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Annex 4

Thailand

Country Development Partnership on

Social Protection - Phase II (CDP-SP II)

Summary of Activities and Outcomes

Thailand

Country Development Partnership on

Social Protection - Phase II (CDP-SP II)

Summary of Activities and OutcomesAugust 2003 – February 2006

February 2006CDP-SP Closing Workshop

70568

Country Development Partnership on Social Protection Phase II (CDP-SP II)


Contents

A. Introduction 1

B. Social Protection Context in Thailand 3

C. Overview of the CDP-SP II Program 5

D. CDP-SP II Activities and Outcomes 11D.1 Social Assistance 11D.2 Employment Services 13D.3 Unemployment Insurance 15D.4 Social Protection Data 15D.5 Occupational Safety and Health (OSH) 17D.6 Social Protection for Informal Workers 19D.7 Coordination and Dissemination 20

E. Conclusion 21



A. Introduction

1. Poverty reduction and income generation have been recognized by the Thai government as high-priority areas in the Ninth National Economic and Social Development Plan. A mainstay of the Ninth Plan is pro-poor growth, meaning growth of economic sectors that the poor typically rely on and growth that provides employment opportunities and generates income for the poor. Among the goals expressed in the Plan, Thailand will seek to reduce poverty incidence to less than 12% of the population by 2006 and provide equitable access to education and social services for the poor and disadvantaged. The Plan also envisages government support for the empowerment of Thai people, especially the poor and vulnerable. The goals of the Ninth Plan are reflected in the pro-poor policies of the current government.

2. This proactive approach to poverty reduction has been influenced by the economic and social consequences of the recent financial crisis. Prior to the crisis, Thailand had relied primarily on economic growth to alleviate poverty. Spurred by rapid growth, Thailand’s poverty incidence fell from over 30% in the late 1980s to 11.4% by 1996. During this period, formal social protection mechanisms were given relatively lower priority. High value was placed on strong community and family ties, which contributed to a strong informal safety net.

3. The crisis stimulated a re-examination of the social protection system. Worsening economic conditions led to a growing awareness that informal household coping mechanisms, while extremely important, were not sufficient in the face of large covariate shocks. In the formal sector, few instruments were available to help individuals mitigate and cope with income and unemployment shocks. Weaknesses in the social protection system became increasingly evident in terms of coverage, equity, adequacy of benefits, cost effectiveness, and timeliness of interventions. Furthermore, available data was not analyzed effectively to inform policy. In addition, several longstanding concerns related to labor market policies, social insurance, and social assistance came to the fore. Based on the lessons of the crisis, Thailand is now in the process of assessing its social protection system and planning reforms to help individuals and communities better manage risks.

4. To help the government achieve its objective of diversifying social risk management instruments, a Country Development Partnership for Social Protection.(CDP-SP) was developed with the World Bank and other partners. The CDP-SP was a multi-year rolling reform program implemented through a series of capacity building and technical assistance activities in priority areas identified by the government. It therefore provided an important vehicle through which the World Bank and other partners could support the government in meeting the goals of the Ninth Plan and improving the effectiveness of the social protection system.

5. The first phase of the CDP-SP, launched in February 2001 and completed in August 2002, focused on providing technical assistance to better understand the range of challenges and policy options in several component areas. The second phase of the CDP-SP (CDP-SP II), launched in August 2003 and completed in February 2006, focused on consolidating the technical analysis undertaken in the first phase, including the development of key policy options necessary to improve service performance and the preparation of plans for broader implementation of service improvements.



Supported by Asia-Europe Meeting (ASEM) grant resources, CDP-SP II activities were implemented by agencies in four government Ministries: Ministry of Labor (MOL), Ministry of Social Development and Human Security (MSDHS), Ministry of Finance (MOF), and the National Statistical Office (NSO).

6. Specifically, the CDP-SP II addressed the areas of:

Social Assistance

Employment Services

Unemployment Insurance

Social Protection Data

Occupational Safety and Health and Workmen’s Compensation

Social Protection for Informal Workers

In these priority areas, the CDP-SP sought to improve the targeting, efficiency, cost effectiveness, and equity of social protection services. The process aimed at assisting Thailand to develop policies and interventions that would promote inclusive, equitable, and flexible labor markets and offer the poor and unemployed better social protection services.

7. This paper summarizes the key activities and outcomes of the CDP-SP II. It is complemented by a paper on issues and directions for social protection in Thailand, which draws upon the findings of the CDP-SP II and places them into a broader social protection context.



B. Social Protection Context in Thailand

8. Thailand’s formal social protection strategy has focused mainly on social safety nets, labor market policy, and social insurance. This section provides a brief overview of these areas, including recent reforms undertaken after the crisis.

Social Safety Nets

9. Analytical work has suggested that the 1997 financial crisis “led not just to higher poverty, but also to greater vulnerability of the Thai population.1” Thailand has a number of social safety net programs aimed at addressing poverty and vulnerability. These programs fall into three main categories: i) cash transfers, including a family allowance and a social pension allowance to supplement the pensions of the elderly poor; ii) in-kind transfers, including subsidized medical services, housing programs, a school lunch program, and various social services; and iii) income generation programs, including job creation schemes and public works projects. A notable feature of the assistance programs is the continued heavy reliance on income generation schemes. Income generation programs accounted for nearly 40% of the budget allocated for safety net measures in 2000-2001.

10. While many safety net programs appear to be somewhat well-targeted, coverage rates and benefit incidence are low in some programs. For example, the social assistance program for the poor elderly is reasonably progressive, with nearly 40% of beneficiaries coming from the poorest quintile and only 5% from the top quintile. However, coverage rates are low, with only 13% of the elderly in the poorest quintile receiving benefits. Other issues surrounding social assistance programs in Thailand include: (i) adequacy of benefits and cost effectiveness; (ii) efficiency of administrative operations; (iii) flow of financial resources from the central to regional and local levels and the criteria used to disburse these funds; (iv) adequacy of administrative capacity at local levels; and (v) implementation details associated with devolution of responsibilities and resources.

