Political Stakes of Pheu Thai’s 10,000 Baht Digital Wallet Initiative

After encountering numerous delays and legal challenges, the Thai government is once again revising its strategy for financing and implementing the Pheu Thai Party’s flagship 10,000 baht (US$270) digital wallet scheme. However, it remains unclear whether this change will ensure the policy’s implementation by the fourth quarter of 2024 as scheduled. More importantly, the fate of the party hangs in the balance: if the scheme flounders, Pheu Thai could lose its historic and emotive connections to its traditional voter base.

To push the scheme through, the government now plans to allocate funds from the national budgets of 2023 (175 billion baht) and 2024 (152.7 billion baht) with the remaining 172.3 billion baht to be sourced from the state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC). Previously, the government had sought a parliamentary bill to borrow 500 billion baht. The government plans to consult the Office of the Council of State for legal advice, particularly regarding the use of funds from BAAC. The concern is whether this action complies with Section 28 of the State Fiscal and Financial Discipline Act and conforms to the bank’s regulations, as it could potentially pose a liquidity risk to a financial institution mandated with promoting agricultural businesses and activities of farmers or agricultural cooperatives. The Bank of Thailand has already cautioned against this approach in its latest recommendations to the government, affirming its previous calls for fiscal discipline and legal clarity.

Further concerns have also emerged regarding the policy’s implementation. The government announced that it will use the existing “Tang Rat” super app, developed by the Ministry of Digital Economy and Society (DES) and the Digital Government Development Agency (DGA). However, it has disclosed strikingly few details about the app’s development, including how it will manage transactions, set spending boundaries, or prohibit the purchase of unauthorised goods. Furthermore, the app’s current restrictions may inadvertently undermine the policy’s stated goal of stimulating the economy from the ground up. For example, the app can only be used at small shops, as defined by the Ministry of Commerce, yet this includes convenience stores owned by national conglomerates. Fund withdrawals will be limited to shops registered in the tax system. There are also stringent requirements on how these shops can utilise the funds from purchases made using the digital wallet in the first phase. Specifically, stores must re-spend these funds at least once in other participating stores (without needing to adhere to district-based spending boundary) before they can be withdrawn. Ironically, these restrictions could deter truly local businesses from participating in the scheme and divert benefits away from the intended beneficiaries.

Considering these potential pitfalls, it is the politics involved in the digital wallet scheme that is the most puzzling and warrants further scrutiny. Why continue (or appear to move ahead) with the policy when it carries risks similar to many of Thaksin’s previous ambitious policies, including fiscal irresponsibility and susceptibility to corruption, without much assurance of the usual political rewards that such policies often provide?

The digital wallet scheme succeeds in evoking nostalgia for Pheu Thai’s past policy accomplishments, particularly the renowned 30-baht universal healthcare scheme implemented under Thaksin Shinawatra’s Thai Rak Thai administration. But it lacks the usual emotional power that these past initiatives typically carry, regardless of whether the policy materialises.

Pheu Thai has insisted that it would implement the policy at any cost, asserting that a one-time 10,000 baht handout is what the Thai people want. Yet, its claim to a popular mandate to bring this policy to fruition is questionable at best, given that Pheu Thai lost the 2023 general election despite campaigning on this promise. More importantly, after repeated delays and significant deviations from its original policy proposal (See Table 1), Pheu Thai has essentially failed to uphold its campaign pledges faithfully and in a timely manner. Its once strong track record of making bold policy promises and consistently delivering on them on time and in full — at a time when most parties did not fulfil their policy commitments, much less propose concrete policy platforms — has effectively been shattered.

The Digital Wallet Saga

Table 1. The Evolution of Pheu Thai’s 10,000 Baht Digital Wallet Scheme

It would be convenient to attribute this failure to changes in the political environment, institutional constraints, and veto players within the coalition government and beyond. However, much of the blame should also rest on the lack of preparation and a clear vision to guide the digital wallet initiative from inception to execution and, more importantly, to ensure that the party’s policy pledges resonate with the electorate, even in a landscape where voters increasingly value ideology over immediate economic benefits. The digital wallet scheme succeeds in evoking nostalgia for Pheu Thai’s past policy accomplishments, particularly the renowned 30-baht universal healthcare scheme implemented under Thaksin Shinawatra’s Thai Rak Thai (TRT) administration. But it lacks the usual emotional power that these past initiatives typically carry, regardless of whether the policy materialises.

In the past, Pheu Thai’s (or its predecessors’) flagship policies were aimed at addressing the unarticulated needs and grievances of marginalised and disaffected groups. These groups, which include rural grassroots communities and the working class employed in the informal sector, constituted Thailand’s numerical majority. This combination of electoral weight and the promise to rectify historical patterns of unjust and unequal distribution of welfare lent Pheu Thai’s policies a high level of legitimacy. In addition, the flow of political largesse through government programmes was what shifted power away from local patronage networks, party financiers, faction bosses and provincial dynasties. It once formed the basis for Thaksin’s widespread popularity and contributed to direct ties between him and his supporters, independent of the traditional electoral gatekeepers that historically mediated relationships between political parties and voters in Thailand.

Consequently, even when critics dismissed the policies as populist, or when they resulted in corruption scandals or plunged Thailand into fiscal turmoil, as seen with the rice pledging scheme under the Yingluck Administration in 2011, they still managed to establish deep emotional bonds with their beneficiaries. As Thaksin became synonymous with a promise of economic security, any attacks against him were seen as threats to this promise. This solidified Thaksin’s influence over his own party and endowed it with a staying power that kept it thriving through coups and colour-coded street politics.

It is not clear that the digital wallet scheme has what it takes to fulfil this role effectively. However, one thing is certain: if Pheu Thai, a political machine historically fuelled by its policymaking prowess, fails to deliver anything tangible in this regard, irrespective of its flaws, it risks reverting to the typical state of political parties in Thailand. This would mean the party functioning merely as an amalgamation of non-ideological factions, business interests, and political elites, devoid of any connection to its electorate other than through its patronage-wielding politicians. This would amount to undoing the political project that began with the TRT. And it would signify the end of Thaksin’s legacy, perhaps not as a political mastermind but as a leader who once sought to overturn the established way of doing politics in Thailand.

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