Six Measures in Six Months:
Is it really free?
Does it really help the poor?
By Jon Fernquest |
Free water, free electricity, free buses, free trains, cheaper cooking gas, and cheaper gasohol and diesel...
A six-month economic assistance package for the poor, is the way that the government's new Six Measures Six Months policy is being promoted.
Does it really help the poor?
Not according to Dr Somphob Manarangsan, noted Thai economist at Chulalongkorn University, who criticised the government programme last week in the newspaper Thai Rath.
The word "FREE" sounds wonderful, that is until you read the fine print or open the hood and have a good look at what you actually get for free. Let the buyer beware (caveat emptor), the buyer of this assistance for the poor being the Thai taxpayer.
Oil subsidies for middle class and rich who own cars and trucks
Over 60% of the "economic assistance package for the poor," about 30 billion, reduces oil taxes.
This helps middle and high income earners who own cars and trucks directly.
Indirectly, the tax reduction also helps everyone who buys goods in stores, including the poor, since oil and transportation costs are part of the costs of those goods.
In a time when people should be cutting back and conserving on energy usage, oil subsidies encourage extravagant use (Read recent article).
In the Thai language newspaper Thai Rath, Dr Somphob Manarangsan, a noted Chulalongkorn University economist, expressed his opinion about the subsidies:
Dr Somphob said Thailand spends the equivalent 1% of the world's GDP on oil products, while at the same time the country's GDP is less than 1% of the global GDP. The economist said this signifies a luxurious spending trend, more so than Thailand's economic status warrants.The best way to help the country to economise on oil use is to let the market mechanism dictate the price, added Dr Somphob.
Free electricity? Most poor live in large households
Subsidised electricity for those consuming low amounts of electricity, should encourage conservation of electricity, definitely a good thing.
Will the poor really benefit from this "free" electricity? Dr. Sophob doesn't think so:
Dr Somphob also took issue with the measure to provide free water to users who don't exceed 50 units and free electricity to those who don't exceed 80 units. He said the notion that this was aimed at helping the poor was not entirely true.Those who are likely to benefit are the middle class couples without children. In this case, both husband and wife are usually at work during the day and thus consume little water and electricity.
Meanwhile, the poor cannot afford their own homes and often share small apartments with a number of other people. Where there are more people, electricity and water usage increase proportionally, so these people will not be eligible for the free utilities.
Most third class train travel may not be free
There are so many exceptions to the "free" third class train travel promised by the government, it is hard to see who will benefit from the programme:
1. Heading south, the free rides would go only as far as Chumphon.
2. Northeastern journeys will end in Nakhon Ratchasima and Khon Kaen.
3. Free northbound services will end their runs at the Den Chai station in Phrae province, despite the northernmost destination being Chiang Mai.
4. Only on non-airconditioned, third-class, non-express trains.
5. Only on 380 carriages of 164 third-class trains and on "combi" trains, which have both freight and third-class passenger compartments.
6. Third-class compartments of combi trains which also have second-class or first-class carriages would not be part of the scheme.
7. Third-class carriages of express services are also not part of the scheme.
8. There will be 10 free services from Hat Yai to the three southernmost provinces of Pattani, Narathiwat and Yala.
9. The fares of express trains on the three Bangkok suburban routes have already been cut from 110 baht to between 20 and 50 baht depending on the distance.
Sanitsuda Ekachai of the Bangkok Post observes:
The urban poor also largely live in the inner city close to work. They then would not benefit from the free rides on non-airconditioned buses and third-class trains. The lower urban middle-class will benefit, however, because they need to commute from outer Bangkok to work downtown.
Dr Somphob observes:
As for the measure to offer free third class railway travel, Dr Somphob argued that few poor people regularly use this means of transportation. Those who would benefit are middle class people who commute every day to work from Bangkok's perimeter.He also said the free buses wouldn't help poor people so much because there are few BMTA buses available and they are often full of people who get on near the beginning of the routes, leaving no room for the poorer people who live closer to the centre of the city.
One wonders why experts like Dr. Somphob were not consulted earlier when the package was being designed. Perhaps, with the help of experts, a package could have been designed that really did help the poor.
(Source #1: Bangkok Post, op-ed section, 26-07-08, KAMOL HENGKIETISAK, temp-link)
(Source #2: Bangkok Post, general news, page 1, 31-07-08, AMORNRAT MAHITTHIROOK, temp-link)
(Source #3: Bangkok Post, op-ed section, 31-07-08, SANITSUDA EKACHAI, temp-link)
Vocabulary:
economic assistance package for the poor - a set of government policies (subsidies, tax reductions, free services) meant to help the poor
fine print - printed with small letters difficult to read and understand (used in a contract to make it difficult to understand, for example)
read the fine print - read the whole contract, even the part written in small letters that is difficult to understand
open the hood - open the hood of the car and take a good look at the engine
Let the buyer beware (caveat emptor) - buyers should be careful and check everything, because some sellers might try to cheat them (See Wikipedia)
directly - happens immediately, without delay
indirectly - happens only as a result of something else, with a delay
conserving on energy usage - using less energy
conservation of electricity - using less electricity (See Wikipedia)
subsidies - money provided by the government to pay part of the cost of something
extravagant use - use more than you can afford, use more than is reasonable
status - your position or rank in society or within a group of people
economic status - how much money you make compared to other people
X warrants Y - situation X makes action Y seem appropriate or necessary
economic status warrants
economise on oil use - use less oil than you did before
supply and demand - sellers in market supply goods, buyers in a market demand goods
the market mechanism - free exchange in a market that follows supply and demand, when buyers and sellers meet and bargain in a market, the price of the good is the price that matches supply with demand (all goods sold), the market clearing price
dictates - determines, causes
let the market mechanism dictate the price - let supply and demand freely determine price
took issue with - did not agree with
the notion that - the idea that
X increases proportionally with Y - X increases by the same percentage as Y
eligible for Y - meet the requirements necessary, so they can receive Y
utilities - basic services like water and electricity (provided by the government or a large company with a monopoly)
exceptions - cases taht do not follow a rule
commute - travel to work
Bangkok's perimeter - communities on the outside and edge of Bangkok
consulted - asked for their opinion
