The Impact of the Crisis on Migration in Thailand

Transcription

1 The Impact of the Crisis on Migration in Thailand Yongyuth Chalamwong Thailand Development Research Institute Foundation Thailand s current economic crisis resulted from the bursting of the bubble economy that developed from a combination of excessive speculation and liberalization of the finance system. Not only is Thailand expected to post a negative 5.5 percent economic growth and 9.4 percent inflation by the end of 1998, but it will also experience a reversal of rural-urban migration trends. The Thai government is stepping up enforcement against illegal foreign workers and is seeking help from neighboring states in facilitating the reintegration of their workers. At the same time the government targets to send at least 215,000 Thai workers to other countries. The Most Unwanted Crisis Thailand s impressive economic growth in the past decade seemed to suggest that Thailand has become another newly industrialized country. In fact, the economy started to slow down in the early 1990s, especially in the second half of 1996, when export growth unexpectedly fell to zero percent. Many Thai macro economists put the blame on the declining world trade. However, they also believed that the slowdown in export growth was temporary and it would recover with a resurgence of demand from trading partners and more aggressive export promotion by the Thai government. This crisis of deteriorating long-term competitiveness seemed to foreshadow the 1997 financial sector meltdown and macro economic instability (Chalamwong, 1998). The trend toward globalization started in Thailand in A cash surplus for eight consecutive years encouraged Thailand to liberalize her financial system. These included eliminating limits on interest rates and lending interest rates in 1989 and 1992 and doing away with foreign exchange control three times (1990, 1991, and 1994). Consequently, the Thai Asian and Pacific Migration Journal, Vol. 7, Nos. 2-3,

2 298 ASIAN AND PACIFIC MIGRATION JOURNAL monetary authority thought that Bangkok was ready to serve as another financial center. Therefore the Bangkok International Banking Facilities (BIBF) started its operations in 1993, and their provincial affiliates (PIBF) followed suit in These moves facilitated local enterprises access to credit and services offered by international banking facilities. Vajragupta and Vichyanond (1998) pointed out that the stability of the baht and the US dollar in the years 1984 to 1993 and the new access to foreign credit via BIBF tempted local Thai enterprises to depend heavily on cheap and available foreign credit. For their part, creditors were presumably confident of large reserves which stood at about nine months of imports as well as the strength of the baht. As a consequence, many sectors engaged in excessive and speculative spending. According to Siamwalla (1997), heavy inflows of capital affected three areas. Firstly, the BIBF stimulated another wave of the property boom, even though the real estate market was already saturated and was in fact facing a credit crunch and collapse a few years earlier. Secondly, the high volume of foreign borrowings led to a decline in Thailand s competitiveness. Thirdly, Thailand s outstanding external debts bloated from US$29 billion in 1990 to US$94 billion in the middle of These excessive foreign debts, according to Vajragupta and Vichyanond (1998), were distressing not only because they partly fueled more external debt deficits but also because they increased the debt service thereby worsening current account deficits in the subsequent year. These external private debts, mostly belonging to the non-bank private sector, accounted for 51 percent of total debts in 1990, which went up to 72 percent in the middle of These private debts were largely short-term debts, which meant higher risks for debtors and the country as well. If the creditors decide not to roll over maturing debts, debtors could easily encounter liquidity shortage. This mismanagement damaged the country s financial market in at least three aspects. First, enterprises tended to borrow short-term debts to finance long-term projects which could pose risks and possible losses at any time when maturing debts were due. Second, private non-bank debtors often leave their foreign exchange positions uncovered. Lastly, Thai enterprises relied too much on debt financing because the local stock market has not reached the stage of maturity. Tapping funds from the equity market is much more difficult than from the debt market. The unfavorable current account balance (i.e., more than 8 percent of the GDP in 1995 and 1996) was aggravated by the financial assistance given to several ailing finance companies and commercial banks by the Bank of Thailand. In addition, the surging value of the US dollar and the baht and growing inflation were unfortunate coincidences which led to widespread speculations that the Central Bank was unable to defend the baht. The anticipated baht devaluation triggered capital outflows which plunged