Labor Market Policies and Programs

11. Thailand’s dramatic economic growth in the 15 years prior to the crisis brought significant changes in the labor market. Real wage growth between 1990-1997 exceeded 25%,2 and the structure of employment changed significantly—industry and services accounted for approximately 50% of a labor force of about 35 million people in 1996, compared to 30% in 1980. Furthermore, relatively flexible labor laws and regulations ensured that employment grew at a rapid pace.

12. With the onset of the crisis, however, the labor market responded through both price and quantity adjustments. In the first year of the crisis, overall employment fell by close to 3%, unemployment rates shot up from 2% to over 5%, and real wage rates fell by over 7%. After rising every year in the 1990s, the number of insured individuals in enterprises over 10 workers fell by close to 11% in 1998, mainly as a result of

1 Bidani, Benu and Kaspar Richter (2001). “Household Vulnerability and the Asian Crisis: the Case of Thailand.” 2 Evidence indicates that the competitiveness of Thai industries in the manufacturing sector had begun to erode during this period as productivity increases were outstripped by wage growth.



significant retrenchments in the formal sector. In addition, informal employment (proxied by self-employed and unpaid family workers) rose during the crisis.

13. With the onset of the crisis in 1997, the Thai government responded to the adverse labor market impacts mainly by ramping up existing labor market interventions (i.e. employment services, skills training, and job creation) along with some policy changes. While extensive evaluations of these programs are not available, recent studies have highlighted some measures needed to facilitate a well-functioning labor market, including: (i) development of better qualitative and quantitative indicators of labor market trends and program performance which can inform policymaking; (ii) design of appropriate regulations and standards (e.g., workplace health and safety) which benefit workers while ensuring that excessive costs are not imposed on employers; (iii) improvements in the design and management of labor programs (e.g., employment services and job creation) to ensure greater cost effectiveness; and (iv) use of appropriate income support measures to mitigate the risk of unemployment.

Social Insurance

14. The pre-crisis social insurance system included programs designed to help mitigate the risks of sickness and disability for formal sector workers (i.e. a workmen’s compensation fund, health insurance, disability and death benefits, and maternity benefits), pension plans for public sector workers, and several private sector provident funds for old-age security. Several major reforms of the social insurance system began in late 1998, such as the introduction of an old-age pension scheme separate from the provident funds as well as a child allowance system. The most recently introduced social insurance program is the unemployment insurance (UI) scheme, which aims to help mitigate the risks of cyclical (versus structural) unemployment.

15. A number of concerns have been expressed regarding Thailand’s current social insurance programs. For example, questions have been raised as to the financial sustainability of the new pension system. One study suggests that under reasonable scenarios of population demographics, current regulations imply that the pension fund will be exhausted between 2040 and 2050.3

16. Most existing social insurance programs benefit workers in the middle and upper income categories, which is to be expected as these programs are contributory and are not designed as poverty alleviation programs. However, to be effective risk mitigation instruments, they should strive to cover a significant proportion of the eligible population. Evidence in Thailand suggests that coverage has been quite low, with 64% of the beneficiaries of the social security scheme belonging to the top two consumption quintiles but less than a third of the eligible population in these quintiles receiving benefits. Coverage is significantly lower among the poor.4

3 Asian Development Bank (2002). “Technical Assistance to the Kingdom of Thailand for Pension System Design”4 Source: Thailand Social Monitor VI, 2001.



C. Overview of the CDP-SP II Program

17. The CDP-SP was developed to help Thailand respond to the challenges identified above through a balanced social protection strategy which would complement existing informal risk coping mechanisms with a more diverse set of public and market-based risk reduction, mitigation, and coping mechanisms. The specific objectives of the CDP-SP were to:

Close the equity gap by focusing services more effectively on those most in need—the poor, the vulnerable, the jobless;

Close the coverage gap of programs so that the benefits of these programs reach a critical mass of intended beneficiaries;

Improve the efficiency and cost effectiveness of programs through application of performance-based management approaches; and

Search for a more productive balance between the public and the private sector in the delivery of services.

18. The CDP-SP was a multi-year rolling reform program, implemented through a series of capacity building and technical assistance activities. It was not intended to be a comprehensive program of reform in social protection; instead, it provided an evolving framework for reforms in selected priority areas as identified by the government. This process aimed to assist Thailand in developing policies and interventions that would promote inclusive, equitable, and flexible labor markets and offer the poor and unemployed better social protection services.

19. As noted above, the CDP-SP II started in August 2003 and was implemented by agencies in four Ministries: MOL, which acted as the Project Coordinating Unit (PCU); MSDHS; MOF; and the NSO. Although the World Bank was the main donor partner for the CDP-SP, the program was designed to complement the activities of several partner and donor agencies, including the International Labour Organization (ILO), Japan International Cooperation Agency (JICA), Asian Development Bank (ADB), Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ), United Nations Development Programme (UNDP), and the Australian Agency for International Development (AusAID). The CDP-SP II was supported by US$985,000 in grant resources from ASEM.

20. The main CDP-SP II components and corresponding budget allocations were:

Social Assistance, implemented by MSDHS (US$163,500);

Employment Services, implemented by the Department of Employment, MOL (US$133,000);

Unemployment Insurance, implemented by the Office of Permanent Secretary, MOL (US$28,000);

Social Protection Data, implemented by the NSO, Ministry of Information and Communication Technology (US$151,500);



Occupational Safety and Health and Workmen’s Compensation, implemented by the Department of Labor Protection and Welfare and the Office of Workmen’s Compensation Fund, MOL (US$155,000);

Social Protection for Informal Workers, implemented by the Fiscal Policy Office, MOF (US$115,000); and

Coordination and Dissemination, implemented by the PCU set up under the Office of Permanent Secretary, MOL (US$239,000).

