Thai editorial: A ray of light for our greying society

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EDITORIAL
A ray of light for our greying society
The Nation

But can the National Savings Fund's launch instil an ethos of saving that's still missing among young Thais?

BANGKOK: -- A lack of money isn't the end of the world, but it comes pretty close for many retirees. The sad fact is that most Thais start saving late for their retirement, then end up with little to live on in later years. Spurred by the dismal findings of recent studies on the subject, previous governments have taken measures to address the problems but made little headway.

Now comes fresh hope with news that the government will launch the National Savings Fund (NSF) on August 18. The plan was first raised during the last Democrat government but then shelved by its Pheu Thai-led successor. Realising that a national crisis is brewing among the country's retirees, the Prayut administration has revived the idea for this added safety net.

Forty-two per cent of Thailand's elderly do not have enough money to support themselves, according to the National Economic and Social Development Board (NESDB). About 12 per cent of Thai retirees have no savings at all. Another study found that very few Thais consider pension plans until well into their 40s. Government assistance for those aged 60 and up is a mere Bt600-Bt1,000 a month, which is hardly enough to live on. Alarm bells are ringing because Thailand's population is ageing, with one in four people set to be retirees in the not-so-distant future.

If things go to plan, the NSF will provide a safety net for some 30 million citizens who are self-employed or work in the unregistered sector, beyond the reach of government social security or company pension funds. Among them are farmers, freelancers and casual workers, all of whose contribution to the country goes largely unnoticed. The NSF will be a state-run provident fund open to people aged 15-60 and topped up by the government at a rate based on the member's savings and age. Once members turn 60, they will get a monthly pension. The sooner they join, the better chance they have of securing their financial status for their retirement years.

Although the NSF is designed as a retirement-savings scheme, it should also do something to foster a "saving" culture, which has so far been missing in Thailand. In fact, the country has seen a continuous drop in personal savings over the past few decades. Among bank customers, 98.32 per cent of us have less than Bt1 million in our deposit accounts, with combined earnings of only Bt2 trillion. Thailand's gross earnings are only 27 per cent of GDP - lower than our Asean Economic Community counterparts Singapore, Malaysia, Indonesia and the Philippines. Experts warn that this worrying situation, fuelled by growing household debts, will affect the country in the long term thanks to slow productivity and sluggish investment.

The launch of the National Savings Fund is a step in the right direction, but more needs to be done in preparing for the advent of our "grey" society. The government must follow up on the plan and bring into place more support.

Premier Prayut Chan-o-cha's move to become the first member of the NSF is good publicity for the fund, but the biggest hurdle still lies ahead - instilling a saving ethos in young Thais.

Source: http://www.nationmultimedia.com/opinion/A-ray-of-light-for-our-greying-society-30264929.html


-- The Nation 2015-07-22

[Praematura]

42% of elderly can't support themselves but since I was last here in 2012 I've never seen so many BMW, Mercedes, not to mention most of the masses have new cars. Then most Thais have newer model iPhones. Not to mention there are more Thais in view talay 5 in Pattaya than farangs.

Good thing they are paying $365 million per sub, maybe the op should touch on that.

[trogers]

Who would win the battle? The National Savings Fund or the Lottery Board?

[SoilSpoil]

Feudal mentality in a modern credit based capitalist society. A recipe for disaster. I am afraid that the consequence will be a migration out of the villages, growing cities and Indian style slums in the coming decades.

[trogers]

Feudal mentality in a modern credit based capitalist society. A recipe for disaster. I am afraid that the consequence will be a migration out of the villages, growing cities and Indian style slums in the coming decades.

If Thailand is so lucky...

No! The rural Thais would remain in their villages waiting for their free handouts...

[SoilSpoil]

Feudal mentality in a modern credit based capitalist society. A recipe for disaster. I am afraid that the consequence will be a migration out of the villages, growing cities and Indian style slums in the coming decades.

If Thailand is so lucky...

No! The rural Thais would remain in their villages waiting for their free handouts...

With rising household debts, there wont be any handouts left. The young are supposed to support their elders but are too blinded by capitalist greed in the form of cars, phones and designer stuff. Kids dont want to follow in their footsteps, so the village will have to move to the cities and industrial estates.

From personal experience, so hardly a fact, I see a lot of wealthier and proffesional young Thais buying up small farms and plots of land for retirement. Village life has become an 'organic and Zen' lifestyle choice for those with exces funds. The poorer villagers (here in Chiang Rai Province) are struggling to keep their properties as less money is pouring in from their families in Bangkok. The bigger plots are going to the Agro giants. The wells are drying up.

Thailand is facing major socio economic changes and I worry about the impact.

[ABCer]

Thailand is a peculiar society.

The social fabric, social interactions and ethical norms are different from the West. Whether it is for better or for worse - I am not the judge.

But the well wishers, do-gooders, democrats and liberals from the outside should be careful in suggesting quick remedies.

Remember: - If it ain't broken, - don't fix it. The simple facts are:

- Yes, Social Security is not provided by the State. It never was. Yet millions of Thais exist through a long history. And there is surprisingly few really hungry old people.

- The role of non existent Social Security was always played by the extended family. Old people live with children helping out with domestic chores and grandchildren.

- The added bonus of such arrangement is - old people are loved, respected, feel needed and generally might be happier than their Western counterparts.

- As I said, each system has its advantages and I cannot say which one is better.

- Perhaps the above needs checking and verification but one definitely should not be rushing into irresponsible changes:

# Creating Western type Pension funds will require huge money, decades of years and crystal clear transparent and responsible management which unfortunately is short supplied here.

# Eroding the existing social ethos is relatively easy and takes only one generation - say 20 - 30 years. And then what?

Naturally all said is applicable statistically, not to individual cases.

To all the jokers feeling the urge to have a laugh regarding this topic - it is far too serious for millions of Thais. Better look in the mirror and ask yourself what the hell are you doing here?

Rich, healthy and happy old people usually die at home - not in a Nursing home, not as unwanted expats.

Cheers.

[Time Traveller]

We all know why Thailand ain't ever going to have a welfare system like in advanced economies.

In anycase, even if Social welfare was wanted in thailand, there's no way they could afford it because their fertility rate is not even at replacement levels for a sustainable population anymore. In fact, Thailand's working age population is forecast to fall by around 10 million over the next 2 decades. That's like the 3rd highest in the world !

I think we've already passed peak Thailand,

[kingalfred]

Thais saving ? And time for more shopping malls

[trogers]

We all know why Thailand ain't ever going to have a welfare system like in advanced economies.

In anycase, even if Social welfare was wanted in thailand, there's no way they could afford it because their fertility rate is not even at replacement levels for a sustainable population anymore. In fact, Thailand's working age population is forecast to fall by around 10 million over the next 2 decades. That's like the 3rd highest in the world !

I think we've already passed peak Thailand,

A shrinking population might be just what this country needs. More resources to spread around...