3 MIGRATION IN THAILAND 299 Thailand s foreign reserves to a critical level (daily transaction amounted to US$4 billion or 3.6 percent of the GDP). As a consequence, the Thai government decided to float the exchange rate on July 2, 1997 after 13 years of pegging the baht to the US dollar-dominated currency basket. The baht s value sank sharply from about 26 baht per US dollar on June 30, 1997 to 47 baht on December 31, The value of the baht nose-dived to 56 baht in January By early April, it stabilized to around 40 baht per US dollar (Vajragupta and Vichyanond, 1998). Ivory Tower s (1997) analysis of how the crisis came about cited the same factors. The current crisis was triggered by internal problems resulting from speculation in the property sector, government liberalization of the financial system, and the launching of the BIBF/PIBF. External factors worsened the crisis. The floating of the baht was supposed to boost Thai exports, but this did not come about because neighboring states were also hit by the financial crisis. Apart from addressing internal factors, external factors should also play a vital role in the recovery. Thailand s economic crisis and the turmoil that followed the baht floatation forced the country to seek financial help from the International Monetary Fund (IMF). The government expects a sharp revenue shortfall in 1998 which prompted large budget cuts. Further cuts are forthcoming if revenue targets are not met. In March the government decided to increase the price of gasoline (excluding diesel) by about one baht to help finance the revenue shortfall. So far the Thai government has strictly implemented the austerity program negotiated with IMF in order to rebuild economic stability. In early August this year, the Thailand Development Research Institute Foundation (TDRI) forecasts that the value of the baht will fluctuate at around per US dollar, and that exports would grow by around -1 percent. By the end of 1998, it was forecast that the Thai economy would grow at -5.5 percent. The industrial sector is expected to grow at -8.5 percent and the service sector by -4.6 percent. Both current accounts and trade accounts would post a surplus of US$10.4 billion and US$11.7 billion, respectively. Inflation would reach its peak this year at 9.4 percent, up from only 5.64 percent in TDRI also forecasts that in 1999 the Thai economy would recover slightly with a positive growth rate of 1.0 percent. By then, the value of the baht would fluctuate at around 36 baht per US dollar and the government would have achieved a certain degree of success in solving the problems in the finance sector. All sectors of the economy would record positive growth rate, and inflation would drop to 4.0 percent. The trade and current accounts would continue to pose a positive growth at US$11.7 billion and US$10.7 billion, respectively (Table 1).

4 300 ASIAN AND PACIFIC MIGRATION JOURNAL TABLE 1 MACROECONOMIC FORECAST (BASE CASE) Economic growth (real GDP %) Agriculture Industries Services Total Inflation Rate (CPI %) Total investment quantity (% increase) Merchandise export Value (billion baht) 1, , ,184.1 (% increase) Value (billion US$) (% increase) Merchandise import Value (billion baht) 1, , ,831.7 (% increase) Value (billion US$) (% increase) Trade balance Value (billion baht) % of GDP Value (billion US$) Income from tourism Value (billion baht) % increase Value (billion US$) (% increase) Current account balance Value (billion baht) % of GDP Value (billion US$) Average exchange rate (per US$) SOURCE: TDRI s Forecast, August 11, 1998