21. This section summarizes the main objectives of each component of the CDP-SP II, as envisaged at the time of the CDP-SP II launch. Details on the specific activities under each component and their outcomes are described in the next section. Notably, the planned program of activities under some components changed in the course of implementation, taking advantage of the flexible design of the CDP-SP II which allowed for modifications as needed to respond to the government’s evolving priorities.

Social Assistance

22. The timing of the CDP-SP II corresponded with the creation of the MSDHS, a new Ministry handling social welfare issues which was separated from the previous Ministry of Labor and Social Welfare. The MSDHS faced a number of challenges, including: demand for residential care which far exceeded the capacity of the welfare centers run by the Department of Social Development and Welfare; lack of information on the impact of MSDHS cash transfer and in-kind assistance programs for disadvantaged persons and families; and inadequate knowledge on the population and characteristics of target groups. In addition, the government’s reform and decentralization policy required MSDHS to shift its role toward policy formulation and administration and to transfer operations of its programs to the local administration units.

23. To respond to these challenges and execute its social assistance responsibilities efficiently, the MSDHS needed to develop or improve its capacity in many areas, such as: understanding of the target groups, their problems, and options; developing a clear definition of the target groups and targeting mechanism for programs; designing a mix of relevant and effective social assistance programs; developing the information system and monitoring mechanisms; creating an impact evaluation system for social assistance programs to measure their effectiveness and efficiency; and building expertise to provide training, assistance, and support to local administration organizations in the delivery of social assistance.

24. To help build the capacity of MSDHS in these areas, the social assistance component of the CDP-SP II aimed to:

Enhance coverage, targeting, and efficiency of ongoing cash/in-kind transfer programs administered by MOLSW (later MSDHS), civil society organizations (CSOs), and other partners;

Adopt a bottom-up approach for management and delivery of social assistance programs through enhancement of the role of village welfare centers, local governments, and nongovernmental organizations (NGOs); and



Develop an information system which identifies demand and supply of cash/in-kind transfer programs.

Employment Services

25. The Department of Employment (DOE) under the Ministry of Labor (MOL) has primary responsibility for providing employment services for job seekers in Thailand through its 75 Provincial Employment Office and 10 Employment Offices in Bangkok. In 2003, with an estimated 700,000 new entrants to the Thai labor market each year, it was found that the share of job placement for these new entrants in DOE’s offices was less than 5%. With services confined to local job vacancies and inadequate labor market information available, the potential for increasing the share of job placement in these offices was limited.

26. DOE has also provided services for workers seeking to go to work abroad as well as private agencies. Each year, more than hundred thousands of Thai workers apply to work overseas for higher wage opportunities, and an estimated 500,000 Thai workers—recruited and sent abroad mostly by private agencies under the approval and supervision of DOE—have been working abroad. The DOE has also been in charge of issuing work permits for foreigners to work in Thailand. However, loopholes in the existing laws and regulations were found to be open to abuse, resulting in incidents of misconduct and conflict in approving and supervising Thai workers going to work abroad and foreign workers in Thailand. Although the Thai Parliament had enacted the “Administrative Procedures Act B.E. 2539” law to ensure that the good governance principle was followed in all government offices, there were concerns that the regulations and procedures used by DOE might not conform with this principle.

27. To improve its job placement role and to ensure good governance in employment services, the DOE needed to improve its capacity in several areas, including: labor market information to better inform job seekers of placement opportunities; dissemination of labor market information to reach more job seekers outside of the groups reported to the employment offices; employment services that provide information on vacancies outside the area covered by each employment office; vocational guidance services to help inform job seekers on how to improve their chance of placements; and development of the legal framework to ensure transparency and justice for job seekers.

28. Therefore, the main objectives of the employment services component were to:

Improve the relevance, timeliness, analysis, and adequacy of labor market information for employment policy and planning;

Develop institutional, management and program level reforms aimed at enhancing the coverage of services provided by public and private providers and ensuring that they are delivered in an equitable and cost-effective manner; and

Develop a legal and regulatory framework for private sector providers to expand their activities in the long run.



29. Support under this component was coordinated with partners such as ILO, JICA, and GTZ, which were working with the DOE in improving of vocational guidance and employment services.

Unemployment Insurance

30. As noted above, the Thai government introduced a national UI system during the CDP-SP II implementation period. Some form of income support for the unemployed was recognized to be an important risk mitigation measure, as receiving such benefits would prevent workers from experiencing large consumption losses and falling into poverty. However, international evidence pointed to several weaknesses of such UI schemes, such as the risk that overly generous benefits would create reemployment disincentives and wage pressures which could increase unemployment. Since UI was new to Thailand, the reaction of the labor market to the program was not yet known so it could not be concluded whether the parameters set were appropriate. The UI program needed to develop the capacity to understand the behavior of the labor market and monitor changes over time.

31. The original objectives of this CDP-SP II component were to:

Assist the government in assessing the overall appropriateness of UI and the role of MOLSW (later MOL) in the development of a UI scheme; and

Assist the government in the design of a UI scheme that is appropriate in the Thai context.

32. Support in this area was coordinated with the ILO and JICA, which were providing support on UI operational procedures, actuarial procedures, and the development of a monitoring and evaluation system for the UI program.

Social Protection Data

33. Following the 1997 financial crisis, Thailand experienced increased demand for more comprehensive and timely data, particularly on employment, unemployment, income, expenditure, and establishment statistics. However, the Socio-Economic Survey (SES) had not been improved or revised significantly for some time, which led to complaints about its content, timeliness, and dissemination. In the case of the Establishment Surveys, which were important for analysis of occupational demands and working conditions, data quality was low and unreliable due to very low response rates resulting in part from incomplete and outdated listings of enterprises. Therefore, the production of data related to social protection did not fully respond to the needs of end-users such as the MOL.

