Author[1]
Sanhanat Satetasakdasiri
Thanaphon Karnnowvakun
[1] This article represents Mr.Pongnakorn Pochakorn’s view in the World Bank Seminar: Towards Social Protection 4.0 on 26 October 2021 and was noted by Sanhanat Satetasakdasiri and Thanaphon Karnnowvakun.
Report Summary
The World Bank published a comprehensive report in July 2021: “Towards Social Protection 4.0: An assessment of Thailand social protection and Labor market systems”. This report makes recommendations for strengthening Thailand’s social protection and labor market systems in four areas as follows:
1. Strengthening social security coverage and adequacy in many ways. First of all, Thai government should consider expanding minimum contingent coverage against shocks for informal sector workers, including for unemployment, as well as providing retirement income in old age. Secondly, they should improve the adequacy of existing pension schemes and improve the sustainability and fairness of existing pension schemes.
2. Improving the generosity, design and targeting of social assistance programs asoverall coverage of social assistance in Thailand is large, but adequacy remains low. The programs should be continued assistance to poor and vulnerable groups, including informal sector workers. The world bank suggests Thai government to determine a maximum/minimum package of benefits that households may receive, based on assessment of how multiple benefits currently accrue to households, and where gaps, overlaps and opportunities for rationalization exist, and convert the current set of State Welfare Card (SWC) allowances to a basic cash payment. Furthermore, Thai government should consider adjustments to the way programs are targeted. Thailand could consider adjusting maximum thresholds for inclusion and greater affluence- and pensions-testing to reduce inclusion error, and harmonize targeting and enrolment for poverty targeted programs (primarily the SWC and Child Support Grant: CSG), to create efficiencies. In addition, they also should extend benefits to the informal sector and other vulnerable groups until the economy recovers.
3. Investing in active labor market programs to transition to demand-driven skills training and employment services informed by a real-time labor market information system. In both the short and long term, social protection will need to be complemented by labor market policies tailored to the needs of a knowledge-based economy. Forshort run policies, Thai government should invest immediately in upskilling and reskilling programs to help workers displaced by the COVID-19 outbreak to find jobs. Training can be linked to wage subsidies that incentivize firms to hire workers or to startup support to stimulate livelihoods opportunities, particularly targeting to vulnerable groups. For longer term, Thai government should invest in a labor market information system that could serve as a backbone for delivering effective labor market programs for supporting basic employment services functions (job matching and career and skills guidance) and serving as a platform to coordinate government support (unemployment insurance, active labor market programs, and other government programs, and to generate real-time, demand-driven labor market information and analysis) Furthermore, could evaluate the effectiveness of existing active labor market programs.
4. Establishing more coordinated and coherent data governance and policy making for social protection across government. Firstly, the government should establish a virtual social registry to support outreach, intake, registration and eligibility determination for all social assistance programs and introduce on-demand updating to strengthen the collection of socio-economic data for targeting poverty programs and enable real-time and comprehensive decision-making. Moreover, each virtual registry can be linked databases and information systems into single platform to exchange and match data in real-time. Also, they should establish data sharing protocols and mechanisms for informed consent and put in place or strengthen privacy protections for personal data. Moreover, they should improve coherence of the social protection system and labor system, by developing a national social protection strategy and establishing inter-agency coordination, as well as by leveraging the virtual social registry.
To do effective public policy implementation for each targeted area, The world bank suggests action plan proposals that can be summarized as shown in Table 1.
|
0-6 Months |
§ Extending emergency payments through the SWC program. § Open enrolments for SWC, to allow newly impoverished individuals to register for assistance. |
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§ Providing trial online enrolments to supplement existing face-to-face options, § Building online registration. |
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§ Investing in upskilling and reskilling programs, linked to subsidies that finance training and wage subsidies. |
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§ Implementing time-limited employment retention measures to protect jobs in the short-term. |
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6-18 Months |
§ Establishing an inter-agency coordination mechanism for social protection and labor programs. |
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§ Undertaking further analysis of how regular and emergency social protection benefits and services accrue to individuals and households. § Reviewing social assistance registries, eligibility criteria and overlaps. |
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§ Evaluating the effectiveness of existing active labor market programs. If appropriate, expand active labor market schemes for SWC holders. |
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§ Drafting social protection and labor market strategy, considering options for: – determining a maximum/minimum package for social assistance benefits at the household level and improving adequacy; – expanding minimum contingent coverage for informal workers; – indexing retirement benefits to prices and indexing the wage ceiling based on which SSF retirement benefits are calculated to wage growth; – gradually raising the retirement age and raising the contribution rate; – transitioning to a results-oriented training and employment services system; – expanding linkages and referral pathways between social assistance, social insurance and active labor market schemes. |
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§ Preparing a road map for data governance reforms, including establishment of a virtual social registry. |
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§ Transition to an electronic cash payment for SWC |
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§ Investing in a labor market information system |
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18-36 months (1.5-3 years) |
§ Implementing the road map for data reforms, including to: – harmonizing targeting and registration for poverty targeted programs, and introduce on-demand updating; – Establishing a virtual social registry; – Establishing data sharing protocols and privacy protections. |
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§ Implementing social protection and labor market reforms, including to: – Roll out new schemes for informal workers; monitor and evaluate uptake and effectiveness; – Consolidating and improve adequacy of social assistance schemes. |
Comments
The report provides comprehensive details of Thailand’s social protection and labor market systems. Moreover, the report also gives us helpful and practical recommendations for reinforcing Thailand’s social security and labor market systems in four dimensions including social security coverage, social assistance, active labor programs and data governance for social protection.
