World uncertainties linger, Thai jobless rate misleading: Supachai
The global economy remains at risk, as major economies like the United States, the European Union and Japan are still confronting economic hardships, while Thailand has seen high numbers of disguised unemployed persons, the former secretary-general of the
“The US, Europe and Japan continue their quantitative easing programmes. However, there’s a question. Does the capital injection really create employment?
“Now, there’s capital across the world but no investment has been made. That capital was used to buy debt instruments with the [US] Federal Reserve,” Supachai Panitchpakdi told a seminar on “Influence of the 2015 Global Economy on Thai Economy and Capital Markets”.
The US economy has been seen by several parties as making a recovery, given its improvement in the unemployment rate from 9.8 per cent in 2008 to 5.8 per cent now. However, another “debt ceiling” is approaching, which could see the government shut down again if Congress does not agree to raise it, Supachai said.
Japan’s economy has been sluggish for more than 20 years. It is also difficult to count on Prime Minister Shinzo Abe’s “Abenomics” policies and his “three-arrow” approach.
Japan’s population is also ageing, and older people mostly prefer to save money and stay at home rather than go out and spend.
China is a hope with a high economic growth rate, but some warn of likely property bubbles. “However, I expect China’s [likely] bubbles can be controlled. It is a mixed liberal and controlled economy and measures can be used as appropriate,” he said.
China, which is a major lender to the United States, also wants to internationalise its yuan and now, its foreign reserves are US$4 trillion.
“Thailand is an agricultural society. Its 0.9-per-cent unemployment rate may not be really [accepted] as the country has high disguised unemployment. Thailand has a high figure for off-season unemployment.”
About 40 per cent of Thailand’s workforce is in the agricultural sector, 40 per cent in service industries and 20 per cent in manufacturing. The agricultural sector has low productivity with average incomes of Bt27,000 per capita per year, while manufacturing sees Bt350,000 and services Bt150,000.
More than 75 per cent of all agricultural workers have only a primary-level education or lower. The solution to this is to upgrade Thailand to a manufacturing- or service-based economy and to increase income per capita. In the future, Thai society should be developed to be technology-oriented, Supachai said.
Thailand used to lure foreign direct investment with cheap land, wages and electricity, but now the country has to find other ways to attract investment, he said.