34. Another challenge for social protection data was lack of coordination among agencies. Historically, Thailand’s statistical production was a decentralized system in which each agency might produce data and statistics for their own use, with the NSO in charge of coordinating among agencies. However, this task was not emphasized in the past, so statistics were being produced in various agencies without efforts to link or share data. As a consequence, Thailand’s data and statistics were likely to be duplicated, incomplete, scattered, and based on different standards, which resulted in



inefficient use of resources and incomprehensive data for the planning and administration of the country. The NSO thus needed to develop a mechanism to coordinate all the producers of data and statistics and formulate a plan for the complete development of the country’s statistical system.

35. In coordination with the CDP for Poverty Analysis and Monitoring (CDP-PAM), the CDP-SP II provided technical assistance for the NSO to improve its statistical production and coordination. The objectives of CDP-SP II support were to:

Support improvements in survey instruments which seek to assess the socio-economic and labor conditions in the country and

Ensure that the data are appropriately utilized for policy and planning purposes, and develop timely and user-friendly dissemination practices.

Occupational Safety and Health (OSH) and Workmen’s Compensation

36. Despite efforts in both OSH law enforcement and promotion of OSH practices, Thailand has faced significant challenges in this area, including low compliance with OSH standards among enterprises, a high rate of workplace injuries and accidents, and limited capacity to perform OSH inspections, with only 700 labor inspectors—less than half of whom had been trained as inspectors—for over 350,000 establishments. These problems have been attributed to factors such as: the lack of a coherent policy framework and comprehensive database on OSH; inadequate coordination among the Department of Labor Protection and Welfare (DLPW) and other agencies involved in OSH activities, including the Ministry of Industry and Ministry of Public Health, which resulted in confusion, duplication of efforts, and incomplete information; and limited financial and human resources.

37. Apart from the DLPW, the Social Security Office (SSO) under the MOL has been involved in OSH for Thai workers through the Workmen’s Compensation Fund (WCF). Although WCF operations have been considered smooth and efficient, questions were raised on whether contribution rates among employers—which have been set between 0.2% and 2% of wages depending on the type of industry—were fair and whether the WCF was financial secure and sustainable in the long run. Moreover, although experience ratings were used to reward safe workplaces and penalize hazardous ones, they failed to encourage employers to implement prevention measures to avoid the penalty. This failure was attributed to the lack of in-house technical capability to apply actuarial mathematics to the valuation of obligations and rate setting.

38. In response to the needs of the DLPW and SSO, the CDP-SP program in this area aimed to:

Improve OSH standards and regulations and the level of compliance;

Develop innovative programs and incentive schemes to improve workplace safety, especially in small and medium sized enterprises (SMEs); and

Improve the coverage and efficiency of the workmen’s compensation scheme to better assist workers affected by OSH accidents.



39. As in the first phase of the CDP-SP, activities in this area were coordinated with ILO and JICA, which were key partners in the enhancement of OSH in Thailand.

Social Protection for Informal Workers

40. After the introduction of the Old Age Pension System (OAP) for the formal sector in 1999, it became evident that the OAP alone could not fulfil the diverse objectives of old age security and financial sustainability. It also left 24 million workers in the informal sector, or about two-thirds of Thailand’s workforce, without social security or pension provisions. Given the country’s aging trends, one of the main concerns regarding informal workers was their income replacement after retirement. Unless a system of savings or pension was established for these workers, the country would face with the huge challenge of providing welfare for this group at old age. However, due to limited information on the characteristics and needs of this group, the government did not have the knowledge needed to develop options for a savings system for pension and welfare for informal workers.

41. Therefore, social protection for informal workers was added as a new area for the second phase of the CDP-SP.to help the government explore and develop ideas for this reform agenda. The main objectives of this CDP-SP II program were to:

Develop a sound and fiscally sustainable pension system for informal workers and

Examine arrangements necessary to move the Thai system to a multi-pillar system in which informal workers are included.

42. This component complemented the continuing support provided to the government by the ADB in developing a pension reform agenda.

Coordination and Dissemination

43. Given the wide-ranging nature of the CDP-SP components and the possible linkages among them, the CDP-SP II provided support for project coordination and management. In line with the objectives of the CDP, this component also supported dissemination of the outcomes and experiences of the project to the wider policy community both within Thailand and in the region.



D. CDP-SP II Activities and Outcomes

D.1 Social Assistance

44. Activities . To help build the capacity of the MSDHS so it could perform its role in social assistance effectively, the CDP-SP II supported the following activities:

Risk and Vulnerability Assessment (RVA) – a study to demonstrate the analysis of problems facing vulnerable groups, their options, and the effectiveness of existing social programs in alleviating the impact of the problems. This activity was divided into four sub-projects:

1. Measuring Deprivation and Vulnerability: Toward a Practical Approach in Thailand – consulting services to analyze deprivation and vulnerability under the Thai context and provide recommendations on the definitions and methods for their measurement. The study applied the concept of social risk management to Thai society. The consultants also provided examples of the RVA analysis and measurement by using SES data of 2002 and 2004.

2. Social Risks and Response in Thailand: Analysis of Household and Individual Survey Information – consulting services to organize and analyze series of ten years of the Labor Force Survey (LFS) and SES data. It reported the size and characteristics of Thailand’s informal workforce as well as suggested the size and characteristics of vulnerable households of Thailand from analysis of 2002-2004 SES data. The study found that the majority of informal workers are farmers and are generally older, less educated, and earned less income than workers in the formal workers. They are also subject to more variations in earnings and are more vulnerable.

3. Thailand Social Protection Institutional Assessment – consulting services to analyze existing social protection programs and measures against risk management needs. The study examined the social protection programs offered by MSDHS and found gaps in terms of coverage and cost effectiveness. The study made recommendations for integrated social protection program management to streamline and coordinate programs for the target groups or recipients.

