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18 February 2014
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TDRI calls for social welfare

Improving education, tax reforms cited

Reform measures aimed at developing social welfare should be enacted to improve the living conditions of the poor and enhance their political participation, say academics.

Somchai Jitsuchon, research director at the Thailand Development Research Institute (TDRI), said reforms should consist of developing education, improving human resources, and providing management skills, citing former Bank of Thailand governor Puey Ungpakorn’s development plan.

A law should be enacted specifying basic social welfare for the general population, with detailed rules and regulations and a clear financial procurement process, he said.

Tax reforms on land, corporate income, and the environment should be ratified, said Mr Somchai, adding environment tax reform could help enhance the poor’s living conditions since many rely on natural resources for their livelihood.

He said the government should allocate financial support to provincial administrative units for human resource development, with 50% of the units’ budget used for this cause, as around 10-20% is currently used for development.

Political reform is also needed as the present economic and social inequalities stem from political inequality.

The poor should be able to voice their opinion on policy implementation, such as provincial administration and the electoral system, to better participate in the political system, said Mr Somchai.

The TDRI has not assessed the impact of the political turmoil on economic growth this year, but the effect is expected to be substantial since the government cannot disburse its fiscal budget effectively and private investors are not confident, he said.

Mr Somchai said 3% GDP growth is possible, but there still is no clear indication how the economy would sustain that growth rate. The rate could dip below 3% if violence occurs in the second half, he said.

He believes the rice pledging scheme should end as it has incurred hefty financial losses, and the government should clarify the rice sales process to enhance public confidence.

Ammar Siamwalla, an honorary TDRI economist, said the scheme is an example of government abuse using budget disbursement loopholes without scrutiny. He feels an audit committee headed by the opposition party leader overseeing public budget disbursement is needed to ensure greater transparency.

Good governance of state power requires a counterbalance from other groups, said Mr Ammar.


First published: Bangkok Post,  February 18, 2014


Ammar Siamwalla, Ph.D.
Distinguished Scholar
Somchai Jitsuchon, Ph.D.
Research Director, Inclusive Development