IDEAL OF A WELFARE STATE IS WORTH EXPLORING

       Improvement in the current social structure is called for and could help avoid political chaos Over the weekend, the Thailand Development Research Institute (TDRI) released a comprehensive report at a conference held by the King Prajadhipok Institute on how Thailand might transform itself into a welfare state. The TDRI believes that a welfare-state strategy would help improve social equity and strengthen the democratic foundation of Thailand.
       The TDRI is quite concerned about the growing tendency towards economic populism. The Thaksin government began this trend by offering handouts to the poor. Subsequent governments, including the current Abhisit government, have followed suit.
       The populist policies, in which the state aims to pump money into the grassroots, might win votes for politicians but in the long run they are not sustainable. Evidence does not support an assumption that populist policies help improve income distribution.
       Much worse, populist policies will end up increasing public-sector debt, which leads to an economic crisis like many South American countries have experienced. But populist policies are like an addictive drug. Once everybody tries it, it is difficult to let go.
       The TDRI has instead proposed a welfare-state strategy as an alternative to populist handouts. This would help address the root cause of the current political conflict and social inequity. Dr Nipon Poapongsakorn, head of TDRI, believes that if the disparities in income and assets are not tackled, Thailand could plunge into yet another political crisis. The TDRI has gone to great lengths to propose that a welfare state would help close the gap between rich and poor, and thus reduce social and political conflicts.
       The research findings showed that the richest had 69 times more assets than the poorest.
       In addition to 10 per cent of the poorest people, about half the country's population, lacks job security. The current market economic system fails to bridge inequality.
       The state also adds salt to the injuries by failing to provide equal opportunity to everyone to access financial credit, knowledge, natural resources because the state represents a large business conglomerate that monopolises businesses.
       Only a handful of politicians and businessmen access the business privileges and benefit from the monopoly.
       The current tax structure does not help reduce concentration of assets and wealth in the hands of a few. Concentration of wealth has a significant correlation to political power as the country has seen business tycoons enter the political arena.
       The TDRI believes without equal economic opportunities and social equity, chances of Thailand developing a democratic system will diminish. At present, the social structure of Thailand is very vulnerable. Most of the poor and middle-class do not enjoy job security. The elderly are also vulnerable to being left out and become poorer when they get older. The Thai society is inching towards an ageing society. Most of the Thai workers do not have social-security coverage.
       The elements of a welfare state are that all Thais must have basic protection and rights and get appropriate assistance when they are in trouble. Yet Thailand's spending on welfare is very low. About Bt252 billion, or 2.8 per cent, of the gross domestic product is being allocated to welfare, compared with 20-31 per cent in countries belonging to the Organisation for Economic Cooperation and Development.
       We support the concept of a welfare state. But further discussion is needed over how we can finance the welfare state. Most developed countries, with strong welfare protection, are facing unsustainable public debt.
       Once the welfare state is adopted, it is difficult to stop the skyrocketing |cost, which does not match tax revenue. We should move in this direction cautiously.