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Alienated Life : Socio-Economic Characteristics of The Ultra Poor in Thailand

by
Medhi Krongkaew
Professor of Economics, School of Development Economics, NIDA, Bangkok, Thailand. I wish to thank the Thailand Research Fund (TRF)
in providing generous financial support 10 me as part of its TRF Senior Fellowship. This has enabled me to engage several of my friends and
colleagues in four regional universities to carry out this research on Ultra Poverty in the four regions of Thailand. This paper only highlights
few findings of each region. For that, I may have missed some important points that regional researchers would have given their stronger emphasis.
I, therefore, take full responsibility for its errors and shortcomings.



Introduction
One of the success stories about economic development of Thailand in the past 20 years is its record of
continuous reduction in the incidence of poverty defined as the proportion of Thai population having income lower than a designated ‘poverty line’. During the ‘economic boom’ periods in the late 1980s and early 1990s, the poverty incidence throughout the country fell so rapidly that, statistically, the incidence of some region (i.e. Bangkok) had approached zero, prompting some researchers to revise the poverty line upward to reflect the changes in population structure, nutritional requirements, consumption patterns, and prices.3 Then the crisis hit in 1997. As a result of a combination of various factors including mismanagement in the financial sectors, incorrect exchange rate and international finance policies, and fall in export earnings, Thailand lost most of its foreign reserves and was forced
to float its currency, which brought about massive capital outflows with ensuing negative effects on domestic financial, employment and general economic conditions. Companies went bankrupt, jobs lost, unemployment increased, and the average income of the Thai people declined. Between 1996 and 2000, the incidence of poverty has increased from 11.5 per cent in 1996 to 13.0 in 1998 to 15.9 in 1999, and finally to 15.0 in 2000.4 This level of poverty is roughly equivalent to the situation in 1995. In a word, Thailand has already lost 5 years of its economic development. If economic difficulties continue, the development and welfare losses can even be greater.

Yet, there is at least one group of the Thai population who are strangely relatively unaffected by this crisis. But the main reason for this is none other than the fact that they were not so much affected by the rapid economic growth that we have alluded to earlier in the first place either. Their lives have been practically alienated from the rest of the population for as long as they could remember. These are the ‘Ultra Poor’ of Thailand who live in the bottom rung of the Thai society, and seem to have always remained there. That is why a new word in Thai is coined to describe these people. We call them, in Thai, คนยากจนดักดาน(kon yak jon dak darn) of which ‘Ultra Poor’ or ‘Hard Core Poor’ is a close description.

Mainly as a result of the crisis which has impoverished many ‘miracle’ economies in East Asia, several
international organisations such as the World Bank, the Asian Development Bank (ADB), the United Nations Development Programme (UNDP), which already had their active programs on poverty, stepped up their activities concerning poverty. The World Bank had chosen as the subject of its new biennial World Development Report (WDR) for 2000/2001 a new outlook and policy direction on poverty whereby the report was written after a series of discussions and consultations with various interested and ‘stakeholder’ groups throughout the world. The ADB even went one step further and redesigned its development lending policy to specifically target poverty reduction as its main emphasis. In its words, poverty reduction has become ‘an overarching’ objective of the ADB. For UNDP where its ‘human-centred’ development policy as reflected in its annual Human Development Report (HDR) has already been accepted as a major alternative to the traditional ‘growth-centred’ development policy also maintains a separate program on poverty, with its annual Poverty Report and a special website geared toward the elimination of poverty.6 But these programs still address poverty problems in general. They did not recognise the problems of the ‘Ultra Poor’ as separate problems that may require separate understanding, and a separate set of policies. Looking around the existing literature on poverty today, one is hard pressed to find any study that looks specifically at the extreme poverty group and analyse them. This ‘Ultra Poor’ group is normally subsumed under the analysis of the general poor, with an irrelevant or ineffective set of policies to solve their problems. This state of affairs is obviously unsatisfactory and should be redressed quickly.

Through the generous financial assistance of the Thailand Research Fund (TRF), I was able to form a
team of researchers to study socio-economic characteristics of the ‘Ultra Poor’ in rural Thailand.7 While the main objective of this research is clear, that we wanted to find out the socio-economic makeup of the poorest households in rural Thailand, we also wanted to go a bit further by looking at two other aspects concerning this group of people: how they adjusted to the market or the environment around them, and how they were affected by various government policies. There may be more that we could learn from the outcome of this research, but since this was really a pioneering effort to learn about a special group of population who had hitherto escaped attention from any researchers, we could not be too ambitious. Our study must be looked upon as a pilot study that shows only the first glimpse of these alienated lives. The results of the study may be useful for designing policies that complement general poverty policies, as well as pointing the way to a more serious study on this group of people.

