Thailand's $14B cash handout delights its poorest

Noi Yaemprakhon, a 64-year-old in Thailand’s northeastern Buriram province, was overcome with joyful tears after receiving the fund on Sept. 25, when the first tranche of the handout was distributed.

She used to make ends meet as a vendor but stopped due to her age, poor health and lack of funding to procure goods, she shared with the Bangkok Post.

She has to take care of three siblings with mental disabilities and three grandchildren who are studying, all on her elderly allowance and disability benefits for her siblings.

The 10,000 baht would give her family much-needed relief and allow her to buy essentials like rice, eggs, and other household items, as well as ingredients to cook and sell food for income.

She thanked the government for supporting the poor and people with disabilities.

Noi Yaemprakhon is one of the 14.5 million welfare card holders and disabled people who received 10,000 baht when the first phase of the Thai government’s flagship handout scheme, which in total is expected to cost US$14 billion, was rolled out late last month.

The money had been given to most of the eligible recipients by the time the phase ended on Sept. 30, with only 2% of transfers failing due to inactive or incorrect bank accounts, according to Nikkei Asia. The government will deposit the money to those missed in the first part at the end of October.

Like Noi, some 86.79% of the recipients in the first phase had used the subsidy to cover daily costs, including water and power bills, according to a survey by Thailand’s National Institute of Development Administration cited by The Nation last Sunday.

Around 14.4% spent it on debt repayments, 13.6% paid for medical expenses and 7.5% for educational costs.

With her handout, 74-year-old Sopak Ruangsang in the northeastern Isaan region first bought cooking oil, rice, and fertilizer before paying off debts and helping her neighbors who did not qualify for the first phase of the handout scheme.

The rest went to her grandchildren’s tuitions, she told the South China Morning Post.

The subsidy afforded some breathing room for the recipients in Isaan, the poorest region of Thailand and home to a third of those included in the first phase of the scheme.

"This money has extended our breath, even if only for a short while," 46-year-old Suwanna Charoenmuang from a province in the region said.

Kirida Bhaopichitr, research director at independent think tank Thailand Development Research Institute, said the initial phase of the scheme could support the Thai government in its efforts to boost the purchasing power of low-income groups and rejuvenate an economy projected to grow by only 2.6% in 2024.

The government expects that the entire stimulus program, which still has two rounds remaining, will boost the growth rate to 5% by next year.

However, critics of the scheme, including esteemed economists and two former central bank governors, have voiced concerns that the scheme is shortsighted and poses fiscal risks, as reported by Reuters.

They warned that there is no quick solution to the structural issues hindering Thailand’s economy, arguing that the billions spent on the handout will only exacerbate the country’s troubling national debt issue.

While the government refutes these claims, it has faced challenges in securing funding sources.

Thai Deputy Finance Minister Paopoom Rojanasakul earlier this month said the government has secured enough funding for the second phase.

The distribution method and timeline will be decided later by the economic stimulus committee, but the second round will move forward, he confirmed.

For the country’s poorest who are not part of the first phase, daily concerns overshadow the larger implications of extensive state spending.

Jariya Pochai, a resident of the Isaan region, said he is looking forward to getting the next round of handouts to feed his family and cover the bills.

"Now utility bills are also expensive. [...] This amount is a lot for us, it would reduce our stress even if only for a short time."