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maintenance(*)

The State and Social Security in Indonesia and Thailand.


Thailand
Health 0.66 1.00 1.15
by M. Ramesh Income 0.61 0.57 0.55
It is widely believed that the dynamic economics of East and Southeast Asia grew as fast as maintenance
they did because they concentrated on economic development and avoided populist social Total Government Expenditure
programs. The reality, however, is far more complicated than this characterisation suggests.
1972-79 1980-89 1990-95
In this article we look at two rapidly growing lower middle income countries in Southeast Indonesia
Asia and show that, contrary to popular perceptions, they have a range of social security Health 2.28 2.18 2.69
Income n.a. n.a. 5.75
programs, defined here to include retirement and health care programs. What distinguishes maintenance(*)
Indonesia and Thailand, the article will show, is not the absence of such programs but their
Thailand
bias towards state employees, and the well-off generally, and inadequate protection for those Health 4.24 5.57 7.56
most in need of state protection. The article will explain the superior programs for the state Income 3.68 3.13 3.61
maintenance
employees with reference to the political circumstances in the two countries which make it (*) Data available only for 1994-95. Source: Based on World Development Indicators
politically unnecessary to provide comprehensive social security to the rest of the population,
1998.
though this may be changing because of the social and political turmoil triggered by the
current economic crisis. As a percent of GDP, public expenditure on health has decreased somewhat in
But before we turn to discuss their social security policies, we need to ascertain a proximate Indonesia and increased substantially in Thailand. Income maintenance expenditure's
idea of the economic conditions which have formed the context in which their public share of GDP has decreased in Thailand; Indonesia did not publish figures on its
policies have been designed and implemented. Between 1970 and 1995, per capita GNP in income maintenance until recently which makes detection of trend difficult.
Indonesia increased from US$ 80 to US$ 980, at an average annual rate of 4.82%, and in Provision and Financing of Social Security
Thailand from US$ 210 to US$ 2,740 at an average annual rate of 5.35%. Their achievement An outstanding feature of the social security programs in Indonesia and Thailand, as
in reducing poverty was equally impressive: from 64.3% to 11.4% in Indonesia, and from indeed Southeast Asia generally, is the different sets of programs for public and private
8.1% to less than 1% in Thailand between 1975 and 1995 (Ahuja et al, 1997). The picture is, sector employees, with superior benefits available to the former.
however, less sanguine when we consider their income distribution record. The Gini Public Sector Employees: Civil servants in Indonesia are covered by TASPEN (The
coefficient for income inequality was 0.504 in Thailand in 1990 (Medhi, 1994). While no Government Civilian Employees' Saving and Insurance Scheme) and pension, whereas
comparable data is available for Indonesia, expenditure inequality data, which greatly their military and police counterparts are covered by ASABRI (the Armed Forces Social
underestimated its extent, show that the Gini has stayed at around 0.33 since the early 1970s. Insurance Plan). Their health care is provided for under the ASKES (Asuransi
Similar to other countries in the region, total public revenues as a percentage of GDP in
Kesehatan Pegawai Negeri) scheme.
both Indonesia and Thailand are small, approximately 18% on average during the 1990s, but
TASPEN was originally established in 1963 as an endowment insurance scheme but
their expenditures are even smaller, about 17% in Indonesia and 15% in Thailand on average
was expanded in 1981 to provide life insurance to civil servants, their spouses, and
over the same period. Both countries enjoyed healthy budget surplus -- 0.7% of GDP in
children. Members contribute 3.25% of their monthly salary to the scheme and in
Indonesia and 3% in Thailand -- over the 1990-96 period, though the deficit has ballooned return receive a lump sum amount roughly equivalent to nineteen times the final
recently because of the decreased revenues and increased expenditures associated with the
monthly salary in the event of retirement or death. In 1995, 100,837 members received
economic crisis.
