Local Responses to Economic Downturns: Evidence from the Informal Sector in Roi Et, Thailand

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Chapter And Authors Information

John Walsh

English Language Programs, International College, Krirk University, Thailand

Sopin Jitpaisan

Ministry of Labour, Thailand
Local Responses to Economic Downturns: Evidence from the Informal Sector in Roi Et, Thailand
From the Edited Volume
Edited By:
Dr. John Walsh
Content

Abstract

The ongoing coronavirus pandemic has sparked an economic downturn that has been particularly difficult for people in the informal sector, who have been mostly unable to access the government support members of the formal sector are usually able to obtain. This paper reports on qualitative research among a sample of informal workers in Roi Et province of Northeast Thailand. It is found that people demonstrated resilience in scaling down consumption, maintaining flexible households and practicing everyday Buddhism. It is likely that similar forms of behaviour would be used to cope with deglobalization forces.

Keywords
everyday Buddhism, informal sector, precarious work, resilience, Thailand

Introduction

Capitalist systems have downturns embedded within them and people, especially the poor, must be aware of means of surviving them. Scott’s (1976) image of the peasant as a person standing still neck deep in water hoping that no disturbance to the water will occur is a familiar one. However, when such a disturbance does occur, people are obliged to reduce their level of expenditure, postpone such purchases as may be possible and, if necessary, selling such assets as will achieve a price (Ansah et al., 2019). The coronavirus pandemic forced governments around the world to require large numbers of people to stay at home so as to reduce the rate of infection and prevent their health systems from being overwhelmed before effective vaccines became available. This led to severe pressure placed on global supply chains and a general disarrangement of economies. However, not everyone was forced to remain at home. There are various categories of occupation which are deemed to be essential to the functioning of the economy and were asked to put themselves at risk by continuing to work. The range of such essential work was unexpected – food delivery, as well as delivery of a whole host of other items, became an essential part of day-to-day living and its practitioners very necessary to the functionality of society. In a paradoxical reversal, those people who had previously enjoyed the benefits of mobility by having the resources to travel, internationally and domestically, so as to enjoy the fine things that the world has to offer, overnight were able to benefit from immobility, as they could stay safely at home while poorer people were incorporated into the risky delivery system. These are some of the problems that will face societies should deglobalization occur and bring about anticipated economic issues. It is evident from Brexit Britain that decoupling the country from the rest of the EU has led to increased costs and prices, decreased exports and increased imports, food left to rot in the fields for lack of migrant labour (Carrington, 2018)and the likelihood of a further bout of ruinous austerity. Pandemic conditions have some similarities with this: reduced economic activities and hence reduced tax revenues, while countries which have put the disease under control have a competitive advantage for their goods and services. It is appropriate, therefore, to examine the resilience of people and of institutions under these conditions as a means of understanding how to prepare for deglobalization, should it ever come to pass. The possibility of deglobalization seems more likely now than for some decades, at least since the process of globalization began in earnest after the collapse of the Soviet Union and the end of the Cold War. The most compelling case for a reversal from globalization is provided by the climate emergency and the urgent need to reduce carbon emissions, much of which results from international trade and investment. There are also political reasons, some positive in nature and resulting from the recognition of inequalities and some negative in nature resulting from the Russian invasion of Ukraine and the emergent Russia-China alliance that might break with the US-EU and force other countries to choose one side or the other. The coronavirus led to derangements of the existing global supply chains which revealed how convoluted they have become in many cases and how fragile they might be to permanent disruption. At the same time, this derangement has contributed to the inflation that is threatening to push the world into a global recession which would further strengthen the movement to reverse globalization.

The Informal Sector

There is a category of people who were obliged to continue working irrespective of the risk and that is the informal sector. Informal sectors, by definition, are not officially part of any company and so government schemes aimed at providing funds to firms to pay their workers and thereby avoid bankruptcy does not reach them. Further, since they are not registered to pay tax, it is problematic how they can be contacted to receive government services. Although it is possible to be economically successful as a member of the informal sector ((Walsh, 2014)), this is quite unusual and most people live subsistence or at least cash-poor lifestyles that do not lead to much in the way of savings. They may be found in just about every economic sector and in both rural and urban areas.

