Populism vs “Populism™” | 19.04.05
Aw, not this word again. Nation columnist Thanong Khanthong makes his case against Thailand’s most discredited — and discrediting — ism du jour.
Economic populism creates more losers than winners
With the first chapter of the Golden Age of Thaksinomics about to come to a close, it is clear who the winners and losers are in the game of economic populism. The rich and the political cronies of those in power have grown richer and the poor have become poorer. And, unfortunately, this income imbalance is likely to widen in the years to come.
What do you call someone to whom “the rich get richer and the poor get poorer” is a well-established fact and perennially effective rhetorical device? Whatever it is, it most definitely isn’t “populist”. You see, Khun Thanong is against populism. Please remember that.
But is that statement true? Not one of those soapbox hacks who spew outrageous claims without ever justifying them, Khun Thanong provides data to back himself up:
Most people are in shock and awe over the dramatic increase in the wealth represented by just the stock market holdings of the Shinawatra family, which ballooned by almost 150 per cent between 2001 and 2004, from Bt12.76 billion to Bt31.54 billion. Most big businesses, particularly those that have ties to the government, have been clear winners from Thaksinomics. The people in finance, the stock market, real estate, construction materials and automotive, telecom and consumer products have been enjoying a heyday as domestic consumption takes the bite.
Mmm… and his complaint is? “Finance, the stock market, real estate, construction materials and automotive, telecom and consumer products” does seem to me to represent a rather large swath of the economy. Why would Khun Thanong begrudge the “heyday” for the consumers, employees, and entrepreneurs who participate in these sectors? I should emphasize consumers, who, of course, part with their hard-earned money for something in return. This may be difficult for some to accept, but trust me, we consumers are really not so dumb as to throw away money for nothing (with a notable exception of consumers of Thai journalism).
Anyway, to someone who measures wealth only by the figures in one’s bank statement and not by the amenities one actually enjoys, this sufficiently demonstrates that the rich get richer. After all, when you shamelessly buy a car (through evil financing!), a house (evil financing, again!), a phone, an internet connection, or a jar of peanut butter, corporations make money, and owners of those corporations are invariably rich. Never mind that thanks to the (evil) stock market, most anyone these days can co-own a corporation and partake in its plunders. And never mind the armies of employees who, too, partake in those plunders and earn their living thus. The consumer “takes the bite” and the rich get richer, period. Got that?
(“Most people”, according to Khun Thanong, did get it. I certainly can’t claim to speak for that coveted crowd, but I can tell you that I’ve never met anyone who can tell you offhand the breakdown of the Shinawatra family’s investment portfolio, let alone its performance since 2001. And “shock and awe” isn’t in the working vocabulary of anyone I know, either. It sounds so… 2003, don’t you think?)
Khun Thanong then moves on to the other half of his claim, the poor:
Yet over this four-year period, the average man on the street has been taking home less pay if inflation is taken into account. While household incomes have been growing at almost 20 per cent […]
So how can it be that the average man is earning less? Is he suggesting that Thailand is suffering from hyper-inflation? According to the Bank of Thailand, there’s nothing of the sort.
Unfazed, Khun Thanong forges ahead:
[H]ousehold debt has outpaced them at 52 per cent.
Ah, debt as a partisan issue. Listening to these people, you would’ve thought that PM Thaksin invented the credit card (perhaps the day after he invented corruption). Yet, once again, the Bank of Thailand contradicts Khun Thanong’s doom and gloom scenario:
Declines in credit card default rates over the past few years are a good sign that household debt levels are not yet a major concern, according to M.R. Pridiyathorn Devakula, the governor of the Bank of Thailand.
Non-performing loans for credit cards were just 2.9% of total card debt outstanding at the end of 2004, compared with 4% at the end of 2001, he said.
[…]
Another central bank survey last year showed that defaults on mortgages and other loans had declined since the start of 2001. It concluded that household debt, at 33% of gross domestic product, was relatively low compared with 85% in Singapore, 84% in the US and 63% in Malaysia.
But Khun Thanong won’t be held back. He’s on a roll, gushing out ever more numbers…
The top 20 per cent of the country’s 63 million people account for 56 per cent of the gross domestic product, while the bottom 20 per cent counts for only 4 per cent. About 30 million Thais earn their livelihoods in the agricultural sector, which accounts for only 13 per cent of GDP.
And surely all this began only after PM Thaksin took office four years ago. Let’s be sure to vote Democrat next time (nobody’s contemplating a coup d’état, right? RIGHT?) and then the people can take their rightful place and properties back from the powerful. Down with populism!
PS For a rather different take on Thaksinomics by someone who really knows what he’s talking about, see Morgan Stanley’s Southeast Asia Economist Daniel Lian.
Update See my definitive post: “Populism and nationalism in Thailand”.
« Apirak Today 3 | Main | Culturally insensitive »