lump sum benefits totalling Rp 393 billion under the scheme (Indonesian National
The following table shows the percentage of government expenditure devoted to income
Social Security Association, 1995: 54; TASPEN, 1995: 7, 8). While it is Supposed to be
maintenance and health is small but not insignificant.
a self-funding scheme, its assets (Rp 3.1 trillion in 1995) are less than half its accrued
liabilities and it is projected that benefits will exceed contributions by the year 2006, and
Table 1: Share of Government Expenditure on Social Security, Annual Average, Percent
Gross Domestic Product
the assets will be exhausted completely soon after, leaving a huge financial burden on
the government (World Bank, 1996: 27-28).
1972-79 1980-89 1990-95
Civil servants are also beneficiaries of a pension scheme established in 1969. The
Indonesia scheme was originally funded solely from the government's general revenues, but civil
Health 0.51 0.48 0.47
Income n.a. n.a. 0.88
servants have been required to contribute 4.75% of their monthly earnings since 1994.
After twenty years of public service and at the age of fifty years, members can expect employment accident insurance, and death insurance. Unlike the programs for the state
monthly pension equivalent to 75% of their final monthly salary. In 1995, there were 1.54 employees, it is funded from private contributions by employers and/or employees.
million pensioners who together received Rp. 3.37 trillion, or Rp. 183,036 per pensioner per Participation in JAMSOSTEK is compulsory for firms with at least ten employees or
month on average (TASPEN, 1995:10). The scheme's contributions and other income cover monthly payroll of Rp one million. The rate of contributions to the provident fund
only 22.5% of the total benefits provided, leaving the government to cover the remaining component is 5.7% of the salary, with the employer paying 3.7% and the employee 2%.
77.5% from its general revenues. The government's payment towards civil servants' pensions Employers are entirely responsible for paying the premium for employment accident
amounted to 22% of its total wage bill in 1995; this is projected to increase to 66% by the insurance (0.25 - 1.70% of salary, depending on the level of risk) and death benefits
year 2020 (World Bank, 1996: 27). (0.3% of salary) schemes. JAMSOSTEK paid out Rp. 6.38 trillion in benefits in 1995;
ASABRI was established in 1971 and covers military personnel, civilian employees of the close to 90% of the total was towards provident funds and death benefits, and the
Ministry of Defence, and the police force. In early 1996, its memberships stood at 0.5 remainder towards employee accidents.
million. While the scheme's rate of contribution is similar to that for civil servants, it is The health care component of the scheme involves contribution of 3% of gross wages
available at the age of 50 and benefit levels are differentiated by rank. The secrecy for single persons and 6% for families by the employer. Its members receive inpatient
surrounding military affairs in Indonesia makes it difficult to arrive at precise assessment of and out-patient services at government or approved private facilities. Rp 29.8 billion
the scheme. was paid out in health care benefits by JAMSOSTEK in 1995 (ASTEK, 1995: 27). In
All state employees and pensioners, and their dependents, in Indonesia are eligible for health 1995, the government launched a new program which gives villagers a modest amount
care under ASKES, which was established in 1968. It is a compulsory insurance scheme (Rp 2,000 in 1996) from the contribution of 2% of profits by large firms. The money is
requiring a contribution of 2% of the wages from all eligible employees, though the credited to each family which they may use to pay for health services. No details are as
contribution receipts are considerably lower than expenditure, with the shortfall met by the yet available on the scheme's performance.
