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Impact of COVID-19 on Poverty in Thailand

COVID-19 in Thailand
COVID-19 and the economic consequences of its spread have caused greater levels of poverty in Thailand since 2020. Reports determined that the COVID-19 pandemic plunged almost 800,000 people into poverty in 2020. The impact of COVID-19 on poverty in Thailand has primarily manifested as a spike in unemployment. By spring of 2021, Thailand’s job market had 710,000 fewer jobs compared to the previous year. The pandemic also adversely affected tourism flow to the nation, which accounts for about a fifth of GDP and 20% of employment. Thailand’s economy and poverty levels have not experienced such a negative impact since the Asian Financial Crisis of 1997.

Government Initiatives to Mitigate Poverty

The government’s initiative, however, in responding to this crisis has somewhat curbed the pandemic’s potential for further devastation. Authorities were quick to introduce quarantine measures that were effective in containing the virus during most of 2020. Though several waves of infections have exacerbated the impact of COVID-19 on poverty in Thailand, the policy packages were effective in creating fiscal stimulus.

The support ranged from financial assistance for debtors to health-related spending for affected households, including those outside the social security system. Simulations suggest that more than 780,000 additional people could have fallen into poverty in 2020 if the government had not bolstered social support.

Thailand’s Continued Alleviation of Poverty

Thailand’s efficient response to the pandemic is impressive, but not surprising. Since 1988, the country has reduced its poverty levels from 65.2% to 6.2% in 2019, according to the World Bank. Its most effective initiative was to scale up cash transfer programs such that it became one of the largest scale fiscal responses to COVID-19 in the world.

“The crisis in 2020 demonstrated Thailand’s ability to leverage its robust and universal digital ID, sophisticated and interoperable digital platform and a number of administrative databases to filter eligibility for new cash transfer programs,” said Francesca Lamanna, the Senior Economist at the World Bank.

The Current Status of Poverty Levels in Thailand

While the government has responded relatively well, the country continues to struggle as it enters the fourth wave of COVID-19. The official unemployment rate was 2% in the first quarter of 2021 due to COVID-19, with the loss of jobs most concentrated in the services sector. On the one hand, slow vaccination rollout and widespread doubt seem to be stalling recovery. On the other, some infected individuals living below the poverty line may go so far as to violate quarantine rules in order to continue earning much-needed income.

The impact of COVID-19 on poverty in Thailand and its economic dependence on contact-intensive sectors means the continuing waves of infection prolong unemployment, with financially vulnerable groups bearing a disproportionate burden of economic insecurity.

Volunteer Workers Spearhead Poverty Aid Missions

In response to these conditions, the number of volunteers in Thailand has also been surging. Bangkok Community Help is one such organization. It has grown to more than 400 participants since its founding early in the pandemic in 2020. Greg Lange and Friso Poldervaart are two restaurant owners that spearheaded the community initiative after neighbors approached them to inquire if they could use their empty restaurant kitchens to prepare hot meals.

While the scale has transformed considerably, Bangkok Community Help’s main objective remains to assist vulnerable sections of Bangkok through volunteer and donation initiatives. “After [last April and May], we decided to focus more on more long-term projects, like building houses for people, turning a garbage dump into a park, and teaching kids,” Lange and Poldervaart told TimeOut.

Donations vary in scale and source. Individuals may hand out meals they prepared themselves to hungry construction workers, while foreign aid initiatives fund larger-scale operations such as survival packages of preserved goods. Australian Aid paid for rice recently distributed outside of Bangkok’s main port facilities through the Australian Government Aid Program. The program provides small grants in support of local, non-governmental organizations in Thailand.

The New Zealand – Thai Chamber of Commerce, an organization dedicated to promoting commerce between Thailand and New Zealand, donated apples. These organizations have even employed volunteers to bring oxygen tanks to the homes of the infected when hospitals were overcrowded, in the hopes of keeping them alive until a hospital bed becomes available. Bangkok Community Help continues to inspire individual and government action through its aid, opening aid centers and converting unused schools and auditoriums into treatment centers.

Future Possibilities

Looking towards the future of COVID-19’s impact on poverty in Thailand, there are different projections. The devastation of the pandemic is a large-scale issue that called for radical measures, but the methods of mitigation employed may be useful in shifting political focus towards strengthening social support systems in the future. These circumstances have the potential to catalyze an economic reform in Thailand, such that its industries can become more digital.

