The Thai government plans to improve the skills of 100,000 workers in an effort to align with modern technologies.
According to Finance Minister Ekniti Nitithanprapas, speaking as head of the government’s economic team, a major issue facing investors considering Thailand is the shortage of skilled labour.
He said on Thursday that the government will use the Competitiveness Enhancement Fund, which has a budget of 10 billion baht, to implement skills training programmes. The training will be demand-driven, based on market needs, rather than supply-driven, he said.
The Board of Investment (BOI) manages the fund and will coordinate with businesses holding investment promotion privileges to determine the types of labour skills they require, he added.
The BOI can collaborate with educational institutions to design standardised training programmes.
‘Our goal is to improve the skills of 100,000 workers through training over four months so they can enter industrial sectors, addressing labour quality issues among investors,’ said Mr Ekniti.
The government also wants to help small and medium-sized enterprises (SMEs) adapt to new technologies. The BOI has a grant programme for SMEs seeking to transform their operations – up to 20 million baht for small enterprises and up to 50 million for medium-sized enterprises.
However, the board requires SMEs to complete their investments prior to receiving the grant. As SMEs often face liquidity problems, he said he would request financial institutions provide bridge financing for SMEs undergoing a transformation.
The financial institutions will be guaranteed that once an SME’s grant is approved, the lending institution will recover its loan, said Mr Ekniti.
Given these liquidity constraints, the government plans to ask the Thai Credit Guarantee Corporation to provide loan guarantees to help SMEs access financing more easily.
Moreover, the government is launching a ‘Big Brother Helping Little Brother’ initiative. Large corporations that purchase goods from SMEs will be allowed to deduct 1.5-2 times the expenses from their taxable income, encouraging them to purchase more from SMEs.
Mr Ekniti said the Thai economy is ‘trapped’ due to four issues:
Low economic growth: Since 2017, growth has averaged less than 2% annually, keeping the country in the middle-income trap and preventing it from advancing to high-income status. A key reason is low investment, as before 1997 investment accounted for up to 40% of gross domestic product (GDP), but after 1997 it fell to only 20%.
Labour skills: As Thailand transitions to an ageing society, with more than 20% of the population 60 or older, there are also widespread skills shortages among the workforces.
Technology upgrades: Rapid technological changes over the past three to four years have made it difficult for industries to keep pace.
Debt: Household debt exceeds 80% of GDP, while government public debt tallies 64% of GDP, approaching critical limits with the ceiling set at 70%.
He said to address low investment, the BOI will set clearer targets for promoting modern industries such as data centres, semiconductors, artificial intelligence (AI) and bio-circular and green industries, leveraging Thailand’s strong agricultural base, as well as electric vehicle industries.
Regarding household debt, Mr Ekniti said the government will use part of the remaining 26 billion baht from the ‘Khun Soo Rao Chuay’ (You Fight, We Help) debt relief programme, allocating roughly 10 billion baht to purchase non-performing consumer debts from financial institutions.
Bangkok Commercial Asset Management Plc and Sukhumvit Asset Management were selected to help restructure these debts, allowing borrowers to continue making payments. This debt relief programme is expected to be launched within one month, he said.