government. In 1993, the scheme covered 4.76 million members (of whom 21% were Although Thailand has seriously considered establishing a statutory income
pensioners) and their 9.9 million dependents. ASKES members utilise health facilities more maintenance system for private sector employees since the early 1930s, it was not until
than five times the rate for non-members (World Bank, 1991: 94-95). 1990 that the Social Security Act (SSA) was adopted and implemented in the following
In Thailand, civil servants, military personnel, police officers, and employees of state year. It initially provided only sickness, maternity, invalidity, and death benefits, but on
enterprises have been receiving pension benefits under Government Officials Pension Act 31 December 1998, the Old Age Pension and Child Allowance programs came into
since 1951. It is a non-contributory scheme funded entirely from the governments' general effect. The SSA currently covers all employees in private firms employing at least ten,
revenues. Since March 1997, however, state employees have been required to participate in but in 2001 the scheme will be expanded to cover all employees in firms employing at
two separate schemes: the pension scheme as before and a new provident fund scheme. The least five; the self-employed are covered on a voluntary basis.
pension scheme continues to be non-contributory and paid from the government's general The SSA requires a contribution of 1.5% of the wages each from employer, employee,
revenues on an annual basis, but unlike the maximum of 100% of their last-drawn salary and the government, which adds up to a gross total of 4.5% of the wages. However, to
which state employees were entitled to in the past, their pension is capped at 70% of the cope with the economic crisis, in 1997 the rate was temporarily reduced to 1% each for
average salary over the last five years of service. Under the provident fund scheme, the three years. Since 1 January 1999, the three parties have each contributed an additional
employee and employer (the government) each contribute 3% of monthly salary to the plan; 2% of wages towards pension and 1% each towards children's allowances. In 1996, 6.67
the government contributes an additional 2% of salary to offset the lower benefits because million claimants received Baht 6.24 billion in benefits, of which almost 65% went
of changes. The accumulated contributions and investment earnings in one's account are towards sickness benefits and 30% towards maternity benefits (Social Security Office,
released to the member as a lump sum at the time of retirement. 1997).
Under Civil Servants Medical Benefits (CSMB) scheme, active and retired military personnel, The following contingencies are covered under the SSA schemes: health care;
policemen, civil servants and employees of state enterprises, and up to their three maternity; physical disability; death; retirement; and child birth. Retirement pension is
dependents, are provided free medical care. It is a non-contributory scheme paid for from available only to those who contribute for at least fifteen years; in other words, benefits
the government's general revenues. Expenditure on the program grew on average by around will not be payable until the year 2013. The benefits are equal to 15% of the average
20% each year over the past decade, even though the total number of beneficiaries increased wage over the last five years of service plus 1% of salary for every additional year over
only marginally (Sanguan and Pannarunothai, 1997: 148). fifteen.
Private Sector Employees: Private sector workers were covered by ASTEK (Asuransi Sosial All state enterprises, listed firms, financial institutions supervised by the country's
Tenaga Kerja) between 1977 and 1992, when it was replaced by JAMSOSTEK (Jaminan central bank, and those receiving government contracts are required to establish
Sosial Tenaga Kerja). In its present form, the scheme provides provident fund, health care, provident funds for their employees. Employee's contribution is limited to 3-5% of
salary, and the employer is required to at least match it. Employees' contribution is also The schemes for state employees generally provide considerably higher rate of income
exempt from taxes, subject a maximum of Baht 7,000 per annum. The accumulated fund in a replacement than those for their private sector counterparts. In Indonesia, for a person
member's account may only be withdrawn at the time of retirement or termination of with 35 years of service in the civil service or military, retirement benefits provide a
employment. In 1996, the scheme covered only 906,000 employees, or about 13% of the rather generous replacement rate of 100% of final pay. In contrast, the replacement rate
labour force. for private sector workers covered by JAMSOSTEK is, under the most optimistic
There are several overlapping health care financing schemes providing varying kinds and assumptions, around 10%. Its low benefits are not only a function of low contribution
levels of service in Thailand. The main schemes include Social Security Scheme (SSS) under rates, but also high administration costs and poor returns on investment. Indeed, it
SSA, Workmen Compensation Scheme (WCS), the Community Health Card (CHC), and would appear that JAMSOSTEK members would do better by simply depositing their
Free Medical Care for the poor, aged and children. The SSS scheme covers nearly all out- entire contributions in a normal savings account with a bank. Similarly, the full pension
patient and in-patient expenses at nominated hospitals and pays 50% of wages in sickness for state employees in Thailand is 70% of their last salary -- it used to be 100% until
benefits for a maximum of six months. The scheme also provides maternity benefits that pay 1998 -- compared to 35% of the average wage during the last five years of employment
for all medical expenses and pays cash benefits equivalent to 50% of wages while absent for SSS members.