4. Capacity Building on RVA – three training workshops held in tandem with the preparation of the RVA studies. The workshops covered the concepts and approach used for the RVA, data sources and data management for the RVA, and the analysis and techniques used as well as implications of the RVA results, respectively. Participants included staff from several bureau and offices under MSDHS as well as officers from the SSO, MOL Office of the Permanent Secretary of MOL, and MOF Fiscal Policy Office.

Pilot of Key Performance Indicators (KPIs) for MSDHS Welfare Centers – consulting services and a series of workshops to develop and test KPIs for DSDW welfare centers providing residential care services to children, disabled, and the elderly. The KPIs for outputs and outcomes of the services were developed then tested in welfare centers in terms of data collection, compilation, and reporting. The results were later discussed at the final workshop, and modifications were made to the KPI sets to ensure that they were adequate,



useful, and feasible given the data available. From the final sets of KPI, a manual was produced for the three sets of KPI for the target groups, together with forms and questionnaires for use in data collection and reporting by the welfare centers and DSDW.

Pilot Testing of the Curriculum for Advanced Training of Social Workers – a workshop organized by DSDW to test and improve the training curriculum developed during the first phase of CDP-SP. Participants included mid-level management and senior staff of MSDHS provincial offices, Regional Technical Support offices, and several DSDW divisions. The curriculum was for a 30-day training emphasizing new concepts of social development such as community empowerment and participation.

Capacity Building on Social Safety Net Policy – support for two officers from the Office of Permanent Secretary of MSDHS to attend the World Bank’s Social Safety Net Policy course in Washington, D.C.

45. Outcomes . From the RVA studies, the MSDHS gained knowledge about social risks and the vulnerability of the target groups of its social assistance programs. It also developed an understanding of the method for doing such analysis. As a result, the Ministry would like to conduct more in-depth studies, including detailed RVAs for specific target groups such as the elderly, disadvantaged women, and disabled and detailed RVAs on the impact of specific events such as drought, floods, and natural disasters such as the tsunami. In addition, as the RVA focused on analysis of vulnerability to poverty, which is only one cause of social problems for MSDHS, the Ministry plans to use the RVA approach to conduct more studies on other causes such as social misconduct and behavior. It also plans to study the linkages between poverty and social problems in Thai society further. Going forward, findings of the RVAs are expected to inform the formulation of social protection policies, strategies, and programs. The MSDHS would like to further strengthen its capacity to conduct the RVA on a continuous basis to monitor changes in society and social problems.

46. The KPI for welfare centers have been included in DSDW’s regular annual performance monitoring and evaluation of the centers for the three target groups. The DSDW plans to use the knowledge and lessons learned to develop KPIs for all other target groups under its services. Building the capacity to monitor and evaluate the performance of the welfare centers is particularly important to DSDW since the centers will be transferred to local administration in the near future. The Ministry also plans to use these KPI for the monitoring and evaluation of private service providers, as well.

47. Based on evaluations conducted before, immediately after, and one month after the workshop, the results of the pilot testing of the curriculum for social workers were found to be satisfactory. Most participants benefited from the training and were able to use the lessons to enhance their work, especially in working with communities. Parts of the curriculum were later used as modules in DSDW’s regular staff training. The curriculum has also been proposed for use in the Ministry’s regular staff training, as well.

48. In the capacity building activity, the officers trained were the principal personnel to coordinate and supervise the consulting services for the RVA studies. The social safety net policy course helped develop their understanding of the concepts, thereby



increasing their capacity to work with the consultant team. The officers also participated in the design and organization of the RVA capacity building workshops to facilitate the transfer of RVA techniques to MSDHS staff.

D.2 Employment Services

49. Activities . To build the capacity of DOE to fulfill its job placement role and to help ensure good governance in employment services, the following activities were supported under CDP-SP II:

Capacity Building for the Labor Market Research Division (LMI Office) – two training workshops on (i) Labor Market Analysis and Labor Economic Principles and (ii) IT Applications for Labor Market Analysis. About 30 LMI staff participated in these workshops, which covered techniques and principles related to the analysis of labor market information, data sources, data management, and report writing. Following the workshops, the staff were divided into groups to conduct an analysis of situations and trends of each regional labor market.

Legal Study for the Approval and Supervision of Private Employment Agencies Sending Workers to Work Abroad, and for Foreigners to Work in Thailand – three consulting services, namely: (i) A Study of Administrative Procedures and Executive Orders for the Supervision of Private Employment Agents Sending Workers Abroad; (ii) A Study of Administrative Procedures and Executive Orders for the Approval of Workers Going to Work Abroad; and (iii) A Study of Administrative Procedures and Executive Orders for the Supervision of Foreigners Working in Thailand. The studies found that the Recruitment Service and Job Seeker Protection Act of B.E. 2528, which was the basis for executive orders and administrative procedures for the supervision of Thai workers going to work abroad, and the Working of Alien Act B.E. 2521, which was the basis for supervising foreign workers in Thailand, were unclear or inadequate. In addition, many administrative procedures and executive orders had not been in conformance with the good governance principle. The consultants recommended legal amendments and modifications to each administrative procedure. They also produced manuals on how good governance according to the Administrative Procedures Act B.E. 2539 should be applied to each of DOE’s administrative procedures and executive orders. Their findings and the manuals were discussed at workshops organized by the DOE.

Capacity Building on Client-Oriented Job Placement Services – two workshops to test the new curriculum for the training of employment services staff. The curriculum, which had just been developed by DOE’s Employment Service System Development Division and had never been used, emphasized the client-oriented approach to employment services. The training course included techniques for competency assessment of job seekers, analysis of employer’s requirements, recruitment considerations, job seeker interviews, industrial environment, and service-minded operations. A total of 105 employment service staff from DOE’s employment offices participated in the workshops.