In Thailand, figures determined by the National Statistical Office (NSO) used a definition of the informal sector of employed persons who are not protected and not eligible for social security provision. It found that the size of the sector had been above 60% during 2005-13 but then declined such that by 2018 it represented 21.2 million workers (55.3% of total employment), of whom 11.5 million were men and 9.5 million were women (Buddhari & Rugpenthum, 2019).

In recent years, attention has been given to work that is precarious in nature, that is, work in which the employee bears the risk of the work and receives only limited social benefits and statutory protection (Kalleberg, 2000, 2009). This kind of work has developed as a result of contracting-out, casualization and other employment practices that have been made possible by weak trade unions and difficult economic conditions. It is most obvious in the fleets of motor cycle delivery people who have emerged as a result of the coronavirus pandemic but it can be found in a wide range of jobs in what has been called the gig economy. The prevalence of cheap internet access on mobile telephones or computers has greatly facilitated the gig economy, that is, short-term work taken on without a formal contract. It has been estimated that up to 30% of the workforce in Thailand is involved with gig work, two thirds of whom will also have a full-time job. Gig workers might make 15-50,000 baht per month in addition to any formal salary, although there would be substantial regional variations in this (Naiyaraksaree, 2017).

It is not clear whether members of the informal sector in Roi Et will exhibit the same forms of resilience in the case of the coronavirus pandemic as others have exhibited at times of economic downturns. This project was aimed at considering whether resilience behaviours were universal in nature and, if so, whether they would be expected in the event of deglobalization.

Resilience

In order to recognized the heterogeneity of people with respect to their ability to cope with various forms of adverse environmental change, the study of resilience has begun ((Martin-Breen & Anderies, 2011; Rutter, 2012). Although the term has received various definitions, these tend to coalesce around the psychological response to such changes and the ability to adapt to them in a positive way. Clearly, some modes of thinking are more likely to promote the ability to demonstrate resilience than others and enhancing this ability in vulnerable people would be a useful tool for recovery and development. To this end, a link has been drawn between the Buddhist concept of mindfulness and resilience. Mindfulness is a construct known in Pali as sati and discussed in the Eightfold Path as one of the essential steps that people must take with a view to achieving enlightenment: “The Buddha says that the Dhamma, the ultimate truth of things, is directly visible, timeless, calling out to be approached and seen (“Right Mindfulness (Samma Sati),” 2022).” This is a state of mind which can be achieved through appropriate action and guidance Attempts have been made to find a link between mindfulness and the response to disasters in Thailand, such as the tsunami of 2004 ((Falk, 2010) and the rescue of the child football team from a flooded underground cave system (Mindfulness or Sati? An Anthropological Comparison of an Increasingly Global Concept. – Document – Gale Academic OneFile, n.d.). Since Thailand practices Theravadin Buddhism, mindfulness tends to be considered an activity to be tackled through rituals, meditation and learning rather than through purely thought alone. Most people live within convenient distance of a wat (temple) and so can perform some activities to promote mindfulness at little or no cost. Of course, Thai Buddhism cannot be described as purely Theravadin alone with no other schools of thought and traditions not being relevant (Assavavirulhakarn, 2010:193). Consequently, the approach to mindfulness is pluralistic in nature.

It would be expected, therefore, that the respondents in this research study would exhibit, to various degrees, some elements of mindfulness in dealing with the problems of the economic downturn occurring in the country now. This would be in addition to the other strategies and tactics employed worldwide by people in attempting to deal with adversity.

The Research Site

Research for this project was conducted in Roi Et in northeast Thailand. Roi Et city is the capital of Roi Et province and interviews were conducted in rural, urban and peri-urban areas. As part of the Isan region, Roi Et has historically been dominated by agricultural issues. However, economic development has reached the province in recent years and now it is one of the emergent third wave of cities following Bangkok, then Chiang Mai, Khon Kaen and Chonburi as the first two waves ((Glassman & Sneddon, 2003). It has an airport that serves three provinces and much-improved retail facilities, including department stores, shopping malls and international restaurants. Even so, outwards migration still takes place, with people, especially younger people, willing to move to Bangkok or one of the provinces where many factories are based in the search for higher-paid work. Improved transportation infrastructure across the country has made such migration less daunting now than it might once have been and the easy availability of internet connectivity enables social relations to be recreated much more conveniently.

