رشد ارزش سهام تجارت کردن در توسعه اقتصادی مدرن: مورد تایلند

The trade-off between economic growth and income inequality is quite clear in the case of Thailand during the last four decades of its development. Rapid economic growth had brought about rapid reduction in poverty while income inequality had risen. The paper also shows that when poverty reduction is decomposed into two separate effects of growth and income distribution on poverty reduction, the growth impact on poverty reduction was lessened by the incidence of high income inequality. In short, the growth in Thailand was not a pro-poor growth. The high income inequality can be explained, in part, by unequal returns to productive inputs in imperfect markets and unfair competition, by unequal landownership and unsuccessful land reforms, and by political and administrative structures that protect the positions and interests of the relatively well-off. To help reduce the growth–equity trade-off, future growth in Thailand must be pro-poor or more pro-poor.

The trade-off between growth and equity in economic development is as old as economics itself. Economics, as a social science, strives to explain human behaviour in making choices between or among sets of alternatives, each of which has associated with it some notions of opportunity costs. What this means is that there is a cost, and/or benefit, associated with every human decision. It is not unusual, therefore, to recognise that development decision or policy that brings about growth may also bring about an alternative cost of growth, of which increased income inequality is a major economic phenomenon. It is possible that this trade-off does not occur, that is to say, growth does not necessarily bring about increased inequality but, on the contrary, income equality may improve with growth. In the past 30 years, economic literature is replete with arguments for and against the existence of this trade-off,1 but it seems that, at least in East Asia, such an argument has lost its importance during the high-growth periods of the 1980s and 1990s because as long as the economy continues to grow rapidly, that everyone’s pocketbook or wallet is bulging, few would be concerned with the issues of income inequality. But growth without equality or growth with high income inequality is not a sustainable growth. The recent economic crisis in East Asia is a good indication of such vulnerability. Indeed it could be argued that the crisis that started first in Thailand in 1997 was brought about by the deep-rooted inequality situation in the Thai economy and society. The main purpose of this paper is to address the issue of the trade-off between growth and equity in Thailand as a typical, rapidly-growing modern economy in East Asia. The use of Thailand of a case study is important in a sense that, while the economic development of Thailand exhibits patterns and traits that can also be seen in other East and South-East Asian countries such as Korea and Malaysia, there is also uniqueness associated with Thailand as the only country in South-East Asia never colonised by Western power during the 19th century colonisation push, and the only country in South-East Asia that the overseas Chinese have been completely assimilated with the indigenous Thais during the last 40 years of economic development. This mixture of common or universal and specific characteristics that determine, and/or are influenced by the growth–equity nexus can be used to explain a unique character of Thailand’s modern economic development experience. Normally when a country embarks on its journey to economic development, it faces a series of questions concerning that path to development. One is the question on what development procedure or philosophy to follow: capitalistic or socialistic or a mix of the two. Then other questions may include: Who is to decide on such procedure? What would be or should be the speed and tempo of such development? Who would gain and lose or how the benefits and costs of development are shared among the people in the country? and so on. In a democratic political system, the first question will need to be answered politically through choices of politicians or political parties representing certain economic and political ideas. The process may be long drawn out as everyone is involved in the choice or selection process. But for Thailand when it embarked on its development journey in the early 1960s, this was not a difficult question at all, as the country was run by a military dictator who decided the path of development on behalf of the whole population. Field Marshall Sarit Thanarat was that military dictator when the First National Economic Development Plan was announced in 1961, heralding the start of Thailand’s modern economic development. Lest the above event be looked upon only in bad lights, it should be mentioned at the outset that many have regarded Field Marshall Sarit as the Benevolent Dictator who ushered in the new era of development to the Thai people.2 He had made a great use of advice from astute technocrats during his time, and put in place many rules, regulations and institutions that, undeniably, helped Thailand grow very fast after the launch of its First Plan. On looking back, his doing, and undoing, could be a part of the reasons that can be used to explain the apparent trade-off between rapid growth and increasingly unequal distribution of income of the Thai people as the country grew. But perhaps the real reasons went much deeper and farther back. There is no one single reason that explains the Thai growth–equity trade-off. The reasons are many, as we shall see. Once the question “Who determined economic development policies?” is solved, the question “What kind of development policies to pursue?” became critical. The late 1950s were the periods of the Cold War between the US and the Soviet Union and China. Many countries around Thailand had succumbed to communist influences, leaving Thailand the ‘front line’ state that the US needed to protect and keep on its side of the Free World. Therefore, the US government poured in military, economic and technical assistance to keep Thailand strong militarily and economically. A part of the US economic help was through the technical assistance of the World Bank which sent in a team of economic experts before Sarit’s time, but the report of this World Bank Mission Team has become the ‘Development Bible’ that guided Thailand in the first one or two decades of its development planning.3 It may look as though Thailand had no choice but to go along with the free-market, capitalistic direction provided by the US, but the truth was that this was also what Sarit himself would like to see Thailand develop. Thus a special relationship between Thailand and the US had developed and last until the end of the Vietnam War in the last 1970s.4 Sarit was dead in 1964, half way through his First 6-Year Plan, but the momentum of growth was already established. His successor, another military prime minister, continued on Sarit’s development legacy until 1973 when he was toppled by a popular, student-led, uprising. By that time (during the Third Plan) it was obvious that rapid growth of the economy had brought about increasing income inequality. The change of Thai government and regime in 1973 had spurred a flurry of economic activities that aimed at social equality and public welfare issues. The short-lived return to democracy in 1974 was ended in 1976 with the fall of democratically-elected government by another military seizure of power. From then on the country had gone into a series of economic and political changes that have direct bearings upon the overall growth and equality in Thailand until today. The above account is just a glimpse of what happened to growth and equity situations in Thailand in the first 10 years or so of its modern economic development. In what follows, we will analyse growth and equity in the Thai economic development in more details. The next section (Section 2), we will look at records of growth, poverty and income distribution of the Thai population in the past four decades. In Section 3, we will explain how we measure the separate effects of growth and equity on poverty, leading to Section 4 where we will try to explain the reasons for such growth–equity trade-off. Section 5 summaries and discusses some important policy implications.