Development of Provincial Labor Information Center (PLIC) – consulting services to facilitate the development of PLIC in MOL’s Provincial Labor



Office (PLO) located in all provinces of Thailand. The consultant designed the information system and reporting system for a potential PLIC, taking into account data that could be made available to the PLO. The potential of the PLO to perform the functions of PLIC as designed was then analyzed, and it was found that PLOs in general had adequate IT equipment and access to the data needed to perform the PLIC functions. It was also determined that although no specific budget was set for PLIC work, the requirements were minimal and within the capacity of the PLO to manage. The major difficulty identified was the availability of qualified personnel in the PLO. In most cases, the qualified staff were being fully utilized already and did not have enough time to work on the PLIC, while staff who were available did not possess the skills required. The consultant recommended that MOL make the PLIC a policy priority and that PLOs be empowered to hire local staff to perform the PLIC functions or train more staff.

50. Outcomes . For the capacity building for LMI activity, the results of the regional labor market analyses were presented to DOE and MOL staff. In 2005, the same group of staff conducted research on Labor Demand and Projections for Seven Strategic Industries of Thailand, which was presented to MOL staff, academics, and the public in a DOE-sponsored workshop. Based on the positive feedback from various stakeholders, the DOE plans to organize such workshops annually to present and discuss research on the Thai labor market situation.

51. The DOE agreed with the findings and recommendations of the legal study activity. It plans to print and distribute the manuals to all 86 employment offices throughout the country. The DOE also plans to include recommendations from the studies in the proposed amendment of the Recruitment Service and Job Seeker Protection Act of B.E. 2528 and the Working of Alien Act B.E. 2521. The DOE expects that job seekers in the future will be better protected and served with the improved administrative procedures and that fraud and conflicts in these areas will be reduced significantly.

52. Pre- and post-test results of the capacity building workshops indicate that trainees’ knowledge and skills were improved by the training, proving the effectiveness of the curriculum. The trainees confirmed that the knowledge they gained was useful and applicable to their jobs. The division incorporated the comments and observations from the workshops into the new curriculum and has proposed to DOE that the curriculum be adopted into its regular staff training. This capacity building is especially important in light of decentralization in which employment offices will be transferred to the local administrations. The training course developed is viewed as essential for building the capacity of local administration staff to handle services efficiently and maintain service standards after the transition.

53. The MOL has accepted the recommendations of the PLIC development activity. Based on the findings and recommendations of the study, the Office of Permanent Secretary plans to propose the PLIC policy to the MOL for decision and a mandate to implement the PLIC in the following budget year. If the PLICs operate effectively, it is expected that both the MOL and Provincial Governor (CEO Governor) would be better informed of the labor market situation and therefore able to develop more appropriate labor market administration policies and programs.



D.3 Unemployment Insurance

54. Activities . Based on the availability of alternate funding for the originally planned activities, this component was modified during CDP-SP II implementation. To build the knowledge base on UI and the Thai labor market, this component supported consulting services for a study on possible effects of changes in minimum wages on the UI program. Using 1990-2000 LFS data, the study found that minimum wage regulation compliance rate for urban workers aged 20-50 had improved considerably from 1990 to 2000. It investigated the variations of minimum wages over time and across the provinces to estimate the effects of changes or differences in minimum wages on the labor market, and it found that the changes had little or inconclusive effect on total and most types of employment. A clear negative effect of the change in the minimum wage was found only in manufacturing employment, while a positive effect was found in urban manufacturing employment. It was noted that the study covered the period of Thailand’s financial crisis, in which unemployment increased and the minimum wage was frozen for several years, which may have affected the analysis results. It was also noted that decentralization of the minimum wage to the provinces only started in 2001, so the effect of provincial variations may not have been captured.

55. Outcomes . The MOL accepted the study and appreciated the opportunity to learn the techniques used in the analysis. The study serves as an example of how to analyze the effects of policy interventions on the labor market. Within the MOL, it was speculated that minimum wage changes had traditionally been passive responses to inflation and increased cost of living, so they had been following rather than influencing the economic situation of the country. The labor market might have adjusted itself before minimum wage changes took place, which likely explains the study findings. Since this pattern could change in the future, the techniques learned from this study will be useful for MOL’s monitoring of the labor market.

D.4 Social Protection Data

56. Activities . In coordination with the CDP-PAM, which supported the NSO in developing panel data for the SES, the CDP-SP II supported the following activities to improve NSO’s statistical production and coordination:

Development of Thailand’s Data Directory – a series of eight workshops organized by the NSO with all government agencies to develop the data directory. As a result of the workshops, a data directory was produced which lists over 20,000 data items available in about 200 departments of 20 government Ministries. The listing was prepared by agency name and by sectors according to the UNDP’s data classification system.

Pilot to Develop the Labor and Social Welfare Statistical Master Plan – consulting services to develop a statistical master plan for the labor and social welfare sectors. The consultant analyzed the data requirements and availability of data for each sector and proposed the master plan for developing the complete statistics of the country. The master plan included data mapping, which was the list of data and statistics that should be made available, the agencies that should be responsible for their production, and the plan for developing capacity to produce such data and statistics. The study was done with cooperation from NSO and in close consultation with agencies involved in the two sectors.



Development of the Common Sampling Frame for Establishment Surveys – consulting services to develop the listing of establishments from existing registrations for use as the common sampling frame for establishment surveys. The consultant studied over 20 agencies that registered establishments according to requirements of the laws relating to their activities. From these agencies, four were selected as sources for the listing based on their complete coverage and significance: Department of Revenue, Department of Business Development, the Social Security Office, and the NSO census. The consultant then studied the detailed structure, format, storage, and updating procedures, developed the protocol for receiving the data, and merged them into a single database containing the complete list of Thai establishments. The consultant developed the system architecture, database structure, and necessary software.

