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Widening class division in Thailand - The Covid-19 factor Widening class division in Thailand - The Covid-19 factor
by Murray Hunter
2021-07-27 08:52:26
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Thailand’s class divisions have dramatically widened during the Covid-19 pandemic. With students returning to the streets in protest, even with tight crowd restrictions in place, after a three-month hiatus during the pandemic, the Prayuth Chan-ocha regime is faltering in public support and perceived competence to handle a dramatic linear increase in case numbers.

Thailand, last year near the top of the list of countries which have handled the pandemic well, now finds itself third last, ranked 118 out of 120 in the Nikkei Asia Covid-19 recovery index. Thailand’s prime minister Prayuth publicly took over personal control of managing the country’s response to the pandemic last April. Since then, the country has been hit with more contagious variants of the virus, and been slow and haphazard in rolling out the vaccine program across the country.

thacoro0001_400The government has put its eggs into Siam Bioscience's production of AstraZeneca, which is both late and providing far fewer doses than expected, and importing the less effective Sinovac Vaccine from China. Given the royal backing, the regime had little choice in supporting AstraZeneca as the primary vaccine. Hong Kong Sino Biopharmaceutical is part of the CP pharmaceutical group, where CP has a USD 515 million investment and 16 percent stake, a major supporter of the Prayuth regime.

The AZ option explains why Thailand was the only country which refused to join the World Health Organization's COVAX scheme, and also why Prayuth and his government passed up options in 2020 to buy mRNA vaccines like Pfizer and Moderna that Thais are now clamoring for. In addition, US pharmaceutical companies are said to have walked away from Thailand rather than contravene the US Foreign Corrupt Practices Act. This has led to a massive shortfall in acquiring enough vaccines to inoculate the nation. Now the government is attempting to mix the Sinovac and AZ vaccines to improve efficacy, contrary to WHO advice.

Nevertheless, Prayuth is on public record pledging the country will return to normality within 120 days, hence the rollout of the “sandbox” tourism reopening, amid rising Covid case numbers and deaths. The politics behind the acquisition of vaccines indicates how very little ordinary Thai people's lives mean to those leading this quasi-military government.

Only 4.5 percent of the population has been vaccinated, where there is criticism that those well-connected elite, who are seen responsible for this outbreak by frequenting entertainment complexes and brothels, used connections to get vaccinated before the needy, vulnerable, and frontline medical workers across the country.

With the prime minister and his entourage seen not obeying rules to wear masks at all times during the opening of the Phuket “sandbox”, on July 1, a scheme to bring back foreign tourists to Thailand, the covid pandemic has become the symbol of a great class divide.

Covid-19 restrictions in place over the last 18 months have gravely weakened the economy. Thailand’s GDP contracted 6.1 percent in 2020, and GDP per-capita declined USD 600 from 2019 to 2020, according to World Bank data. The Bank of Thailand estimates that GDP growth in 2021, have been downgraded to 1.8 percent. However, this estimate was made before the cabinet reintroduced restrictions in response to the dramatic rise in Covid cases, now around the 10,000 per day level, at the time of writing.

Thailand’s official unemployment rose to 1.96 percent, 760,000 people, in the first quarter of 2021. However, there are a further two million people unemployed in the informal sector, due to economic downturn and the collapse of both foreign and now domestic tourism across the country.

Poverty in Thailand is on the rise again, rising from 7.2 percent in 2016 to 8.8 percent in 2020. While aggregate household consumption grew, household consumption of the bottom 40 percent has shrunk.

At the same time, 38 of 50 of Thailand’s most wealthy families have increased their net worth. According to Forbes 50 Richest list, the Chearavanont brothers, of the Charoen Pokphand Group (CP), increased their wealth by USD 2.8 billion, to USD 30.2 billion over the last 15 months. Chareon Sirivadhanabhakdi of the Thai Beverage Group increased his wealth from USD 10.5 to USD 12.7 billion. The Chirathivat family, controlling the Central Group, increased their wealth from USD 11.6 billion, from USD 9.5 billion. Sarath Ratanavadi, of Gulf Energy Group and Advanced Info Services (AIS), increased his wealth to USD 8.9 billion. Thailand’s healthcare tycoons all increased their wealth substantially. The Sincharoenkul family, behind the Sri Trang group, which manufactures rubber gloves, made the list for the first time. Bancha Ongkosit, whose KCE Electronics manufacturers printed circuit boards for the automotive sector, came onto the list, with the upswing in demand for electric vehicles.

However, some families’ wealth dropped over the last year. Aiyawatt Srivaddhanaprabha, owner of King Power, which suffered a downturn from the travel freeze last year, was still ranked 16th with USD 2.15 billion. Somporn Juangroongruangkit, mother of banned politician Thanathorn Juangroongruangkit, still managed 47th position with USD 815 million.

Thailand’s Stock Exchange Index rose 43 percent over the last year, which helped increased the wealth of most of Thailand’s elite families.

Over the last 18 months, economic activity has slumped dramatically, particularly in the SME, service, and tourism sectors. Government directed restrictions during the third wave of Covid outbreaks, since April, is starting to economically and socially devastate susceptible communities. In the fourth quarter of last year, there was some optimism the worst was over, and the domestic economy slowly began to normalize. The government tried to kickstart tourism, promoting travel to Thai citizens, in the absence of foreign tourists. However, the outbreak from Thai workers returning from Myanmar in Mae Sot, destroyed the local tourism initiative, and the Thor Lor entertainment complex outbreak over the April Songkran holidays, led to restrictions that are gradually getting tougher, due to the linear growth in the number of daily Covid cases.