5 MIGRATION IN THAILAND 301 Based on international ratings by Moody s Investors Service, Thailand s growth in 1998 is likely to be moderate due to four factors: (1) legal uncertainties and weaker juris-prudential traditions to interpret and modify procedures and laws; (2) continuing macro-economic instabilities that hinder financial market development; (3) an ASEAN attitude to investment that has traditionally been more oriented to equity rather than indepth risk-return analysis; and (4) an overly cautious market sentiment among bond investors in the mature market (The Nation, 9 April, 1998:B8). However, the Organization for Economic Cooperation and Development (OECD) sees the Thai economy as more resilient than the government has previously predicted. The agency estimated that the Thai economy in 1998 would contract by just 1.5 percent from the previous year, compared with official forecasts that the GDP would shrink by between 3 to 3.5 percent. OECD is more optimistic about Thailand s currency account balance, which is expected to have a surplus of 5.2 percent of GDP, compared with the government s estimate of 4.4 percent (The Nation, 9 April 1998:A2). The IMF forecasts the Thai economy will not register a positive growth until the fourth quarter of 1998 (The Nation, 14 April 1998:A4). The slowdown of the Thai economy in 1997 and the recession expected in 1998 would definitely increase open employment. This point will be explored further in the next section. The turmoil that battered the economies of Thailand, Indonesia, and Malaysia, and to lesser extent, the Philippines, Laos, Vietnam, and Burma, exposed some painful truths about the Southeast Asian bloc. A failure of vision coupled with the rise of the global economy would tend to shrink the importance of this region in the world economy (The Nation, 8 April 1998:A4). The Impact of the Crisis on the Labor Market Regional and income disparities were exacerbated by a decade of economic boom that was concentrated in Bangkok and the Metropolitan Area and Eastern Sea Board. The concentration of growth in these areas created heavy migration from rural to urban areas. The growth of employment in industrial and service sectors in urban areas has not severed migrants ties with rural households. Rather, this growth provided rural households with more wage employment opportunities to supplement their earnings from agriculture through seasonal migration (Medhi, 1995). This seasonal pattern started to change over time, as agricultural workers who migrate to urban areas for temporary employment tend to stay year-round. Consequently, there has been a slowdown in seasonal migration over the past several years (NESDB, 1998).

6 302 ASIAN AND PACIFIC MIGRATION JOURNAL The lack of employment and educational opportunities in rural areas and labor market segmentation in urban areas are push factors which have driven some of the most able-bodied men and women to work overseas. The pattern of labor outflows is consistent with sectoral and income disparities and the Thai labor market (Sussangkarn and Chalamwong, 1994). In fact, the push factors (including emerging attitudes against low skill menial jobs) as well as pull factors (e.g., better education and employment opportunities) increasingly drew people to urban areas. This created a labor vacuum in the rural areas, which became a pull factor that led to increasing migrations from neighboring countries. The internal conditions of neighboring states (e.g., Burma) were also push factors that led to the massive influx of foreign workers to Thailand. Just before the crisis in 1997, enormous changes in the production structure led to a lag between the demand and supply of labor. Labor market tightening was clearly evident from the low levels of open unemployment rates (i.e., less than 1 percent) and from the rapid rise in wage rates. Labor market tightening spread out from Bangkok and its vicinities to other provinces nationwide. This was particularly felt in the agricultural sector during the peak seasons. Shortages of labor were also experienced in fisheries and related sectors, domestic household services, construction, and small-scale manufacturing (Chalamwong, 1997a). Labor shortages and changing attitudes toward menial and low paid work amongst the Thai labor force led the authorities to accept low-skilled economic refugees from neighboring countries. The number of illegal migrants increased rapidly from 38,000 in 1987 to about 733,000 in 1996 (Chalamwong, 1997b). Thailand experienced a labor market dilemma characterized by shortages of medium- and high- level educated workers alongside surpluses of less educated workers (i.e., primary education or less). The labor market dilemma shifted when the bubble economy burst. The number of educated unemployed rose when the 56 finance firms were permanently closed down. The author estimated that more than 10,000 were laid-off in this sector alone. So far, attempts to solve the country s economic problem, especially the financial crisis, have yet to bear fruit. Many property developers, once part of the bubble boom, are now suffering from the collapse of the bubble economy. Up until now there have been no signs of recovery. The automobile industry, once dubbed as a rising star, shrank suddenly as market demand receded due to lesser loan funds for consumer purchase and a sharp reduction of purchasing power. Small and medium exporting firms are now also experiencing lack of capital funds as a result of the liquidity crunch (Chalamwong, 1998). An unmanageable floatation of the baht is adding to the private sector s foreign exchange burden and is contributing