Capacity Building for NSO Staff – support for officers from NSO to attend the World Bank Institute’s Labor Market Policy Workshop in Washington, D.C.

57. Outcomes . After the Data Directory was completed, the NSO developed internet-based software for providing directory services to users. The software included a search mechanism and display of the data items and their attributes. The Data Directory was then put on the NSO website to enable the public to access it through the internet. The NSO also disseminated the Data Directory on CD-Rom to all agencies that participated in its development. The Data Directory has been useful in presenting the overall picture and situation of data availability in Thailand. It has also served as a major information source for the development of the Statistics Master Plan by NSO in later activities.

58. The proposed master plans have been accepted and agreed upon by the NSO and officers from agencies participating in the consultative process. The NSO has now embarked on the development of master plans for the remaining 21 sectors, using the approach and method learned from the CDP-SP II activity. The master plans developed under the CDP-SP II have provided guidelines for NSO in coordinating and administering the production of the data and statistics throughout the country. The activity has also helped NSO learn about the tasks and capacity needed to serve as the center of administration of the country’s statistical system. In the workshop to discuss the findings of the study, the NSO concluded that major reforms in its organizational structure and operations were needed urgently to implement the master plans. It intends to develop a reform plan which will be proposed to the government.

59. The NSO accepted and agreed with the Common Sampling Frame study and has decided to adopt the system. It plans to organize an executive briefing to make a formal request for cooperation from the agencies identified as the data sources. After the formal agreement is reached, the full data sets will be acquired and used to create the database with complete listing at NSO. The listing would be tested and used in the next round of the Establishment Survey. Once the accuracy of the new listing is confirmed, the NSO will no longer need the manual listing. The NSO also plans to provide the listing on its website as a service to other agencies.

60. The capacity building activity helped the officer in charge of the LFS understand labor market issues and gain insight into labor market policy issues. As a result, the questionnaires and reporting of the LFS had been improved and adjusted to better address labor market issues policies. The improved LFS is expected to be more relevant



and to provide data and statistics responsive to the needs of the Thai labor market and policymakers.

D.5 Occupational Safety and Health (OSH)

61. Activities . The CDP-SP II supported the DLPW and SSO in the following:

Improvement of OSH Management, which was divided into four sub-projects:

1. Study on International Experience on the Establishment and Operations of OSH Autonomous Public Organization (APO) – consulting services to review international experiences on OSH APO. The consultant studied OSH APO experiences in Australia, Canada, Germany, Japan, Korea, Malaysia, and the United States. The study reviewed the objectives, legal status, organization structure, and administration of the APOs. The study found that while organization structure and programs and activities of the APOs might be different, the objectives, policies, funding, and major functions were mostly similar. The OSH APOs have been the focal point in promoting safety and health in workplaces and preventive measures and had put OSH on the national agenda.

2. Study on International Experience on the Enforcement of OSH Law and Regulations – consulting services to study international experiences on OSH law enforcement. The consultant studied OSH law enforcement in South Africa, 11 European countries, 6 Asian countries, Australia and New Zealand, the U.S.A., and Canada. Using country examples, the study suggested that OSH law enforcement be under the umbrella of a National OSH Program which links to targets for improved accident rates. The objective of OSH law enforcement should be to improve OSH standards and compliance rather than to penalize establishments, and establishments should be encouraged and even assisted to comply with OSH regulations.

3. Study on International Experience on the Developing and Operating OSH Information System – consulting services to study international experiences on OSH information systems. The consultant studied OSH information systems from Australia, Canada, Germany, the United Kingdom, Japan, Korea, Malaysia, Singapore, and U.S.A. The study found that a wide variety of OSH information systems among the countries studied. The study suggested that for Thailand, in which a large segment of workers in the informal sector are not covered by the WCF, a good combination of survey information with the WCF’s records, together with examples reported in the study, should be used to create a complete national OSH information system.

4. Study on the Establishment of Thailand’s OSH APO, OSH Law Enforcement, OSH Information System, and OSH Government Agency –consulting services to review the international experiences on OSH in the above-mentioned studies, analyze the present OSH situation and context of Thailand, and propose the management structure of Thailand’s National OSH Program. The structure included OSH APO and the Department of OSH. The APO’s role would be to promote OSH standards and prevention activities as suggested by the international study. The DOSH would be the government unit for the OSH administration, which would administer the



legal infrastructure, inspections, and law enforcement; be the central OSH information system; and provide support to the APO and other private organizations engaged in OSH activities. The study outlined the legal status, management structure, funding, roles and responsibilities, and programs of the two organizations.

Improvement of Compensation Rate Settings and Actuarial Calculations, which was comprised of two sub-projects:

1. Study to Develop the WCF Simulation Model – consulting services to develop a simulation model for WCF to investigate the impacts of using different methods of contribution rate settings on its funding and financial status..The consultant developed three WCF simulation models for the study. As WCF had only complete data sets in electronic files from 1998 to 2004, the consultant had only six years of injury and illness data. After initial analysis, no single pattern could be used to represent the occupational risks with confidence. As a result, the three most likely situations were modeled for WCF using occupational risk, financial obligations of compensation payment, and discrete experience ratings, respectively, for calculation of contribution rates. During the study, the consultant provided training for staff of WCF’s Rate Setting Division on the model and computer programs.

2. Capacity Building for WCF Staff – series of four workshops aimed primarily at building advanced actuarial capacity for WCF staff. The workshops covered actuarial training, IT applications for actuarial calculations, the WCF simulation models, and new directions for actuarial valuation and rate setting. The fourth workshop on new directions was organized to disseminate the results of the simulation study and to discuss the likelihood of a new rate setting policy with WCF and SSO management. The managers agreed with the proposed new approach to rate setting using actuarial techniques, which would be more responsive to the risks of the industry and establishments. However, they expressed concern over the accuracy of the data and the need to improve the IT operating system so the data could be more reliable and give accurate results.

