Handouts to poor do harm
The military government plans to spend 40 billion baht on cash handouts and subsidies.
Of interest is the 2,750 baht monthly payment to qualified low-income earners. Despite the good intentions, cash handouts to the poor have never worked, nor are they financially sustainable in the long run. The only exceptions are one-off cash payments (stimulus packages) for spending to stave off recession during a financial crisis.
Welfare schemes invariably have a political dimension. Aside from the junta's spending spree on defence, if they spend a lot on welfare, it will shift the financial burden to the next elected government. What if the next government cuts welfare spending? Will they be accused of being unsympathetic to the poor's plight? Will the scheme condemn the poor to be forever dependent on government handouts? Lee Kuan Yew said it best: "A fair, not welfare, society".
As millions of low-income earners are eligible, this will involve a lot of data processing and tracking, requiring lots of manpower and agencies. The government plans to credit the funds to users' electronic cards. Can we verify each individual is aware of this scheme and has the card? (Think ghost voters.) As the stored credit cannot be rolled over to the next month, will the unused portion be returned to the Finance Ministry? Who will monitor these processes? Are they accountable?
More appropriate, I believe, are direct discounts and the creation of real value to the economy, as follows:
1. Set up job training centres in every province where low-income earners (and indeed anyone) can get training in skills such as carpentry, craftsmanship, electrical work, etc, as well as a job search.
2. Do away with handouts. Provide the poor with a card that entitles them to free or discounts on transport, electricity and water bills, much like students or the elderly. No funds change hands.
3. Annual high-school and university scholarships.
4. Increase prices of agricultural produce or government direct purchases, as was the case with the government purchase of rubber in the South.
Throwing money at poverty will do more harm than good.
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