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Thailand offers safety net to informal workers to boost economy

Proponents say that a safety net in the form of social insurance for Thailand's informal workers – including taxi drivers, food vendors, garbage recyclers – could ease social tensions in a politically polarized nation.

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Experts say corrupt cops usually run these rackets and are rarely caught because workers have few avenues of complaint. Mr. Thaksin tried to stamp out the practice by registering drivers as part of a campaign against mafia organizations. The current government has said it plans to reregister drivers and their bikes, estimated to number around 200,000.

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Formal vs. informal

Much of Bangkok’s informal workforce is drawn from the rural hinterland. Professor Sungsidh, who has written several books on the informal economy, says it is difficult to extend social insurance plans to rural workers because their income is seasonal. Some farmers migrate to cities between crops to earn extra income.

For decades, labor experts have debated the role of the informal economy and asked whether governments should promote formal employment and get tougher on unregulated jobs. Others argue that the informal economy generates opportunities for the poor and should be supported by donors, while governments try to lower barriers for entrepreneurs.

The UN has shifted toward a “staircase” approach that recognizes that there are many steps between informal and formal employment, says Celine Felix, a regional expert at the International Labor Organization in Bangkok. By providing social insurance, governments can provide a safety net for informal workers, even if it falls short of the benefits enjoyed by other workers.

Banding together

Informal workers can also help themselves by banding together. Under the Thai policy, taxi and motorbike drivers who apply for loans as groups receive preferential rates. Ms. Felix says that a group of taxi drivers in Senegal agreed to hand over their insurance contributions to the lunchtime cook at their garage so that they wouldn’t fritter away their earnings. The cook then collects their contributions and pays into the state system.

Last year, Mr. Wichian cofounded a motorbike taxi drivers’ association, a first in Bangkok. He says that many drivers are unsure about the benefits of paying into the new insurance program, which includes a government copayment. He complains that it is less comprehensive than welfare programs for government employees.

Nor is he convinced by Mr. Abhisit’s election year outreach to his members. “They start by ignoring us. Now suddenly they notice us. Is it politics that makes us visible?”

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