7 MIGRATION IN THAILAND 303 to the volatility of the business environment. These factors, coupled with the lack of confidence in Thailand s economic fundamentals, could prevent the country from staging a full recovery in a short period of time. The impacts of the economic recession on the labor market in 1998 are clear. The tight labor market disappeared very quickly and there is now surplus of both low- and high-skilled labor. It is observed that some laidoff workers are being re-absorbed by the informal sector, which has contracted in recent years as formal sector employment grew rapidly. Table 2 depicts the rise in overall unemployment, from million (2.88 percent) in 1997 to million (3.53 percent) of the labor force. The unemployed in 1998 comprises 353,000 who are openly unemployed (those who are looking for jobs) and 601,000 who are available but are not looking for jobs. This unemployment rate is not very high according to international standards but it represents a large increase that Thailand has not experienced for more than a decade. With the crisis, underemployment is expected to increase from million in 1997 to 1.16 million in 1998, i.e., an increase of 0.65 percent from the previous year. If those who are unemployed and underemployed are added, total employment will be over one million. The macro-economic picture seems to show signs of improvement in recent months but the crisis is far from over. High interest rates, severe liquidity crunch, sky-high unemployment and underemployment and very high inflation are still evident. Not to mention that the crisis has reached the grassroots level. Thus far, the government s plans to create safety nets and to generate employment have not yet materialized because the government is too busy solving the country s financial problems. Sectoral Impacts of the Crisis The real sectors except agriculture have truly felt the impact of the crisis. Thai manufacturers produced less because of the greater costs of inputs from abroad and higher inflation. Tight liquidity and enormous foreign debt aggravated the situation, thus many Thai companies opted to downsize their operations and reduce their staff and wages. A large number of the 4.54 million workers in the industrial sector and the 2.79 million work force in the service sectors will be adversely affected by the economic slowdown. It is expected that before the end of 1998, massive lay-off is inevitable although many employers would try to postpone this eventuality. The credit crunch is the main concern. The Thai Chamber of Commerce has asked the government to solve problems of liquidity crunch now experienced by exporters and manufacturers, especially the small- and medium-size firms. In its report to the Asian Development Bank (ADB), the Brooker Group (1998) surveyed the impact of the crisis in the manufacturing industries and

8 304 ASIAN AND PACIFIC MIGRATION JOURNAL TABLE 2 FORECEAST OF MANPOWER AND EMPLOYMENT IN THAILAND, Indicators f 1998f Economic growth rate Total population 60,003 60,602 61,201 Population (>13 years) 45,837 46,646 47,240 Labor force 32,381 32,836 33,095 New entrants 488 n.a. n.a. Employment 31,220 30,693 30,349 Unemployment Unemployed, looking for job Unemployed, not looking for job ,016 Waiting for season (average) Round 1 (low season) 1,160 1,036 1,100 Round 3 (peak season) Underemployment (less than 35 hrs./week) ,167 Not in the labor force 13,456 13,810 14,145 Population (<13 years) 14,166 13,956 13,961 Unemployment rate (%) Unemployed, looking for job Unemployed, not looking for job Seasonal unemployment rate (%) Underemployment rate (%) SOURCE: The Subcommittee for Estimation of Labor Force, Employment and Unemployment related sectors from December 1997 to January The study found that the construction-related industries and heavy industries were more likely to use measures to reduce labor costs. The strategies adopted by manufacturers include: natural attrition (38.2 percent), reduced working hours (28.9 percent), reduced salaries (21.1 percent), reduced overtime (15 percent), lay-offs (11.8 percent), and reduced or suspension of benefits (10 percent). Non-manufacturers resorted to natural attrition (45 percent), layoffs (38.3 percent), reduced salaries (28.3 percent), reduced working hours (18.3 percent), reduced overtime (3.5 percent), and reduced or suspension of benefits (7 percent).

