Thai industry still in dark about AEC

Most Thai businesses remain indifferent to the growing challenges of labour mobility within Asean once regional economic integration is completed in 2015, says the Federation of Thai Industries (FTI). "The FTI has been trying hard to inform members of the drastic changes in terms of trade, investment and labour mobility in Asean once the Asean Economic Community (AEC) takes full effect, as well as possible adverse effects from other free trade pacts, but most still ignore such challenges as they do not feel the issues are urgent," said Santi Vilassakdanont, chief adviser to the FTI.

While freer labour movement will benefit industries in the region, Thai businesses need to be mindful of a possible flight of Thai skilled workers as well as scientists and engineers to earn more lucrative incomes elsewhere.

"Naturally, labour will opt to flow to countries that pay better. That's why workers from Burma, Cambodia and Laos have been flooding into Thailand," said Mr Santi. "Thai entrepreneurs may have to increase salaries to convince skilled workers to stay in Thailand." A labour shortage looms large in Thailand because over the past few years several industrial sectors such as automobiles and components, electronics and food processing have expanded to tap global demand.

A preliminary estimate by the FTI shows the industrial sector needs more than 200,000 unskilled and skilled workers, notably for the automotive and electronics industries.

The labour shortage could grow more severe in the next two years as fewer graduates enter the industrial sector while the level of staff retiring is the same.

According to regional statistics, Singapore offers the highest average manufacturing wage in Asean at the equivalent of US$11 per hour, followed by Malaysia at $5.50 and Thailand $2. Mr. Santi said Thai businesses and the government need to upgrade the productivity of the Thai workforce to cope with challenges and to supply Thai investments overseas such as in Vietnam or Dawei in Burma.