1.5 million more in poverty as World Bank warns of political unrest and sluggish vaccination rollout

January 21, 2021 at 4:46 pm
by James Morris and Son Nguyen
in Economy, Personal, Thai World, Thailand
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Figures on poverty levels show an increase of 41% on those living under the breadline in Thailand by the end of 2020 with the vast majority predicted to stay there throughout 2021. This is despite a strong rebound in the third quarter of last year before the latest Covid-19 wave of infection and a predicted growth rate of 4.2%.

The World Bank has revealed that over 1.5 million Thais fell into poverty over the course of 2020 due to the impact of Covid-19 on the economy. The bank predicts that Thailand’s poverty ratio will still be at 8.4% by the end of 2021, a rise of 34.5%.

1.5 more Thais in poverty as World Bank warns of political unrest — The information was published in a report on Wednesday from the World Bank titled ‘Restoring Incomes, Recovering Jobs’ which was presented by senior economist Kiatipong Ariyapruchya. He highlighted the sharp rise in the number of Thais left living in poverty due to the Covid-19 pandemic defined by lack of access to ฿165 or $5.50 per day. The figure at the end of 2020 has risen to 5.2 million people.

The World Bank has given some insight into the impact of the Covid-19 economic crisis on the poorest in Thai society in a report published on Wednesday.

Details were given to the media by Kiatipong Ariyapruchya, a top economist at the institution who monitors Thailand’s economic activities and progress.

5.2 million Thais left below the breadline

Mr Kiatipong explained that at the end of 2020 there were 5.2 million Thais who had descended into poverty. Poverty was measured as the inability to spend ฿165 per day or $5.50. This was nearly a 41% rise on the figure for 2019 when this pool of people was quantified at 3.7 million.

The bank predicted that the poverty rate will decline marginally in 2021 but will still leave 5 million people under the threshold. This would leave the poverty rate at 8.4% down from 8.8% at the end of 2020 and far higher than the 6.2% recorded at the end of 2019.

Casual economy hardest hit by foreign tourism industry closure as well as the farming sector

Official figures in Thailand show that the Thai economy experienced losses of 340,000 jobs in the first half of 2020. However, the ravages of the shutdown of the economy were even more felt in the kingdom’s casual sector which was severely impacted by the cratering of the foreign tourism industry.

The figures gleaned by Mr Kiatipong showed a sharp drop in working hours for women with an average of three hours lost while it was two for men per day. There was a decline in income within the private sector which worked out for the year at 1.6% although official figures tend to underestimate the true extent of the impact because of the casual nature of a vast segment of the Thai economy.

He said the farming sector was particularly badly effected.

Labour market has been profoundly hit

‘The outbreak affected the Thai labour market significantly, particularly during the first half of last year, which led to higher unemployment and more underemployed workers. This reduced the income of Thais’ Mr Kiatipong disclosed.

The economist was able to identify a significant recovery in the kingdom’s economic prospects in the third quarter with over 850,000 jobs added. He said that this trend continued into November.

However, at the end of that month, there were still fewer people employed in the Thai labour force than in the same period of 2019.

Loss of jobs in administration and manufacturing

The World Bank official also said that he identified less activity and employment in the key sectors of the economy such as administration, services and manufacturing.

The economic analysis is contained in a bulletin issued by the World Bank in Thailand titled ‘Restoring Incomes, Recovering Jobs’ which has just been released.

Wider picture more positive with contraction for 2020 down to 6.5% and upside on growth in 2021

The economist has predicted that the final figure for Thailand’s GDP contraction for 2020 will be 6.5% taking into account the rebound that was seen in the third quarter and in the period running up to the Covid-19 outbreak in December.

Currently, the bank is predicting that the Thai economy will grow by 4.2% in 2021 but is warning that the imposition of a government lockdown will reduce this to 2.4%.

While the bank identifies an upside with a potential growth rate of 4.7% with the return of foreign tourists expected at the end of 2021 depending on the government rolling out its vaccination programme to over 50% of the population, it is warning of several potential issues which mean that there is a pronounced risk of a downside.

Threats posed by continued political unrest in the kingdom and sluggish worldwide vaccination rollout

One of these is the threat posed by heightened political unrest in Thailand. Protest activity broke out again in Bangkok on Saturday even leading to the detonation of an explosive device in the city.

The other key risk factor is what appears to be the retardation of efforts worldwide to implement vaccination programmes which economists believe are the key to returning the global economy to growth and ending the current uncertainty.

Call for childcare provisions to allow women to work

The virus crisis has also exposed the vulnerability of many people within Thailand’s labour market.

World Bank Chief in Thailand, Birgit Hansl, called for the strengthening of labour, income and employment prospects particularly for those at the margins of society.

She also suggested that Thailand should look at providing affordable childcare so that more Thai women could enter the employment market and contribute towards greater productivity.

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About the Author

James Morris and Son Nguyen

James Morris is a pename for an international writer based in Bangkok who works on various international news media. He is a sub editor with the Thai Examiner news website since it began in 2015. Son Nguyen is an international writer and news commentator specialising in Thai news and current affairs. He commenced working with the Thai Examiner News Desk in May 2018.