How the “Rich People Network” Feeds the Poverty Cycle in Thailand and Asia
In the article “Rich get richer, poor get the picture,” Thai writer Paritta Wangkiat complains of the Thai poverty cycle: “the majority are being overlooked as the door of opportunity is opened only for the rich to get richer” [1]. What she is talking about, specifically, is how the state keeps rolling out policies that keep on benefitting the top 1%: “investment incentives, tax exemption and partnerships with government projects” [1]. Investment incentives, tax exemption, and government project partnerships are given only to companies owned by those who are well-connected in Thai society and have close ties to government officials. And, not surprisingly, the “well-connected” people in this network happens to be the top 1% (or, more accurately, 0.01%). Government policies are designed and lobbied for by those in the “rich people network.” Once you are in this network, you will gain the power to put yourself in places where you can make even more money, which helps you build even more links and ties within the “rich people network,” and further increasing your wealth and strength in this network, and so forth. If you are outside of this network, it is almost impossible to insert yourself into the right places and know the right people who will help you benefit from government policies and similar situations. Special policy benefits is just one demonstration of how the “rich people network” in Thailand (and many other Asian countries) perpetuates the poverty cycle. Note that I am not saying that this system is bad or good, nor am I blaming any specific government or political party (I understand that it is very difficult to put an end to such an ingrained system, and I definitely understand how Thai politicians often already have too many important things to deal with). I am merely making an observation with regards to the surprising power of the network effect, which is a main theme of this course.
Another example is in the education system. (I am sure that a similar phenomenon exists in many other countries as well, such as Japan, China, and the UK, and perhaps even the US, to a certain extent.) All (almost all) rich and successful people in Thailand received education at Chulalongkorn University, the nation’s most prestigious university located in downtown Bangkok (or, at Thammasat University, the nation’s #2, arguably). Those who go to Chulalongkorn are granted access to a powerful network of business owners, company executives, and government officials. These connections are extremely important in Thailand, and presence in this network is *required* for career success. But the issue is, most often, students who pass the rigorous entrance examinations into Chulalongkorn are those from privileged (or at least semi-privileged) backgrounds, almost always from Bangkok, which is home to only roughly 10 percent of the Thai population. This leads to a (almost complete) closure of network of students who will become powerful in the nation. Students outside of this network, such as those from the far North or Northeast of the country, due to insufficient funds to receive a competitive high school education and geographical inability to live in Bangkok or near Chulalongkorn, have little chance of joining this great network. Hence, rich people and their children remain in the powerful Chulalongkorn network, while outsiders (mostly from less wealthy families outside of Bangkok) remain excluded and unable to join this network of great life opportunities. Successful people keep coming from the same old families, and the poverty cycle is perpetuated.
Sources:
[1] https://www.bangkokpost.com/opinion/opinion/1379095/rich-get-richer-poor-get-the-picture
[General reference] https://borgenproject.org/facts-about-poverty-in-asia/
[General reference] https://asia.nikkei.com/Life-Arts/Education/Breaking-the-poverty-trap-through-education