62. Outcomes . The DLWP agreed with the recommendations of the OSH management studies. It plans to incorporate the findings in the Second OSHE Master Plan for 2007-2011, which will highlight the organizational reform and National OSH Program as recommended by the studies. The Master Plan is currently being drafted and is expected to be presented to the Cabinet for approval in 2006. In the meantime, the DLPW will use the information gained from the CDP-SP II studies to improve the existing OSH information system, training of inspectors, and administration of inspections.

63. The Compensation Rate Settings and Actuarial Calculations activities created capacity within the WCF to perform actuarial calculations and investigate policy options. The WCF staff, after gaining an understanding of the principles behind the construction of the simulation model, were able to develop two models in addition to



the three developed by the consultant. The WCF has established a technical collaboration with the WCF office (CSST) of Quebec, Canada. The WCF reorganized its Rate Setting Division, improved its information system, and developed a three-year reform plan. It is expected that the complete reclassification of employers will be completed within 2006, the calculation and report of actuarial liabilities within 2007, and the implementation of the new method of compensation estimation and rate setting in 2008. After the reform, it is anticipated that employers and employees will receive services that are fair and efficient, minimizing the costs of injuries and illness to employers with incentives to implement preventive measures while at the same time providing adequate protection for workers.

D.6 Social Protection for Informal Workers

64. Activities . To help inform policy formulation for social protection for informal workers, the CDP-SP II supporting the FPO in the following activities:

Social Risks and Response in Thailand: Analysis of Household and Individual Survey Information – consulting services to analyze series of 10 years of the Labor Force Survey (LFS) and SES data, as described under the “Social Assistance” component above5.

Study of Community-Based Pension System for Informal Workers – consulting services for conducting participatory-style research on the feasibility of a community-based pension system for informal workers. Ten communities, which already had savings cultures, were selected to be pilot sites for the study. All the pilot communities reported the desire and need for the pension system, which should be an individual account or “defined contribution” system. They suggested that the system be managed, and detailed regulations determined, by the community. Some communities proposed that the government help manage the investment of the fund with guarantees on the investment as well as the return, which should be subsidized. The government could also play a role in registering the savings groups and auditing their operations. In addition, communities expressed the desire for a Welfare Fund, a system in which members would make regular contributions to the fund in order for the fund to provide benefits to members in need. Benefits could include compensation for health care expenses (except those covered by the 30-baht scheme), disability, maternity, child support, death, income replacement, and minimal pension. The system could be a “defined benefit” system with funding on a pay-as-you-go basis.

Social Risks, Social Protection, and Informal Sector in Thailand: Preliminary Feasibility of Savings and Pension System Options – consulting services to conduct a pre-feasibility study of savings and pension system options for informal workers. The consultant studied the information provided by the report on Social Risks and Responses described above and identified possible options for the pension system for informal workers. The study suggested that the pension system for Thai informal workers should be an individual account savings or defined contribution system on a voluntary basis. It was strongly suggested that the government assist these funds with management and investment of the funds, perhaps with subsidies. The study also recommended

5 See paragraph 44, first bullet, number 2, page 11



that these pension systems be closely tied to social welfare for the elderly as some informal workers could not afford to save or contribute enough regularly to earn the benefits of a pension.

Pilot Project on Pension and Welfare for Informal Workers Using Community Mechanism – a series of workshops designed for experimenting with the establishment of a community pension system in pilot tambons. Three tambons in three different provinces were selected for the pilot. A series of five workshops was held in each tambon to draft the regulations, disseminate information, and recruit potential members for the pension system. It was found that most community members were interested in the scheme, but only a few actually applied for membership due to lack of confidence in the security and health returns on investment of the fund. They were particularly sceptical of the community’s ability to manage investment of the fund. With limited information, knowledge, and opportunity, it was extremely difficult for the community to find investments which were secure and earned better returns than a bank savings account. It was again recommended that the government assist communities in funds investment and management so people could be confident of the fund’s security, as well as support public relations and dissemination of the concepts to the general population.

65. Outcomes . The FPO agreed with the findings and recommendations from the studies. It plans to summarize and integrate the ideas and concepts then propose them to the government through the MOF urgently. If the proposed system is approved, it is hoped that the government will direct the agencies involved to conduct detailed studies for finalizing the system design and develop policies to support the system.

D.7 Coordination and Dissemination

66. To ensure effective implementation of the CDP-SP II, this component covered:

Project coordination, including a project adviser to coordinate activities among the various CDP-SP II components and with all related parties, as well as to provide technical support to the activities to ensure smooth and efficient implementation. It is expected that the capacity built for staff of agencies working with the CDP-SP will enable them to move forward with implementation of their social protection programs and develop follow-on activities.

Dissemination activities, including stakeholder workshops to disseminate the outcomes and experiences of the project and to receive feedback from stakeholders. Efforts were made to ensure that relevant domestic and international agencies were informed of the CDP-SP’s approach, activities, and outputs and outcomes, as well as implementation experience.



E. Conclusion

67. While the time span and resources of the CDP-SP II would not be adequate to resolve all issues on Thailand’s social protection agenda, the CDP-SP II appears to have made a significant contribution in helping build capacity to address challenges in the selected priority areas. The CDP-SP II also helped inform the development of policy options aimed at promoting inclusive, equitable, and flexible labor markets and improving social protection services for the poor and unemployed. It is expected that the CDP-SP II will serve as a strong starting point or platform for further reforms within these priority areas beyond the end of the program.

Documents

Report v1.2 - documents.worldbank.orgdocuments.worldbank.org/.../705680ESW0P09700of0a… · Web viewAnnex_4_summary_of_activityP097211.docx - 27/06/2012 12:19:00. ii. ClientNameHereReportTitleHereSubtitle/optional