6.3 The Distribution of Income It is commonly known that the role of the Thai government was rather concerned with its traditional functions, namely the provision of social and economic infrastructure, the
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maintenance of a stable economic framework, and the promotion of growth. But social welfare policy was paid less attention. The Thai government for years has been prone to enhance economic growth and stabilize the economy for fostering industrialization via exports rather than to emphasize equal income redistribution or the achievement of special social goals. The past experience indicates that over the last three decades, the production of goods and services has increased faster than population. In general, great progress has been achieved in the field of primary education and health care. Life expectancy has risen, while illiteracy has clearly fallen. The quality of live has also improved. However, living standards remain low among the lower class; agricultural workers and small farmers. It is commonly asserted that absolute poverty in rural areas was declining during the 1950s to the 1970s. However, the general depression in the world commodity markets after the 1980s adversely impinged on Thai farmers at large. As a consequence, the rural poverty which tended to decline, instead started to rise after the early 1980s. Inequality has virtually risen and there is no question that the degree of inequality in Thailand is widening with the poorest engaged in the agricultural sector. The government intervention by all means is responsible for this performance as rightly observed by Timmer (1991) as follows: Thailand did not use similar trade and pricing for key commodities in an effort to protect domestic farmers from the very low prices that occur from time to time in the world market. Although the strong performance of Thailand in terms of rising labour productivity argues that such free-trade policies promote growth, Thailand paid a price in terms of rural poverty (Timmer, 1991). During the period of readjustment in the early 1980s, the Thai government seemed to have been reluctant to implement the structural adjustment programmes fully. Development policy aimed at alleviating poverty in the agricultural sector and government expenditures and the tax system were instead firmly moved towards the creation of an environment suitable for export-oriented industries in urban areas, especially in the proximity of Bangkok and peripheries. It is also obvious that the scale of land reform was very limited and ineffective at keeping poor farmers from becoming indebted. Previous attempts to limit private land ownership were never successful due to vested-interests but the Agricultural Land Reform