Thailand pursues sustainable development through inclusive growth

While Thailand has made remarkable progress in recent years in combating poverty, boosting access to education and health services for all and enhancing quality of life, progress has often been unbalanced. Some areas remain better off than others and income inequality remains a persistent problem. However, sustainable solutions in business – and ideas on sufficiency economy – are helping address this challenge, although much still remains to be done.

In Numbers

As a way to measure the country’s progress, the UN human development index (HDI) ranks Thailand and other countries with reference to three basic dimensions: a long and healthy life, access to knowledge, and a decent standard of living.

Thailand achieved an HDI score of 0.726 in 2014, placing it in the high human development category and 93rd out of the 188 countries surveyed. This also represented a 44.6% increase in the country’s HDI since 1980, or around 1.09% per annum. To break down those figures, over the 1980-2014 period Thailand’s life expectancy at birth increased by 10 years, the mean years of schooling rose by 3.6 years and expected years of schooling by 5.6 years, according to the UN. Indeed, schooling has shown one of the more dramatic improvements over the last few decades, with mean years of schooling at just 3.7 in 1980, rising to 4.6 in 1990, 6.1 in 2000 and 7.3 by 2010. In 2014 it stood at 13.5 years. Life expectancy at birth also rose rapidly between 1980 and 1990 – from 64.4 years to 70.3, demonstrating big improvements in post-natal care, while since then it has continued to rise steadily to a 2014 level of 74.4. Gross National Income (GNI) per capita in 2011 US dollars at purchasing power parity (PPP) rose 277.4%, from $3,530 to $13,323.

These successes can also be seen in Thailand’s performance with the UN millennium development goals (MDGs). These set a timeframe for completion of 2015, with Thailand achieving many MDGs ahead of schedule and progressing on to the more ambitious MDG+ scheme. Between 2009 and 2012, the portion of the population living below the poverty line fell from 17.9% to 12.6%, with the percentage living on less than $2 a day at PPP down to 5.6% in 2014.

These numbers are a great achievement; yet, as with many such averages, they also mask a great degree of imbalance. When the HDI is adjusted for inequality – producing the IHDI – the level of human development falls by some 20.6%, to 0.576. This is more than the loss suffered by neighbouring states such as Vietnam and the Philippines which, despite lower overall HDIs, suffer less from inequality than Thailand does, according to the UN report.

Nonetheless, there has still been improvement since the UN introduced the IHDI in 2010. In 2011, the first year for which figures for Thailand became available, the country’s IHDI stood at 0.537, rising to 0.543 in 2012, then 0.573 in 2013. The index is a composite of three measurements – inequality adjusted life expectancy, education and income. In 2011 these three measurements stood at 0.768, 0.49 and 0.411; in 2012, 0.768, 0.491, 0.424; by 2013, 0.755, 0.51, and 0.488; and in 2014, 0.755, 0.519 and 0.488, according to the UN. In terms of gender inequalities, while the overall HDI scores for men and women were the same in 2014, Thailand also ranked behind Vietnam and the Philippines in terms of access to education and the political representation of women.

Regional Differences

The UN Economic and Social Council report on Thailand in 2014 also noted that in 2012, two-thirds of the country’s poor lived and worked in rural areas, with the north and northeast regions having particularly high concentrations of poverty. At that time, the north-east region alone was home to 3.7m poor persons, a figure representing 19.8% of the region’s entire population and 44.5% of Thailand’s total poor. Some 90.5% of the poor are also unskilled labourers, with little or no access to vocational training. Further figures from the National Economic and Social Development Board (NESDB) show that in 2013, average household income for the north-east stood at BT19,267 ($580) a month, while for the north it stood at BT19,181 ($577). The figure for Bangkok and its three neighbouring industrialised provinces, meanwhile, was BT43,058 ($1296) – more than twice that of the northern regions.

Regional inequalities are also evident in health care. This time, the southern provinces have the highest rates of infant mortality, with Narathiwat, on the Malaysian border, recording an under-five mortality rate of 16.8 per 1000 live births and an infant mortality rate of 14 per 1000 live births in 2012. Access to hospitals and midwives is a major factor behind this, along with a local practice of giving birth at home.

