Speech by H.E. Mr.

Abhisit Vejjajiva Prime Minister of the Kingdom of Thailand "Thailand's Social Policy: Vision and Direction" Tuesday 18 January 2011, 15.00 hrs. Vithes Samosorn, Ministry of Foreign Affairs ----------------------Excellencies, Distinguished Guests, Ladies and Gentlemen, It is a great pleasure for me to be at the Ministry of Foreign Affairs once again and to have this opportunity to speak about the vision and direction of Thailand’s social policy. I have had many occasions and opportunities to meet and to speak to those of you present in the room over the past two years, but rarely do I have the opportunity to speak about social policy and social issues. Obviously, the attention of much of our society and yourselves has been on the global economic crisis which unfolded just over two years ago, and of course the political problems that Thailand has been through. On the many occasions that I have met you, usually we talk about the economy, politics and not nearly enough on the social policy issues. Maybe because on social matters, in trying to effect changes and put policies forward, these policies are structural in nature and take time and maybe a lot of you around the room thought that we were not going to be around for long enough to think about these issues. But I have, since day one of assuming office, maintain that despite the circumstances where the urgent issues of the economic crisis and the political troubles would have to be dealt with, I saw it as a very important task of the current government to also pursue some fundamental structural changes and deal with social issues. Many of you may not know that these issues are very close to my heart and if you looked at my political career, when I was elected member of parliament for the third term and had the opportunity to actually chair a parliamentary committee, it was the education policy committee of the House that I chaired. Also during my time as Minister attached to the Prime Minister’s Office, I was also put in charge of education reform, as well as issues such as decentralization. When I became Prime Minister, one of the things that I did which apparently is not a usual thing for many prime ministers, was that all the committees that dealt


with social policy, I decided to chair myself rather than delegating that to a deputy prime minister which has been a standard practice for as long as almost anybody can remember. So from issues ranging from health to education, to the elderly, to gender issues, they are policy committees which I personally chair. Over the last couple of years, I have put into effect some key policies which I think will establish a very clear direction for our social policy for the future. That direction, vision and set of policies very much governed by what I see as key challenges that not just Thailand but the whole world faces. The idea that I have pounded and have also insisted should be the center of our social policy is putting people right at the center of our approach -- putting people first, which in fact was the slogan that we ran during the last election campaign. Here we are talking about human development, human security and human rights -- challenges which just not Thailand, not just the region of Southeast Asia, but I think, the whole world faces together. Over the last two years, the emphasis has been just that -- making sure that we put people first in our decisions. The way we approach the tackling of social issues is not to isolate these problems and deal with them individually; rather what I have told the cabinet is that we should always take into account the social impact and design our policies so that we deal with the social challenges and issues directly and in all that we do. A clear example of that approach was the way we tackled the economic crisis itself. When we were faced with a very rapid slowdown of the economy, it was contracting by 7.2 percent during the first quarter since when I assumed office, the stimulus package we designed was very unconventional and it was clearly aimed at helping the least fortunate, the most vulnerable people. This was to make sure that we do not have people put out of jobs, lacking income, lacking opportunities which would then lead to social and other problems as a direct impact of the economic slowdown. Likewise, in our decisions on industrial policies and other policies, the main thrust of the approach of the current government is that we are not going to think about social issues as an after thought -- fall into the same trap that many people have fallen into in the past where they deal with economic problems and political problems, they say that there will be social impact and then repair the damages after. The approach you want to take is a holistic one that takes into account all dimensions of the problems that we face and take an integrated approach towards policy-making and I think that has paid-off. It is one of the reasons why


unemployment in Thailand never rose much above 1 percent during one of the severest economic crisis that we have faced and indeed it has now dropped below 1 percent. It is also the reason why our domestic economy was able to recover faster while we waited for our trading partners to recover so that our export and tourism income can pick up. It was one of the key reasons why we were able to stabilize the economy as quickly as maybe two or three quarters into the financial crisis and then began to see stability and subsequent positive growth; and of course, that provided a foundation for the very strong 8 percent growth in GDP last year. As far as social policies are concerned directly, when I say we put emphasis on people, there are three main aspects: creating opportunities and empowerment, looking at the quality of our people, and also providing security or welfare for our people. The reason we needed to do this was simply because the country, like many others in the world, is also facing some fundamental changes in the structure of our society. First, clearly we have a more competitive environment as far as economic competition is concerned. It means there will be more volatility, more changes and more risks for ordinary people; therefore there is an absolute necessity of making sure that we provide some kind of security and some kind of mechanism that will allow people to adapt quickly to changing circumstances. You will see the diversity in Thailand where people in the agricultural sector, still the majority, are subject to all kinds of volatility in terms of weather patterns as well as price of agricultural goods. We see the continuous relocation of industries moving from one location to another, sometimes within the region, sometimes to other regions; which means that our workers have to be ready to adapt and acquire new skills. We, like many other Asian societies, are about to transform into an aging society, where the proportion of elderly people as the proportion of the population is going to rise very rapidly. Currently, we have people over 60 making up about 10 percent of our population, but it will soon be 20 or 25 percent, and this change will come a lot quicker than many industrialized economies had gone through. The first thing we needed to do was to make sure that we create opportunities for our people; and one of the key policies that we quickly adopted was to make sure that the 15 years of free, basic education are truly available to everybody. Free, basic education is something that has been in our Constitution since 1997 but had been neglected for so long so that, in fact, a lot of people, particularly poor


