Page 179 - _21-0619 OK

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

additional farm price subsidies. The health care scheme is credited with moving
several hundred thousand households above the poverty line by reducing
household expenditure on health, and safeguarding poor households against

the financial disaster of a health crisis in the family (Nualnoi, 2013).
Second, the initial improvement in the Gini Index came in the bubble

before the 1997 crisis when the labor market became tight, and real wages
improved. This trend was disrupted by the crisis, but returned in the early 2000s,
despite the influence of the in-migration of several million unskilled workers
from neighboring countries.
Third, agricultural prices trended upwards in the early 2000s, prompting
expansion of cultivation of rubber and fuel crops.

Fourth, the policy of decentralization to elected local government
bodies, inaugurated in 1999, resulted in a shift of government budget away from
the center, more to the provinces and more to the rural areas. The revenue and

expenditures of elected local governments increased from less than
10% of the annual total national budget to around 24% in 2006 and to 28-29%
in the late 2010s. Although local bodies were often criticized for corruption
and wasteful spending, they have also responded to constituents’ demands by
providing better basic services including piped water and paved roads.
Finally, people have not been passive agents in this process of convergence
but have moved to tap the unevenly distributed gains of growth. Labor migration

began from the early development era, but swelled in the early-mid 1990s
when around 5 million persons transferred out of agriculture into industrial and
service sector jobs, and continued after the recovery from the 1997 crisis. A large
factor in the faster-than-average growth in rural incomes has been the contribution
of transfers from family members working in the urban economy.

While the trend towards better income distribution between 1992 and
2015 now seems well established, three major problems remain.
First, as Kobsak (2013: 38) shows, while the incomes of most of those in the
top two-fifths of the income pyramid grew slower than average over 1988–2011,

the incomes of the top 1 percent grew spectacularly fast, around 2.8 times faster
than the average. In short, Kobsak has discovered that Thailand has a “1 per cent

171
Pasuk Phongpaichit

5/1/2565 BE 09:05
_21-0619(167-184)10.indd 171
_21-0619(167-184)10.indd 171 5/1/2565 BE 09:05