According to Thailand’s bi-annual household socio-economic survey there were about 22 million Thais living below the poverty line in 1988. The vast majority of them (about 18.5 million) were in rural (non-municipal) areas.

Thailand’s greatest achievement over the past two decades is the dramatic lowering of this number. The 2009 survey found that there were about 5.3 million people living in poverty. Of these 4.7 million were in rural areas (with about 2.8 million poor in the rural areas of the Northeast alone).

In a macro sense, much of this reduction has been achieved by Thailand’s sustained economic growth. As the economy has grown, vast numbers of people have been able to move into more productive pursuits both within the agricultural sector and outside it.

But how is this livelihood transformation achieved at a micro-level? How have Thai households managed to lift themselves out of poverty?

A recent study of monthly household finances in over 500 households in 16 Thai villages suggests a number of answers. Among the surveyed households:

  • “43 percent realized significant and lasting gains in net worth over a seven-year period, … 81 percent of that wealth accumulation was due to savings of income, as opposed to gifts or remittances”
  • “Households that do get ahead have some generally shared characteristics. The heads of households tend to be younger than in the families that do not increase their worth. Additionally, gains in wealth correlate specifically to the highest level of education obtained by a family member, and not the family’s median educational level.”
  • Willingness to try new ventures is often an important factor in creating a pathway out of poverty. “There is not a poverty trap in these Thai villages … There are strategies people can pursue to increase their relative wealth.”

Nothing particularly surprising here – just sound common sense about the importance of encouraging saving, promoting rural enterprise and, perhaps most importantly, providing quality education. As populism becomes politically mainstream in Thailand, let’s hope that it doesn’t lose sight of these basics.