the nation: Thai unemployment set t

[suriya@xxxxxxxxxxxx]

Politics 

      Thai unemployment set to
      soar

      The ranks of unemployed workers in
      Thailand will swell by 59 per cent this year
      as the country sinks deeper into recession,
      possibly triggering social unrest, the Asian
      Development Bank fears. 

      The 1.8 million jobless, representing 5.6
      per cent of the workforce, could become
      the chief policy problem for a country that
      has few social protections and has not
      experienced serious unemployment in
      recent memory. 

      Bong-Suh Lee, an ADB vice president,
      said if the recession continues into 1999,
      the shortage of jobs and tight money could
      trigger social unrest. 

      The ADB expects unemployment to peak
      this year, Lee said. 

      ''Up until now, Asian countries have never
      experienced serious unemployment,'' Lee
      said. ''It wasn't part of the system. All of a
      sudden, it's come up and it could be a very
      big problem.'' 

      Thailand's unemployment rate is expected
      to surge to 5.6 per cent in 1998 from 3.5
      per cent in 1997 and 1.5 per cent in 1996,
      according to a study commissioned by the
      bank. 

      The study says the economic downturn has
      resulted in ''sometimes violent''
      demonstrations by workers who have been
      laid off and an ''apparent resurgence of
      demand for ... child workers,'' according to
      a copy obtained by Dow Jones

      . 

      The ADB yesterday approved a US$500
      million loan to Thailand for a social
      programme aimed at easing the impact of
      the economic crisis, especially on the
      poor and disadvantaged. More funds will
      becoming, Lee said. 

      ''This is the first major assistance for the
      social sector in the current crisis and is the
      biggest social-sector loan ever provided
      by the ADB,'' he said. 

      The loan is part of the ADB's $1.2 billion
      contribution to the $17.2 billion
      International Monetary Fund-led rescue
      package. 

      Pisit Lee-artham, Deputy Finance
      Minister, said the first $300 million will be
      disbursed by this month and the rest will
      be available at the end of the year. 

      The maturity of the $500 million loan is 15
      years, with a three-year grace period and
      the rate of interest is about 6.93 per cent at
      present and will be changed every six
      months. 

      The social programme is specifically
      designed to support poor people who have
      been laid off, students who have to drop
      out of school and other vulnerable groups
      needing access to critical health and
      education services. 

      ''The Thais are a very nice people,'' Lee
      said. ''But if unemployment goes on a long
      time, it becomes a big problem. After a
      while, this could become the most serious
      issue the government would have to
      address.'' 

      Thailand was the first of Asia's miracle
      economies to stumble into crisis in 1997,
      sparking a contagion that rocked financial
      markets worldwide. 

      Since then, Lee said, Thailand has made
      more progress than other crisis-stricken
      countries to reform its economy. The Thai
      government has predicted the economy
      will shrink 3.5 per cent in 1998, but says
      growth will resume in 1999. 

      Still, Thai citizens are only just beginning
      to feel the pain, the ADB report said, and
      unemployment is only just beginning to
      take on serious dimensions. 

      Between January and October 1997, the
      study said, 647 Thai companies reported
      32,214 layoffs. Of those companies, 181
      cited a permanent shutdown of operations,
      44 cited temporary shutdowns and 130
      blamed it on cuts in production. 

      The numbers marked a big increase in
      reported data -- in 1996, 77 companies
      reported layoffs of 5,015 people. The
      report said that large numbers of layoffs
      have probably not been reported. 

      Three out of four of the reported layoffs
      were in the manufacturing sector. Nearly
      one-third, or 11,713, occurred in
      metropolitan Bangkok. 

      Nationwide, the hardest-hit industry after
      manufacturing was the retail and
      wholesale industry, where 4,251 people
      were laid off. In construction, 3,076 people
      were laid off. 

      In the real-estate and finance industries,
      2,371 people were laid off -- 2,059 of them
      in Bangkok. The agriculture sector was the
      least affected, reporting just 47 layoffs. 

      - In a related development, Pisit said
      Finance Ministry plans to launch
      international bond in order to raise fresh
      funds. 

      The Nation, Associated Press