In Bangkok, restaurants, micro-businesses, and tourist-based enterprises have suffered from the periodic restrictions, depressed consumer spending, and the absence of both foreign and local tourism. With a new set of restrictions starting with a dramatic rise in Covid cases, and little relief from the government in the form of debt moratoriums and a co-payment scheme (Khon La Khrueng), that subsidized food to the value of 3,000 baht last restrictions, food stalls and vendors are suffering.

There are clearly visible signs of economic malaise all over the country. Empty factories and warehouses, closed down shops, houses and land for sale. More food banks are being opened by charities, trying to assist those who are struggling to feed themselves. Sex industry workers, estimated around 500,000, who as a group, contributed USD 6.4 billion, or 3.0 percent of GDP pre-pandemic, were not eligible for government assistance, as their vocation is deemed illegal in Thailand. During the first outbreak, most used savings. During the second outbreak, many borrowed from friends or moneylenders, and this current outbreak is making many destitute. Workers in the Bangkok, main provincial city areas, and tourism precincts, have returned to their home provinces, looking for some economic activity to undertake to produce an income.

The same is occurring in many provincial cities, especially those that relied on tourism to survive. Some cities like Hat Yai, that relied on Malaysian tourists are virtually ghost towns in the city centre. Its only rising rubber prices that have kept the smaller towns buoyant.

The Prayuth government has attempted to balance economic considerations and public health in making decisions about restrictions. Large manufacturing concerns have not been under any restrictions during the pandemic, even though small and service businesses have been restricted, with many ordered to close, last year for a number of months on end. Many provincial hotels were forced to shutdown for months, with many never reopening.

Twenty percent of the economy was driven by tourism, with almost 40 million foreign tourists visiting Thailand in 2019. This has almost completely disappeared when international borders were closed in March last year. Later in 2020, the government promoted local tourism with travel and accommodation subsidies. However, outbreaks in the beginning of the year, and during the April Songkran break, sabotaged this initiative. The government has now started what is called the ‘sandbox’ scheme, opening up Phuket, and later Koh Samoi, Pattaya, and Chiang Mai to international tourism under stringent requirements. Tourists have begun to trickle in by the hundreds daily, far short of the 109,000 daily international tourist arrivals before the pandemic.

Prayuth’s balanced approach to lockdown has put him under intense criticism. Prayuth is being criticized for not acting fast enough to lockdown the country before case numbers started escalating, and also for the destitution of the people, who had little financial support from the government during the latest outbreaks. The latest covid case outbreak has become a symbol of Prayuth regime incompetence.

The escalating pandemic in Thailand has focused attention of the double standards applicable to the elite in society and the others. This has been very evident in the vaccine rollout. The elite and privileged have been able to secure a vaccination before many of the vulnerable in society. While people have been suffering, the grounds and infrastructure of the grand palace complex in central Bangkok has been enlarged, to become a city within a city. Politicians have been perceived and criticized as being above the law on social media. The Prayuth regime now has critics from a much wider spectrum of society, than before the pandemic, where discontent with government performance is growing.

There is speculation that the coalition government, Prayuth had cobbled together is becoming much more difficult for him to control. There is growing disunity and distrust among the coalition partners. The major party, Phalang Pracharat (PPP) is currently in a number of disagreements with the prime collation partners, Bhumjaithai (BJT), Democrats, and Chat Thai Phatthana parties. This has been very evident over the constitutional changes issue, and management of the pandemic.

At the same time, the renewed student protests, which began again on 24 June marking the 1932 anniversary of the end of absolute monarchy, is still calling for the resignation of Prayuth as prime minister. Protest numbers still reached the thousands, even though there are strict covid restrictions on meetings, and more than 60 students have been arrested during prior demonstrations, under the notorious section 112 of the criminal code, Lese Majaste, which has a jail term of up to 15 years on each offence. In a recent protest, a prominent former Red Shirt leader, Jatuporn Prompan, who was just ordered to serve a prison sentence in two defamation cases in 2009, against former prime minister Abbisit Vejjajiva, made an appearance.

The students are unhappy with the very limited proposed constitutional amendments and their earlier demands for the abolition of the 250 member military appointed senate, and reforms to the monarchy, so it becomes more accountable. This is after king Maha Vajiralongkorn took direct control of over USD 30 billion worth of assets from the State Property Bureau, and placed two army units in the Bangkok region, under his direct control.

In what was called a car mob, students in central Bangkok called on both the Democrats and Bhumjaithai parties to abandon the government and join the opposition to topple Prayuth as prime minister. Hypothetically, if this defection occurred, this would give the opposition 321 votes out of the 276 votes needed to topple Prayuth. Prayuth has the 250 member senate firmly behind him, as all the members are appointed by the military.

Thailand is now in a much deeper era of class division, where the poor have become poorer, over the duration of the pandemic. The political parties that support the Prayuth regime are under more pressure to abandon the government. However, this would leave the political situation just more unstable, as there is very little likelihood of an election with the current pandemic situation. Currently, overt support for the student movement hasn’t expanded beyond the students themselves. The former red shirts are hesitant because of how the army destroyed the movement after the 2014 coup, but economic desperation is bringing back political narratives among the Thai population, who abandoned political talk for years after the coup. This time there is much more awareness and open talk about how the poor and middle class, don’t have a say in Thai politics today. However, politically, there is little voice that can espouse their displeasure and their economic hardships.

This awareness and of the divide between the people and the elite of Thai society will long outlast the pandemic, and will play a role in future political narratives for years to come.

Murray Hunter’s blog can be accessed here

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