The impact of the global food, fuel, and financial crises and policy responses: Suwanee Khamman Deputy Secretary-General Office of the National Economic and Social Development Board of Thailand A Child-sensitive Approach

Outline 1.The economic crisis: its causes and consequences 1)The 1997 crisis 2)The 2008 crisis 2.Policy responses to the crisis 1)Responses to the 1997 crisis: Lesson learned 2)Responses to the 2008 crisis : 2-stimulus packages 3.Challenges: Sustainable development 1)Quality and accessibility 2)Affordability 3)Decentralization

Overview of the impact of the world economic crisis on Thailand World economic crisis* Economic impact Social impact Lower export Shrinking tourism industry Lower consumption Financial institutions in G7 continue to collapse until Q1/ Stock and bond unresponsive to the Rescues Plan Bill Lacking liquidity in the world market Biggest depression in U.S., Japan, E.U. in 70 years Stable oil and agricultural product price until Q2 of 2009 Reduced OT payment/Salary Layoff Unemployment among recent graduates Unemploymen t Return to homeland Social problem Economic – social envi. Prior to crisis ie; global warming, the volatility in food and oil price

Thailand 1997 Crisis Causes Careless financial liberalization Loss in competitiveness Overconsumption of imports Consequences Education Increase in dropout rates Lower quality of education High unemployment among recent graduates Health Increase in malnutrition rate in rural and urban area Social aspect Increase conflict within the family due to financial pressure Increase in child labor, street children

Responses to the 1997 crisis Four Measures Stabilizing the economy, restructuring financial institutions, restoring confidence. Reducing overall public expenditure, but safeguarding investments in social sectors. Providing protection to the unemployed and vulnerable groups Addressing long-term structural impediments in the Thai economy. Policy Implications Education Free education as a safety net for children during the crisis Health Need for a universal health care scheme with non-contributory financing for the poor Community Local community empowerment as a social security for the crisis Lessons Learned Vulnerability of children, the elderly, and the socially excluded to the crisis Various impacts of the crisis on children Capacity of the Thai local community to absorb unemployment from the crisis Health care no longer affordable by those inflicted by the crisis

2008 Crisis Truly Global Problem Causes Financial collapse in the U.S.A. and European countries Rapid transmission via globalization process Inadequately prepared and imbalanced social structure unable to withstand the crisis Consequences Unemployment Rapid unemployment rate from both newly graduates and laid-off workers Inability of the local community to absorbed the unemployed Export Export shrinkage due to declined real income of trading partners Need for domestic stimulus for the economy Education Positive outcome on return to education of the temporarily unemployed Concurrent Issues Increase in food and oil price Global warming : climate change Internal political instability

Response from the Government Stimulus package 1 Income generating measure – Building grass-root economic potential via sufficiency economy fund – Creating income insurance for senior citizens – Promoting proactive role of village health volunteers Reducing cost-of-living and social investment measure – 15-year free education – Income subsidy via cash transfers – 5-measures 6-months program Unemployment alleviation and capacity development measure – Strengthening capacity of the unemployed – Reducing lay-offs and labor mobility Stimulus package 2 Enhancing food and energy security Upgrading public infrastructures to improve economic competitiveness Improving income-generating capacity of tourism sector Creating new income-generating sectors in the Creative Economy Upgrading quality of education and holistically modernizing learning system Raising quality of public health care system. Creating jobs and increasing incomes for people at the community level March 2009 Sept Sept.2011 Short term response Financial support Create 1.5 million jobs within 3 yr.

Water System/ Agricultures 238,515 Mil-Baht Public Infrastructure 837,642 Mil-Baht Tourism 8,506 Mil-Baht Creative Economy 17,585 Mil-Baht Education 53,969 Mil-Baht Public Health 10,441 Mil-Baht Community 91,708 Mil-Baht Water Management Technology & Standard Improvement for Agricultural Sector Transport & Logistics Image Revival Tourism Marketing Creative Tourism Products Standard Improvement Tourism Site Recovery Cultural Heritage Conservation and Restoration Arts and Cultural Town Creative Product Promotion Thai Handcraft Promotion Thai Software Industry Promotion Design Industry and R&D Promotion Learning Community Building Quality and Standard Improvement on Education and Learning System Intellectual Infrastructures Improvement plan and Center of Education in sub-region and region Alternative Energy Telecommu- nication Natural Resources Education Public Health Science & Technology Social Security Quality Improvement on Teachers and Education Reform Research and development of medical technology Program 1.43 Tri-Baht Sub- Program Stimulus Package II Development Programs for 5 Provinces in Southern Thailand Investment Programs for Job Creation and Income Generation in Communities Midium and Long term obj. : enhance national competitiveness / generate employment Avoid water crisis The prospect of climate change, The decline of small family farm. Aim to secure food supply Production and Strengthening Capacity of Medical and Health Care Staff

Challenges what are the challenges remain… Quality and accessibility An equitable distribution of health services (quality) Efficiency of the public education system; the quality of public education and Well-educated workforce. Social inclusion of individuals outside the formal social protection scheme A domestically driven economy that make the country resilient to external crises. rural and urban poor are well targeted (access to food)/ vulnerable to price rise Affordability The rapidly aging demographic structure – Pressure on the sustainability of the health insurance scheme – A sustainable old-age pension program that covers basic minimum needs – Carefully crafted social protection system without insolvent public deficit Targeting cash transfers to the chronic poor Need for accurate poverty data, and economic modeling of impacts of existing projects Lack of information regarding program response and coverage.

How to cope with the challenges Comprehensive outreach system To channel to the needy in the most effective and efficient manner- area based approach Strengthening decentralization and community empowerment Establishing community based social protection programes Proposed steps include: 1.Improving area-based budget allocation process 2.Coordinating with local governments in delivering services 3.Delegating some tasks to selected NGOs / civil society for particularly targeted gr. 4.Training assistance to officials to locate the poor and monitor the effectiveness of the program Sufficiency economy : Guiding principle shaping the policies and practice of the Thai government, to create a balance amidst external and internal changes Helping minimizing the vulnerability of the poor to economic and social shocks in various ways: – human-based projects that generate an equitable distribution of benefits. Focus on small-scale – Greater self-reliance – Improving standards of governance in public administration

THANK YOU