She was also pessimistic about whether Asean members had the political will to liberalise the service sector.
“Only Singapore is trying to promote the free flow of skilled labour. Thailand doesn’t want to change anything anytime soon, and most Asean member want to keep the status quo. Don’t forget MRAs are still voluntary.
“I think many Thais are afraid they will lose their jobs to foreigners if the service sector opens up. Of course the answer is to get better training and pick up more skills so they can acquire better jobs, but both the government and professional councils prefer to ignore this point. The government needs to announce a national policy regarding opening up the services sector to investment and labour, but implementation has been very slow. There simply is no economic reason to continue protectionism in this sector.
“Most professional councils don’t see any benefit in actively using MRAs. They believe protectionist policies better serve their members. But the Nursing Council is starting to realise maybe it could open up the sector to all Asean members voluntarily, and this may have a knock-on effect for other services.”
Dr Saowaruj doesn’t want to cast a negative light on the AEC. After all, she supports much of what it is trying to accomplish.
“Asean has had great success in eliminating most tariffs for inter-regional trade,” she said. “And I think the AEC provides good motivation for the government to do something about the service sector.
“I’m an economist—of course I support a competitive, free and fair market. But we have a long way to go in many sectors. Just look at telecommunications; it is not competitive and is run by only three companies. It would be better to open the market up to foreigners and allow more money and technology to flow in. In fact, any industry that is high-capital and high-tech should be opened up.
“And as an academic, I also want the education sector to liberalise. I would like to see knowledge transfer between universities so intelligent Thai students can stay in the country to study if they want.”
Like a lot of economists, she sees the way forward for the Thai economy comprising improving skills and providing better products and services.
“The most important factor in this whole discussion is dual impact—making sure the government does something to prepare its domestic firms in the service sectors it eventually plans to open up,” said Dr Saowaruj. “For example, the government should offer training to increase productivity if they’re going to increase the minimum wage. A higher wage should come with higher productivity. But much like with the planned AEC, the government has not offered any preparation.
“Thailand needs to adopt a bottom-up approach to these Asean agreements because then the professional councils will actually support what is proposed. With a top-down policy negotiating can take forever.
“Some educated Thais do want to practice abroad, but usually not in Asean. They would prefer to go to the US, Canada or Europe. If the councils develop agreements with other countries outside Asean voluntarily, this would enable freer movement.”