9 MIGRATION IN THAILAND 305 The same study also found different degrees of impact felt by various sectors as shown in Table 3. Among manufacturing industries, metals, construction materials, automotive and garments have been the hardest hit. Early this year, mass lay-offs in the financial sector took place. Telecommunications, real estate, wholesale and retail and construction contractors followed suit. They are expected to experience more turbulence due to continued reduction in domestic consumer purchasing power and lack of financial support. In addition to lay-off problems, unemployment will be severe for the new entrants to the work force. The Manpower Department of the National Economic and Social Development Board (NESDB) estimated that more than 86 percent of almost 500,000 new graduates this year will be unemployed. TDRI estimated that out of 600,000 students who graduated last February with bachelor s degrees or lower, only 20 percent would be employed this year. The largest unemployed group would be higher vocational school graduates and university students. The upper secondary school and primary school students will have better chances of getting jobs. The Impact of the Crisis on Migration The crisis affected patterns of internal and international migration in Thailand. After the bubble economy burst, the labor market in Bangkok and Metropolitan Areas and Eastern Seaboard areas shrank very fast. There are almost no vacancy positions. There are no available data to confirm this until the results of the Ministry of Interior s countrywide survey in late 1997 to early 1998 are out. The only available data on the impact of the crisis on migration comes from a study done by the Ministry of Interior s Center to Assist People in the Economic Downturn, Department of Local Administration. Table 4 shows levels of return migration in the various regions. The largest percentage of return migrants after the crisis started is observed in the Northeast, the poorest region, followed by the North, the Central and the South regions. The total number of return migrants was million. As mentioned earlier, there has been less seasonal migration in the last several years because workers now choose to stay out of agriculture year-round as reported by the Brooker Group (NESDB, 1998). This was confirmed by the Labor Force Survey conducted by the National Statistical Office which found that internal migration dropped from 15.1 percent to 13.1 percent between August 1996 and August The report suggested that the current crisis is slowing down and is even reversing the trend of resettling around major metro areas. As job opportunities in the metropolitan areas are drying up, more and more people choose are return to the rural areas.

10 306 ASIAN AND PACIFIC MIGRATION JOURNAL TABLE 3 SURVEY ON THE IMPACT OF THE CRISIS BY INDUSTRY Sector % firms importing % firms expecting % firms expecting % firms already more than 50% of profit in 1998 sales to stay constant laying off raw materials or increase in 1998 workers Jewelry Plastic Rubber Chemical/Petrochemical Iron and steel Metals Paper Construction materials Electronics Textile Garment Food Automotive Telecommunications Construction Contractors - Hotel Real Estate Wholesale & Retail No. of respondents SOURCE: Table 11a in NESDB, (1998) Chalamwong (1997b) pointed out that the return migrants would head back to the poorest region of the country, the Northeast. The impact of the crisis on international migration is complicated by Thailand s dual status as a sending and receiving country of migrants. In 1997, the number of legal and illegal emigrants was million and million, respectively, while the number of legal and illegal immigrants was estimated at million and million, respectively. Based on these figures, Thailand has a net immigration of million. Of Thailand s one million illegal workers, about 85 percent are from Burma, 9 percent from Cambodia, 4 percent from Laos, and 1 percent from other countries. In

11 MIGRATION IN THAILAND 307 addition, Archavanitkul and Warrangrattana (1997) reported that the number of overstayers from Bangladesh, Pakistan, China, Nepal and India during 1991 to 1996 could be as high as 85,000. The proportion male among overstayers and undocumented migrants is believed to be much larger compared to females. Findings from a study by Archavanikul and Kerdsawang (1997) provide some information on the entry and situation of migrant women in Thailand. They estimated that Thailand has some 77,094 female sex workers, of whom about 12,607 or 16 percent were illegally brought to Thailand. About 90 percent of illegally trafficked women came from neighboring countries, especially from the upper northern part of Burma and the southern part of China. More than 60,000 of women and children from neighboring countries and minorities who live along Thailand s borders were thrust into the commercial sex business since The period of stay of those illegally staying in Thailand range from 2-3 months to many years. The annual turnover was estimated at 10,000. The large influx of illegal workers presents conflicts among various parties. One view is that the government should control and repatriate undocumented workers in order to make room for rural returnees. Another view is that if the country forcibly removes the illegal migrants, the labor shortage could intensify in the agricultural sector despite the return of Thai worker to the rural areas (NESDB, 1998). Also, pushing back these illegal migrants at the same time that Thailand is trying to send more workers abroad could tarnish Thailand s international image. Policy Measures Regarding Unemployment and Migration There are several on-going and prospective programs and projects by the government and various organizations to address the impact of the crisis on unemployment and underemployment. In early November of 1997, the Ministry of Labour and Social Welfare (MOLSW) announced eight measures to help laid-off workers. These measures include domestic placement, overseas placement, replacement of migrant workers, home-worker and sub-contracting arrangements, agricultural extension, self-employment, opportunities in the service sectors, and distributing low-price commodities. Various agencies have banded together to provide assistance to those affected by the crisis. The Ministry of Industry (MOI), in cooperation with the Ministry of Agriculture and Agricultural Cooperatives (MOACC), the Ministry of Commerce (MOC), the Ministry of Education (MOE), and the Ministry of Science, Technology and Environment, is working with the King s foundation, Chaipattana Foundation, in target areas to assist return migrants and rural families and to initiate new approaches in agricultural production. MOE and MOLSW offer several training programs and financial assistance to support laid-off workers,

