It’s one of the oldest marketing gimmicks in the world and it hasn’t lost its appeal. You’ve seen the slogans before: “Enter now for your chance to win!” Companies have expanded their market share by luring in new customers, from soda giant Pepsi’s offering of a Harrier jump jet in 1996 to Publisher’s Clearing House deceiving consumers for decades with the chance to win millions, particularly if they bought products from the company. One would think that the general public would now be wary of such false promises in the information age, but Thailand’s Pheu Thai Party is banking on the same corruptive practice with their recently announced election sweepstakes.
The pitch is straightforward. As many Thais know, the size of their country’s informal economy is massive. According to the OECD, in 2024, roughly 21.1 million individuals or 52.7 percent of the workforce, were informally employed. These figures rank it as high as 14th in the world, and Thailand stands second in ASEAN, behind only Myanmar. To incentivize inclusion and gather data about the informal sector, Pheu Thai has promised to grant nine daily winners 1 million baht ($31,746) per day each. The winners will be chosen from different target groups, including income tax return filers, farmers, senior citizens, veterans, and more. That’s it. Instant wealth for a chosen few.
The catch is that you must first vote for Pheu Thai – and you have to hope they have the political mandate to push this latest populist scheme through the legislative process. The additional benefit is that through increased participation in Thailand’s taxation system, the Kingdom would see an estimated VAT revenue increase of 20 percent or nearly 200 billion baht ($6.4 billion) annually. There is little to no information on how long the scheme would run, nor are there solid projections on how the government would finance it.
Thai voters should be skeptical of such promises. In fact, Pheu Thai itself has learned from its own failed 10,000 baht digital wallet scheme, the previous cash injection that it promised during the 2023 election cycle. More than 32 million people registered for the populist scheme, but the Srettha Thavisin government had to retract part of it due to opposition from economists and because of the fact that large commercial retailers could have qualified as merchants under the scheme. The Bank of Thailand warned in 2024 that instead of broad economic measures, stimulus should target vulnerable economic groups as opposed to a universal cash handout. This new scheme hits that exact target demographic, but it comes with the same catch: a Pheu Thai victory.
The benefits of data collection in the hopes of creating a “digital” transition could be exaggerated. Pheu Thai might not like what the vulnerable underbelly of the economy truly reveals. For example, Thailand’s high level of household debt, which now equates to roughly 88 percent of GDP, makes the Kingdom the “sick man” of Asia. Figuring in “informal” debt would likely push this figure higher still. Underexplained in this proposal are the negative consequences of VAT taxation, as it is ultimately regressive rather than progressive. For small enterprises, there are advantages to informality, including avoidance of bureaucracy and taxation. The dim prospect of becoming a millionaire would likely not convince many to bind themselves to state institutions that have little public trust.
Pheu Thai could focus the same 3.2-billion-baht lottery fund into more legitimate policies that would benefit the most vulnerable, including schemes to offer loans and relief for those trapped in underground “black market” loans. The informal economy must be modernized, rather than used as a government vehicle for revenue collection. But Pheu Thai has failed to understand the downsides of its populist proposals, even when they are aimed at the most vulnerable.
But as they say, “but wait, there’s more!” Pheu Thai has other election-year economic stimulus plans for those not duped by the dreams of instant millions.
Back in 2011, then-Pheu Thai candidate Yingluck Shinawatra proposed a massive minimum wage increase. A new version of the same promise aims to increase the base wage to 600 baht per day by 2027, which also comes with risks. Adding millions of low-skilled workers to the formal sector could make both low-skilled formal and informal workers unemployable due to the added labor burden caused by the increased daily wage. The result could be even more informal workers. A transition from the informal to the formal sector cannot be accomplished with either a higher wage or a corrupt lottery scheme. Instead, low-skilled workers need pathways and legitimate opportunities for formal employment.
As a patchwork election-year ploy, Yodchanan Wongsawat and the Pheu Thai leadership have offered 10,000 baht to workers who want to “upskill” and have pledged a “war on poverty”, handing out free cash to an estimated 3.4 million people who currently fall below the national poverty line. The downside is that it creates additional fiscal burden, akin to the digital wallet program, which borrowed billions while failing to lift the country’s GDP. Reforms that benefit Thailand’s large informal workforce will not be solved overnight. Cash handouts will not remedy the myriad of complexities facing the informal sector, including low literacy rates, a lack of access to technology, and inadequate institutions to oversee and regulate training that will ultimately make them competitive in the labor marketplace.
Thai voters should not look to half-baked economic policies to boost a flagging economy, nor to a party damaged by disasters of its own creation. In other words, if it looks too good to be true, it probably is.
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