Table 1. Demographic Indicators of Roi Et and Thailand

Area

Population (2021; persons)

Size of Informal Sector
(2021; persons)

Average Monthly Income per Household
(2021; baht)

Farming Households
(2020; households)

Roi Et

1,296,013

464,430

17,713.50

239,189

Northeast Region

21,826,920

7,200,559

21,587.00

3,447,547

Bangkok

5,527,993

1,133,5556

40,200.77

49,962

Whole Kingdom

66,171,439

19,598,061

27,532.00

7,384,180

source: Department of Provincial Administration, Ministry of Interior (note: US$1 = 36.59 baht)

Semi-structured interviews were conducted using a prepared and tested question agenda by experienced local researchers. At total of 50 questionnaires was collected and interviewers used a snowball strategy to identify respondents supplemented by purposive sampling towards the end of the process to avoid the problem of an overly homogeneous sample was avoided. Demographic criteria considered included gender, age, location and health. Interviews were recorded and transcribed and then rendered into English by a qualified translator. The interviews were entered into a database, together with relevant secondary data and research journal, for subsequent content analysis according to a recognized method.

Impact

The impact of the pandemic and economic crisis on the sample of respondents was diverse and ranged from minor inconvenience to severely problematic. The degree of the impact depended to a considerable extent on initial circumstances. Respondents in households with various kinds of accessible capital (including mobility and network capital) were better able to weather tribulation than those without, as might be expected. In general, people in the informal sector are limited in what they are able to earn and rarely accumulate much of a surplus. However, this can be mitigated by membership with complementary resources. It became clear that, especially during difficult times, people tend to think on the level of the household as a unit rather than on the level of the individual. This is not to say there are never any issues with intra-familial relationships but, in such cases, a problematic person (as defined by the other members of the household) is conceptually placed outside the household and the remaining members bond together. Consequently, social relations can be recreated to reflect the new reality.

The expected strategies of resilience in times of difficulty were found: these include, postponing or cancelling non-urgent purchases, general scaling back of the standard of living and, when necessary, the sale of assets. Since Thailand is now a highly interconnected society, as a result of the prevalence of mobile telephones and easy internet access, people have access to a wider network of contacts and, hence, more opportunities to find or offer solutions to problems that people were facing.

As members of the informal economy, respondents were not able to access many of the various forms of government assistance that were provided to support individuals. However, one measure that it was possible for them to access and which was popular throughout the country is the Khon La Khrueng co-payment scheme. According to this policy, individuals can register to join and, for a range of general consumer and household goods at participating stores, would have half the cost met by government, thereby reducing the cost of living while also transferring capital to local producers of daily goods. The scheme has subsequently been extended on two more occasions and the number of participants has continued to increase. Respondents welcomed this approach which involved little to no bureaucracy (participants register for an app for use with their smartphone) and no direct involvement with the state. Although respondents generally praised the conduct of state operations by local government institutions in the province, in general, members of the informal economy have few interactions with the state at the level of everyday politics (Kerkvliet, 2009). Few respondents saw this as a problem and seemed to accept it as simply the way of life that they lived.

Coping

Rimmer and Dick ((Rimmer & Dick, 2009)) describe households in Bangkok in which, on a daily basis, individuals will decide what work they could do that day which would yield a contribution to overall household expenses. This system of cooperation on the basis of ability to contribute is reminiscent of rural communities, in which labour is pooled to ensure that each household can in turn receive a timely amount of inputs to ensure its rice harvest is efficiently collected. These examples illustrate family dynamics in which people will cooperate to help each other, with flexible households according to circumstances and a willingness to accept that bad situations must be endured from time to time. However, this is not fatalism – as the research for this project indicated, people are innovative and entrepreneurial in seeking solutions to mundane problems. Since Roi Et is still fundamentally an agrarian province, most people have a direct relationship to the countryside in one way or another. This might be as simple as being allowed to access someone else’s land holding. That allows people to forage for herbs and vegetables and hunt for edible animals such as frogs and land crabs. A number of the respondents indicated that one of the ways that they could reduce expenditure was to cook their own food from scratch using ingredients they could obtain for themselves for free.

