Demographic shift 'a life and death' issue: Kosit
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Declining workforce amid ageing society needs to be addressed urgently, or the drain on economic growth will worsen
Demographic change is a “life and death” issue that has undermined Thailand’s economic growth and needs to be addressed without delay, says Kosit Panpiemras, executive chairman of Bangkok Bank.
The former deputy prime minister and industry minister told a seminar held by the National Economic and Social Development Board (NESDB) yesterday that the Kingdom was simultaneously facing three structural problems that had “pulled down” economic growth and made monetary and fiscal stimulus measures less effective.
They are high household debt, income inequality and demographic change.
“Whatever is done – the ‘return happiness’ [campaign], giving away gifts, or any other methods – will become ineffective in pulling us up to the growth we desire” unless demographic shift is addressed, he said.
Without adequate and proper measures deployed in a consistent and long-term effort, Kosit said, the declining workforce would make the country the most inferior nation in Asean in terms of market size and number of consumers.
“These are the reasons we must be serious” about demographic shift, he said, adding, “If Thailand really wants to grow and get out of the ‘middle-income trap’, it has to tackle these structural problems, and one of them is our demography.”
Wassana Im-Em, assistant representative to the United Nations Population Fund (UNFPA), told the seminar that Thailand would become the first nation in Asean to experience negative population growth, after the size of its population peaks at 68.5 million in 2025.
“Thailand currently enjoys the peak of its workforce population, which numbers about 50 million. However, half of them are in the agricultural sector, and nearly 70 per cent of our young people aged 15-24 have secondary school or lower education.
“We have fewer [people] being born, and have inferior quality” people in educational terms, she said.
While Thailand is rapidly falling deeper into an ageing society – with its workforce forecast to drop to 38 million in 2045 – Asean as a whole will still enjoy a peak in its combined workforce at about 500 million people by that time, she added.
The UNFPA’s representative for Thailand, Caspar Peek, urged the country to “invest in young people” and make smart investments in high-quality education, long-term care and pension schemes.
“The question is not one of having a big population, but of having a rich population,” he said, mentioning Singapore and Luxembourg as examples of countries with small but prosperous populations.
Citing Malaysia, which has 6.7 million immigrants, or about one-fourth of its population, Peek said Thailand should formulate its population policy with regard to foreign migrants.
Furthermore, since a happy and healthy workforce is more productive, the Kingdom also needs to develop its urbanisation policy, such as creating “more Bangkoks” to reduce congestion in the only mega-city it has, he said.
“There is still a window of opportunity for Thailand to attain its demographic dividend, but this window is closing fast,” he added.
Deputy Transport Minister Arkom Tempitayapaisit said that by the definition used by the United Nations, Thailand had already fallen into the category of an ageing society.
Moreover, the number of elderly citizens is projected to grow to 20.5 million or 32 per cent of the population in 2040, while the number of people of working age will fall to 35.18 million by that time, compared with 42.7 million in 2010.
Since the declining workforce could affect economic growth and create a fiscal burden in the future, the NESDB has been assigned to lay down a long-term population plan for submission to the Cabinet, Akom said.
Kosit, who was appointed to head the NESDB’s subcommittee for steering development of the national population plan, said demographic shift was a complex issue that needed more evidence-based research before appropriate measures could be drawn up to address it.
“For example, if members of the workforce lack knowledge, they won’t get high a salary, and consequently they will have less money left for saving. At the same time, companies have to hire more workers,” he said.
Worawet Suwanrada, dean of Mahidol University’s College of Population Studies, said research had found that only 37.5 per cent of elderly Thais generated income from savings, and a mere 3.1 per cent said the amount represented a significant source of income.
