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The International Journal of the Royal Society of Thailand
Volume XII, 2020

new evidence has challenged the relationship between inequality and growth,
we see a dramatic change of heart. Many economists now say high inequality is
not good for economic growth. An OECD study shows that societies in which many

people are in the low to middle income range cannot finance the accumulation
of education and skills to allow many to ascend the social ladder and contribute
to higher economic growth (OECD, 2014). Berg et al (2012) argue that inequality
underlies the political conflict that disrupts long-term growth.

The rising income inequality all over the world, and the resultant
economic slowdown from the 1980s to the 2000s, has become a big global issue.
Thailand also has a problem of high economic inequality. Although the situation
has improved somewhat in the last 15 years, when compared to neighboring
countries in Asia, Thailand still has high income inequality (Pasuk and Baker,
2016: 14), and this is the root cause of inequality in political power, social status
and access to resources of all kinds. It has led to practices, both visible and
invisible, that are embedded in the institutions and structures of society; and lies
behind the tumultuous and unstable Thai politics from the mid-1990s (Bowornsak,
2009). Understanding the inequality issue in Thai society has thus become more
important than ever.

This article analyses inequality in income and the concentration of wealth
and power in contemporary Thai society from around the mid-1980s to the 2010s,
explains the causes and negative economic impact, and suggests policies to
alleviate inequality. The paper is divided into four sections. The first section
presents empirical evidence on economic inequality in Thailand and analyzes
the roots of high inequality. The second analyses the relationship between
inequality and politics. The third suggests some way out which can reduce the
inequality to a less dangerous level. The last is a summary.

Economic Inequality in Thailand

Worsening inequality of income in the development era
The World Bank (2016) praised Thailand for its economic performance
with GDP growing at an average annual rate of 7.5 percent in the period from
the 1970s to the mid-1990s, as well as a dramatic reduction of extreme poverty as
measured by the international extreme poverty line (USD 1.9 per day, 2011 PPP)

from 14.3 percent in 1988 to less than 0.1 percent in 2013. But inequality
rose, especially in the high growth period of 1985-1992.

168 Inequality and Policy

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