As a country with pronounced political polarization, Thailand is used to divisive debates in which the arguments on both sides have merit. But when it comes to the ruling Pheu Thai Party’s economic stimulus program of handing out 10,000 baht ($298) to all Thais aged 16 and older, the debate is increasingly less about whether it’s a bad idea and more about just how bad it is.
Following an announcement last week, the stimulus program is now advancing to its third phase. After distributing money to 14.5 million vulnerable individuals – 12.4 million state welfare card holders and 2.1 million disabled people – in the first phase and 4 million elderly citizens in the second, the third phase will direct payments to 2.7 million youths aged 16 to 20. Unlike the direct bank transfers of previous phases, the third phase will introduce digital currency, bringing Pheu Thai’s flagship “digital wallet” election pledge to life at last.
The overwhelming consensus among experts leaves little doubt that Thailand’s slow growth is rooted in deep-seated structural deficits, and that monetary stimulus is just a short-term remedy. What one must ask is whether this remedy amounts to nothing more than a band-aid solution. The numerous opponents of the stimulus scheme firmly think so. Nearly a hundred Thai economists and academics cautioned early on that prioritizing targeted investments, not pouring funds into consumer spending with little strategic focus, would be the wiser approach in the context of Thailand’s fiscal limitations and the need to prepare for future uncertainties, such as the rising burden that comes with a rapidly aging population.
A different, less mainstream view holds that boosting consumer spending is like performing CPR on Thailand’s chronically unhealthy economy, thereby creating better conditions for meaningful long-term structural reform. The degree of success would nevertheless depend on the policy’s design.
Time is the ultimate judge. Earlier this February, estimates by the World Bank revealed that Thailand’s most ambitious Phase I stimulus, launched in September 2024, drained 0.8 percent of GDP yet delivered a meager 0.3 percent in growth. While not a final verdict, such unimpressive returns should have prompted a rethink of the program.
Unfortunately for Thai taxpayers, the Pheu Thai government is displaying a shocking lack of prudence. It doesn’t take the brightest mind to see why handing money to teenagers is reckless. For starters, they are usually unemployed and more likely to blow the money on non-essentials. Moreover, the notion of easy money could dull their incentive to work and maintain financial discipline, potentially leading to greater social problems in the long run. Of course, money giveaways have long been normalized in Thai society, or else populism wouldn’t be so enduring. Still, one would hope that future generations, who must keep pace with the driven youth of Thailand’s regional peers, will not be encouraged to adopt this dependency.
One good rationale in favor of funneling digital money to the 16-20 cohort would be to help ease the burden placed on low-income families. But the program’s capacity to offer substantial relief becomes limited when it can’t be used to pay tuition fees or services like water or electricity bills. Deputy Finance Minister Paopoom Rojanasakul said as much, clarifying that only goods can be purchased with stimulus payments.
Regulating which goods can be sold is tricky, not to mention the edge conglomerate-owned convenience stores naturally have over smaller businesses. According to Finance Minister Pichai Chunhavajira, shops that primarily sell goods like cigarettes and alcohol will be excluded from the government’s scheme. At the same time, restricting mom-and-pop stores participating in the scheme from stocking small quantities of these items is hardly practical. Keeping these items away from minors would ultimately require strict verification standards, which may be the norm abroad but is not quite the case in Thailand, as evidenced by the widespread availability of e-cigarettes and cannabis among youths.
Another good rationale for targeting the 16-20 age group would be the consolidation of Thailand’s digital monetary system. This is important particularly in light of the ASEAN Digital Economy Framework Agreement aimed at making the Association of Southeast Asian Nations (ASEAN) a leading digital economic pact. Indeed, Paopoom emphasized how the younger demographic’s digital fluency would make accessing the digital money that comes with Phase III seamless.
However, the rationale of using perfect test subjects in an emerging field falls flat when one considers the strides Thailand has already made toward digitalization. The country is a digital frontrunner in the region, and up to 97 percent of Thai consumers reportedly use mobile banking apps for cashless payments at least once a week. Thai aunties and uncles are clearly more digitally adaptive than they’re often assumed to be. So, spending 27 billion baht ($802 million) to teach Thais how to use something they’re already familiar with – or would pick up in no time – is, to put it mildly, a head-scratcher.
Lacking robust economic justification, the only compelling rationale for the Pheu Thai government to push ahead with its controversial digital wallet scheme targeting youths is political. And it seems less about building loyalty among first-time voters in the upcoming election and more about rebuilding political capital. With reference to Napon Jatusripitak of the ISEAS-Yusof Ishak Institute, Pheu Thai’s strength lies in bold policy pledges and their full, timely execution. Non-fulfillment of the digital wallet promise, flawed as it may be, would thus prove that Pheu Thai is no different from other Thai parties: a patchwork of factions, business interests, and political elites with no real vision.
Seen purely through the lens of political survival, one might sympathize with Pheu Thai. But for those invested in Thailand’s long-term future, what is unfolding is a bitter pill to swallow.
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