people, still suffer from a lack of opportunities because they could not afford to send their children and keep their children in school. As soon as we came in, we had clear provision for the basic needs: tuition fees, uniforms, textbooks as well as other supplies, made available free for 15 years of basic education. We also created opportunities for handicapped children, now actually they get opportunities to go right through to university. You will see that this programme, in fact, has been the most popular programme whenever a poll is taken and asked people to cite what they feel has been the biggest achievement of this government. We are talking about a very meaningful programme for 12 million children and many more parents around the country and it is also one of the best investments that we could make in our society. But more needs to be done. When I announced a new reform programme on New Year’s Day, we recognize that there are still people that fall through the cracks. For instance, there continues to be a number of remote areas, rural areas, where children may not have access to schooling, where they still have a very high rate of dropouts -- from primary to secondary schools. These children can become problems for their communities and societies as they grow up. We still need to provide more for handicapped people. And so what we did in our reform programme now is to make sure that we identify these groups and also provide alternative education; this will be one of the key supplementary programmes to the 15-year free, basic education that will be driving forward this year to ensure that all Thai children have the opportunity to acquire schooling and skills. We also know that, before they get to schools, there continues to be lack of opportunities and great disparity. We have undertaken some programmes that many of you may have been involved, for instance, now there is a clear programme to tackle iodine deficiency, right through from pregnancy and then early childhood. Also, we are now making sure that there will be childcare centers that will be spread around in all tambons or sub-districts. We have surveyed, and there are 481 sub-districts out of 7,000 that do not have these childcare centers; they will be set up in this reform programme within this year; and we are going to provide tax incentives also for private companies to make sure that there are childcare centers in the workplace so that this will not only help the children but also the careers of many women. There will also be other measures to make sure that opportunities of our people are really enhanced. At the same time, we are addressing the issue of quality of the education. The reform programme which has been undertaken is in


fact the second decade of the education reform package. The quality of the education system, the quality of the children, I think the experience of the whole World has proven, depends crucially on the quality of teachers. So this year, we are placing special emphasis on programmes that drive up the quality of teachers in our schools. We began two years ago, again as a part of the economic stimulus package, in trying to take a lot of the burden off teachers -- burdens that have been placed on them and they are burdens which have nothing to do with teaching in schools. They have been asked to do a lot of administrative work. They have been asked to do a lot of other work that has placed a great burden. In our stimulus package, we actually hired people to do this work for teachers so we release more time for teaching and, therefore, helping with the quality of education. We will do more this year by changing some of the structure in terms of how their career path can progress so that their career promotion will be directly linked to the quality of teaching that they provide to children. This will be a core of the activities that we will work with the private sector in their programmes of corporate social responsibilities where we will ask them to provide extra incentives and sponsor teachers that devote a lot of time to quality teaching for our children in school. So again, that has been a clear focus of our policy. As far as security is concerned, over the last couple of years, you would have seen a clear extension of safety nets and the extension of the welfare network that we are now making sure will cover the entire population. As you know, we already have the universal coverage for the healthcare programme in place but it was suffering also from under-funding. Over the past couple of years, we have raised the per capita health expenditure substantially to make sure that the universal healthcare that we provide is improved in terms of quality and standards. But also, we have extended coverage as far as income support for groups like elderly people and the handicapped. For instance, for the elderly, while we have about 6 or 7 million people over 60, before this Government came in, only 1 million of those had some kind of income support at only 500 baht per month, when in fact, at least 3 or 4 times that number have very low income. Again, the Government came in and decided that now we would provide universal coverage as far as income support for the elderly is concerned. Now, the figure stands up to 4 or 5 million being paid a monthly income support of 500 baht. Likewise, only a tiny fraction of handicapped people were receiving financial assistance from the Government and we changed that. There was a