Another inequality exists in local provision of education. A quality assessment in 2010 by the Office of the Basic Education Commission found that the number of schools failing to meet the required standards was higher in the northern and southern provinces than in the other regions of the country. Access to schools and colleges may also be difficult in the north and south because of a lack of transport infrastructure, given the more difficult terrain.

While income levels have risen dramatically over the years, too, the level of debt has also been rising. Figures from the National Statistical Office for 2014 show that while average household revenue rose from BT18,660 ($562) per month in 2007 to BT25,194 ($758) per month in 2013, average household debt had risen from BT116,681 ($3512) to BT163,068 ($4908) over the same period. As a percentage of GDP, total household debt was 54.6% in 2007 and 82.3% in 2013. The debt issue is particularly concerning in rural areas, where farmers have sometimes used loan sharks to gain access to credit in times of need (see Agriculture chapter).

The quality of life for many Thais has also been negatively affected by environmental degradation. Thailand ranked 91st out of 180 countries in the 2016 Yale Environmental Performance Index, ahead of its neighbours Cambodia (146th) and Indonesia (107th), but behind Malaysia (63rd). Air quality and agriculture were the two areas that brought down the country’s average, although improvements have been made in water resources and water and sanitation. The effect of the depletion of natural resources is being exacerbated by climate change and unsustainable consumption patterns. More frequent natural disasters have heightened impact due to the degradation of coastal areas and deforestation in the interior.

Making A Difference

Successive Thai governments, along with NGOs, international NGOs, individuals and corporations, have sought to tackle these issues in recent years in the pursuit of sustainable development for the country. Anti-poverty campaigns have included the government’s Blue Flag programme – which endorsed shops that sell good-quality, low-priced consumer goods – the Energy Credit Card scheme, minimum wage policies, bonuses for those holding higher education certificates and village community funds, the Thai Women’s Empowerment Fund and the Business Fund. Social security programmes have also been expanded to include the informal sector.

At the same time, schemes to encourage local entrepreneurship have been launched, such as One Tambon One Product, which backed commercialisation of local products at the tambon (sub-district) level. A key organisation here has been the Population and Community Development Association, an NGO platform which launched the Thai Business Initiative in Rural Development in 1988, to bring together private sector, government and community initiatives.

Education & Health

Access to education has also been improved by a move towards universal primary education and a “15-year free education for all” plan launched in 2010. The Life Cycle Development strategy of 2014 also focuses on each successive age group, from the new-born to the elderly, in encouraging skills development. In health care, the introduction of a universal health care scheme has reduced infant mortality rates and maternal mortality rates and has expanded vaccination coverage, which by 2014 had reached 99% for children.

In terms of communicable diseases, Thailand has had some success in bringing down the rate of infection by HIV or AIDS, with UN data showing this had fallen from 0.5% in males and 0.58% in females in 2008 to 0.4% overall in 2012. UNAIDS data also shows a 56% drop in AIDS-related deaths between 2005 and 2013, although the rate of decline was slowing. Malaria infection has slowed, except in areas such as rubber plantations, while incidences of tuberculosis and heart disease have risen.

Another MDG was environmental sustainability, with a focus on addressing water issues. A series of three national biodiversity strategies and action plans have been developed, running from 1998 to 2012, along with the biodiversity conservation corridor initiative along the Mekong River, which ran from 2005 to 2015. The portion of households with sustainable access to an improved water source has thus risen from 96.3% in 2005 to 98.2% (the MDG target) in 2013, while access to improved sanitation over the same period improved from 99.6% to 99.8% in urban households and from 98.6% to 99.6% in rural areas.

Raising productivity as a way to sustainably upgrade the living standards of working people has long been a goal of businesses and governments. Yet average productivity rose only 1.5% over the 2008-12 period, according to the UN. Lack of skills is one major reason for this, with around half of the labour force possessing only primary education or lower in 2012. Education and training development is thus a high priority, and Thailand has been investing heavily in this area.

Implementing further steps to bring greater sufficiency principles, moderation, reasonableness and prudence to Thailand remains a significant task for government, businesses and individuals, as both the country and the world face substantial challenges to achieving better sustainability in the coming years.

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The Report: Thailand 2016

Sustainability chapter from The Report: Thailand 2016