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New Economic-Stimulus Package Won’t Include Cash Handouts for Average Thais – Supattanapong

Thailand Unemployment Office
Thais look at open job notices at a local unemployment office.

A new economic-stimulus package being constructed by Thailand’s new Cabinet likely will not include another round of cash handouts to the growing numbers of unemployed, Deputy Prime Minister Supattanapong Punmeechaow said Monday.

The package, which should be finalized by the end of the month, will focus instead on cost-of-living reductions, employment for low-income earners, support for small- and medium-sized companies, accelerated government spending and improved collection of government revenue, said Finance Minister Predee Daochai.

At the first meeting of the government’s new economic braintrust, Supattanapong implored the Finance Ministry to support citizens who are financially affected by the Covid-19 crisis and small businesses in order to maintain employment.

In the long term, the ministry must seek a way to ensure the stability for all businesses and help them to get through the critical period while the coronavirus pandemic still affects global activities.

The government has been offering 30 billion baht in soft loans, intended to help businesses maintain their operations and save jobs. These soft loans have so far been approved for 63 businesses, and helped save 8,158 jobs, the Labor Ministry said.

However, while the government’s first major pandemic-aid package put 5,000-baht monthly payments into the hands of workers in the country’s massive “informal” labor sector, the new package would not see noticeable cash handouts, Supattanapong said. If the final proposal doesn’t include direct financial aid to individuals, the payments will be smaller than before, he predicted.

After installing his new Cabinet last week, Prime Minister Prayut Chan-o-cha created an economic-management center, which he will head, to revive the economy through use of a 400-billion-baht loan.

Supattanapong said short-term economic challenges are the declines in tourists and exports, an increase in unemployed people to 745,000 – who formed 2 percent of the total labor force – and limited money for economic stimulation.

Predee, meanwhile, forecasted that the economy would shrink by only 7.5 percent this year and slowly improve next year.

Opposition parties and outside researcher have disputed both the government’s economic-slowdown predictions and estimations of the unemployment rate.

The Joint Standing Committee on Commerce Industry and Banking last week forecast that gross domestic product would contract 8.5 percent this year while the University of the Thai Chamber of Commerce predicted a historic 11.5 percent shrinkage.

On Monday, Thailand reported its largest economic contraction in 22 years with gross domestic product plunging 12.2 percent in the second quarter compared to a year earlier.

The Office of the National Economic and Social Development Council said it was the largest quarterly downturn since the kingdom recorded a 12.5 percent contraction during the Asian Financial Crisis.

As for employment, the Federation of Thai Industries estimated on July 24 that the pandemic will likely leave up to 8 million people jobless by the end of this year, a report that oppsotion parties in parliament seized upon to demand more economic relief for average Thais.

New Labor Minister Suchart Chomklin hit back against that estimate Monday, insisting at a forum on the pandemic’s impact on workers that unemployment currently sits about 2 percent and would rise to no more than 4.5 percent by year end.

Thailand’s official unemployment rate, however, is infamously unreliable, as it undercounts those in agriculture and the “informal” labor sector – such as street vendors, taxi drivers, the self-employed and those working in Thailand’s “gray economy” – and doesn’t include foreign and migrant workers at all.

Suchart cited statistics from the Social Security Office that, of the 16.3 million office workers and others who are part of the system, about 714,000 have unemployment-benefit payments due to the pandemic.

The Social Security Office has made about 17 billion baht in payments to eligible benefit-holders and compensated some 900,000 furloughed workers employed at businesses now temporarily closed, he said.

Addressing the claim that the government has failed to take care of all affected workers, the Minister of Labor said the government has launched several campaigns, such as the general payout campaign, and employment campaigns that are now employing some 200,000 workers from its 400,000 target.

The Ministry of Labor is also planning to set up a National Employment Center to facilitate jobseekers and provide job matching guidance to the general public. It will be advocating the development of a central online employment platform funded by the 400-billion-baht emergency loan.

In addition, the Ministry of Labor is set to encourage the employment of 5,000 more people through its campaign funded by its 2021 Fiscal Year budget.

The Thai News Agency contributed to this report.