Thailand Public Revenue and Spending Assessment: Promoting an Inclusive and Sustainable Future, Strengthening Social Protection

Thailand’s social protection system faces significant challenges stemming from a slowing economy, inequality, rapid aging, the changing nature of work, and a highly informal workforce. At the same time, the social assistance system is highly fragmented and though a large majority of Thais were receiving at least some form of social assistance before the pandemic, this reflected a lack of efficient targeting across various programs, reducing the impact on poverty and income distribution. Moreover, while overall spending has risen in recent years, and more than doubled as a share of GDP due to the cash transfer response to COVID-19, it is returning to relatively low levels as compared with other countries at its income level. Again, this is due primarily to low benefit levels rather than low coverage. Thailand also faces increasingly significant exposure to natural disasters, floods, landslides, storms, and droughts, and their impact on livelihoods is more likely to be larger on the poor and those living in rural areas. This makes social assistance even more important and highlights the need for the social protection system to become adaptive, resilient, and able to respond to the needs of broad segments of the population who may be at risk. This chapter analyzes the adequacy and efficiency of social protection spending in Thailand, including with reference to international comparators. It examines lessons from the significant scale-up in transfers in response to COVID-19 and proposes longer-term policy reforms to social assistance programs that would be cost-effective in terms of their impact on poverty and inequality, without unduly straining the overall government budget. Chapter 8 then delves further into the distributional impacts of current social protection spending programs and these proposed reforms.