The impact of the global food, fuel, and
financial crises and policy responses:
A Child-sensitive Approach
Suwanee Khamman
Deputy Secretary-General
Office of the National Economic and Social
Development Board of Thailand
Outline
1. The economic crisis: its causes and consequences
1) The 1997 crisis
2) The 2008 crisis
2. Policy responses to the crisis
1) Responses to the 1997 crisis: Lesson learned
2) Responses to the 2008 crisis : 2-stimulus packages
3. Challenges: Sustainable development
1) Quality and accessibility
2) Affordability
3) Decentralization
Overview of the impact of the world economic crisis on Thailand
World
economic
crisis*
Financial institutions in G7
continue to collapse until
Q1/
Stock and bond
unresponsive to the
Rescues Plan Bill
Lacking liquidity in the
world market
Biggest depression in U.S.,
Japan, E.U. in 70 years
Stable oil and agricultural
product price until Q2 of
2009
Economic
impact
Lower export
Shrinking tourism
industry
Lower
consumption
Economic – social envi.
Prior to crisis ie; global
warming, the volatility
in food and oil price
Social impact
Reduced OT
payment/Salary
Layoff
Unemployment
among recent
graduates
Unemploymen
t
Return to
homeland
Social
problem
Thailand 1997 Crisis
Causes
• Careless financial
liberalization
• Loss in competitiveness
• Overconsumption of imports
Consequences
Education
•
•
•
Increase in dropout rates
Lower quality of education
High unemployment among recent
graduates
Health
•
Increase in malnutrition rate in rural
and urban area
Social aspect
•
•
Increase conflict within the family
due to financial pressure
Increase in child labor, street
children
Responses to the 1997 crisis
Policy Implications
Four Measures
•
•
•
•
Stabilizing the economy,
restructuring financial institutions,
restoring confidence.
Reducing overall public expenditure,
but safeguarding investments in
social sectors.
Providing protection to the
unemployed and vulnerable groups
Addressing long-term structural
impediments in the Thai economy.
Education
• Free education as a safety net for
children during the crisis
Health
• Need for a universal health care
scheme with non-contributory
financing for the poor
Community
• Local community empowerment as a
social security for the crisis
Lessons Learned
•
•
•
•
Vulnerability of children, the elderly, and the socially excluded to the crisis
Various impacts of the crisis on children
Capacity of the Thai local community to absorb unemployment from the crisis
Health care no longer affordable by those inflicted by the crisis
2008 Crisis
Truly Global Problem
Consequences
Causes
• Financial collapse in the U.S.A.
and European countries
• Rapid transmission via
globalization process
• Inadequately prepared and
imbalanced social structure
unable to withstand the crisis
Concurrent Issues
• Increase in food and oil price
• Global warming : climate change
• Internal political instability
Unemployment
•
•
Rapid unemployment rate from both
newly graduates and laid-off workers
Inability of the local community to
absorbed the unemployed
Export
•
•
Export shrinkage due to declined real
income of trading partners
Need for domestic stimulus for the
economy
Education
•
Positive outcome on return to
education of the temporarily
unemployed
Response from the Government
Financial support
March 2009
Sept. 2009- Sept.2011
Stimulus package 1
•
– Building grass-root economic potential
via sufficiency economy fund
– Creating income insurance for senior
citizens
– Promoting proactive role of village
health volunteers
•
Reducing cost-of-living and social
investment measure
– 15-year free education
– Income subsidy via cash transfers
– 5-measures 6-months program
•
Stimulus package 2
Income generating measure
Unemployment alleviation and
capacity development measure
– Strengthening capacity of the
unemployed
– Reducing lay-offs and labor mobility
•
•
•
•
•
•
•
Enhancing food and energy security
Upgrading public infrastructures to
improve economic competitiveness
Improving income-generating
capacity of tourism sector
Creating new income-generating
sectors in the Creative Economy
Upgrading quality of education and
holistically modernizing learning
system
Raising quality of public health care
system .
Creating jobs and increasing
incomes for people at the
community level
Short term response
Create 1.5 million jobs within 3 yr.
Stimulus Package II
Public
Water System/
Infrastructure
Agricultures
837,642
238,515
1.43 Tri-Baht
Mil-Baht
Mil-Baht
Program
SubProgram
Water
Management
Technology &
Standard
Improvement
for Agricultural
Sector
Avoid water crisis
The prospect of
climate change,
The decline of small
family farm
. Aim to secure food
supply
Tourism
8,506
Mil-Baht
Transport &
Logistics
Image Revival
Alternative
Energy
Tourism
Marketing
Telecommunication
Creative
Tourism
Products
Education
Tourism
Site
Recovery
Natural
Resources
Public Health
Social Security
Science &
Technology
Standard
Improvement
Creative
Economy
17,585 Mil-Baht
Cultural
Heritage
Conservation
and
Restoration
Education
53,969
Mil-Baht
Learning
Community
Building
Quality and
Standard
Improvement
on Education
and
Learning
Intellectual
Thai Handcraft
System
Infrastructures
Promotion
Improvement
plan and Center
Creative
of Education in
Product
sub-region and
Promotion
region
Arts and
Cultural Town
Public Health Community
91,708
10,441
Mil-Baht
Production and
Strengthening
Capacity of
Medical and
Health Care
Staff
Research and
development
of medical
technology
Thai Software
Industry
Promotion
Design Industry
and R&D
Promotion
Quality
Improvement
on Teachers
and Education
Reform
Midium and Long term obj. : enhance national competitiveness
/ generate employment
Mil-Baht
Development
Programs for 5
Provinces in
Southern
Thailand
Investment
Programs for
Job Creation
and Income
Generation in
Communities
Challenges
what are the challenges remain…
Quality and accessibility
Affordability
•
•
An equitable distribution of health
services (quality)
•
Efficiency of the public education
system; the quality of public
– Pressure on the sustainability of the
health insurance scheme
– A sustainable old-age pension
program that covers basic minimum
needs
– Carefully crafted social protection
system without insolvent public
deficit
education and Well-educated
workforce .
•
•
•
Social inclusion of individuals
outside the formal social
protection scheme
A domestically driven economy that
make the country resilient to
external crises.
rural and urban poor are well
targeted  (access to food)/
vulnerable to price rise
The rapidly aging demographic
structure
•
•
Targeting cash transfers to the
chronic poor
Need for accurate poverty data,
and economic modeling of impacts
of existing projects
Lack of information regarding program response and coverage .
How to cope with the challenges
Comprehensive outreach system
•
•
•
•
To channel to the needy in the most
effective and efficient manner- area
based approach
Strengthening decentralization and
community empowerment
Establishing community based social
protection programes
Proposed steps include:
1.
2.
3.
4.
Improving area-based budget
allocation process
Coordinating with local
governments in delivering
services
Delegating some tasks to selected
NGOs / civil society for particularly
targeted gr.
Training assistance to officials to
locate the poor and monitor the
effectiveness of the program
Sufficiency economy : Guiding principle
•
•
shaping the policies and practice of the
Thai government, to create a balance
amidst external and internal changes
Helping minimizing the vulnerability of
the poor to economic and social shocks
in various ways:
– human-based projects that generate
an equitable distribution of
benefits. Focus on small-scale
– Greater self-reliance
– Improving standards of governance
in public administration
THANK YOU