The middle-income trap in three stories
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The middle-income trap in three stories

Thailand is said to be caught in a "middle-income trap". Having attained middle-income status in the mid-1980s, the country remains, seemingly marooned, in this middle-income category today.

A farmer carries cassava plants from a field in Kanchanaburi. When non-farm work remains precarious, many migrants prefer to return to farm in their home villages so their livelihoods are secure. EPA/BARBARA WALTON

It is this failure which has puzzled — and concerned — development economists and policy-makers who have sought to understand the stickiness of economic development in the transition from middle income to high income.

Thailand is caught between low-income countries, with which it cannot compete on wage cost grounds, and high-income countries, with which it cannot compete in terms of skills, technology and productivity.

Why has Thailand failed in recent years to close the gap with rich, advanced economies?

The focus of attention has often been on two sets of failures: the failure of the state to invest adequately in education and research; and the failure of firms to promote skills and technological upgrading.

For the economist Peter Warr at the Australian National University it is the first of these which is paramount. "Reforming Thailand’s antiquated systems of primary and secondary education," he writes, is "the single greatest impediment to long-term economic progress in the country."

Here, however, we suggest there is a third "personal" element to the story. It is sometimes not so much that Thais can’t engage in such work, but that they won’t. We explore this issue through the lens of three villages, 105 households and the experiences of 151 first- and second-generation migrants in Khon Kaen province.

Phichai was 39 years old at the time of our interview with him in 2013, and he had left Ban Don for his first migrant sojourn in 1993 at the age of 19. This first foray took him to a job in a roller blade manufacturing company in Samut Prakan. He resigned after two years and returned to the Northeast, to take up work as a labourer in Khon Kaen City.

Here he stayed for seven years, before returning to Bangkok where he job-hopped for another five years. After 14 years working away from home, Phichai returned to Ban Don in 2007. Over the course of his migrant career he had acquired skills from stocktaking to basic computer applications and proved himself a quick learner. On his return to Ban Don, however, Phichai was unable to put these skills to any great use. To begin with he worked in a sports garment factory in neighbouring Chumpae, then in a chicken slaughterhouse, and finally set up on his own, making and selling grilled pork balls from home.

We heard many such stories of individual resourcefulness and not a little bravery: women and men who had left home and worked for years across the provinces of Thailand and further afield, in South Korea, Hong Kong, Taiwan, Saudi Arabia, Israel, Brunei and Malaysia.

There was a common thread to their stories. Of the 151 migrants in our study, just 22 had left their villages on a permanent basis; 85% had either returned or were intending to return. Moreover, of those who had returned, the large majority were not able to use the experiences and skills they had acquired during their absence, which stretched on average to 19 years.

Our 54 first-generation migrants left their villages in the years before the financial crisis of 1997. They departed as sojourning farmers, hoping to escape the poverty trap. Seven out of 10 were educated to primary level, and they left hoping to earn a little extra money to improve their houses, fund the education of their children, and buy consumer goods.

Kanya, who left Ban Na at the age of 18 and worked for 15 years in Bangkok, Chanthaburi and then in Hong Kong before returning in 2002 at the age of 33, put it to us like this: "Both my husband and I started with zero, we had nothing. Now, I have saved enough money to build a house."

These first-generation migrants left as farmers and, in the main, returned to farming. They were farmers on the make. Their work prospects in Thailand’s burgeoning non-farm sector in the 1980s and 1990s were restricted to domestic work, construction, low skill/low wage factory employment, and various informal sector activities. Just one of the 54 acquired any further educational qualifications.

Livelihood transformation was never on the agenda for these migrants. Their allegiance was not to a new life, but to an old one. Migration was a means to keep people in the village, and not — paradoxically — to take them out of the village.

What, though, of the children of the first-generation migrants? Our 54 first-generation migrants may have had only primary level education, but more than half of our 97 second-generation migrants were educated to secondary level, or above. Was their experience of work transformational?

The answer for the great majority was definitely "no".

Indeed, if anything, our second-generation sojourners were being de-skilled as their secondary- and even tertiary-level education led them only into relatively menial or semi-skilled factory work. And the large majority had either returned to the village or were intending to do so.

In remaining loyal to the village, our migrants were not being capricious. Maintaining a presence in the village and on the land provides a degree of livelihood security; people recalled the effects of the economic crisis when many thousands were thrown out of work. Even today non-farm work remains precarious. While villagers were far from being rural romantics, they did see attractions in the resilience and security that comes from living in their rural homes and holding allegiance to them.

Such an approach to life and living, migrants and their families seek to protect what they have — a degree of security — while pursuing what they do not have — a measure of material prosperity. But they were also, arguably, compromising their opportunities for further upward mobility.

The three villages that we studied had become places to leave, but they were not places to leave behind. Rather, they were places to return to.

This feature of rural living, if it is multiplied many thousands of times, may work against Thailand negotiating its way out of the middle-income trap. But if engagement with work beyond the village remains precarious, is it any wonder that only 22 out of our 151 migrants sought a permanent life beyond the village?

There may also be an insight here into the country’s current political impasse. Our migrants were peasant cosmopolitans, acutely aware of the wider world but also with an enduring commitment to their rural roots. These women and men were far from being the "buffalos" of the popular, urban imagination.

Jonathan Rigg is based at the National University of Singapore, Buapun Promphaking at Khon Kaen University, and Ann Le Mare at Durham University in the UK. The research on which this article draws was funded by the UK’s British Academy.

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