Thailand has made remarkable progress in reducing poverty from 58% in 1990 to 6.8% in 2020, driven by high growth rates and structural transformation.
Yet 79% of the poor remain in rural areas and mainly in agricultural households, according to the Rural Income Diagnostic released by the World Bank yesterday.
The diagnostic indicates Thailand's poverty reduction has slowed since 2015, with poverty increasing in 2016, 2018 and 2020, mirroring a slowing economy, stagnating farm and business incomes, and the Covid-19 crisis, respectively.
In 2020, the rate of poverty was more than three percentage points higher in rural areas than urban areas, while the number of rural poor outnumbered the urban poor by almost 2.3 million. The distribution of poverty has also been uneven across geographic regions, with the poverty rate in the South and Northeast almost double the poverty rate at the national level.
"Thailand has the potential to support faster and sustained income growth of rural households," said Fabrizio Zarcone, World Bank country manager for Thailand.
"As Thailand's economy adjusts to a new normal post-Covid, policy measures that increase agricultural productivity, support diversification to higher-value crops, and improve access to markets through better rural connectivity and digital technology adoption can help overcome the constraints faced by the rural poor."
According to the study, the pandemic severely affected the urban sector because of strict mobility measures, business closures and layoffs. However, the urban sector is expected to rebound faster, while the impact of the crisis will last longer for the rural economy.
Results from a World Bank Thailand Covid-19 monitoring phone survey revealed that 70% of rural households reported a reduction in their income since March 2020.
The analysis found that with an income Gini coefficient of 43.3% in 2019, Thailand has the highest income inequality rate in the East Asia and Pacific region. In rural households, the average monthly income was only 68% of the level recorded in urban households. Rural households also continue to suffer from low education, a large number of dependents, and difficult living conditions.
"Cross-cutting policy measures related to skills development will also be important to support rural households," said Nadia Belhaj Hassine Belghith, poverty economist at the World Bank.
"With low levels of education and digital literacy compounded by an ageing farming population, it is important to build the skills of farmers, both young and old, to enable them to adapt to the changing context of climate change and benefit from new technologies."
The World Bank Rural Income Diagnostic for Thailand aims to examine the challenges and opportunities to improve income and productivity in the rural sector. The diagnostic also examines how to facilitate income growth in the short to medium term, with a focus on farming households.
