Thailand and Kon La Krueng Co-payment Scheme: A Challenge towards Sustainable Consumption – Modern Diplomacy

thailand-and-kon-la-krueng-co-payment-scheme:-a-challenge-towards-sustainable-consumption-–-modern-diplomacy

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The COVID-19 has impacted many people around the world, particularly the poor people who are unable to meet their fundamental needs through self-sufficiency. These hard times of the COVID-19, it has taught us that our world is becoming more complex and that we must be prepared for unexpected events, such as this severe pandemic. From this case, it is evident that many poor people all over the world have been disproportionately affected by the COVID-19; as a result, surviving during this adversity is not easy for them.

Since the first outbreak of the COVID in early 2020, Thailand has been on lockdown and un-lockdown alternately. The closure of the country’s borders has not allowed foreigners to enter the country. This is to prevent the COVID-19 infection from spreading throughout Thailand. Nonetheless, the country’s closure has resulted in a slew of issues, including a drop in GDP growth.

According to the World Bank, Thailand’s economy is still suffering from the COVID-19 pandemic and is expected to grow at a low 2.2 per cent in 2021, down from the 3.4 per cent anticipated in March of the same year. It is obvious that due to this pandemic, the country’s growth could be that surprising. Nonetheless, it is not only Thailand that couldn’t achieve its expected growth but also many other countries worldwide. If we focus specifically on the ASEAN countries, most countries are facing the same situation; the GDP growth projection has dropped this year compared to last year’s. Indonesia is one of the countries that have been facing this slow growth because of the pandemic, the GDP Growth Rate Projection of Pre-COVID was 6.0 per cent and has dropped to 3.2 per cent for this year.

Apart from affecting the country’s GDP growth, it is undeniable that it also heavily affects people in the country. There is a wide range of impacts on people, especially vulnerable people, poor people, informal workers, etc. Many Thai people lost their jobs and returned home without money to feed their families. This is a bad thing that happens to them. Poor people have been affected heavily by the COVID-19 pandemic; many could not find work during these times. During the country lockdown, many informal workers such as street vendors were not allowed to go outside of their houses; thus, this badly affected their lives to find money to feed their families.

Moreover, this also led to unemployment issues in the country, not only in Thailand but also in other countries across the world. For Thailand’s case, the unemployment rate of this year was likely to reach 2.5% in the second quarter, representing about 937,500 unemployed workers, up from 1.96% in the first quarter, representing 758,000 unemployed workers. Therefore, it is obvious that the COVID-19 has impacted the country in many ways. Thus, the government should take action to help their people to overcome these hardships during the pandemic.

Thailand has shown a satisfying solution for this issue. The Thai government has come and played a critical role in helping people who have been suffering from this pandemic’s negative impacts. There are some financial schemes or programmes that were released by the Thai government to help the Thai people. One of those is the Kon La Krueng (Half-Half) co-payment scheme which is a project that the Government expects to stimulate domestic consumption and boost the economy by giving pocket money to Thai successful registrants.

The first phase of this project began on October 16, 2020, with payment beginning on October 23 – December 31, 2020. Registration for the second phase began on December 16, 2020, and payments were accepted from January 1 – March 31, 2021. While the third phase, round 1, opened for registration on June 14, 2021, the payment period ran from July 1 – December 31, and the second round’s phase 3 registration ran from October 16 – December 31, 2021, the payment period ran from October 4, 2021, to December 31, 2021.

For eligible and successful registrants above the age of 18 who are not state welfare or other financial scheme cardholders, the government provides 8,000 Baht. The length of time it takes to pay varies. If she or he had fully registered for the first phase, she or he will earn 3,000 Baht and an additional 500 Baht for the second phase without having to re-register. As a result, the total cost is 3,500 Baht. In phase 2, new registrants will receive a total of 3,500 Baht right away. And for phase 3, everyone will earn an additional 4,5000 Baht, with the first 1,500 Baht being given out during round 1’s phase 3 and the remaining 3,000 Baht being given out at round 2’s phase 3 on October 1 and November 1.

There are roughly 43 million registrants for all three phases of this financial scheme, which allows both sellers and buyers to register and take a critical benefit from this financial support from the government. Only food, beverages, general items, and service charges (massage, spa, manicure and pedicure, public transportation) are permitted to be sold under this scheme. Every purchase will be subsidized by the government to the tune of 50%. A successful registrant is permitted to spend the scheme subsidy at a rate of not more than 150 Baht per day or no more than 300 Baht for the shared cost. Every payment will be made through the Pautang G Wallet application.

Kon La Krueng (Half-Half) Co-payment Scheme has helped both consumers and local vendors positively across the country. Local businesses are growing as the money is spent in the local community which is positively affecting the local economic growth. Many vendors are also benefiting from this project; it grows local business and higher the consumption of local businesses. Moreover, it is promoting a cashless society as those involved with this scheme will have to pay online through G Wallet in the Pautang application. So, this is a change in people’s behaviour and adaptability toward a cashless society. From all this, it is undeniable that the government spending through this half-half scheme has grown the local consumption across the region and the nation positively.  The government spending on the half-half scheme for phase 3, round 2 (October – November) has increased the country’s GDP to 0.24 per cent. This means that this financial scheme has increased national consumption which positively affects GDP growth.

The spending behaviour of Thai people through this scheme during this pandemic is increasing, particularly local consumption across the country. This has a beneficial impact on overall national consumption. Local companies are flourishing, and local vendors can generate more income. Nevertheless, this consumption behaviour leads to some concerns about sustainable consumption. People are delighted while spending their money on common necessities, which can lead to rapid consumption both locally and nationally. As a result, the government may need to consider sustainable consumption so that people are more conscious of it, particularly their rapid consumption during this scheme, which may influence their negative money-spending behaviour and less sustainable daily consumption.

To conclude, the Kon La Krueng co-payment scheme provided by the Thai government has helped Thai people to consume more which is benefiting most Thai people in the country during the COVID-19 pandemic. Also, it helps increase the GDP growth, particularly from national consumption and government spending. Nevertheless, this rapid consumption of Thai people during this pandemic has arisen some concerns, particularly sustainability in which the government should promote this awareness so that people will be more aware of their daily consumption behaviour.

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