from work for a period not exceeding 90 days. The Workmen Compensation Scheme, which Not only are the replacement rates for public sector employees higher, their benefits are
is funded entirely by employers, pays for all curative expenses, to the maximum of Baht funded from public exchequer, unlike the private sector employees' schemes which are
30,000 per episode, as well as cash benefits equivalent to 60% of wages. Disability benefits funded by the employees themselves and their employers. Indeed a significant
equivalent to 60% of wages is also available for a maximum of ten years. proportion of the Indonesian and Thai governments' social security expenditures,
The Free Medical Care For the Low Income program (FMCLI), launched in 1976, is a public though small overall, is directed at such employees. The Indonesian government funds
assistance scheme for the poor which covers about eleven million people. It is funded half of lump sum retirement benefits and more than three-quarters of pension benefits
entirely from the government's general revenues, at the cost of Baht 4.8 billion in 1996 for state employees. Similarly, a significant proportion of ASKES expenditures is
(Sanguan and Susapit, 1997:152). There are also public assistance schemes, established in derived from the government's general revenues even though it is supposed to be a
1992, which provide free out-patient and in-patient care to the elderly (aged sixty and above) contributory scheme. In contrast, private sector workers covered under JAMSOSTEK
and children in primary and lower secondary schools. In 1996, the various public assistance receive no state contribution. The scheme's shortcomings are compounded poor
programs for the poor, children, and aged together covered 28% of the population (Anuwat, administration, low returns on investment, and high administration costs. Of those
1996: 3-4). The Community Health Card project (CHC) was launched in 1983 as a prepaid covered, only 25% are in compliance with contribution requirements. Worse, about
health care financing scheme for the rural self-employed population. It covers in excess of 40% of the assets under its management are not posted to individual accounts (World
7% of the entire population (Anuwat, 1996: 3-4). Only adult individuals on income below Bank, 1996: iv), which is a significant lapse for a scheme based on individual savings.
2,000 Baht a month or families on income below 2,800 Baht a month are eligible for the JAMSOSTEK's administrative expenses are very high -- almost 12% of contributions --
card. The government contributes about 1,000 Baht a year for each family; the families and real returns on investment negligible, in the order of 0-1.3%.
themselves pay 300-500 Baht per family per year. A health card carrier is entitled to medical In Thailand, the situation is somewhat better in that while the government fully funds
care at state and member hospitals and health institutions. the schemes for state employees, it also pays for one-third of the total contributions to
The Privileged Position of the Public Sector Workers SSS. However, the SSS scheme's tripartite is not entirely equitable because the majority
The formal social security programs in Indonesia and Thailand cover only a small share of of the population does not benefit from the scheme; in other words the tax payers pay
the labour force and even a smaller share of the population. Income maintenance programs for benefits only available to a small proportion of the population. Moreover, by tying
cover 7% of the population in Indonesia and 10% of the population in Thailand. Health care benefits entirely to contributions, SSA does nothing to redistribute benefits to those
financing schemes programs have a larger coverage: 16% of the population in Indonesia who held low-wage jobs in their last five years of employment.
