Thailand is set to roll out a controversial $13.8 billion handout plan in digital money to citizens

🌈 Abstract

The article discusses Thailand's plan to provide digital cash handouts to eligible businesses and individuals in an effort to boost the country's lagging economy.

🙋 Q&A

[01] Thailand's Digital Wallet Program

1. What is the Digital Wallet program and what are its key details?

• The Digital Wallet program is a controversial government initiative in Thailand that aims to provide 10,000 baht (about $275) in digital money to 50 million eligible citizens to spend at local businesses.
• The program was a major campaign promise of the ruling Pheu Thai party and is expected to boost GDP growth by 1.2 to 1.6 percentage points.
• Eligible individuals can register for the program starting August 1, 2023.
• The program's estimated cost has been reduced from 500 billion baht to 450 billion baht, and the government plans to fund it through the 2024 and 2025 fiscal budgets.
• The program will exclude certain goods and services, as well as tens of thousands of shopowners and past recipients who have a record of committing fraud.

2. What are the criticisms and concerns around the Digital Wallet program?

• Economists have criticized the program, calling it an ineffective way to contribute to sustainable economic growth compared to other measures.
• The financing of the program has faced several hurdles, delaying its planned implementation.
• There are concerns about potential fraud and abuse, leading to the exclusion of certain individuals from the program.

3. What is the current state of Thailand's economy and how does the government hope the Digital Wallet program will impact it?

• Thailand has suffered from a sluggish economy in recent years, with no clear signs of growth.
• The World Bank's Thailand Economic Monitor projects GDP growth of 2.4% for 2024.
• The government hopes the Digital Wallet program and the subsequent consumption it generates will boost GDP growth by 1.2 to 1.6 percentage points.

[02] Eligibility and Funding for the Digital Wallet Program

1. Who is eligible for the Digital Wallet program?

• The program was initially proposed for all Thais 16 and older, but was later limited to only lower-income Thais, defined as those with yearly incomes not exceeding 840,000 baht (about $23,000) and savings in financial institutions not totaling more than 500,000 baht ($13,700).

2. How is the Digital Wallet program being funded?

• The government initially said the state Bank for Agriculture and Agricultural Cooperatives would cover some of the funding needed, but after warnings by financial experts, it was announced that the project's funding would come out of the 2024 and 2025 fiscal budgets.
• The estimated cost of the program has been reduced from 500 billion baht to 450 billion baht.

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