Thailand allocating $7 billion more for consumer spending, help businesses

27, Jan. 2021

A street food stall in Bangkok offers affordably priced delights. The government has also been giving monetary aids to Thais whose livelihoods are hit by the economic crisis brought about by the pandemic.(NNA)
A street food stall in Bangkok offers affordably priced delights. The government has also been giving monetary aids to Thais whose livelihoods are hit by the economic crisis brought about by the pandemic.(NNA)

By Chalermlapvoraboon Valaiporn

BANGKOK, NNA— More than 31 million people in Thailand stand to receive aid worth about $233 (7,000 baht) from February under a new scheme to help those whose livelihoods were hit hard by the COVID-19 pandemic.

Amounting to $7 billion (210 billion baht), the cashless 'Rao Chana' scheme is for them to use the money to buy food, drinks and other essential items at shops and eateries using the 'Pao Tang' app.

The way the aid is disbursed is similar to last year's subsidy program called 'Khon La Khrueng', which transferred money as co-payment via the same app when users made purchases.

However, the latest scheme offers two new advantages.

First, it has been extended to cover passenger costs for various modes of public transport, such as registered motorbike taxis, taxis and passenger vans, which will also help thousands of riders and drivers affected by the tourism slump.

Second, the new program allows people to accumulate credit, instead of having to spend a certain amount each day previously.

Although the new aid would be doled out in portions in February and March, people could use their credit till end-May. Among those receiving the aid will be more than 13 million people who are state welfare cardholders.

Those earning an annual income exceeding 300,000 baht or have savings of more than 500,000 baht as of Dec. 31 last year are not eligible.

Deputy Prime Minister Supattanapong Punmeechaow said the scheme would be funded by loans the government had approved for stimulus packages last year to help the country recover and cushion the impact of the economic fallout on businesses and people's livelihood.

In addition, the Thai cabinet has approved the extension of the 'Khon La Krueng' scheme to cover more people or those who did not exercise their claim when it was launched last year. The second phase will see 1.34 million Thais each receiving aid worth 3,500 baht from Jan. 25.

“I think Rao Chana is a great scheme to support Thai people and their spending,” Wanwisa Sriratana, a spokeswoman for Kasikorn Bank, told NNA. “It helps expand income and alleviate hardships for business operators,” she added.

Wanwisa expects people to use the 'Rao Chana' and 'Khon La Krueng' subsidies "more wisely”, which would benefit businesses dealing in food and essential items more rather than those selling luxury items, furniture and clothing.

Agreeing, accountant Jang S., 43, said, “I will most likely use the subsidy to buy food and home cleaning products like detergent and dishwashing liquid. I can also use it for my lunch and travel costs.”

While many people welcomed the additional aid, some had criticisms and questioned why the government refused to give cash directly. They pointed out that many low-income earners and old people do not own a mobile phone, so they would not be able to benefit from the subsidy.

“How will the elders receive the subsidies if they have no access to smartphones?” one netizen asked during a Facebook live session hosted by Finance Minister Arkhom Termpittayapaisith after he presented details of the new scheme.

Another participant said direct cash aid would also help people settle other kinds of bill if they do not want to use all the subsidy disbursements on essential items.

Private business owner Suwannee C., 58, told NNA, “The people who are really in need are the struggling ordinary people among the grassroots. If the benefits are given to every household rather than to individuals, then no family would be left out."

While Arkhom acknowledged that aid schemes would not be able to compensate for losses caused by the pandemic, he said they could help alleviate the hardship of people facing difficulties.

Meanwhile, Deputy Prime Minister Supattanapong has said that the government is looking at ways to help low-income earners own a smartphone.

The smartphone penetration rate in Thailand stood at 72 percent in 2019, according to a report by Statista Research in September last year. The figure is expected to rise to 87 percent or about 62 million smartphone users by 2025.

Global lockdowns and severe restrictions by Thailand to fight the spread of the pandemic have taken a toll on Thai retail and tourism.

In 2020 alone, the country’s GDP slumped by 6.6 percent, said the Bank of Thailand. It estimates the contraction to narrow to 3.2 percent this year

A survey conducted by the Tourism Council of Thailand recently shows more than 65 percent of 1,884 tourism-related establishments surveyed nationwide are still operating while the rest or a third has remained closed due to insufficient funds.

Any COVID-19 resurgence in Thailand could affect the projected GDP for this year, Kasikorn Bank market analyst Kevalin W. told NNA.

However, with the recent commitments for vaccination plan, vaccine purchase and production as well as further lifting of lockdown restrictions, Kevalin believes these could offset any negative challenges, and hence, the GDP estimate may not be affected.

Last week, the Bangkok Metropolitan Administration allowed the reopening of businesses in 13 categories in the capital. They include beauty parlors, games centers, banquet halls, internet cafes, bowling alleys, and skating rinks.

Businesses that are usually crowded or see close body contact such as entertainment venues, boxing stadiums and massage parlors continue to remain closed.

Thailand, which expects to receive 50,000 doses of AstraZeneca vaccine, is set to launch its vaccination campaign on Feb. 14. The country, which has recorded more than 14,600 infected cases and 75 deaths, is now battling a new wave which erupted in mid-December.

“Thailand could face many uncertainties including the level of COVID-19 vaccine effectiveness and other factors. So, we have to closely monitor the situation,” Kevalin added.