Economic reform: key to end political conflicts

The political turmoil has been caused by problems with the economic structure, resulting in massive financial losses, Thailand Development Research Institute

(TDRI) chairman Kosit Panpiemras told an annual seminar entitled

"Economic Reforms for Social Justice".

Kosit highlighted three fundamental issues: poverty; business monopolies via policy corruption; and the income gap.

"These collide against political factors, the so-called 'populist policies'

that, through support of the neglected majority, guarantee overwhelm

ing political success. However, such policies are dubious, because they

tend to ignore monetary and fiscal discipline and sustainability. That

means they are unacceptable to the middle class of elites shouldering a

growing tax burden," he said.

The focus must therefore shift from political reforms alone to eco

nomic reforms that alleviate poverty, reduce politicians' ability to benefit

from government projects and narrow the income gap.

As long as a high economic disparity, monopolies and loopholes

benefiting politicians exist, the conflicts will continue. Since the gains

are concentrated, political power will

also be concentrated, as will the political conflicts, which will in turn weak

en democracy. Reforms in basic public services would reduce the eco

nomic discrepancy and social divisions, Kosit said.

TDRI research shows Thailand's income discrepancy is as bad as Latin

America's. The wealthiest 20 per cent control 55 per cent of the money in

Thailand, while the poorest 20 per cent share 4.4 per cent. Democracy

tends to strengthen when this sort of

discrepancy narrows.

TDRI president Nipon

Poapongsakorn said if Thais wanted

democracy, they would have to weigh

the cost of military coups.

Without positive change, the people could rise up. However, extreme populist policies could also foster sup

port for a coup among higher middle-income earners.

Nipon said for sustainable democracy, these discrepancies must be

addressed, fiscal policies must be fair

to all, and everyone should have

access to basic public services.