According to the International Monetary Fund (IMF), the authorities see this as an opportunity to transform tourism from low-cost, high-density travel, to high-end, low-density travel. This would allow for other domestic industries to flourish without wreaking havoc on the country’s economy. It may also be more ecologically friendly, offering greater protection of natural resources on which the tourism industry is dependent. All of these factors have the potential to gradually reduce the number of people living below the poverty line, by strengthening Thailand’s social and fiscal fiber.

– Arahi Fletcher
Photo: Unsplash

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Australia’s Foreign Aid Initiatives Amid COVID-19

Australia's Foreign Aid Initiatives Amid the COVID-19 PandemicAmid the COVID-19 pandemic, Australia continues its foreign aid efforts, especially with investments in sustainability and infrastructure. This demonstrates Australia’s deep commitment to altruistic sustainable solutions. The total Australian development assistance was still four billion AUD (Australian dollar) in the 2019-2020 year, even though the nation is in the depths of its first recession in 29 years and is affected by the global pandemic. This four billion AUD makes up 0.21% of Australia’s total budget as seen in recent years, highlighting foreign aid as a prerogative for Australia despite economic shortcomings, including budget cuts and a global pandemic.

The Pacific

Australia’s foreign aid used $1.4 billion to finance developmental assistance in the Pacific. There are significant infrastructure needs in the region, so developmental assistance includes infrastructure. The Australian Infrastructure Financing Facility in the Pacific became operational on July 1, 2020. This funding supports efforts such as roads, buildings and power. Australia’s foreign aid works with governments and institutions on education and health programs in the region. This was done in recognition of the notable infrastructure needs in the region and the important role infrastructure plays in sanctioning growth. This demonstrates the depth of Australia’s commitment to the growth and development of the Pacific region.

The Australian Infrastructure Financing Facility for the Pacific aims to transform Australia’s international assistance and be a pillar of sustainable, principles-backed foundational investments in the Pacific and the nation of Timor-Leste. It permits Australia to work directly with partner governments, and also the private sector, to manage essential infrastructure gaps while unsustainable debt is avoided. This highlights Australia’s commitment to sustainability.

Australia’s foreign aid budget poured $500 million into financing infrastructure in the Pacific since 2017. The amount of $450 million went to humanitarian and protracted crises, which saves lives, alleviates suffering and strengthens human dignity.

The Coral Sea Cable System

From 2017-2020, the foreign aid budget spent up to $200 million on improving access to the internet, dubbed the “Coral Sea Cable System”, in the Solomon Islands and Papua New Guinea. This has many beneficial aspects, such as improved access to resources for rural populations.

In 2019-2020, Australia’s foreign aid budget also spent $145 million contributing to strong, inclusive and sustainable economic growth in Indonesia. Australia’s aid to Indonesia is important because about 26.42 million Indonesians live in poverty, and roughly 5.5 to 8 million Indonesians are estimated to have fallen into poverty due to COVID-19. According to the World Bank’s Human Capital Index, the next generation of Indonesian citizens would be 54% as productive as they could have been if they had a complete education or full health. Therefore, Australia’s foreign aid is very important at this time.

Labor mobility describes how easy it is to move from one occupation to another. Countries like Papua New Guinea, Solomon Islands and Vanuatu face challenges such as a large percentage of their population living in remote regions. Thus, these populations have low labor mobility. Expanding labor mobility is necessary for the future of these regions.

Conclusion

Despite being in the middle of a recession and amid a global pandemic, Australia was able to give four billion AUD, or 0.21% of its total budget, in developmental assistance toward the Pacific region, especially investing in sustainability and infrastructure. The Australian Infrastructure Financing Facility in the Pacific aims to be sustainable, functional investments by allowing Australia to work directly with partner governments to manage infrastructure gaps while avoiding unsustainable debt. Since 2017, Australia has invested $500 million into infrastructure in the Pacific.

– Madi Drayna
Photo: Flickr

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The Success of Australia’s Humanitarian Aid to Fiji

Humanitarian Aid to FijiIn February of 2016, category five Tropical Cyclone Winston killed 44 people and negatively affected the lives of the 540,000 residents of Fiji. Recorded as the most powerful storm to ever hit the Southern Hemisphere, Fiji was in desperate need of emergency assistance. The Australian government was one of the first to step in to help, as they are economic partners with Fiji, and donated $15 million worth of emergency humanitarian assistance. Australia was able to provide humanitarian aid to Fiji that changed the lives of thousands of people for the better.

