little government revenue and have too few public services. For example, only about half the households have piped tap water. Providing more public goods is the best way to counter both poverty and inequity. According to the estimate by TDRI, the universal health scheme lifted half a million people out of poverty, and improved equity to boot. The scheme may be far from perfect, but there are good reasons why it is so popular. We need similar, dramatic changes in elementary and secondary schooling – especially by improving the quality. We need more and better public transport.

On the whole the focus should be public goods which benefit everyone equally. At the moment a lot of public goods and subsidies tend to benefit the well to do more. This should be corrected. Obviously government must find ways to direct public goods to those intended. In this respect a detailed, workable information system which will enable government to do this must be one of the priority.

And of course enforcing the rule of law. A lot of people long to see a government which can reduce the use of influence, do away with powerful people being able to get away with anything. Whether rich or poor, powerful or powerless, must be subject to the same law.

These are challenges which a democratic government must be able to achieve.