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Economic miracles may take the form of bubbles if there is 'no
redistribution of wealth. Some of the east Asian tigers are
examples of this. Thailand's economic miracle, for instance,
appears to be bursting like a bubble. Around 20,000 Thai villagers
have been squatting outside Prime Minister Chavalit Yongchaiyudh's
office for the past two months. By Indian standards, this Thai
'Assembly of the Poor' as this group is now known, appears quite
well off. These well-clad men and women with a list of 120 odd
problems for the government to solve, however, have gained
considerable sympathy in Bangkok. Reason: by Thai standards, these
people are certainly poor and deprived. Thailand is the world's
fifth most unequal society. Its economic miracle appears to vanish
a few miles outside Bangkok. And, what is worse, the inequalities
have worsened during the past one decade of high growth of eight
per cent per year. The growing discontent among villagers from the
north eastern part of the country which is highly underdeveloped,
only proves that high growth with worsening inequalities is
politically unsustainable in the long run. What makes these
growing disparities worse is the very narrow power structure.
Economic disparities are just one of the various problems that the
Thai economy is facing today. Its GDP growth is expected to slow
down to five per cent; exports have almost stagnated; the stock
exchange index has fallen by 45 per cent in the past three years
and the current account deficit has ballooned to eight per cent of
GDP. The Thai currency, the Bhat is highly over-valued.
Devaluation of Bhat may revive exports 'and reduce the current
account deficit, but may also worsen the plight of the deprived.
However, that appears to be the bitter pill that the Thai economy
may have to swallow to get out of the present situation. A
considerable amount of over capacity has been created, specially in
areas like real estate, and the economy will have to deflate to get
out of this crisis.
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