(Jakarta Post, 26 September 1997) and 55% of the population in Thailand. Of all covered by As with income maintenance, the publicly-organised health care financing schemes in
various social security programs, more than one-half in Indonesia (Vittas, 1991: 34) and Thailand favour government employees, who pay only a small share of the costs. The
about two-fifths in Thailand are in the public sector. The low coverage is largely a result of government subsidy for CSMB scheme is eight times higher, and for the SSS five times
exclusion of the unemployed or those employed in informal sectors or in small firms from higher, than the Free Medical Care scheme for the poor (Anuwat, 1996: 6-4). There is
the schemes. What is unfortunate is that it is the excluded portion of the population that also a wide gap in the level by which budgetary allocations have increased: the civil
suffers from greater incidence of poverty (Firdausy, 1996) and, as such, is most in need of servants' health benefits soared from Baht 6.9 billion in 1992 to Baht 13.9 billion Baht
statutory income maintenance. in 1996, whereas the SSS budget rose from Baht 3.2 billion to Baht 4.8 billion during
the same period, even though the latter covers more workers (Bangkok Post, 6 September response to pressure from these groups in Indonesia and Thailand. What is more likely
1996). the case is that the ruling elite established and expanded the programs to reinforce the
The Politics of Social Security in Indonesia and Thailand bureaucracy and military's loyalty to the regime.
The question before us now is why do social security programs in Indonesia and Thailand Since the early 1980s, a large literature has emerged which emphasises the goals and
accord superior benefits to the state employees and, relatedly, why do they neglect the capability of the state itself to explain policies, though its application to social policies
income protection needs of the private sector workers, especially those outside formal in Eastern Asia is still rare. In a pioneering study, Crone (1991) explains the differences
employment. The existing literature on both developed and developing countries provides between the social welfare policies in Indonesia and Thailand in terms of their regimes'
few clues in explaining this seemingly anomalous policy, as the brief literature in this section different security outlooks. He argues that the need to contain the threat from the Left
will show. It will be more fruitful, the article will show, to examine the domestic political led the Thai government to pay special attention to welfare concerns, whereas the New
circumstances obtain in the two countries to understand the phenomenon. Examination of Order Indonesian state feared the elites more than the masses and hence could afford
the domestic political conditions will also explain why Thailand has done more than to neglect social welfare programs. This is a promising line of argument, despite the
Indonesia to expand social security programs in recent years. Early studies on the origin and fact, it exaggerates the level of statutory social welfare in Thailand and the role of the
development of social security attributed heavy causal significance to industrialisation and Indonesian military in policy-making. It was not until the late 1980s that Thailand
the associated socio-economic processes, mainly urbanisation, ageing and rising income established comprehensive social security programs, at a time when there was no visible
(Wilensky and Lebeaux, 1958; Cutright, 1965). Regardless of its explanatory potential and threat to the regime from Leftist forces. In the following discussion, I will build on
shortcomings -- there are numerous empirical and theoretical flaws despite the considerable Crone's insights and show how the politics of regime survival has shaped the
empirical proof supporting their position -- this essentially functionalist approach is pitched contemporary social welfare programs in the two countries.
at too high a level of abstraction to account for the differences that exist between different To understand the current social security programs, we need to go back to the time
segments of the work force in our case studies. The realisation that rapid industrialisation, when they were established. The establishment of social security programs in Indonesia
economic growth and urbanisation in Eastern Asia have not been accompanied by is concentrated in three short periods: the tumultuous last days of Sukarno's rule, after
proliferation of social welfare programs of the type found in the West spawned cultural the nation was rocked by riots in the mid-1970s, and during the late 1970s when
arguments. It is claimed that in Asian societies individuals and families look after themselves industrial unrest was on the rise. It is remarkable that no significant new social security
and their family members in times of need (Jones, 1993; Rozman, 1991; Vogel, 1991). While or health was launched during the 1980s or 1990s, the hey-days of Suharto's regime and
intuitively appealing, it is difficult to take the argument seriously because if individual economic growth.
