Why is Thailand PoorEven though Thailand is considered a development success story, it is still in the category of a developing nation. Between the 1980s and 2015, poverty in Thailand has greatly declined from 67 percent to 7.2 percent. However, the country’s growth slowed between 2005 and 2015 to an average of 3.5 percent. Currently, 10.5 percent of Thailand’s population is living below the poverty line.

Why is Thailand poor? The reason that Thailand remains poor is imbalanced development. Due to the critical poverty rate of Thailand in the 1960s, emphasis was put on industrialization to boost the economy. This industrialization caused rapid economic growth and poverty reduction, but development was not widespread. To support industrial production, resources were centralized to the capital and surrounding urban areas, thus depriving rural areas. Because of this, 80 percent of poor people living in rural areas as of 2014.

Concentration of development in urban areas means a lack of investment in rural Thailand. For example, Bangkok houses only 10 percent of the population, but it contributes more than 50 percent of Thailand’s GDP. Highlighting the inequality, rural areas have a poverty rate of 13.9 percent compared to 7.7 percent in urban areas.

In answering the question “Why is Thailand poor?” one must look at the disparity between development in urban and rural areas. Poor people living in rural areas have very limited access to public services that could help them out of poverty. To gain access, rural poor persons must be able to afford both the service and transport to urban areas.

Education is an example. Many rural poor people cannot afford education more than the six years of compulsory schooling. The enrollment rate for “tertiary education” was reported as 18 percent in rural areas compared to 39.5 percent in urban. Due to lack of education, many rural poor people are under-qualified for higher paying positions, perpetuating a vicious cycle.

In recognition of the disparity, Thailand has created a 20-year economic plan to bring the nation to developed country status. The reforms aim to bring economic stability, equal economic opportunities, competitiveness and effective government bureaucracies. To reach its goal, Thailand needs to overcome what is constraining growth in rural areas and maintain widespread growth.

Poverty in Thailand, despite its success in development, reveals the need for further research into poverty alleviation. Approaches to ending global poverty should keep in mind the complexity of the problem.

Haley Hurtt

Photo: Flickr