KHON KAEN / UBON RATCHATHANI – One month after the military government issued welfare cards to low-income earners, the policy is drawing mixed reactions in the Northeast. As shop owners participating in the scheme report a jump in sales , critics say the policy fails to alleviate poverty while mainly benefiting private companies.

On October 1, the government launched a new flagship policy worth 41.9 billion baht (about $1.26 billion) to support low-income earners across the country. Welfare cards charged with a monthly credit of 200 or 300 baht let consumers buy goods at registered stores equipped with special card readers. Card holders also receive a 45 baht discount every three months for cooking gas purchases.

The policy also covers monthly travel stipends for interprovincial trains, buses, and public transport in Bangkok.

Of 14 million applicants countrywide, 11.6 million people were deemed eligible for the welfare cards, commonly known as “cards for the poor.” In Khon Kaen Province, about 355,000 people of 452,000 applicants receive the electronic cards, which they can currently use at 1,161 stores. In Ubon Ratchathani Province, about 503,000 people have been registered to receive the cards.

But after one month in use, the scheme is drawing mixed reactions from consumers, shop owners, and experts in the Northeast.

A banner advertising a Blue Flag shop in Khon Kaen City participating in the government’s welfare card scheme. While the shops are advertised as selling products at cheap prices, card holders have complained about overpricing.

Minor issues?

Card holders in the region report several issues ranging from difficulties finding registered stores in their area to problems with the card readers.

In Si Sa Ket Province’s Uthumphon Phisai District, people were not able redeem the travel allowance on trains because no card readers were available, according to a news report.

Following up on complaints that the policy’s Blue Flag shops were selling overpriced goods, The Isaan Record visited several shops in Ubon Ratchathani and Khon Kaen Provinces to review prices over the past month.

In Ubon Ratchathani’s Det Udom District, a large Blue Flag shop was found selling several goods at higher prices than sold in general shops. For example, the shop charges 120 baht for 30 eggs while the same amount is priced at 90-100 baht at other shops in the area.

In Khon Kaen City’s Mueang District, some products at the shops registered for the policy are sold cheaper while others are more expensive than in general shops by about 5 – 14 baht.

Since the policy was launched last month, shop owners in both provinces report a major jump in sales.

Phisamai Jamjaroen, the owner of a large Blue Flag shop in Ubon Ratchathani’s Det Udom District, praised the scheme for supporting not only low-income earners but also small entrepreneurs like herself.

“It’s also good that with the welfare cards the poor can’t waste their money on lottery tickets, alcohol, and cigarettes,” said Ms. Phisamai, who saw her sales soar in the past month.

In Sila Subdistrict of Khon Kaen City, Sunantha Lueanglue and her husband run a large Blue Flag shop. Since they started accepting welfare cards, many people from the surrounding villages have been flocking to their store. Their daily sales have jumped from 10,000 baht to 20,000 – 30,000 baht, a two- to threefold increase.

“Most shops around here haven’t gotten the card readers yet. When they install them, our sales will probably drop again,” Ms. Sunan says.

The couple says there are often problems with the card reader at their shop as the connection keeps getting cut out, forcing customers to wait for some time before they can pay for the goods.

Sunantha Lueanglue and her husband Saman Lueanglue say their sales have soared since they began participating in the welfare card program last month.

Somphet Wongkho, a 63-year-old owner of a Blue Flag shop nearby, also says his sales have gone up since the policy was launched. But the card reader often heats up and stops working during heavy use, causing customers to leave the shop without making a purchase, he says.

But Khamnuan Sunvannadi from Khon Kaen’s Provincial Commerce Office, one of the state agencies overseeing the implementation of the policy in the province, argues these are only minor issues.

By the end of November, card readers will be installed in shops in all of province’s 26 districts, addressing the problem that card holders can’t find shops in their area, Mr. Khamnuan said.

Concerning the issue of overpriced goods, the agency received only a few complaints. Shops found selling overpriced products have been ordered to lower the prices and those who continue the practise will be expelled from the program, Mr. Khamnuan claims.

