Thailand’s 10,000-Baht Digital Wallet Dilemma: Low-Income Earner Problem

In the bustling streets of Bangkok, amidst the cacophony of city life, Mr. Pradit Boonkate, a 67-year-old security guard, has been a silent sentinel for 16 years. Leaving behind his humble hometown in Ratchaburi province, he journeyed to the Thai capital seeking a better life. Working tirelessly, he manages to earn 15,900 baht (US$437) every month, granting him just six precious days of leave each year.

When the news broke that Mr. Pradit would be one of 56 million Thais set to receive a 10,000-baht digital cash handout in February; he was initially overjoyed.

Recipients were required to spend the money within six months on specific items like food, medicines, and occupational tools, but only at local businesses within a 4km radius of their registered address.

What does this situation entail?

This posed a unique problem for individuals like Mr. Pradit, whose heart and registered address remained in his hometown. The vast distance between his workplace and home, common among rural residents, made spending the digital cash a daunting task. He explained, “For people who live in the countryside, there is a huge distance between the town and their homes. Their villages often have small grocery stores selling things like canned fish and eggs which won’t accept digital money.”

Amidst this uncertainty, a chorus of critics emerged. They worried that the program would inadvertently favor the wealthy and established businesses, who had the infrastructure to facilitate digital transactions. This raised concerns that the 10,000-baht cash handout would ultimately become a windfall for the rich.

Ninety-nine academics, economists, and former governors of the Bank of Thailand voiced their apprehension, citing the potential public debt and long-term financial instability this scheme might create. Dr. Sethaput Suthiwartnarueput, the governor of the Bank of Thailand, recommended targeting specific groups rather than implementing a universal program.

How Small Business Owners are reacting

Small business owners like Ms. Orapin Thanomsap in Bangkok shared their reservations about participating. She feared that most consumers would flock to large retailers, leaving small shops like hers in the shadows. “It’ll benefit 7-Eleven, not humble shops like mine,” she remarked, vowing to spend the digital money at big supermarkets to restock her store.

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Prime Minister Srettha Thavisin, however, stood firm in defense of his party’s policy. He believed that by injecting $15 billion into the economy through digital wallets, the scheme could uplift local communities and not just favor big cities. In a heartfelt message, he said, “Our intention is that the money is spent in local areas where your address is registered. This will help develop your communities and not just the big cities alone.”

The lingering question remained: How would this ambitious program be funded? There were three possible sources: the 2024 fiscal year budget, borrowing from state agencies, and other loans. However, with the national budget only ready in April the following year, the government would likely need to borrow money to implement the policy, a move that could draw public criticism.

How the program will move forward

In a bid to address these concerns, analysts proposed postponing the program until May, when the budget would be readily available. They also suggested splitting the payment into two rounds, with the first 5,000-baht installment in May and the second in November to alleviate the financial burden on the nation.

This program, conceived as a campaign promise by the Pheu Thai Party, has become crucial for their political future, especially after a recent electoral loss. But as analysts caution, while populist policies can help the less fortunate, they should also focus on self-improvement and productivity among beneficiaries. Giving money is one thing; ensuring it fosters growth is quite another.

For Mr. Pradit, the 10,000 baht represents a lifeline, but to spend it, he’s prepared for a heartfelt journey – a day off from work, a more than 100km journey to his hometown, and the hope that stores there will accept his digital wallet. As unique and human as the people it aims to serve, the digital wallet program paints a portrait of dreams, challenges, and aspirations in the intricate tapestry of Thai life.