How Thailand 4.0 can solve the Kingdom’s rural crisis
Recently, as I was practising my Thai with a couple of villagers building a wall at my home, Professor Pavida Pananond’s explanation of the global value chain popped into my head.
Prof Pavida is a leading thinker on the push for the high-value innovation-based economy known as Thailand 4.0.
What I was witnessing in my village was actually the rural variant of the value chain that operates all over the world. Elsewhere, the chain ends with high-value products such as the iPad. In my case, the product is a renovated house.
The Thai government is fortunate that the country has a mainly rural population many of whom are willing (or forced) to leave their loved ones behind to look for work. This decades-old phenomenon lessens the burden on local governmental structures and generates Bt205 billion annually in remittances from overseas. These go to pay expenses for school, farm equipment, debts, caregivers, skipped generation members, etc, while the remaining sum is saved in the bank. The savings build up and are eventually used to pay off debts, offer donations for temples, and build new houses or renovate old ones.
Building or renovating houses generates work for members of the community, in most cases older migrant workers who have returned to the village armed with skills as carpenters, tilers, welders, etc – their personal human capital. These people often have to rely on agricultural activities, casual work and of course money from younger family members who have migrated away for work. Steady jobs are increasingly rare in rural Thailand outside local government positions such as village headman. As such, the opportunities in building – which often take place after the harvesting period up to Songkran – are a key link in the rural economy.
This “value chain” appears to be functioning quite well in rural Thailand. However, in reality it is subject to the same disruption from 4.0 processes, including automation and artificial intelligence, as the wider global value chain.
Both scenarios indicate, once again, that we need to improve our education system and boost the quality of our human capital. The aim should be to produce a local skilled workforce, which will produce high-value added products, reduce the need for worker migration and reverse the growing toll of the “skipped-generation” in rural Thailand.
Dirk Sumter
