World Bank offers new Thai govt tips on closing income gap


  • Thailand
  • Wednesday, 31 May 2023

BANGKOK (The Nation/Asia News Network): The World Bank has come up with several policy recommendations for the new government to follow, including delayed retirement and better old-age allowance.

The world financial authority believes that increasing the elderly allowance to 2,000 baht per month and allocating more funds for social assistance programmes would help reduce poverty and inequality.

The policy recommendations proposed on Monday (May 29) include:

• Higher long-term social assistance expenditure: The World Bank suggests the Thai government boost its spending on social assistance schemes beyond the short-term relief measures implemented during the Covid-19 pandemic. This would provide sustained support to vulnerable households and help alleviate poverty in the long run.

• Implement targeted social assistance schemes: To reduce the burden on the financial system, the World Bank recommends implementing more targeted social assistance schemes. This can be done by focusing resources on specific groups, like the bottom 40% of the low-income population. The monthly allowance for the elderly in this group can also be adjusted to 2,000 baht.

• Reduce fragmentation and establish better monitoring systems: The World Bank said a more comprehensive monitoring system will help prevent fragmentation of social assistance schemes. This would help ensure the resources are utilised efficiently and effectively, and the impact of the schemes can be accurately assessed.

• Reform retirement benefits and social security contributions: The World Bank proposes a series of reforms to retirement benefits and social security contributions to promote fairness and financial sustainability. These include extending the retirement age, reducing the disparity between retirement age in public and private sectors, using lifelong income as a basis for calculating initial pension payments, creating an index for increasing pensions and establishing an income ceiling for social security funds to calculate pensions.

Overall, these policy recommendations aim to strengthen social protection in Thailand, improve the effectiveness of social welfare schemes and ensure the sustainability of retirement benefits as well as social security systems.

By implementing these reforms, the Thai government can work towards reducing poverty, promoting equality and enhancing the overall well-being of its citizens, the World Bank said.

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Thailand , World Bank , income , gap

   

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