Beware of looming labour shortages
Despite the recent estimation that there are now close to a million unemployed Thai workers, Thai tourism and service industries will face a severe labour shortage of 300,000 to 500,000 people after the relaxation of Covid-19 control measures and the opening up of the country to foreign visitors.
Why? Over a million and perhaps as many as two million migrant workers -- both with and without legal permission to work in Thailand -- have left the country since the pandemic began owing to business disruptions and closures. As the economy is now on a recovery track, demand for labour is quickly returning. Available Thai workers are not very well-suited for those jobs once held by migrant workers, as they tend to be low-paying and come with harsh working conditions. A sharp rise the number of illegally imported migrant workers is to be expected, or may even be happening now. These illegal workers, who are certainly not likely to be tested for Covid-19 let alone vaccinated, could be the source of the next big outbreak in Thailand. If that happens, and proves serious, locking down the country once more may be unavoidable.
Before one blames Thai workers for being overly picky in terms of what jobs they choose, such gruelling labour doesn't suit the local workforce. One should realise that the median age of Thais is 40.1 years, second only in Southeast Asia to Singapore (42.2 years). We are an ageing society compared to neighbouring nations such as Vietnam, where the median age is 32.5 years, the Philippines (25.7) and Lao (20.8). The purpose of this article is to warn the government that, without the proper management of (illegal) migrant workers, all efforts to revive the economy by relaxing Covid-19 control measures and reopening the country are destined to fail.
Within a few days, Thailand will welcome visitors from 45 countries and one territory without quarantine. In my view, it might not be the best time for international travel as the world is still recording half a million new cases every day, with outbreaks recurring in countries like England, Russia and China. Moreover, northern hemisphere countries are concerned about the usual winter surge in cases. But, as I mentioned in my previous article, reopening the country is a necessity for economic survival, not a choice.
To emphasise the importance of the tourism industry to the economy, let's look at these numbers. In the last two months of 2019, when the tourism industry was enjoying its peak season, the kingdom welcomed 10 million tourists and received 340 billion baht in foreign tourism income.
The Ministry of Tourism and Sports hopes that 20% of tourists will return after we open the country on Nov 1. Therefore, we can expect to have two million foreign tourists generating a total of about 68 billion baht. This could boost our last-quarter GDP growth by 1.6%. Not bad at all.
But hold your horses. Not all countries are welcome yet. The list of 46 nations does not include two major sources of tourists: India and Russia. Furthermore, China is not expected to allow its citizens to travel abroad for leisure in the midst of renewed outbreaks. Discounting these three countries, the number of potential tourists and income will be cut by a third. If things go as planned, 1.33 million tourists would come and 45.3 billion baht would be earned in the last two months of this year. Still, not too shabby.
Everything comes with a price, of course. After the reopening, the government must prepare to cope with this anticipated labour shortage and, most likely, more clusters and outbreaks.
The main cause will not be those 1.33 million foreign tourists. I give full benefit of the doubt that tourists will be properly screened for Covid-19 and monitored while travelling in Thailand. I am particularly concerned about all those illegal migrant workers who won't be screened, vaccinated or monitored.
As of January last year, there were three million migrant workers registered with the Ministry of Labour. By September 2021, the number reportedly stands at 2.35 million, suggesting that over 600,000 registered workers left Thailand during the pandemic period due to the weak job market.
Apart from legal migrant workers, the International Organization for Migration (IOM) estimated that there could have been 1–2 million undocumented workers in the country -- most of them unvaccinated. Since they are not registered, the number cannot be confirmed.
With the reopening and relaxation of Covid19 control measures, migrant workers are needed to fill their previously held jobs. If businesses only need 20% of the workers they let go to help resume their business activities, a conservative estimate would be that they require an additional 300,000 to 500,000 migrant workers now. That number is surely large enough to trigger a huge new outbreak.
Why? Because all of those migrant workers who are returning from Myanmar, which accounts for 70% of the total migrant labour force here, will enter Thailand as illegal workers.
Since the Myanmar coup in February 2021, it is almost impossible for workers to leave Myanmar legally. The only option is for them to do so illegally and, thus, enter Thailand in contravention of the law as no proper documents such as passports can be provided. The influx of Myanmar workers is not solely based on the demand from Thai businesses, but also a supply push from people in Myanmar seeking better lives in Thailand.
The problem is that illegal, undocumented and unregistered workers can never be controlled and monitored for health conditions. Where would they go for a Covid-19 test and to get the proper shots? Once exposed, they run a high risk of being arrested by Thai authorities and sent back to Myanmar. These illegal migrant workers would rather hide underground while quietly spreading the virus of whatever variant.
In light of this, the first thing to do after opening up the country is to change the labour law to accommodate undocumented migrant workers. I don't know how because the issue is politically sensitive.
However, I do know that the best solution for Thailand would be to open our borders to prospective workers from Myanmar. Test them, quarantine them, vaccinate them and monitor them. But the Myanmar government would not be happy with that as there would be long lines of people waiting to cross into Thailand. Worst of all, they could send money -- earned here -- back to fight the junta government.
As I said, everything comes at a price. Thailand needs to reopen its borders before the economy collapses, and for that it requires a migrant labour force. The government must make managing this issue a top priority.
Chartchai Parasuk, PhD, is a freelance economist.