What is of immediate importance is how to identify our ‘Ultra Poor’ group, to find them and interview
them. It is true that we could look for statistics concerning these people from the Socio-Economic Survey (SES) which is the country-wide survey of household income and expenditure and other socio -economic characteristics of the Thai households conducted regularly by the National Statistical Office (NSO), but it is quite likely that this SES will fail to adequately capture the true socio-economic pictures of the very poor, just as it was well known that it fails to capture the same of the very rich. A special survey that targets only the poorest samples is called for.

But how to do this quickly and cost-effectively? One method is to set a poverty level that defines extreme poverty and select anyone whose income fall under this poverty level as our sample. But this technique is obviously very costly as going around scouting for those who are qualified would be very time consuming and resources-draining. The other method is to use the knowledge of local leaders who know well the income or economic positions of households or people in their localities. On the assumption that these local or village leaders know all the people in their villages, the identification of those who are the poorest in the village, or those who are poorer than the others in the village, could be easily undertaken. What we need to be careful is that these leaders must not be allowed to prepare for their identification in advance because they might bias in their selections. We decided to adopt this
latter method as we can get our samples quickly and conveniently. All research teams in the four regions adopted this technique of sample selection.8 After the experimental survey and study in 1998 for the Northeastern region only, we launched our nation-wide surveys in 1999. The core findings that I will analyse in this paper come from these 1999 surveys, plus the earlier survey in 1998 for the Northeastern region only.

Concept of Poverty: Size, Depth, and Severity
Before embarking upon the analysis of the Ultra Poor, we should dwell a little on various concepts of poverty and various measures of such poverty. This is in order to better understand the meaning of extreme poverty and the need to develop a specific set of policies that deal specifically with the problems of the truly poor.9 One of the first questions that is often raised in the discussion concerning poverty is: what should be the basis on which poverty is measured? Should it be income, a simplest and most straightforward base for measure of poverty, or consumption, or deprivation from a certain physical necessities such as food, clothing and shelter? Any of the above could be used as bases for poverty, but we chose income as our poverty base for a simple reason that it better reflects command over resources and the acceptance of the belief in modern economy where specialisation and exchange are standard economic practices. But the debate may not stop here. Indeed, poverty could be regarded as a multi-dimensional concept that goes beyond a mere economic measurement using income Poverty
could be looked upon as a non-physical conditions such as lack of knowledge, lack of democratic spirit, lack of human compassion, excessive selfishness, and so on. In this case, the whole discussion could become quite chaotic. It is practical, therefore, to start the analysis on a narrow base, say income, and work ourselves up to include other non-economic factors that could explain poverty more completely.

Once we use income as our poverty base, we usually decide who is poor or who is not by checking
whether that person’s or household’s income is below or above the agreed poverty line. As mentioned earlier, the most common measure of the size of poverty is the so-called ‘Head Count Ratio’ (HCR) which is the proportion of people or households having income below poverty line.10 But this measure does not distinguish those people or households whose income hovers just below the poverty line or so far down below the poverty line. It should be immediately obvious to us that the situation is much bleaker if most people cluster around the bottom of the income scale rather than at the point near the poverty line. We can measure this depth of poverty by looking at their income shortfall from the poverty line or how far their income positions are from the poverty line, and how much resources are required to move everyone or every household up to the poverty line.11 Still this measure does not
take into account the movement of income within the poor group itself. If a poorer person among the poor group transfers his income to a less poor person in the same group, nothing is changed in the income shortfall measure while our common sense tells us that a proper poverty measure should show a worsening of the welfare of the whole group. But if the opposite happens, that is a less poor person transfers his money to a poorer person in the same group, then a more appropriate measure should show an improvement in poverty condition. Taking the suggestion from a group of economists, Foster, Greer, and Thorbecke (1984), who designed such a measure, we can now pay attention to the severity of poverty. If the poverty is very severe, with most people at the bottom of the income scale, any changes in income among these people will be more than proportionately captured in a measure that reflects our different concern or aversion over poverty.12

So, if we want to address the issue of poverty in general without going into detail of the depth or
severity of poverty, we will use HCR. Any more serious discussion on poverty may bring about the need to use IGap, or PGap, or FGT as the case may be. But for the most part of this study, our focus is different. We have already chosen our target group, the poorest in the chosen villages in the four regions of Thailand. And the following is what we have discovered.


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Create Date : 30 มิถุนายน 2550
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