responsibility and filial piety were truly as embedded in the culture as claimed, then President Sukarno established and expanded social security programs for the state
policymakers would not have established generous income maintenance programs for employees because of the political challenges his government was facing. He had
themselves. unleashed democratic forces, most evident in the 1955 election, that he could not
In contrast to their socio-economic counterparts, political explanations eschew determinism control and raised popular expectations he could not satisfy. He responded by
and emphasise political pressures and the policy-makers' responses to them. Commentators instituting Guided Democracy (1959-1965) measures to protect his government from
from a variety of perspectives argue that competition among political parties and candidates conflicting social and economic pressures. Faced with a thoroughly disgruntled
leads them to offer increasingly more social welfare benefits in order to win votes (Amenta population, Sukarno relied increasingly on the bureaucracy and military to remain in
and Carruthers, 1988: 665; Myles, 1989; Verbon, 1988). While electoral competition clearly office (Anderson, 1996: 31) and the establishment of social programs for them was
has an effect on public policy in democracies, the level of political competition has been low designed to win their support.
in Southeast Asia (Taylor, 1996) and policymakers have not had to resort to social policies to The Suharto government, in contrast to its predecessor, was never really under serious
garner votes except for some brief periods, when we do see evidence of expansion of social challenge until the final days of its rule in early 1998, except for the initial few years
programs. According to some analysts, it is not democracy itself, but the strength of trade when it was still in the process of consolidating its hold on power and during the mid-
unions and the electoral success of the political parties that espouse their interests that 1970s when it was raked by street protests. The political instabilities that lingered on in
determines the quality and level of social welfare entitlements; (Korpi, 1980; Shalev, 1983; the late 1960s precipitated the establishment of ASKES in 1968 whereas the student
Myles, 1989). The explanation is of limited use because unions and Left parties have been demonstrations in 1973 and the riots in Jakarta in 1974 led the government to
woefully weak in both countries. Instead of class competition, Meso-Lago (1978) argues for undertake social policy initiatives, including the establishment of ASTEK in 1977. The
the importance of competition among social groups, claiming that social welfare programs in firmness of Suharto's grip on power for much of his term in office made it politically
Latin America were established in response to, and reflect, the political strength of the civil unnecessary to establish new social programs. The few new social policy initiatives his
service and military. There is nothing to suggest that such programs were launched as a government did take in later years were of minor significance and intended for
employees of large firms who tended to be concentrated in urban areas and were more likely the Ministry of Labour and Social Welfare and, no less remarkably, deciding to sponsor
to join trade unions. the Social Security Act. In July 1990, the Thai Parliament unanimously passed the bill,
The fact Suharto faced elections every five years did not noticeably reduce his government's thus overturning the earlier Senate veto. The Act almost died following the coup of
autonomy or capacity, as he and his party handily won all elections they contested. Nor was February 1991, but the military government decided to go ahead and implement the
the legislature a threat to his rule, as he personally appointed 60% of the members of Majelis Act as scheduled. The unpopularity of the bureaucracy and military with the economic
Permusyawaratan Rakyat (People's Consultative Assembly). Trade unions, which played a elite and the general public alike helped overcome resistance from the bill's opponents
key role in the expansion of social programs in the industrialised countries, were similarly who had scuttled similar efforts in the past (Reinecke, 1993: 90-91).
