With technological advances eliminating jobs, and economies struggling to keep up with inflation, many leaders, such as former Democratic presidential hopeful Andrew Yang, have called for a universal income program. Thailand is now dipping its toe into that pool.
Back in April, the country’s Prime Minister Srettha Thavisin announced a controversial plan to give digital money to low-income citizens in an effort to boost the economy. This program will be implemented in August.
Here’s a rundown of what we know.
Who is Prime Minister Srettha Thavisin?
According to The Guardian, Srettha is a 60-year-old real estate mogul, who has served as prime minister since August 2023 before which he had no experience in government. Born in Bangkok to a wealthy family, Srettha majored in economics at the University of Massachusetts and received an MBA at Claremont Graduate University. He helped found Sansiri, one of the largest real estate developers in Thailand, but resigned as CEO before running for prime minister. Many are critical of his past business dealings, with some accusing him of helping landowners evade taxes. He has denied these allegations.
Srettha was technically not elected prime minister. His party, Pheu Thai, aligned with the military. This helped bring home the exiled former prime minister, Thaksin Shinawatra. Thaksin then backed Srettha, who got enough support from parliament and an endorsement from the king to take the job. One of his campaign promises was the digital wallet program.
What are the program’s details?
The program was announced in April. Srettha says he hopes to stimulate the Thai economy, which has not yet bounced back following the pandemic. He aims to do this by giving lower-income Thais 10,000 baht, the equivalent of about $275, to spend at local businesses.
To qualify for the program, Thais must not make more than 840,000 baht a year (the equivalent of about $23,000), and their savings must not exceed 500,000 baht (or $13,700). It is believed this program will benefit 50 million people. Registration begins on August 1 and will go into effect in October.
There are rules as to what the money can be used for, and it can only be spent in the district in which the recipient lives. Also, it must be used within 6 months of receipt.
What does it hope to accomplish?
Households in Thailand typically have high debt. Interest rates in the country are high, so the average person does not borrow or spend money. They also don’t invest. This program aims to change that.
Srettha says he believes this will be a “life-changing policy for the people” and is hoping for an “economic tornado,” predicting the stimulus and subsequent spending will boost the gross domestic product (GDP) by 1.2 to 1.6 percentage points. To put that in perspective, in December of 2023, the World Bank roughly calculated Thailand’s year-on-year GDP growth at 1.5%.
The program has its fair share of critics. It will cost the country 500 billion baht, or $13.7 billion. The money will come out of the 2024 and 2025 fiscal budgets and the state’s Bank for Agriculture and Agricultural Cooperatives. And beyond the price tag, some economists believe it is only a temporary bandage on a much larger problem.