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Thailand: The economics of
vice
By David Fullbrook
BANGKOK - In the 1970s and 1980s refugees poured
into Thailand from Cambodia, seeking safety from war and
genocide, lingering in camps for years. A decade ago,
peace of sorts descended and the king returned to
Cambodia, followed by the refugees. Now it is Thais
seeking refuge, if only for a few hours or days, in
Cambodia's border towns - refuge from laws that forbid
gambling in Thailand.
That flow of refugees may
slow to a trickle if a proposal to legalize gambling in
neon-soaked Las Vegas-style gambling emporiums being
floated by the Thai government becomes law, giving the
state a nice tax cut of the huge revenues. It is a
touchy subject, not least because gambling is forbidden
by Buddhism, to which most Thais adhere.
However, the chances are strong that
legalization will come as Prime Minister Thaksin
Shinawatra expresses support for the idea and has
proposed allowing voters to decide by a simple majority
in a referendum some time during the next few months. Dr
Sangsit Piriyarangsan, vice chairman of the National
Economic and Social Advisory Board, worries that this
leaves little time for informing the public of the pros
and cons. Ignorance could play in Thaksin's favor.
During his first year in office, Thaksin mooted
casino legalization, drawing howls of protest. Things
are different now for his business-minded
administration. Economic good times have returned and
Thaksin's Midas touch has him soaring high in the polls.
That gives him the clout to go after contentious
business. "The government is trying to legalize for
economic reasons. It expects to get more tax and money
from foreign tourists, and also from Thais who go to
gamble in neighboring countries," says Sangsit.
And no wonder. Sangsit estimates gambling
revenues at around 500 billion baht (US$12.8 billion) a
year, of which perhaps 100 billion baht is net profit. A
substantial chunk would shift into state-sanctioned
casinos, where it would be open to tax, perhaps
providing a windfall in time for the 2005 election.
Legal casinos would also reap huge revenues from
tourists, especially among fast-growing visitors from
China and India, where gambling is also banned.
That Thais enjoy gambling perhaps too much is in
no doubt. Up to half a million trips are made to border
casinos annually. Passports are regularly pawned for
cash in casino towns. Illegal underground lotteries
betting on the last few numbers of the state lottery are
widespread, and so efficient that they persist despite
being copied by the state lottery this year.
"Even if Thailand opens casinos, illegal
gambling dens will still exist as they will give more
incentives. They can still operate because of corruption
in the police," says Somchai Homla-or, a prominent
human-rights lawyer.
Despite Thaksin's immense
power and will to tackle problems, Somchai sees no signs
of the police force being cleaned up. "I don't think
this government has strong political will to solve
corruption among the police. They use the police as a
political tool."
Sangsidh too thinks police
corruption and gambling must be tackled together. "If
the government is to legalize casinos, it must first
reform the police as they have received benefits from
illegal gambling dens for a long time. The police
organization needs to be decentralized, made smaller and
placed under the authority of each province. Centralized
authority means corruption. With less power they will be
less corrupt."
Tax revenues, tourism and that
slurping sound as money drains out of the economy may
not be the only concerns on Thaksin's mind. Some profits
from border casinos are suspected of flowing into the
pockets of Thai politicians, nominally allies of
Thaksin. Lower revenues at border casinos will cut
income and ability of suspect politicians to resist or
even challenge Thaksin.
Despite the apparent
benefits, both Sangsidh and Somchai worry for the social
consequences. "If this way of development continues it
will destroy the values and beliefs of Thai society.
Money will become the only value. It's very dangerous,"
says Somchai.
Gambling is not the only big
illegal industry from which the government hopes to
garner fat tax revenues. Proposals have also been made
to legalize prostitution, outlawed in the early 1960s.
While revenue would be smaller, estimated at 100 billion
baht in 1995 and perhaps as much as 150 billion baht
now, the social benefits could be significant.
Between 100,000 and 200,000 women are thought to
be regular sex workers, alongside perhaps 10,000 or so
male sex workers. Criminalized by the law, many have to
pay bribes to the police and numerous petty fees to bar
or brothel owners. They pay no tax on their often
substantial incomes nor are they entitled to the legal
protections and social security benefits enjoyed by
other workers.
As among the public, sex workers
are not all in favor of legalization, largely because
some proponents are demanding the registration of legal
sex workers.
"What does it mean by legalization?
To control a certain group of people or provide equal
opportunities? It only means another law to control the
people. Illegality has brought a lot of problems," says
Chantavipa Apisuk, director of Empower, a foundation
fighting to improve sex workers' conditions.
A
simple solution would appear to be at hand. "To legalize
prostitution is correct, but not to register them. This
can be done by simply repealing the law [criminalizing
prostitution]," says Somchai.
Registration programs
in Europe have not been roaring successes; only about 40
percent of sex workers have signed up. "Will
registration help corruption? Will it protect women from
crime in prostitution? Will it solve their social
problems?" asks Chantavipa.
Thaksin has notably
been less vocal on the issue. There is a strong puritan
streak running through his ruling Thai Rak Thai (TRT)
party, epitomized by Deputy Prime Minister Purachai
Piumsombun, a former justice and interior minister.
Thaksin has also threatened to drop TRT members of
parliament who cheat on their wives in the next
election.
Resistance from two powerful groups
may have to be overcome to bring sex workers under the
state's protection. "I think it's a good idea, but
public opinion is very much against it. Opposition comes
from two groups: Buddhists and feminists," says
Professor Pasuk Phongpaichit of Chulalongkorn
University, who has written extensively about Thailand's
vast illegal economy.
(Copyright 2004 Asia Times
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