12 308 ASIAN AND PACIFIC MIGRATION JOURNAL TABLE 4 UNEMPLOYED PERSONS AND RETURN MIGRANTS BY REGION, DECEMBER 1997 Region Unemployed Persons Return Migrants Total No. % No. % No. % No. % North 238, , , , Northeast 517, , , , Central 33, , , , South 25, , , , Total 813, , , ,156, SOURCE: Center to Assist People in the Economic Downturn, Department of Local Administration, Ministry of Interior [Table 7 in NESDB (1998)]. particularly at sub-district levels in the provinces that have large numbers of return migrants. MOLSW launched an on-line matching system in nine governmental employment agencies in Bangkok and one in each province to help match applicants with job vacancies. MOLSW, along with MOI, MOC, MOACC and the private business sector are collaborating on projects that expand home-work and subcontracting for return workers in the villages. Fewer programs and projects deal directly with migration. Although Thailand is bent on repatriating illegal workers, this is easier said than done. Under the replacement of migrant workers scheme, MOLSW proposed to the Ministry of Interior (MOI) and National Security Council (NSC) to restrict undocumented migrant workers to 13 border provinces next to Burma, Laos and Cambodia. The ministry will allow illegal workers to register and work in fisheries and related activities. The ministry will not renew the working permit of 269,948 foreign workers upon expiry in June this year, except those in fisheries and related activities. This represents a more restrictive policy compared to the June 25, 1996 cabinet resolution allowing undocumented migrant workers to work in 43 provinces across the country. The main objective of the scheme is to replace migrant workers with local workers. Currently, more than 300,000 unemployed Thais have applied for jobs with the ministry. Labour Minister Trairong Suwankhiri expects that the ministry would be successful in repatriating 300,000 illegal workers without resorting to force by the end of April. Since the crisis, the NSC expected nearly 200,000 illegal migrants to voluntarily return home. The Council also asked the

13 MIGRATION IN THAILAND 309 authorities concerned to step up their enforcement in the border areas. From January to October 1997, the Council reported that almost 100,000 aliens were caught and were immediately repatriated. The government, through the Ministry of Interior, will step up the enforcement of sanctions against illegal workers starting from June Employers face up to three years in jail and those who provide home for illegals will face up to 5 years' imprisonment. Thailand has had difficulties in repatriating undocumented migrants since May Day. As reported by the Department of Employment, Ministry of Labor and Social Welfare, some 230,000 illegal migrant workers or about 76 percent of the government s target were deported. Thailand would not have much difficulty sending illegal workers back to countries in South Asia, China, Laos and Cambodia. These countries have been well informed and are willing to accept their return migrants and migrants would not have problems reintegrating in their own societies. The exception is Burma where persisting economic and political problems render return migration impossible in the near future. The Thai government is seeking cooperation from neighboring countries, especially Burma, Laos and Cambodia, to facilitate the safe return of their nationals when the Thai government starts to crackdown on illegal workers and repatriate them beginning in June this year. The Deputy Secretary General of the National Security Council announced recently that Thailand would enter into labor agreements with neighboring countries in order to stop the flow of illegal workers. Such agreements would help control the flow of migrant workers as well as protect their rights (Bangkok Post, 13 November 1997). The crisis also prompted Thailand to consider overseas employment. MOLSW has explored job possibilities for Thai workers in countries such as Israel, Taiwan, Japan, South Korea and Singapore. The Ministry targets to send at least 50,000 Thai workers overseas in the next six months or a total of 215,000 workers by the end of Low interest loans for workers who seek overseas employment would be provided by the Ministry, in cooperation with government and private banks. In another attempt to promote overseas employment, the Thai Automotive Industry Association asked the Japan Automotive Manufacturers Association to temporarily hire laid-off Thai auto workers to work in Japan. Toyota and the Siam motor group have already started to send some workers to Japan. Policy Recommendations This study provided evidence showing that large numbers of laid-off workers have started to return to the rural areas, a reversal of internal migration trends that Thailand has not seen for many years. Since policies were focused on the industrial and service sectors (in the hope that

