The question of employability

In recent decades, Thailand has built its economy to a prosperous upper-middle income status by moving away from an agricultural base, to a combined focus on small and medium enterprises, exports and tourism.  Yet cracks have appeared in this model, from as early as the 1997 Asian Financial Crisis to the current Coronavirus epidemic. Recent years have shown the diminishing returns of growth common to middle income countries (GDP is projected to grow by only 3.4% in 2022), with many sectors including secondary industries, exports and even tourism in decline. This is due to several compounding issues - all of which relate back to the middle income trap and sustainable employability for young people.

The first challenge of employability in Thailand is the labour market. Thailand’s labour market occupies a difficult middle ground; it is relatively expensive compared to countries such as Vietnam, but lacks the advanced labour force to compete with high-income economies such as South Korea. This limits investment and development of more sophisticated industries. The second is education, which remains a challenge for Thailand despite universal access to basic education at primary and secondary levels. Access aside, there is a pressing need to address the quality of education being provided. In particular, higher and vocational education needs to equip the future workforce with skills required by industry and the emerging needs of the service economy. Thirdly, inequality remains rampant in Thailand, with vast differences in income, education, social mobility and opportunity across different demographics, as the Global Wealth Report and Databook, published in December 2018 by Credit Suisse revealed that “Thailand has the largest wealth gap in the world”. In 2019, 1% of the population held 50.4% of the wealth, and 10% held three quarters of the wealth (76.6%).  

Alongside this, while COVID-19 has not created entirely new problems with the Thai economy, it has dramatically  exacerbated or highlighted existing issues with employment, education, inequality, and social mobility. While Thailand was praised for its initial handling of the pandemic, the Nikkei Asia COVID-19 Recovery Index ranked Thailand at the bottom of the list of over 120 countries in 2021 based on infection rates and management, social mobility, and vaccine rollouts, although Thailand’s response improved substantially as the year progressed. Yet recovery - or indeed survival – among the poorest and most marginalized groups has been uneven and inconsistently supported. A recent study from Prince of Songkla University “The Economic and Social Impact of COVID-19 in the Southern Border Provinces” shone a light on some of the most marginalized areas in Thailand: Pattani, Yala, and Narathiwat, all of which are under-developed regions with high poverty rates. COVID-19 doubled the number of unemployed workers in these regions, particularly those who were day laborers and retail workers, and there were an estimated further 100,000 workers who returned to Pattani from Malaysia due to Covid who were not included in these estimates[1]. The study also highlighted that this unemployment had a substantial negative ripple effect on communities, particularly on elders and younger workers who hadn’t finished elementary education. While rapid emergency response and relief kits are vital to support vulnerable groups in emergencies, COVID-19 has shown that long-term investments in employability and skills are necessary to allow communities to support themselves. 

Ensuring that Thailand’s economy is fit-for-purpose as it navigates the years ahead will require addressing all these root causes of employability, or a lack thereof, and this means that young people’s employability in particular should be the utmost priority. There are several avenues for addressing this, including education reform, but vocational training and life skills in particular offer a key lifeline for the most vulnerable, as they can often be made more accessible than traditional educational programmes. USAID and Save the Children’s ACHIEVE project in Pattani province is one such project offering vocational training to out-of-work young people, and has demonstrated value in a clear pathway linking young people from school to work. There are also private and public sector initiatives across the country which recognize the critical role vocational skills will play in ensuring that Thailand’s workforce will have the skillsets to meet the country’s economic aspirations.

Recommendations:

1) Prioritize joint government/private sector initiatives to provide more inclusive vocational training in response to current and future private sector demands, with a particular focus on teaching young people skills relevant to current market demands, transferable life skills, and digital skills for Thailand’s changing economy.

2) Support initiatives building and training transferable life skills in young people in Thailand. This will give companies an easier transition and staffing when engaging more heavily with Thailand's transition to 4.0 economy and Bio-Circular-Green (BCG) economic model as adopted by the Thai Government.

3) Encourage dynamic educational reform that clearly links school to work, and teaches young people an evolving syllabus that provides the skills they need to flourish in Thailand’s future workforce.

4) Provide financial and technical support to organizations, including youth-led organizations, who are already providing supplementary courses, skills training and information on employability. Utilizing their existing expertise while scaling their reach and broadening what they can offer to young people is both practical and cost-effective.

5) To build the realities of the digital divide into Thailand’s employability plan, with proportionally greater resources and financial support given to young people living in rural areas or part of marginalized groups, including migrants and minorities.

6) Ensuring that any measures taken to increase employability do so in a gender-responsive way that helps both young women and young men find work, while encouraging them to step beyond traditional gender roles and jobs. This is particularly important in heavily gendered industries and sectors such as STEM.