registration of all handicapped people, and now close to a million people receive support. Clearly we have been reaching out and trying to provide greater security and safety net for all groups of the population. But we have also learnt a lesson from more advanced economies that simply handing out these financial assistance or cash handouts cannot be sustained. So what we also had pushed forth had been a wider coverage of social security system whereby the people will also have to make their contributions and make sure that these systems could be sustained in the long run. We will face to the problem, because as you know, among the over 60 million people here in Thailand, only 9 or 10 million are actually in the formal sector, and therefore have some kind of a social security; after that, maybe just over a million more civil servants. But, we are left with over 40 million people without any kind of schemes that would provide them with social security. We changed that in a number of ways. First, we had now submitted a legislation to set up a National Savings Fund which for the first time will allow people outside the social security system if they save and contribute to this Fund, they will get matching contributions from the Government. At last, they will also have some kind of security when they get old. We hope this law will be passed and approved by parliament, which should not take longer than a couple of months from now. Then for the first time, the over 40 million people that have had no kind of schemes that would provide for their old age will now have an opportunity to contribute and have the Government contributing to this National Savings Fund. We have also tapped some of the initiatives that had been taken by a number of local communities which have their own welfare schemes by also providing Government contributions and also asking local authorities to provide contributions if the community can organize among themselves so that there is a strong savings funds within the community. Again, over the last couple of years, we have been able now to contribute to over a thousand funds all over the country; these are very small savings, 1 baht per day, but it can be very meaningful in terms of providing welfare for people in the communities. Again, this means that we are extending coverage to make sure that more and more of our people have greater security in their lives at local and at the national level. Today, the Cabinet approved of a change in the social security system whereby people in the informal sector now have a real opportunity of joining the social security system. Before, they could only join social security by paying 280


baht per month without any matching Government contributions at all, so there are absolutely no incentives for them to do so. Today we have changed that to two options or packages that they can choose from. One is to pay 70 baht, and the Government will match 30 baht to make it 100 baht per month or they can pay 100 bath and the Government will match 50 baht for 150 baht; and they will get the benefits from social security as far as sicknesses is concerned, as far as childcare and other benefits that they get from social security according to the package that they select. Once again, we think this will take roughly about half a year to be fully operational and then we will have more and more people enjoying greater security and having better welfare, not just for now but for the future as well. These are the kinds of the policies that we have adopted. We have a target, that a universal welfare system will be in place by the year 2016 -- five years from now. We think this is the direction that all subsequent governments will have to follow. We are confident that the people in the informal sector, urban and rural people, will be satisfied with these alternatives that they have and we hope to see them actually joining by quite a large number over the next a couple of years. Apart from these benefits and welfare that we have provided, we also know that there are a number of opportunities that they lack and that there is, and continues to be, a great deal of disparity in many areas. The number one complaint that we receive when we talk about unequal opportunities has always been the access to credit whereby, because the way the banking system works here, people without collateral have little or no chance of accessing credit despite the fact that they have the ability. One of the programmes that we ran very successfully last year was dealing with debts in the informal sector. People who are paying interest of 2 or 5 percent a month, not a year, some of them actually pay per day; it was incredible how these people actually survived at all. And what we did, we did not have a program of debt-forgiveness that would just be announced and then be popular for some time and then of course people return to the old ways; but rather, we actually restructured these debts so that the state-owned banks took on these debts and restructured them and paid off the creditors in the informal sector. So far it has worked out very well. In many ways, it is a bit ironic that the banks that participate in this programme did not see these opportunities in the old days. I recall a woman selling things in the market who was paying 1,000 baht per day because she had accumulated these debts that had very incredible interest rates but she survived. Just imagine now, she is paying an interest rate of 15 percent per year; this means she is making a lot of savings and money. What is more, the bank that had


restructured these debts has a very good customer now because she is obviously able to earn a lot more and able to service her debts. There are, I dare say, hundreds and thousands of people like her and they are now within the banking system. A number of banks that participated are now very happy that they have very good customers joining them and this will continue. The next steps we are taking now as far as the reform program is concerned are tying up these issues of access to credit with the working environment of a number of groups and people. For instance, we are now going to offer a good package for taxi drivers who will be able to purchase their cars at a rate that is cheaper than actually renting them. This will obviously provide them with their own cars within 5 or 6 years. For motorcycle taxis, there will be a new round of registration, so they will not have to pay either the police or the BMA to operate illegally and will improve the working environment and also ask them to become volunteers to help police monitor communities against the threat of crimes and drugs. Clearly, the approach that we are now taking, by reaching out, providing welfare, opportunities, credit, improving their livelihoods, I have mentioned taxis, motorcycle taxis, will also do the same for all the street merchants by having the BMA and other local authorities redraw the lines as to where they can sell their goods and do so in a legal manner. This is a package that I think will make a real difference to a substantial part of the population, particularly, the urban poor will benefit greatly. I think that the kind of disparities and the kind of inequalities that people often complain about, for the first time, will have their problems addressed in a very direct and concrete ways. Apart from this package that we are undertaking, we also need to take a more macro approach as to how development also becomes more environmentally and socially friendly. One of the problems that, as many of you know that we have to face over the last year had been is the Map Ta Put issue that is a clear instance where industrial development has imposed unreasonable cost on local people; with poor enforcement of the law and no real concrete action being taken to address these kinds of problems. We changed the crisis and turned into an opportunity now to provide and the way the authority should work with industry and the local community in Map Ta Put. We have now put in a number of programmes to help the local people. They did not have running water despite the fact that it was one of the most developed industrial area; we have fixed that. We now have health checks for all the residents there. We now have real time monitoring of pollution.


