Teflon Thailand's wealth gap

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From South China Morning Post

Coronavirus turns Teflon Thailand’s wealth gap into a economic chasm

• As Covid-19 eats into exports and tourism, the gap between rich and poor in one of the world’s most unequal countries is only getting wider
• With both the lower and middle classes now facing ruin, ‘Teflon’ Thailand’s reputation for weathering financial crises is feeling the heat like never before

 

On a roadside in a mixed Bangkok neighbourhood stands a shiny metal box – a “Pantry of Sharing” – where the haves in one of the world’s least equal countries can leave food for the have-nots, the ranks of whom are bulging as the coronavirus lays waste to the Thai economy.

Each day, maids from the grand mansions nearby drop off an inventory of essentials – eggs, noodles, milk, sugar and water, sometimes a bag of mangosteens or rambutans – charity for those suddenly jobless.

Opposite the pantry, Sumarin Boonmee says her life has been pitched into uncertainty since she was put on unpaid leave from her job at a supermarket three months ago.

“I have no idea when I can go back, so I am selling meat skewers here for a little income,” she says, tending to a tabletop grill.

She is a member of the Leelanut community, a slum of day workers and stallholders living under corrugated roofs amid cluttered walkways beside a mucky canal.

The community is flanked by wealth – gated villas, wood-panelled cafes, condos and high-end salons. It is a hangover from old Bangkok, before money poured in and breakneck development airbrushed most of the poor from prime areas of the city.

There are millions of newly unemployed like Sumarin, according to the Thai government, which last Sunday secured a near-US$60 billion stimulus package – the largest in Thai history – to resuscitate an economy flatlined by the virus.

Bangkok locked down in late March. It is stuttering back to life. But jobs have been shredded, especially for those who depend on daily wages or low-paid jobs as cleaners, motorbike drivers and security guards.

At the pantries, most are embarrassed for being forced to turn to handouts.

“I’m just taking enough for now, so that others have something too,” says Suthep, a 49-year-old truck driver, taking a red-bean bun and a carton of milk for his granddaughter.

Thailand’s economy leans heavily on exports and tourism and has been cruelly exposed by the impact of the virus, which has closed international travel and shrunk global demand.

Now the “Teflon Thailand” tag, earned for resilience through financial crises, disasters and cycles of political turmoil, is being tested like never before.

There are now scores of pantries across Bangkok, lifelines for those in need but also rare connection points between the rich and the poor.

The pantry at the Leelanut community is filled twice daily by an heir to a large sock company, who lives 100 metres along the road in a grand house.

“My business has been hit hard by Covid. But I’m very lucky,” says Pinnarat Sethaporn, 51. “I really feel for those living hand-to-mouth at times like this.”

But it is not just the poor who are facing ruin. Middle-class workers are losing their office jobs, and small and medium-sized enterprises (SMEs) are bleeding cash, with knock-on effects on mortgage, car and school payments.

Between six and seven per cent will be hacked off annual growth, according to an IMF estimate.

The damage is already worse than the “Tom Yum Goong” crisis of 1997, when Thai banks overly leveraged with foreign debt collapsed, leading to a slump in the baht, white-collar redundancies and capital flight – problems that spread across the region and led to the Asian financial crisis.

“This time, those who will be hit the hardest are the low and middle classes,” says Pavida Pananond, an academic at Thammasat Business School in Bangkok.

“This crisis will further widen Thailand’s inequality.”