It is true that in the broad, macroeconomic picture, Thailand's economy has improved dramatically. But, as the Thailand Development Research Institute pointed out the other day, the recovery during the Thaksin era has benefited from the reform programme that was undertaken by the previous Chuan government.

Moreover, Thailand's recovery is not unique at all because every other crisis-hit country has also experienced a strong recovery, with some enjoying an even better economic performance than Thailand.What is more interesting, however, is the reality of income distribution - it is horrible.

According to the National Economic and Social Development Board, for every Bt100 gained over the past five years, the rich at the top of the pyramid have taken Bt57. Those at the bottom have gained only a sliver - Bt4.

Middle-class people, who shoulder most of the tax burden, have received something like a Bt19 share.

Between 2000 and 2004, farmers saw their annual income growth decline, while the wealthiest saw their annual income growth rate rise. At the same time, household debt rose from 5.63 to 6.99 times annual income during this period.

If you really are a Thai that loves your nation, you have to evaluate the success of this economic policy by the real increase in incomes and the income distribution rather than by the rate of economic growth. Thai Rak Thai has only targeted high economic growth - which is actually not very high by regional standards - and growth of the stock market.

As we all know, Thai Rak Thai cronies lay claim to most of the golden eggs in the stock market.

A serious economist wrote to me recently about Thailand's economic development. She said: "When economic policy creates growth but worsens income distribution, we must change the course of economic development, the sooner the better.

"Otherwise, the population at the low end of the distribution, who are getting squeezed by economic growth, will join the dark sectors such as drug, prostitution, gambling and crime.

"When people talk about free-trade agreements [FTAs], I want to ask them a basic question. Can they tell me exactly 'how' FTAs will raise real income for most of the population?

"So far, I haven't heard anybody talking about that. Most people give vague answers such as job creation and technology transfer. How will farmers and their uneducated children benefit from technology transfer from foreign automakers? How much of the profit margins are passed down from auto-part factory owners to autoworkers?"

People carrying the banner of Thai Rak Thai like to ridicule those who do not agree with them about maintaining an open economy. Basically, an open economy is good. But the questions are where, when and how we open it.

Privatisation is also basically good. But again, the question is how we privatise our state enterprises. If we privatise state enterprises in such a way that the benefits go to political cronies of the ruling party, then why should we do it? The Supreme Administrative Court's decision to block the privatisation of Egat serves to highlight the poor practices of governance involved in this process.

The economist wrote further: "We can open up the economy following a middle way. Why don't we tell other countries to aggressively reduce protection on their agricultural and fishery products too? Why don't we think about upgrading technology in the agricultural sector?

"Advanced countries exploit natural resources in Africa, but subsidise their own agricultural products, such as sugar and corn. American farmers overproduce and tank the world price of those crops. What the US should have done is open up their agricultural sector to increase demand for agricultural products in developing countries.

"We should take foreign capital inflows as a good thing if we set incentives so that the funds go to the sectors employing a large chunk of the population. We should also impose a capital gains tax. Taxes of 10 to 20 per cent will not dry up 'good' foreign investment. A capital gains tax is a burden only when stocks are sold, so this will upset only short-term investors. We don't want hot money anyway.

"As for the sufficiency economics, it is philosophically useful since it emphasises the role of domestic capital. But we need to discuss more about how sufficiency economics will shift income distribution. To put it in easy terms, the formula should go like this: gradual integration with the world economy + savings to fund domestic investment + more taxes on capital, land, assets and alcohol = a rise in real incomes and more equal distribution."

So many rural Thais do not own anything, even a piece of land. They were born without any capital. How can they help improve their children's future through education when they start from zero? They need social capital (schools, libraries, basic health care, etc) funded by tax revenues from various sources.

Unfortunately, income distribution and real income are not issues that are being discussed in this election campaign because we are instead having a referendum on the premiership of Thaksin. Nothing more and nothing less.

Thanong Khanthong