A shortsighted policy?

While low-income earners and shop owners in the Northeast have generally welcomed the new welfare program, many say the support is neither enough to lift the financial burden off the poor nor to solve other pressing issues.

Jiranat Sararat runs a small grocery store in Khon Kaen’s Sila Subdistrict but decided against registering her shop for the policy. She criticises the scheme for not addressing the problem of high prices for everyday goods.

“If the state really wants to help, it’d be better to not raise the taxes too much,” Ms. Jirant says. “Handing out welfare cards is like trying to solve the problem at the wrong end.”

Jampi Jintasi, a 60-year-old rubber farmer from Ubon Ratchathani’s Det Udom District, says that she applied for a welfare card after her family income plunged due to low market prices for rubber.

But her welfare card’s monthly 200 baht credit is far too little to really help with her family’s financial problems, she says.

“If the state is handing out only this much, it should be cash so I can buy things close to my home,” says Ms. Jampi who had to travel from another district to find a Blue Flag shop.

Jampi Jintasi, a 60-year-old rubber farmer from Ubon Ratchathani, says she prefers to receive state support in cash as it gives her more flexibility of where to spend the money.

Other locals interviewed in Ubon Ratchathani City told The Isaan Record they expect the welfare cards to help reduce household spending to some degree. But for many of the urban poor, there are other, more pressing issues than the prices of everyday goods.

In Khon Kaen City, the construction of a new high-speed railway that began in August 2015 has pushed hundreds of families out of their homes.

For Anong Hongtuanlom, a 61-year-old woman who lives in an area owned by the State Railway of Thailand in the city, housing is a major concern. She is worried that her community will be forced to move out of the area and will have nowhere to go.

“The next time the government wants to help the poor, they should help with housing issues,” she says.

Echoing her view is 78-year-old Boonmee Sintusiri, who earns only 200 baht per day as a vendor and lives in a visibly worn-out house.

“The last time the government had a residential development plan for low-income owners like the baan man kong project, me and several other people didn’t receive any help,” she says.

Who benefits really?

Dr. Sataporn Roengtam, a professor of Public Administration at Khon Kaen University and an expert on public policy, argues that the welfare card scheme won’t alleviate poverty in the long run and is designed to boost the sales of private companies.

As low-income families carry a high household debt burden, the welfare cards will have only a fleeting effect on people’s finances, Dr. Sataporn says.

Household debt in Thailand has spiraled in recent years. In December 2016, the ratio of household debt to gross domestic product (GDP) stood at 79.8 percent, according to CEIC Data. The rate fell from 81.2 percent a year earlier but it remains among the highest in Southeast Asia.

Dr. Sataporn Roengtam, a professor of Public Administration at Khon Kaen University, criticizes the welfare card scheme for not addressing the root problems of low-income earners and lacking of local participation in policy-making.

But Sukhon Wijitkunsawat, senior researcher at the Fiscal Policy Office Khon Kaen, believes the welfare card scheme is able to help the poor because it provides tangible support with low bureaucratic barriers.

In contrast to last year’s welfare policy which handed out one-time cash payments of 1,500 – 3,500 baht, the welfare card scheme is a more focused approach to support low-income earners, Mr. Sukhon said.

Since it took power in 2014, the military regime has struggled to revive Thailand’s sluggish economy in which export and domestic demand remain weak. This year’s welfare policy is one of many spending stimulus measures targeting especially farmers and the poor.

Dr. Sataporn argues that the new welfare policy is not really geared towards the poor but designed benefit private companies and the government. The policy boosts the military regime’s popularity and pushes sales of producers of consumer goods.

“This policy puts the state’s money into the pockets of private companies,” Dr Sataporn says, “not directly, but passing through the hands of the poor.”

Reporting by Rossukhon Hongthong, Watannu Suriyan, and Jirasuda Saisom. Watannu and Jirasuda are participants of The Isaan Journalism Network Project 2017 organized by The Isaan Record.