(ILO, Bangkok) Trade union leaders met to learn about the Thai Government’s initiative to expand the coverage of a pension scheme for both the formal and informal sector workers and discussed about various aspects of social protection--challenges, strategies and standards. The seminar “Social Security Development in Thailand: Government Initiative and ILO Recommendations” was organized by the International Labour Organization (ILO) in Bangkok on 13th July 2009.

The seminar was attended by about 20 people representing Labour Congress of Thailand (LCT), Thai Trade Union Congress, State Enterprise Workers’ Relations Confederation and National Congress of Private Industrial of Employees.

In the opening speech, Mr. Bill Salter, Director of the ILO Subregional Office for East Asia (SRO) said the social security system intends to improve productivity, reduce poverty and create more opportunity for the better livelihoods of the poor in society. The global economic crisis currently taking place has had a negative impact on employment and industries. Textile workers are being laid off in great numbers, some workers become victims of human trafficking and many children are forced to leave school. The social security system can help alleviate social tensions being resulted from the economic downturn. The critical issue is that the social security coverage is still insufficient, accounting for around 20 per cent of total population in Asia. He said the ILO has campaigned for universal coverage of a minimum set of social security provisions for all.

Mr. Chinnachot Saengsank, President, LCT who made remarks on behalf of the participating unions highlighted three major issues. Firstly, there is need for the expansion of social security for some 20 million informal sector workers, who have no protection. Secondly, a child support scheme needs to be extended up to 12 years and increase the payment from 200 baht to 500 baht. Thirdly, the pension payment which comes to only 20 per cent of a worker’s last month salary does not reflect rising inflation and the economic needs of the retirees.

Mr. Pong-Sul Ahn, Senior Specialist on Workers’ Activities, ILO SRO, stated that trade unions have to mount their pressure to the Government in order to improve the social security system and allocate more budget for social security. The budget for social security in developing countries is too small, compared to other expenditures in the countries’ development plans. Gaining living wages is essential to secure decent living standards. He also mentioned that unless a worker has a job, social security can not be an absolute solution for poverty alleviation. He stated that trade unions have to play an active role in the designing, management and implementation of the social security system.

At the technical session, Dr. Thaworn Sakunphanit, Senior Specialist from the National Health Security Office, provided insights about the importance of social security, stating that the implementation of social security is based on the principle of wealth redistribution and social equality, and it takes place by making a choice between the concept of liberalism and the concept of mutual help. He explained that the social security system for the formal sector in Thailand is quite comprehensive but it needs to be extended to the informal sector. Currently, 17-18 per cent of workforce in the country benefit from social security. In order to sustain the pension fund, workers’ contribution has to gradually increase from 6 per cent to 13 per cent. Also, the Government aims to increase its contribution to social security by 1 per cent of GDP and also the Ministry of Finance initiates to extend the pension scheme to both formal and informal sectors, targeting additional 23 million workforce. He stated that timing and funding are issues of concern in the expansion of its coverage to the informal sector. He suggested that trade unions play a crucial role in advocating this initiative to their members and workers.

Ms. Aidi Hu, Senior Social Protection Specialist, ILO Geneva, stated that the ILO had made two recommendations to the Thai Government concerning social security: firstly, the Thai Government should raise the monthly allowance benefit in the universal pension initiative for citizens aged 60 and over to 1,000 Baht/month for informal workers; secondly, the Thai government should expand the savings pension scheme coverage by enlarging the voluntary provident fund scope as well as making it an open fund which operates at national level and starts paying pension to members when they are 60 years old. This pension fund will provide protection for all private sector workers currently unprotected by the provident fund as well as for all informal workers. Formal workers may be provided with the option of joining the fund, too, in which case their employer is bound to contribute 50 per cent of the minimum premium prescribed by law. Informal workers may join the fund by paying a minimum contribution of 100 baht per month.

The Thai labour movement unanimously welcomed the Government’s initiative to extend social security to other labour groups, especially to informal workers and recommended that the Government substantially improve its governance system, by taking into account the aging population and the principle of equal entitlement of benefits. They also suggested that the Government revise the law and enforce a new taxation system to improve the financing of the fund. The participants proposed to continue discussions on social security with the management and the Government.