And we will take further steps to improve the quality of the local people that have these costs imposed upon them by the industry. We have set a clear guideline for further developments, whether in the eastern seaboard or in the south, or in other areas that there will now be higher standards that they must observe; particularly according to the constitution where not just the environmental impact assessment has to be made but also the health impact assessment. Again, this is an example of how we are now taking a clear approach of placing great emphasis on the social dimensions of development. There are also many other initiatives, for instance, on gender equality, labour rights. The cabinet has approved a number of steps that we will take to be partied to conventions, to get rid of some of the reservations that we have had in the past, to clearly move forward because we feel that now it is the time to make sure that our people enjoy the kind of rights that they deserve and we should promote them and not see those as some kind of costs or impediments to development. I would like to finish off by saying that this approach that we have taken, as far as domestic policies are concerned, is also being extended to the way we conduct foreign policy. Let me emphasize that the Government remains focused on right-based, human security approach and also human development. As you know, we are now a member and current President of the United Nations Human Rights Council, which we clearly recognize means that we have greater responsibilities as well. We are not just taking the position without the added responsibilities, and therefore, we will continue to give a strong emphasis to the rights of special groups within society, such as women, children, the disabled and the marginalized. We believe that rights related to health, education and development should be addressed in the Council in an even-handed manner. Our commitments on humanrights related legislation at the international level will also aim to reinforce the realization of the Government’s social policy at the national level. An integral part of that extension to foreign policy is also to contribute to international norm-setting, especially on social welfare and human rights. We have thus initiated a notable activity to counter violence and discrimination against women, the so-called “Bangkok Rules” -- the “Draft United Nations Rules for the Treatment of Women Prisoners and Non-custodial Measures for Women Offenders” guided by Her Royal Highness Princess Bajrakitiyabha. That has been adopted and has the approval of the United Nations General Assembly in December last year.


There are also other things that we are pursuing actively. Poverty alleviation, South-South cooperation, where a number of projects are now being implemented in Africa in our field of expertise, particularly agro-industry. There is also what we call health diplomacy where we will play our part in raising awareness of our common vulnerability in the face of transnational health threats and natural disasters. And we have had very successful health programs through Thai health and through the Health Assembly which would provide very good models for public health policy-setting and also implementation in other countries. We still also assume our responsibilities on the humanitarian front. As you know, the problems along the border continue. We certainly provide shelter and assistance to people in need. We are also active in tackling the human-trafficking issue which we do through the Bali process and also through other international fora. Finally, let me just also mention, because I just went down south to Pattani yesterday that this current Government’s approaches to solving the problems in the South take on board the approach that we have taken about putting people in the center. Yesterday, I went to Mae Lan District in Pattani, which is the first district to have the State of Emergency lifted and is the first time in five years that we have been able to lift the provision of special laws in the three provinces. We have already lifted martial law in four districts in Songkla last year, and we will continue with this approach. We have been able achieve this, for instance in Mae Lan, where there have only been two incidences of violence last year because of the success of the approach that we have adopted which is through “development and justice” as a way of achieving sustainable peace in the region. Let me end by saying that social aspects are a central part of our national policy. I reaffirm my belief that the most important investment that any government or any country can make, is in its own people, because they are the core of the society. Social policies are being implemented in Thailand, not only at the national level, but also through local governance and our role in the international community. So the vision and direction of the Royal Thai Government is clear, and I am determined to carry forward and implement these policies for the ultimate benefit of the people of Thailand. But of course, to fully realize our vision, we do not, and can not work alone. We continue to need your support, participation and


understanding in translating our social policy vision into action. The task ahead of us is huge as we are crossing a very important juncture in Thailand’s social and economic development, and I hope that I can count on all of you for support, as always. Thank you very much and Sawadee Krub.


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