In a seminar hosted by the Nation Group, government critics said that the populist policies, which underline "Thaksinomics", will be discontinued only when tax money needed to fund them runs out (leaving thousands of households in debt), or when the public realises their real costs.

"Given Prime Minister Thaksin's assurance of a new election in 15 months, it's interesting to see what will happen in the meantime," said Somchai Jitsuchon, an economist at the Thailand Research Development Institute (TDRI). "If the public is properly educated of the causes and consequences, this could have an influence on the next election."

Somchai said that once the tax money runs out, the budget-guzzling policies will fall apart. This seems likely considering the government's plan to channel most of its budget into its Bt1.8-trillion mega-projects.

Still, he said, a newly elected Thai Rak Thai government could introduce policies that do not rely on tax money, such as financial programmes through state-owned institutions like Krung Thai Bank or the Government Savings Bank.

"How long these additional policies would survive then depends on the ability to investigate the institutions' financial position. If the government's power remains strong, the burden could then be concealed," Somchai said.

Somchai and four other speakers at the seminar said that promises of further populist policies would greatly influence the April 2 election. The majority of rural poor people are awaiting further government assistance to refinance existing debts incurred through policies such as Village Fund loans and those from the Bank for Agriculture and Agricultural Cooperatives (BAAC), Somchai said.

All five speakers denounced the policies as "a debt trap".

In the past 10 years, average household debts have tripled, they said. Although low interest rates have accounted for most of that by encouraging members of the middle class to borrow, about one third of the increase has been attributable to populist policies.

Compared to a farmer's average annual income, the average debt of Bt130,000 per household is huge, they said.

Anu Sa-ngaruangrit, a coordinator of the Eastern Social Development Club, said a survey of 20 tambons in Uthai Thani showed that combined annual household revenues were Bt2.098 billion while expenses were Bt2 billion.

On top of that came combined debts of Bt1.396 billion, out of which Bt779 million had been borrowed from the BAAC and Bt174 million from the Village Fund scheme.

"Populist policies distort the way we look at poverty problems," he said. "Due to their huge debts, the rural poor are receptive to all help even if it leads to bigger debts in the future."

Anu said that this analysis explained why Thai Rak Thai, which was ready to inject more money to keep the majority of voters happy for the time being, should again win by a landslide.

Prathin Wekhawakyanon, a representative of the Slum Network for Democracy, accused the government of deceiving the urban poor. Impoverished urbanites living in some 5,000 communities around Bangkok are harbouring false hopes on account of the government's Ban Mankhong and Ban Ua Athorn schemes, she said.

"It's all just rhetoric," she said. "The schemes will not solve the root of the problems."

Prathin noted that although Ban Ua Athorn was producing cheaper houses, they remained beyond the financial means of most poor people. To seek assistance through financing programmes from banks, potential buyers needed to have a payslip - a symbol of permanent employment, she added.

On the 10th anniversary of the nominal purchase, home-owners are forced to pay higher instalments, which inevitably means that most of them sell their homes before then, she said.

Similarly, the Ban Mankhong scheme, which offers low-interest loans to help people finance the construction of their own house, does not guarantee permanent accommodation for the poor. Houses built on government agency land, might also incur expropriation, she said. Owners of homes built on land owned by the Ports Authority of Thailand are now facing eviction because the agency wants to develop its Teleport project.

"What's worse is that the policies widen conflicts within communities," Prathin said.

Before Thai Rak Thai's populist policies came along, communities tended to save money in a cooperative style. But now people have stopped saving in favour of applying for government loans. Quarrels over money are frequent with people often being forced to move from their communities, she said.

"Certainly, these people hope Thaksin will return so they can get more money to refinance old debts. Such an attitude weakens communities as people no longer think about helping themselves," Prathin said.

Nevertheless, both Atthachak Sattayanurak, a lecturer from Chiang Mai University's Faculty of Humanities, and Praphat Pintob-taeng, a political scientist from Chulalongkorn University's Faculty of Political Sciences, believed Thai Rak Thai will win support from the poor thanks to populist policies.

"Half of the people have really received money and Thai Rak Thai has used this to build its support base," said Atthachak. "In providing the money, the government did not take into account the economic consequences. It simply wants to tell the public that they have money in their pockets and more will come.

"I cannot imagine how these schemes will help the poor get out of the low-return agricultural sector."

All such populism will yield in the long run is further votes for Thai Rak Thai and further promises of easy money in return, he said.

Atthachak stressed that people were being misled by such largesse because even though the government was promoting itself as the champion of the poor, under the Constitution economic benefits are guaranteed as basic rights for the poor regardless of who was in power.

"The Bt30 health scheme must be abolished and replaced by a comprehensive health plan that covers all citizens," he urged.

Praphat said that while none of the government policies had really helped pull people out of poverty, the government had failed to take care of the welfare and minimum wages of factory workers, initiate just resource allocation, or consider the consequences of free trade agreements on the poor.

"We hope that once the poor realise they are losing rather than gaining from the government's economic policies, particularly FTAs [free-trade agreements], they will understand Thai Rak Thai's real 'virtues'," Praphat said.

"The government has so far been successful in painting rosy pictures and punching in nice figures," he added. "It has said 98 per cent of the loans under the Village Fund programme have been repaid; in fact the borrowers tap money from other schemes introduced later to finance that. Where this will end?"

Now that Thai Rak Thai stands to win again, more projects could be introduced to provide new funds that could be used to finance debt incurred in old schemes. But the consequences will be grave for the poor once money-pumping machines stop, the speakers said. "Anywhere on earth, the more quickly populist policies end, the less damage [they cause]," said Somchai of TDRI.

Achara Deboonme

The Nation