20.09.2010 - Megan McCarthy, UNESCO Bangkok

Impact of the global financial crisis on education: the case of Thailand

The UNESCO commissioned Global Monitoring Report was recently officially launched in Bangkok. The launch included a roundtable discussion titled: “Financing Quality Education in the Face of the Global Economic Crisis: the Thailand example”, with participants from UNESCO Bangkok, the Thai Ministry of Education, Ministry of Finance and National Economic and Social Development Board. The discussion provided a platform to reflect on Thailand’s response to the global financial crisis and its impact so far on the education sector.

The Asian Financial Crisis of 1997 saw Thailand suffer the financial collapse of the baht at a time when the country was already saddled with significant foreign debt. The country suffered considerable hardship during the crisis, but by 2001 the economy had recovered markedly, and in the years following, strong growth was driven by exports and investment.

However, Thailand was not immune to the global financial crisis which began to have a negative impact on the economy in 2008, a situation exacerbated by domestic political unrest. The country’s financial sector has become more protected since the 1997 crisis, nonetheless, a heavy reliance on external demand left it vulnerable to the most recent crisis.

The economic data for 2009 reveals this impact with the fourth quarter figures showing there was a 9 per cent contraction in exports and a 4.3 per cent year-on-year GDP contraction.

Government revenue increased in the financial year 2008, however, during the first seven months of 2009, government revenue fell 16.67 per cent below the projected target figure because of slow tax collection, lower income from state enterprises and various tax rebates.

Recent UNESCO research: The Impact of the Global Crisis on Public Education Expenditure: Evidence from 12 Country Case Studies has found that Thailand has protected its education budget through the crisis and enacted policies aimed at maintaining access to education.

Worldwide, many governments have responded with stimulus packages to negate the impact of the global financial crisis and Thailand is no exception. The Thai government has provided extra funding for education under two economic stimulus packages, known as SP1 and SP2.

SP1, which amounted to 116.7 billion baht or about USD$3.4 billion or 1.34 per cent of the nominal GDP, included two education initiatives specifically targeted at the most vulnerable.

The first was the introduction of the 15-year free education project that includes pre-primary to secondary education. Launched in May 2009, the policy aims to cover fees for education, books, educational materials, student uniforms and a range of extra-curricular activities by distributing 19.3 billion baht among more than 40,000 local schools throughout the country. The project has already benefited 12 million students.

Sivika Mektawatchaikul, Deputy Permanent Secretary, Ministry of Education said that the aim of the project “is to ensure that no child’s level of educational attainment, employment prospects and life options are compromised due to financial constraints”.

The second project, under SP1, was specifically aimed at the unemployed, those facing redundancy and new graduates. This project had a focus on vocational education and training with a specific focus on agriculture and retraining.

According to Ms. Mektawatchaikul more than 200,000 people joined the programme and employment opportunities were generated for 149,000 people.

Designed to prepare Thailand for global recovery a second three-year stimulus package, SP2, was introduced earlier this year, funded by borrowing both domestically and abroad. For the financial year 2010, the planned budget for education is expected to decline by 4 per cent but under the second economic stimulus package, the education sector will receive an additional 69 billion baht to implement 16 projects over the next three years (2010-2012).

These education initiatives are, according to Ms. Mektawatchaikul: “based upon our three pillar policy to expand educational opportunities, increase access to education, and improve the quality of educational provision”.

The focus of these initiatives is to enhance the quality of learners and improve the status of the teaching profession. It is planned to provide more professional development opportunities to teachers and encourage talented young people into the profession.

These initiatives also include a focus on literacy and lifelong learning to help develop skills in learners that will enable them to adapt to rapidly changing labour market demands. The physical condition of school buildings is also a concern. To help address this, a project funded from SP2 aims to upgrade the condition of 3,000 schools.   

Indeed, these measures have mitigated the impact of the global financial crisis on education; however, future education reforms need a continued focus on the challenges of quality and equity within the education sector.

The government provides significant subsidies for disadvantaged students, and the 15-year basic education policy may help to offset educational costs for households that experience greater hardship due to the crisis.

A high level of dropouts, however, is still a concern particularly at the secondary level. The current economic situation may in part explain the dropouts, but other issues may also be influencing the decision to leave school.  

The issue of quality within the education system reflects structural and institutional problems. Steps have been made in recent years to raise the living standards of teachers and, as mentioned, there is a long-term strategy to improve access to ongoing professional development for teachers, including new models for pre- and in-service training. Incentives have been put in place to encourage young people into the profession to in part address the current shortage of teachers.

Furthermore, there is a current mismatch of skills with labour market needs. Chirapun Gullaprawit, Acting Director of the Social Development Strategy and Planning Office, National Economic and Social Development Board, stated during the roundtable discussion that graduates need to be responsive and adaptable to labour market requirements, and there needs to be a greater focus on producing creative and work ready students, who have the skills and knowledge required by the private sector.

Pisit Puapan, Director of the Macroeconomic Analysis Division within the Ministry of Finance, stressed that it is important to define the role of the education system when considering the future agenda for education reform.

In the financing of education in Thailand there has been a move away from funding the supply-side to the demand-side a trend that will continue in the future.  Mr. Puapan said that this strategy allows the education sector to become more responsive to student needs and encourages choice.

UNESCO research has found that the “global crisis had a limited impact on Thailand education due to budget protection and the strong 15-year free basic education policy that heavily subsidizes the demand side of education”.

If any strong impact is felt it is expected amongst the private education sector.  Mr. Puapan, however, stated that the government understands that the private sector means fewer burdens on the state as it enables more resources to be utilized for the poor and vulnerable. With this in mind, the Thai government has taken some measures to assist the private education sector.

Although the education sector in Thailand has remained protected throughout the global financial crisis, and SP1 and SP2 have provided significant funding to the sector, there is a continued need to address on-going concerns.

The future agenda for education sector reform is expected to focus on the quality of learners with the aim of creating a population of adaptable lifelong learners. The status and quality of teachers needs to be a focus as well as the quality of actual educational institutions and learning resources.

Finally, there is a planned revitalization of administration and management, which is designed to promote good governance and participation at all levels of the community. In a country that still has an estimated 6 per cent of children who do not receive an education, it is important reforms are pursued in order to address the priority areas of quality and equity in education.  

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