too weak to affect policies. The level of open industrial unrest was generally low or non- The protracted difficulties with the adoption of social security proposals in Thailand
existent, except for the late 1970s and early 1980s when the manufacturing sector in the reflected the military's dominance and the absence or weaknesses of democratic
Jakarta area was hit by significant strike activity (Manning, 1993: 70-71). The government institutions and processes until the late 1980s. For much of the period under
responded to the unrest with increased control over the union movement, but it also offered consideration, the military either directly ruled the country or had a vital say in all major
some concessions, especially in the form of ASTEK, which targeted medium to large firms policy issues. While the military personnel themselves were recipients of generous social
in which unions were concentrated. Moreover, while only 3-5% of all employees and 5-10% security benefits, they used their dominant position to thwart proposals to provide
of all manufacturing employees were members of trade unions in the early 1990s, about one- similar benefits to private sector workers for almost four decades. The situation
third of all enterprises with twenty-live and more employees had unions (Manning, 1993: 70). changed in the late 1980s when democratic elections forced governments to devise
This perhaps explains the origin of JAMSOSTEK, which essentially caters to employees of policies to appeal to voters and ignore the military's opposition. SSA was a part of such
middle-sized private sector firms. Employees in smaller firms posed little threat to their an effort, which was especially popular in the Bangkok area where there are a large
employers, much less the government, and did not need to be catered for. Those in informal number of seats. The rural voters too were catered for, but not through formal social
sectors were politically even weaker in this regard and the government could afford to security but piecemeal development projects dispensed by local politicians (Suchit,
exclude them from social security protection. 1996; Laothamatas, 1996). Similar to Indonesia, trade unions have played only a
Statutory social security in Thailand has been shaped by long periods of conservative military peripheral role in the social policy process in Thailand because of government- and
dictatorships and political fragmentation among the supporters of expansion of social employer-sponsored intimidation and low union density (3% of industrial workforce in
security. While the government first proposed social security programs in the 1930, and the 1991) and their own internal fragmentation. The problems were compounded by the
legislature actually passed an Act to the effect in 1954, they did not lead to any concrete fact union membership was concentrated in the public sector which was already
result because of the powerful forces opposed to it. In the 1950s, both employers and protected by rather generous social security programs.
employees in the non-agricultural private sector were mostly Chinese, whereas the public Conclusion
sector was mostly Thai (Pawadee, 1986) which made it politically unnecessary and even The article showed that unlike the common perception that social security programs are
awkward to extend social security benefits to private sector workers. Public sector workers absent from the Southeast Asian countries, a close look at Indonesia and Thailand
and employees of large firms already had income maintenance and health schemes superior shows the existence of a range of programs. What is remarkable about the programs is
to what was being proposed and so had solid reasons to oppose any legislation that might the separate treatment of public and private sector employees and the availability of
dilute their superior protection. superior benefits for the former. The generous state-funded programs for state
Chances of adoption of a comprehensive social security program for private sector workers employees are both inefficient and inequitable, as they impose heavy long-term
improved after the overthrow of military government in 1973. The expectations were liabilities on the state, the cost of which is borne by taxpayers, who themselves are
partially realised with the establishment of the Workmen's Compensation Fund in 1974, denied the same benefits.
followed by health care initiatives in the following year. In 1975, the Social Action Party There is no defensible reason why public employees should be given more income
government inaugurated a broad social policy reform agenda, establishing the Free Medical protection than other workers. The argument that pension benefits are a partial
Care scheme for the poor (later expanded to include the aged and children) which continues compensations for the lower wages in government services holds little water, as this is
to this day. These health programs together continue to be the largest programs, in terms of true only for the higher echelons; private sector wages tend to be lower in the bottom
the number of people they cover, in Thailand. rungs. In any event, if low salaries are indeed a problem it should be addressed directly
The pace of reform picked after the new government led by Chatichai was sworn in 1988. through higher salaries rather than retirement benefits. What is particularly troubling is
This was a period of heightened labour unrest in Thailand, because increasing economic that the schemes for state employees are funded from general tax revenues but are not
disparity amidst economic boom fostered demands for higher wages and better social subjected to the same level of scrutiny that proposals for expanding programs to the
security. Chatichai, ever a skilful politician, sought to solidify his support base by establishing private sector have to endure because they are an ongoing budgetary commitment.
M. Ramesh, Dept. of Government, University of Sydney
Publication Information: Article Title: The State and Social Security in Indonesia and
Thailand. Contributors: M. Ramesh - author. Journal Title: Journal of Contemporary Asia.
Volume: 30. Issue: 4. Publication Year: 2000. Page Number: 534. COPYRIGHT 2000
Journal of Contemporary Asia Publishers; COPYRIGHT 2004 Gale Group