The Australian government enacted an aid program to provide assistance to Fiji. Australia’s Department of Foreign Affair and Trade’s aid program focuses heavily on creating a prosperous Fiji through development assistance for the rural poor. The focus is on aspects of education and economic opportunity. The program includes three objectives to be addressed and resolved. The three components are increased private sector development, improved human development and Tropical Cyclone Winston recovery. A total of $65.6 million in the 2017-18 years will be contributed to the resolution of Fiji’s most important issues.

The third objective in Australia’s aid program is of utmost importance as recovery processes are still being made post-cyclone. Altogether, Australia has contributed $35 million in assistance services. Five million dollars was used for lifesaving supplies and support, $10 million was used to send children back to school and provide health services to residents and $20 million was leftover for Fiji’s long-term recovery.

The $20 million is to be used primarily for reconstruction of hospitals and schools, replacing damaged medical equipment and restoring water and sanitation systems back to their original state. The rebuilding of communities is allowing individuals to return to work, whether that be to their farms or to the markets.

Australian non-profit CARE was among the many emergency responders after Cyclone Winston. Their humanitarian aid to Fiji was able to bring relief to more than 25,000 residents across 231 communities.

CARE distributed emergency shelter kits to 2,500 families, hygiene kits to 4,196 families, constructed 17 community water supply systems and 253 toilets, distributed seed kits to 4,290 families and conducted agricultural training for 231 communities.

The Australian Red Cross has also been a large contributor to the recovery efforts. The Red Cross has successfully provided supplies to more than 50,600 families to assist in the repair of their houses and with medical issues. After the cyclone, the Australian Red Cross managed to raise a total of $4.2 million, in just three months, to use towards humanitarian aid.

Every contributor to Fiji after Cyclone Winston helped the country to work towards rehabilitation at a more successful pace. With the year-plus humanitarian efforts, Fijians were able to begin recovery. Australia’s contribution of humanitarian aid to Fiji gave the country the opportunity to find itself again.

– Brianna Summ

Photo: Flickr

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A History of Australia’s Foreign Aid Program

Australia's Foreign Aid Program
Australia’s foreign aid program has seen many changes since it first became a single government agency in the 1970s. Besides the name, changes have taken place within the program’s administration, its focus, the countries that receive aid and the type of aid provided.

Australia provided aid to other countries well before there was an official government program. In the 1950s, Australia granted aid to Papua New Guinea in the form of grants and to South and Southeast Asia by way of educational scholarships and assistance with employment.

In 1974, under Prime Minister Whitlam, Australia established the Australian Development Assistance Agency (ADAA) as a single government entity that would administer the country’s aid. Since that time, the name of the program has changed several times, first to the Australian Development Assistance Bureau (ADAB), then to the Australian International Development Assistance Bureau (AIDAB), then to the Australian Agency for International Development (AusAID) and finally to its current name, Australian Aid.

In 2010, Australia established AusAID as an executive agency within the Department of Foreign Affairs and Trade. In Australia, an executive agency is separate from its department for staffing, accountability and reporting purposes. However, the 2013 change to the country’s current program, Australian Aid, integrated the executive agency into the Department of Foreign Affairs and Trade so that it was no longer a stand-alone agency.

In a 2014 press release, the Australian Minister for Foreign Affairs, Julie Bishop, introduced Australian Aid: “The Australian Government’s new approach to overseas development assistance will focus on ways to drive economic growth in developing nations and create pathways out of poverty. Strict performance benchmarks will ensure aid spending is accountable to taxpayers and achieve results.”

The program incorporated a new development policy that focused on promoting prosperity, reducing poverty and enhancing stability. A new performance framework, Making Performance Count, enhanced the accountability and effectiveness of Australian aid by establishing performance benchmarks and impact assessments in targeted aid areas.

Australia’s foreign aid program will also have a new focus on the Indian Ocean and Asia-Pacific regions. In 2014, Minister Bishop gave a speech in which she further explained the reason for the change in focus. “In the past, [our aid program] has been spread far too thinly across the globe…We must direct our aid to where we can make the biggest difference and align it with our national interest.”

According to preliminary data from the Organization for Economic Cooperation and Development (OECD), Australia’s official development assistance (ODA) was $3.22 billion in 2015, which was 0.27 percent of their gross national income (GNI). The United Nations adopted a resolution in 1970 stating that ODA spending in developed countries should be at least 0.7 percent of GNI. Preliminary data from the OECD shows that only Sweden, Norway, Luxembourg, Denmark and the United Kingdom met that target in 2015.

– Kristin Westad

Photo: Flickr