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Social Protection for Thailand’s Informal Economy Workers

People working in the informal economy are vulnerable and often lack social protection. When natural disasters such as the 2011 flood in Thailand strike, they are frequently left without adequate support. But now the International Labour Organization (ILO) and other United Nations agencies are working with the Thai Government to change this and create a suitable social protection system. Alice Molinier and Kakkanang Ghettalae, ILO Social Protection Consultants, and Poonsap Tulaphan, Foundation for Labour and Employment Promotion report.

Feature | 05 April 2012
BANGKOK, Thailand (ILO Online) – The 2011 flood was the worst natural disaster in Thailand in 70 years. People lost their homes, jobs, belongings, and – for some – their family members.

Neeramol Sutipannapong's house in Bangkok’s Laksi area was flooded on 21 October 2011. The water rose above one meter and stayed for a month, destroying almost everything she owned.

Neeramol, a mother of three, earned her living by sewing clothes at home. She lived with her husband who works as a watch repairman during the day and a motorcycle taxi driver during the night.

When the flood hit their house it was so quick that they did not have time to move the sewing machine or the motorcycle. Both were damaged and could no longer be used. For more than a month, Neeramol and her husband had no source of income. They had to spend all their savings to buy food and other supplies, at prices that had risen because of the flood.

What’s more, the couple worried about where they could get money to repair their house, buy a new sewing machine and motorcycle, or send their children to school. They had no collateral security to get a loan from a bank. They could borrow money from a loan shark, but the high interest rates would put them at risk of sinking into a debt cycle.

For a long time poor and vulnerable people in Thailand only had access to ad-hoc, means-tested assistance programmes. However, in recent years Thailand has made significant moves towards universal basic social protection, by introducing two major universal schemes that now form the main pillars of the Thai social protection floor.

The Universal Coverage Scheme (UCS) was introduced in 2001 to provide universal health care coverage to those – a majority – who were not already covered by existing public health protection schemes. In 2008 the Universal tax-financed 500 baht scheme was established to provide income security to those aged more than 60.

Reaching out to the informal economy

One of the primary remaining challenges is to extend coverage to the informal economy workers (own account workers, unpaid family workers) and their families who make up 76 per cent of Thailand’s total population remains. Attempts to extend coverage to this group include the provision (under Article 40 of the Social Security Act) of a voluntary package, partly subsidized by the Government, which covers sickness, invalidity, death, and an optional old-age benefit in the form of a lump sum.

Despite the sharp increase in the number of persons covered, the majority of the working age population in the informal sector still has no income security and lacks access to skill development opportunities. When natural disasters such as the 2011 flood strike, they are frequently left without adequate support.

The Royal Thai Government has recently declared its intention to address this issue and had made the expansion of social protection a key target of the 11th National Economic and Social Development (NESDP) Plan for 2012-2016, with the objective of creating “more justice in society”.

In March 2010 a Social Protection Floor Joint Team (SPFJT) was set up to support the Thai Government efforts in progressively implementing a rights-based, systemic, adequate social protection system. The team is led by the ILO with coordinated support from other United Nations (UN) bodies.1

Towards universal basic social protection

“The objective of the SPFJT is to develop a holistic and coherent vision on social protection in Thailand to move progressively towards the provision of universal and basic social protection to all”, explains Mr Jiyuan Wang, Director of ILO Country Office for Thailand, Cambodia and Laos.

The SPFJT team has also created a video, Building a Social Protection Floor in Thailand to advocate for the rights of people like Neeramol and raise awareness about the remaining challenges.

For the informal sector, the United Nations’ SPFJT advocates for the establishment of social security measures to compensate for the loss of income caused by work-related injuries, sickness, or maternity. These are coupled with incentives and vocational training programs to develop individual’s capabilities.

The SPFJT team has also created a video, Building a Social Protection Floor in Thailand to advocate for the rights of people like Neeramol and raise awareness about the remaining challenges.

The UN has designated the social protection floor as one of its nine initiatives in response to the global economic and social crisis. Led by the ILO and the World Health Organization, it aims to promote a set of basic rights and social transfers, as well as essential services in the areas of employment, health, water and sanitation, nutrition, education and family support, to protect and empower the poorest and most vulnerable so they can escape poverty.

In June 2012, the 101st Session of the ILO International Labour Conference will discuss the elaboration of a Recommendation on the social protection floor.

Including the United Nations Resident Coordinator), UN Children’s Fund, UN Population Fund, World Health Organization, UN Education and Cultural Organization (UNESCO), UN Development Programme and UN WOMEN.