In this paper, we have been able to discuss the pattern of economic growth of Thailand, one of the fastest growing economies in East Asia. We went back to the period of the early 1960s when Thailand began its modern economic development through a series of indicative plans. We explained the basic philosophy underlying the free market approach to economic development that the Thai leader had chosen, and the good results that came out after the firs few years of systematic development applications. The 40-year records of development of Thailand had shown a very satisfactory growth rate in the country’s GDP, which had translated into a significant reduction in poverty incidence in all regions of Thailand. However, while the poverty was falling with the rise in the growth rate of GDP, the distribution of income of the Thai people had become more unequal. The relationship between growth and income inequality fit well with the classic Kuznets curve which predicts the rising inequality as the economy expands. In other words, the trade-off between growth and equity in the case of Thailand is very clear. We have also attempted to capture and measure the separate effects of growth and income inequality on poverty reduction, and we have been able to demonstrate that, indeed, the growth impact on poverty reduction was lessened by the incidence of high income inequality. Had Thailand managed to achieve more equal income distribution during the periods leading up the economic crisis in 1997, the poverty reduction would have been greater, and perhaps the severity of the crisis would not be as much as it actually was. We have also attempted to provide some answers to the questions: Why the rapid growth in the Thai economy had brought about increased income inequality, or why there must be a trade-off between these two aspects of economic development. We have looked at mainstream economic reasoning, and suggested that the unequal returns to productive inputs brought about by imperfect market and unfair competition were probably the main reasons explaining the disparities in the past income distribution. We have also made references to the importance of land ownership and land reform issues, believing that the concentration of wealth through land ownership could be one of the major reasons for chronic income inequality. Finally, the political and administrative frameworks of the Thai government, and those involved in policy making in Thailand could have some impacts on the trade-off between growth, poverty, and income inequality. The policy recommendations based on the above situations are obvious. The future growth must be pro-poor, or more pro-poor, if the faster and more sustainable poverty reduction is to be achieved. To do that everyone involved in the decision making, the design, and implementation of development policies in Thailand must realise that equity issues are no longer to be relegated to policy of secondary importance. Several traditional instruments to correct income inequality are already at the government disposal, be they tax and expenditure policies, and some more direct government intervention or safety net measures. Perhaps a more important policy implication is not what policy instruments to be used to bring about greater income equality, but a necessary message that will startle our government leaders into action. Ten years ago, one of the authors of this paper was asked to conduct a study on the rural poor in Thailand.15 At the end of that study he had made a remark that once the government was strong enough, it should pay more attention to the provision of minimum guarantees for the welfare of the people and the problems of widening disparities in income distribution. Once the welfare of the poorest group had received government help, poverty would no longer be a critical economic issue. In its place, however, income inequality would need to be addressed. This was a continuing issue that every government in Thailand must face. What was said 10 years ago is still valid today.