What will happen when more than 77% of Thailand's assets belongs to the richest people of the country that only make up to 10% of the population?

When more than 77% of Thailand's assets belongs to the richest people of the country that only make up to 10% of the population, it makes Thailand the most wealth inequality in the world.

But how does the problem of inequality affect the economy? Where did this problem start from, and how could we fix it?

KKP Research by Kiatnakinphat, they said that the inequality of Thailand is likely to increase steadily. Assuming from how fast that the richest people, 1% of the country has grown drastically in assets from 2008 to 2018, and also their growths of revenue. The data clearly indicates that the higher income earners grow financially a lot more faster than the lower income earners. This has cause Thai economy to grow and distribute unevenly.

At the same time, Thailand's income inequality may be higher than the official figures,which nowadays often based on data from the national economic and social survey. The samples in the survey tended to be low-income people, and also excluding high-income people, this makes the inequality figure below reality.

Most importantly, although the income inequality in Thailand has improved recently, it is unsustainable in the long term view, because a part of it comes from the loan given by the government to people. It does not directly reflect the increase in labor productivity.

Most of the reasons that cause Thai economy to have high inequality can be listed in 4 reasons as follows:

1. More than 31% of Thai people work in the agricultural sector, but the agricultural products have very low price. Resulting low income growth, causing more inequality.

2. Inequality opportunity.

Low-income group have less chance to access a good education, labor rights are low, wages are growing slower than the economy.

It also causes even more inequality, because of the government policy, such as: labor has no bargaining power, profits concentrated in large companies make it difficult for smaller firms to compete, and the government also still has no welfare benefit to help the low-income people.

3. Covid-19 situations affect the earnings of people low paid groups more than those with higher incomes. Even there are a lot of the informal sector workers (54% of the total workforce), there is still un useful welfare for them.

4. Thailand is about to enter an aging society, which will make the inequality worse.

However, solving the problem of inequality must be accelerated as quickly as possible. There will be 5 parts to improve as follows:

1. Economic mechanisms that facilitate a fair competition, that allows everyone to compete on equality.

2. Improve the tax system in order to distribute income.

3. State welfare that let everyone to access a good education, health care services, credits and more. And also a better social safety net.

4. A law enforcement to prevent corruption, any kind of corruption, either the direct way or the policy corruption, to reduce disparities in access to political power.

5. Decentralization of political and fiscal powers, both need to be allocated appropriately to the local governments.

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