The Thailand Development Research Institute Foundation (TDRI) has urged the government to prioritise upskilling and reskilling Thai workers as a means of addressing economic inequality and the challenges posed by an ageing population.
TDRI believes this focus will not only help bridge skills gaps but also drive sustainable economic growth by attracting more foreign investors.
In an interview with the Bangkok Post, Somchai Jitsuchon, TDRI's research director for inclusive development, emphasised Thailand is facing issues related to its ageing society and widening economic inequality.
Mr Somchai said these challenges have contributed to Thailand's stagnating economic growth, which is the lowest among the 10 Asean countries.
"Thailand's growth figures are the weakest in Asean. Foreign investors are hesitant to invest in Thailand because the country lacks a skilled workforce capable of supporting new, high-tech industries," he said.
Mr Somchai pointed to the example of Alibaba Group, which invested in both Thailand and Malaysia.
However, while the company directed investments into low-tech industries in Thailand, it focused on high-tech sectors in Malaysia. This, Mr Somchai argues, highlights the crucial role that workforce skills play in attracting foreign investment.
TDRI's research also reveals that 42% of Thais are over 40 years old and have only completed middle school (Mathayom 3) or even lower.
This demographic, Mr Somchai argues, is not equipped to keep up with the demands of a fast-evolving technological landscape. Many are unable to use basic tools like Microsoft Excel, let alone complex technologies such as artificial intelligence. This skills gap is one of the key reasons behind the Thai economy's underperformance.
Without a skilled workforce, foreign investors are reluctant to invest in Thailand, leaving a large portion of the labour force stuck in low-skill, low-wage jobs.
This, in turn, hampers the country's overall economic growth. Mr Somchai attributes this issue, in part, to ineffective government policies, which have contributed to a structural problem in the economy.
"If this situation persists, we'll continue to see sluggish growth. This year, the economy is expected to grow by just 2.5% to 2.8%, even in the absence of a crisis," he warned.
"Thailand is likely to remain at the bottom of Asean for the next five years. After that, growth may slow further due to an increasing elderly population and a workforce lacking sophisticated skills. This will reduce government revenue, impact tax collection and limit its ability to care for the ageing population."
The country's public debt will approach 70% of GDP, up from the current 64.02%. This mounting debt threatens to erode the legitimacy of the central treasury, further stalling economic growth. Mr Somchai stressed that without new policies to break this cycle, Thailand's economy may continue to stagnate.
Regarding the management of Thailand's social security system, Mr Somchai suggested that it should operate independently, outside the influence of any ministry. The Social Security Board should be free from political interference, with leadership appointments based on skills rather than political connections. He also called for greater transparency in its administration to ensure it is more responsive to the needs of the insured.
Looking ahead, Mr Somchai recommended a policy to upskill and reskill 10 million Thais annually. He suggested a shift from supply-driven to demand-driven training, where the business sector designs curricula based on actual market needs.
The government's 10,000-baht cash handout could be used to fund these training programmes, with individuals receiving coupons that could be redeemed for skills courses.
Each person could use up to 6,000 baht for course fees, while the remaining 4,000 baht could cover expenses during training.
This model would encourage competition among private sector training providers, ensuring that the courses offered are relevant and effective. The government's role would be to ensure proper oversight to prevent fraud and guarantee the quality of training.
Some may question whether 10,000 baht is enough, but Mr Somchai believes it would make a tangible difference.
"Even if 10,000 baht isn't enough on its own, it's a start. And if the private sector sees the programme's value, they may contribute additional funds for further education," he said.
Mr Somchai argued this upskilling initiative would have a far greater, more lasting impact on the economy than short-term cash handouts.
"Training people in skills will have a lasting effect because those skills don't disappear, unlike money that is spent and gone," he said.
"In three years, this initiative could boost GDP by 0.5% to 1%, which is more sustainable than the temporary economic boost from the 10,000-baht handout, which only increases GDP by 0.3% and fades quickly."
Finally, Mr Somchai proposed the retirement age be extended to allow people who are 60 or older and still capable of working to remain in the workforce for an additional 5–10 years. With the average human lifespan increasing, this change would allow experienced workers to contribute to the economy for longer.
"Upskilling and reskilling initiatives will be the key to sustainable economic growth in Thailand, enabling the country to address both its ageing population and economic inequality," he said.
