Govt must rethink Covid recovery plan

Govt must rethink Covid recovery plan

In file photo taken on Sept 8 last year, a new farm and food tech startup showcases its innovations within the food processing industry. Young Thai entrepreneurs produce meat-substitute foods from nutrient rich-mushrooms for export. (Photo: Varuth Hirunyatheb)
In file photo taken on Sept 8 last year, a new farm and food tech startup showcases its innovations within the food processing industry. Young Thai entrepreneurs produce meat-substitute foods from nutrient rich-mushrooms for export. (Photo: Varuth Hirunyatheb)

The House of Representatives' recent passing of a controversial loan decree should make the Thai government rethink its post-coronavirus recovery plan.

This executive decree -- which MPs voted for 270-196, with two abstentions and one no vote during the parliamentary meeting last week -- will allow the Thai government to borrow 500 billion baht for its Covid-19 emergency response, as well as stimulus packages and recovery projects. It followed last year's one-trillion-baht emergency loan decree. Both loans when combined will increase Thai public debt close to 60%, which is the public debt ceiling.

In economics, debt is not always a bad thing if it is invested wisely -- such as in improving human capital or developing new technologies, which could improve the economy and the country's global competitiveness to ensure enough trade and revenue so that it can repay its debt in the future.

But the record of the government's spending of the one-trillion-baht loan last year shows the loan might not have been spent wisely. Around 68% was allocated to handouts, subsidies, short-term stimulus packages; 45% to public health, and 27% to economic recovery projects.

In my humble opinion, the recovery projects are indeed the most important; spending wisely and in an efficient manner means effective human resources and the development of production capacity. For the post-Covid recovery, South Korea and Singapore have poured in money to help their citizens adapt to digital acceleration while subsidising the green economy to create millions of new jobs, sustainability, and resilience.

However, information from MPs from the Move Forward Party during the parliamentary debate last week revealed that many projects funded by the one-trillion-baht loan turned out to be flash in the pan initiatives that will not lead to sustainable growth in the future.

They included fixing local roads, building vocational centres, and local handicraft promotion programmes, which are based on local governments' proposals before the pandemic.

At least a quarter of the loan funding recovery projects went to the sufficiency farming programmes run by the Thai bureaucracy.

Sufficiency farming gained momentum after the 1997 Asian Financial Crisis when many domestic migrant workers, most of whom came from rural villages, were laid off by manufacturers in urban areas.

Coming from my parent's generation, these workers had backgrounds in agriculture and grew up in an agrarian society. They could return home in rural areas and temporarily shift to farming after losing their jobs in the cities. The agriculture sector also played a prominent role in the Thai economy during that period -- around 14% of Thai GDP in the 1990s, compared to 8% today.

In their case, rural areas and the agricultural sector helped absorb workers who had been fired during and after the financial crisis over two decades ago. Therefore, the sufficiency farming method had been a formula for success that the Thai bureaucracy turned to in order to promote an alternative economy.

But the world has changed drastically in the past two decades and I doubt this approach would work in the current socioeconomic context when the digital economy, the gig economy as well as artificial intelligence have become the name of the game. People of this generation are no longer attached to the "agrarian society"; our way of life is tied to urban settlements, digital connectivity and globalised business activities.

And the demographic workforce shows that Thailand is moving away from the traditional agrarian society, a period around three decades ago when 70% of the workforce was in the agricultural sector. According to the World Bank's data in 2019, the share of Thailand's urban population surpassed 50% in 2019 and nearly 70% of the labour force works in the service and industrial sectors, which have been hit less by the ongoing Covid-19 pandemic. So not all of these people will reap the benefits from the government's recovery projects that focus on labour-intensive areas such as agriculture and construction.

Moreover, people's life expectations today are different from past generations as the internet connects everyone to images of the "good life" in different parts of the world.

For young people that I come across, the good life can mean the power to purchase, the ability to buy experiences and explore the world through travelling, access to online courses and life-long learning, a capacity for competitiveness that is comparable to people in advanced markets, or even having a sense of purpose in everything they do.

Take the case of Jang, a friend of mine, as an example. Jang learned English and project management skills through online courses. The skills earned her the ability to work as a contract-based consultant for an international non-profit organisation. Thanks to the internet, all her work can be done remotely, which has allowed her to keep her job during the pandemic.

Sarina, another friend of mine, is a fabric designer. One of her clients is a Swedish-based clothing company that found her portfolio online. She can live in Bangkok while reaching out to job opportunities globally.

Last but not least is Satang, a young farmer who runs a cacao plantation in Phetchaburi province. He plans to apply smart farming techniques, using a mobile device to monitor and manage his farming operation. Not only will it increase his farm's productivity, but it will also spare him some time to run his film production house studio, another call and passion in his life.

Anecdotes from Jang, Sarina and Satang provide examples of ongoing career trends that require workers to be more resilient and flexible to change.

Therefore, the old economy, including sufficiency farming -- despite its proven merit, may not be the only answer for millions of workers who lost their jobs during the pandemic. An agrarian society may no longer be the assuring cushion to absorb workers who return home after their offices and factories shut down.

Of course, workers may see an opportunity in sustainable farming. But they also need acquired additional skill sets that will connect them with the global market too. The Covid recovery plan therefore should focus on building necessary skills for the future market -- the digital economy and IT know-how, leadership and entrepreneurship.

It also needs to address inclusiveness. The three friends of mine are educated middle class. But people from disadvantaged backgrounds will require different types of assistance.

A good example is the Singaporean government's labour upskill scheme that customises digital training courses to fit various type of people -- from hawkers and officer workers to organisational leaders.

Improving digital and high-tech infrastructure is necessary, too, to help people connect to a broader market. But to do that, the Thai government must first and foremost push the Thai bureaucracy to operate on a mission base instead of working nine-to-five and pouring money into unnecessary projects. Rethinking the recovery plans will assure all that the 1.5-trillion-baht debt can be paid off.

Paritta Wangkiat


Paritta Wangkiat is a Bangkok Post columnist.

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