14 310 ASIAN AND PACIFIC MIGRATION JOURNAL Thailand would also become another Asian tiger), the agricultural sector, the traditional safety net, has been neglected for decades. Due to misguided policies, agriculture can not provide a sustainable livelihood to most rural people, and rural people have to depend more and more on income from non-agricultural sectors. To revive agriculture and at the same time to survive the present turmoil, a new approach as suggested by His Majesty the King must be adopted to achieve a more sustainable development. The concept of a self-sufficient economy must be developed and extended to at least 25 percent of the rural economy. If this new strategy of agricultural development would succeed, it would be able to absorb the large number of return migrants. In addition, policies to achieve better spatial balance in development such as the promotion of agro-industries, more decentralized planning for effective regional development, and introducing more growth poles other than the Bangkok and Metropolitan Region (BMR) should be promoted. Strategies of diverting industries from the BMR would have significant impact in diverting migrants away from it (Sussangkarn and Chalamwong, 1994). To cope with potentially high levels of unemployment, the following measures should be introduced immediately: Improve the ability of the labor market to adjust by improving the efficiency of information dissemination and job placement services. Promote re-training of laid-off employees to prepare them once new opportunities emerge. Promote self-employment in both urban and rural or agriculture areas. Such programs will be more effective if supplemented by sound credit schemes and courses to improve entrepreneurial skills. Provide immediate assistance to the hard core unemployed. During the crisis, employers and employees must endure the hardship together. Hence a good relationship between them is extremely important. Labor disputes could further reduce the competitiveness of firms which will eventually hurt employees. Employers should take the opportunity during the production slowdown to improve employee capabilities through skills upgrading.

15 MIGRATION IN THAILAND 311 The impact of the present crisis on people and workers, including the lay-offs of workers and rising unemployment and underemployment, has attracted the attention of the government and various groups. With close cooperation, the above recommendations can be implemented to respond to the urgent needs of those who suffer the most. Furthermore, the government must carefully implement policies concerning undocumented migration. In the short-run, the alien workers not allowed to work in certain jobs must be repatriated to make room for Thai workers and to reduce the threat to national security. After the completion of the 60 days of undocumented alien registration which started on August 3, 1998, the concerned agencies must launch a drastic countrywide crackdown on illegal migrants by arresting and sending them back home. In the long run, Thailand should enter into agreements with neighboring countries in order to stop the flow as well as to protect the rights of migrant workers. A more permanent national committee should be set up to monitor the local labor market and formally import workers in occupations where shortages occur. REFERENCES Archvanitkul, K. and A. Warangrattana 1997 Analysis of Alien Workers in Thailand (in Thai). Nakhon Pathom: Institute of Population and Social Research, Mahidol University and Thai Research Fund. Archvanitkul, K. and P. Kerdsawang 1997 The Roar of Female Workers from Neighboring Countries inthailand's Sex Trade (in Thai). Nakhon Pathom: Institute of Population and Social Research, Mahidol University and Thai Research Fund. Chalamwong, Yongyuth 1998 Economic Crisis, International Migration, and the Labor Market in Thailand, TDRI Quarterly Review, 13(1): a Recent Growth Trends and Undocumented Migration Policy in Thailand. Paper presented in a seminar on International Migration and Labour Markets in Asia, organized by the Japan Institute of Labour, Tokyo, January b Thai Labour Policies in the Age of Globalization. Paper presented at the 22 nd FAEA Annual Conference on Southeast Asian Beyond 2000: The Human Dimension, Bali, Indonesia, October

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