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Gini Coefficient


Now that the latest round of red-shirt demonstrations is fading in strength, what is at stake for Thailand is becoming more apparent. Masks are dropping and real interests are emerging from under the hyperbole and rhetoric. The country is coming back to politics as usual, with one group - the red-shirt spokesmen - seeking power and authority and another group - the coalition government - negotiating to align public opinion on its side and get its best possible deal. And all peacefully positioned under the constitution and the laws. Nothing new to Thai history here.

One important mask has fallen away and the actors can be seen for who they are. Thaksin has been exposed as not the real reason for the demonstrations, though his name is mentioned and he calls in from his haven abroad. The red-shirt leaders have distanced themselves from his personal cause of getting his money back from the courts. The red-shirt leaders have their own agendas now. They are focused on forcing elections and how they can benefit from that competition.

But one big mask is still out there. That is the pretense that Thailand has a deep structural crisis of social and economic inequality; that an elite - the ammat, the military (who is actually in this "elite" has not been made clear) - is thwarting the urban poor and poverty-stricken rural residents from sharing in national prosperity.

Is this true about Thailand? Does Thailand have a serious gap of inequality that demands radical political and social change as the red shirts demand?

The professional measure of a country's inequality is its "Gini Coefficient". The Gini Coefficient is the comparative ratio between two areas. One area is defined by a curved line between a horizontal axis on which the share of people with different income levels is plotted, and a vertical axis on which the cumulative share of income earned by percentage of the population is plotted. In a country with perfect equality the curve would be a straight line at a 45-degree angle, where every increase in income adds the same amount to the cumulative total of all income earned. The area between the straight line at an angle and the curve is compared to the area on the other side of the curved line. The bigger the first area, then the more inequality there is in that country's income distribution as the slope of the curve is farther away from the 45-degree straight line.

Of all nations, the lowest Gini coefficient is found in Denmark at 24.7. The highest is found in Namibia at 74. Both the UN and the CIA estimate Thailand's Gini Coefficient at 42. Other Asean countries have the following Gini Coefficients: Malaysia 49;

Philippines 44; Laos 34; Vietnam 34; Cambodia 41.7; Myanmar - no calculation available; Indonesia 34.3/36.3; Singapore 42.5; So Thailand has less income inequality than Malaysia and the Philippines, and a little less than Singapore.

So why is such a fuss being made by some Thai politicians and many foreign commentators about inequality and an unsustainable gap between rich and poor in Thailand and not about similar or worse conditions in Malaysia, the Philippines and Singapore? Why is Thailand singled out for such criticism? Some other relevant countries to compare with Thailand are: The US with a Gini Coefficient of 40/45; the UK at 36; Norway at 25.8/28; and Germany at 28.3. China has a Gini Coefficient of 46.9, or more inequality than Thailand even though it when through a period of Maoist social and economic equalisation.

It is time to drop the pretense that there is something very wrong with Thailand, its values and traditions that is unfairly - when compared to other countries - keeping its people down. Thailand, along with the US and China has work to do to raise up those with lower incomes. But that is the normal task of economic and social development, education and job creation. No political crisis or social upheaval is needed to deal with Thailand's economic challenges.

Professor Stephen Young is the global executive director of the Caux Round Table.






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