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In the lead-up to the 2023 general election, the Pheu Thai Party had campaigned on the slogan kid yai, tum pen, pheu Thai took khon. The official translation of this slogan was think big, act smart, for all Thais.
We have an abundance of evidence now that Pheu Thai and its predecessors were capable of thinking big. This is not a party for the timid policymaker. Thaksin virtually invented the playbook of economic populism in Thailand, and universal healthcare was realized under Thai Rak Thai, after all. But whether the party is acting smart, currently, is much more open for debate.
The major point of contention? Pheu Thai’s policy to hand out 10,000 baht to every person in Thailand above the age of 16. The backlash in which this promise has evoked is ferocious. Deservedly so. It is an ill-considered policy that has all the potential of becoming an unmitigated disaster.
Handing out cash and putting them directly in the pockets of Thais is not a new concept, of course. The Abhisit Vejjajiva administration was probably the first to pioneer such a scheme with the Check Chuay Chart program, while the Prayut Chan-o-cha government’s Khon La Krueng scheme proved highly popular. The difference between those two programs and Pheu Thai’s plan is that both came as a response to economic crises — the Great Recession and the COVID lockdowns, respectively. With an economy already in recovery, what Pheu Thai’s policy is responding to is much less clear.
Don’t take my word for it. Few policies in Thailand are so worrisome that they can provoke 99 economists at the country’s top universities to sign an open letter calling for it not to be implemented. Even more impressive is that not one but two former Governors of the Bank of Thailand signed that letter. (The incumbent did not sign, but is also on the record that he has concerns.) The issues they raised were numerous. The massive amount of government expenditure required, to the tune of 560 billion baht, for one. The possibility of reigniting high inflation. The mismatch between what the economy currently needs and the solution being proposed.
The response from Prime Minister Srettha Thavisin, who has vowed that the policy will move forward, was that these “experts are just one voice compared to 10 million people who really need the money.” It’s a reply has all the vibes of UK Conservative minister Michael Gove saying in the run-up to the Brexit referendum that “people are sick and tired of experts” — and yes, the experts turned out right about how Brexit would go.
Instead of dismissing the views of the experts, perhaps the prime minister should consider being level with the 10 million people who need the money. It’s not a matter of just asking people if they need 10,000 baht. Many people do — that’s a given. But it’s not a free lunch.
As the Nanyang Technological University economics professor Nattavudh Powdthavee quipped in a Facebook post, “Suppose I told people I will give you 10,000 baht, and in return the value of the money you have will go down because of inflation, and you and your family members may lose their jobs because employers can no longer cope with rising wages, and your children will have to pay higher taxes to service this debt, and if an emergency like COVID-19 occurs the government would no longer have enough credit for emergency borrowing to assist those in need — would you still want this money?”
One suspects that the Pheu Thai team knows all of this, but they still feel the need to go ahead with this scheme because it is an election pledge. Unlike Palang Pracharath in 2019, which backtracked on its bonanza of election pledges after Prayut received his second term, Pheu Thai wants to get this done to keep their populist credentials intact; an especially pressing priority given the fact that the party just burnt its pro-democracy brand at the altar of power.
The irony, however, is that the 10,000 baht scheme, so heralded by the party’s campaigners, likely proved in the end to be an electoral dud. After twenty years, the Thaksin playbook has been relentlessly copied by the other parties. In response, Pheu Thai tried to outdo every other party with the flashiest policy of them all, and the reward they got was a disappointing second place showing, far short of the landslide they had hoped for.
The experts have spoken, and for good reason. Thailand is not a policy lab in which to experiment, or a playground in which every ill-conceived promise must be carried out. Pheu Thai would be far better off delivering long-term economic reforms that will put Thailand in a position to exit the middle income trap, instead of focusing on a single short-term policy that might very well end up producing a national car crash.