6 June 2024

Thailand’s economy is undergoing major changes, with ominous signs of a downward spiral. The country has been battling slow growth since the Asian financial crisis of 1997-1998, after being a “tiger” economy for close to a decade.

In addition to a series of political crises, the country has also faced several other setbacks, such as the global financial crisis in 2008, the devastating floods in 2011, and the COVID-19 fallout recently.

It has been observed that whenever there is an economic crisis, urban migrants tend to return to the security of their villages.

But the recurring crises have taken a heavy economic toll on people in lower income groups, who are already handicapped by lower levels or poor quality of education.

“Migrants living in big cities like Bangkok have moved back to their hometowns, as they do not foresee a promising future [in the city],” said Nipon Poapongsakorn, distinguished fellow at Thailand Development Research Institute, who led a research team studying migration patterns since 1967 and looked into the causes of why more migrants were moving back to their rural areas.

At present the number of people moving back to rural areas exceeds the number of people migrating in search of jobs to big cities.

There are also cultural factors that influence the migrants and the sufficiency economy philosophy, which makes them view their villages as places to return to, not places to leave behind.

People from rural areas move to Bangkok at a young age after finishing school or college to seek higher-paying jobs instead of working on farms that yield lower income.

Or, they could not find good jobs in second or third-tier provinces close to their villages.

While factories have relocated to the Northeastern region, such as clothes and shoes, and food processing plants, they offer only low-paying jobs.

Moreover most of Thailand’s manufacturers have failed to upgrade their production or move to modern industries, with evidence showing that most of them cannot move up the value chain, according to Nipon.

When migrants get older or reach close to their retirement age, many find it difficult to continually reside in Bangkok due to the high cost of living, or their skills do not match market demand.

On average, four in five among them plan to move back to their rural hometowns before reaching retirement age.

The number of migrants having a bachelor’s degree who return is slightly lower than those with a lower education level, as those in the higher education group are able to earn adequate income for living in a big city, according to the study.

Half of those moving back to their rural towns want to look after their old parents and most of them are women. One-fourth move back to receive land inheritance.

Many do not have job security as they rely on temporary jobs, or work in factories.

When factories close their operations, these workers are unable to find new jobs.

And about one-third experience a personal life crisis through unexpected events, which leaves them financially burdened.

Small land holdings

In an ideal economic model, more people should move out of the agricultural sector and find jobs in manufacturing and services that provide higher income.

When this happens, the number of people working in the farm sector would be smaller and they would own larger farm sizes. Such a development has occurred in Europe.

But Thailand does not follow the European pattern.  More people who used to migrate to cities have moved back to their villages and they now own smaller land plots, especially in the Northeastern provinces.

A survey in 2023 showed that around 40 per cent of respondents owned land plots less than 4 rai (0.64 hectare) in area, up from 20 per cent in a 2010 survey.

The average household had 19.69 rai of land in 2010 but landownership fell to 15.13 rai in 2019, according to Nipon.

“The alarming issue is that migration out of rural areas has decelerated, but reverse migration — those who go back to their villages — has increased, leading to smaller size of  farmland ownership per family.

This could potentially cause a truncated agricultural transition,” according to the study.

Poor people do not have much choice; they either move back to their hometown, go to work on farms in Israel or seek jobs in Europe, Nipon lamented.

A part of the problem is that economic development has been concentrated in Bangkok and a few provinces in the Eastern Economic Corridor.

So people have to move far away from their homes to work in Bangkok or the Eastern provinces.

Had Thailand’s economic development been more decentralized, people would have worked close to their hometowns.

For example, people living in small cities in Europe or Japan often ride trains to work in neighbouring larger cities, said Nipon.

What are the solutions?

The coalition government led by Pheu Thai Party has pledged to modernize the farm sector and promises to increase farmers’ income by as much as three times within four years.

Nipon is pessimistic about Pheu Thai being able to deliver on its claim, explaining that it is almost impossible as each farmer has only a small land plot.

Given this situation, technology can improve the life of farmers only to a limited extent.

The government’s plan to give a cash handout of 10,000 baht each to Thais aged 16 and above, at a total cost of 500 billion baht, would be just for short-term consumption, and not help in the long run, Nipon said.

Cost of living subsidies, such as cheaper cooking gas and electricity bill, would not help much either.

The solution would be to improve education quality that would help people find better-paying jobs.
The government should have strategies and policies to promote regional development.

Tax and other incentives should be offered to attract private investment in a group of provinces, according to Nipon.

By Thai PBS World’s Business Desk