In addition to the social assistance through state welfare card in this paper, it might be good to add an updated information on current social assistance programs implemented by the Ministry of Finance.
To support the economy and the affected groups, the Thai government has passed an emergency loan decree worth 1 trillion baht in 2020. Additionally, in 2021, the government had to issue an emergency decree permitting the Ministry of Finance to seek an additional 500-billion-baht loan. Most of this spending is for alleviating the Covid-19 affected group, particularly vulnerable group, through social assistance programs, such as “Rao Chana’ (We Win)” and Section 33 We Love Each Other scheme. Currently, there are couple programs that have been implemented, as summarized in table 2.
1) Cash handout to SWC holders scheme, given an additional monthly allowance of 200 Baht per month to state-welfare cardholders, starting from October 2020 to October 2021 and support allowance more with a total of 500 Baht per month from November to December 2021. The purpose of this scheme is to alleviate the burden of expenses for people who already have state-welfare cards. Currently, the program is in phase 3 with the total disbursement of around 17.0 billion baht as of 19 November 2021, and the current users are 13.55 million who have low income (Total of targeted people are 13.65 million).
2) Cash handout to people who need special assistance scheme, providing a monthly handout of 200 Baht per month for 4 months (July – October 2021) with a total of 1,200 baht per person and 500 Baht per month for 2 months (November – December 2021) with a total of 1,500 baht per person. The participants will receive money via their citizen ID cards in order support these people to purchase goods from Blue Flag shops as well as goods or services from stores or service providers participated in the Half-Half scheme. Currently, the total disbursement of this cash handout scheme is 1.4 billion baht as of 19 November 2021, and the current users in this programme are 1.4 million (Total of targeted people are 2.5 million).
Current Measure |
Target |
Cash in Circulation |
|
Cash handout to state-welfare cardholders scheme phase 3 |
13.65 Million |
Total disbursement of (Only phase 3) 16,981.1 Million Baht (As of 19 November 2021) |
|
Cash handout to people who need special assistance scheme |
2.5 Million |
Total disbursement of 1,422.6 Million baht (As of 19 November 2021) |
Furthermore, in part of policy recommendations, some more policy measures should be added in order to complement and strengthen the existing policies provided in the report. The measures are for aiding two groups of people including Grassroots/Local Economy and low-income Labor between the rest of 2021 and 2022 as shown in table 3.
|
Period |
Measures for supporting Grassroots/ |
Measures for supporting |
|
The rest of 2021 |
§ Supporting children’s tuition fees through the SWC to help poor children get back into the school. § Co-payment for the SWC holders to pay children’s tuition fees. The government might support 50 percent of tuition fees to bring children of them back to the school. § Co-payment for 1 million jobs employment in the homeland to encourage 3 million MSMEs hire jobs. The government might subsidize 50 percent for labor wages, depending on the minimum wage rate in each area, through e-Wallet application. |
§ Launching a Learning Platform on g-wallet application to be a learning center for both online and offline training courses from public and private institutes. People who are under the supervision of the Ministry of Finance, such as state welfare card’s holders and those who have the g-wallet application can choose to attend training for Upskill/Reskill/Newskill § Increasing monthly cash allowances on the SWC for informal labors (11 million), who are not in the social security system in section 33 39 and 40.
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2022 |
§ Starting a new round of registrations for SWC to offer the benefits to a larger range of recipients, mainly those who were unemployed after the outbreak and were left out of state welfare benefits in the previous round. In the new round of registration, the criteria for eligibility would be stricter to prevent duplication as some cardholders may also be receiving other welfare benefits. § Developing career for the SWC holders who have income below the poverty line (5.8 million). The government should prepare the courses for career development and encourage them by supporting more money as “diligence allowance” in every month.
§ Strengthening the grassroots economy through the One Tambon One Product (OTOP) program by subsidizing monthly allowances for OTOP entrepreneurs to develop new products and services and supporting job matching on OTOP business. |
§ Providing 2 credits per years for developing skills to state welfare card’s holders. The state welfare card’s holders can apply for training courses via the learning platform. *For those who haven’t smart phones, they can contact officers at Krung Thai Bank to apply and select training courses without service charges. § Rolling out a co-payment subsidy for helping employers to pay the monthly salaries of state welfare card’s holders who have completed skills development courses on the learning platform. |