Similarly, respondents pointed out several ways in which they had adopted their work to deal with the changed circumstances. One of the more straightforward ways in which this was tackled was to take the business to customers who had been required to remain at home. This is an example of the reversal of mobility capital that was revealed by the pandemic. Previously, people with the ability to travel here and there were considered to be privileged and to enjoy a better quality of life as a result. During the pandemic, those who were able to stay at home and still continue working (or to be part of the formal sector that was financially supported while workplaces were closed) were the ones with the privileged lifestyle. It was the so-called ‘essential workers’ who had to put themselves at risk by continuing to go outside and work during a time of plague. In common with most other countries, Thailand witnessed an enormous and probably irreversible increase in the home delivery of all kinds of goods. Deliveries require drivers and, in the case of Thailand, this means motor cycle riders. In the sample obtained for this project, ten respondents had become motor cycle delivery riders. One female respondent of this sort observed that she would be required to deliver orders to unknown addresses with people she did not know and could not predict whether they might be drunk and disorderly and, potentially, dangerous to her. It is known that work of this type is precarious in nature.

Mobility was also demonstrated by respondents who took their wares to where their customers would be able to access them. In some cases, this necessitated adopting different lines of business, particularly with those personal services such as hairdressing and massage which rely on physical proximity. Sometimes people were able to take advantage of new opportunities by selling hand gel and protective masks, before these became widely available.

An alternative strategy for coping was to change the size of the household. Household sizes tend to be flexible anyway as people move from place to place for work purposes or to maintain social relations. At a time of economic crisis, changing the household becomes a decision based on the ability of different people to contribute to household expenses (or to represent less of a drain) on a case-by-case basis. In these situations, people might not really want to go ahead with the relocation but they realise the need from the perspective of the family network overall. This becomes evident in the acceptance of the need to adapt and endure when necessary. This is a form of everyday Buddhism – that is, Buddhism not in a sophisticated form of understanding but as it is perceived by people on the day-to-day experience of life. Buddhist Thais, who are the majority of the population, practice Theravadin Buddhism, which favours right doing over right thinking. To embody needed virtue in adversity, it is acceptable to quiet the mind and smile in the face of adversity. This was a common theme.

Discussion

It has been generally assumed in the development literature that the presence of a large informal sector is a hindrance to inclusive economic growth at the national level. As a result, it was thought that growth would inevitably be accompanied by a movement from the informal to the formal sector, although some people might need some additional assistance. However, as the findings from this project show, many people are in no hurry to move into the formal sector even when there are clear financial incentives for them to do so. There are diverse reasons for this: for some people, family of personal circumstances dictate that this is a necessary thing for them to do; in other cases, it is a matter of personal preference and, having tried the formal sector or at least having been exposed to it, some people conclude that they prefer a lifestyle over which they have more control. This is not surprising given that people throughout the developed world who have lived through the shutdown period of the pandemic. The advent of the Great Resignation has in fact been an increasing trend for most of this century (Fuller & Kerr, 2022)for people to change their jobs and their lifestyle, for a variety of reasons. However, what has become more evident from the pandemic is that large numbers of people have reconsidered the extent of alienation that they find in the contemporary workplace and decided that the decades-long decline in the value of their wages (Bergholt et al., 2022) resulting from neoliberal policies means that it is just not worth continuing. This research reinforces the understanding that, in many cases, the apparent benefits offered by the formal sector are insufficient to induce many more people to join it when they do not have to and, indeed, the opposite seems more likely to be true.

One distinctive feature of the coronavirus pandemic in terms of resilience has been the reversal of mobility patterns. Roi Et, in common with the other provinces of the north-east of Thailand, experiences consistent outwards migration to the job providing places of the country and also overseas as a means of seeking a higher standard of living. At the same time, wealthier people tend to enjoy restaurants and nightlife and travel for leisure and self-advancement in a number of ways. They benefit, that is, from mobility capital. Growing inequalities in society are revealed in (im)mobilities and the need for mobility justice (Sheller, 2018:e17). However, the pandemic has reversed this situation, perhaps in some cases permanently. Now it is the case that immobility capital marks out the people with more means, since although they may be confined to home, they now have the ability to have all their needs catered to by delivery people who are now the ones obliged to face the risk of everyday mobility with no guarantees of any relief in the event of hardship. This research lends credence to the argument that COVID-19 has given rise to a new form of mobility crisis and may have permanently altered the conceptualization of mobility capital.

Buddhist mindfulness has been used, mainly by western authors, as a form of proxy for resilience to adversity. Studies have considered the nature of Thai mindfulness in the context of well-known disasters and striven to show the impact that it might have. This study suggests that many if not all people bear within themselves the notion that they can and should respond to adversity with the sense of resignation that one day things will get better. This is a form of Buddhist right mindfulness – samma sati – but one that exists, as far as the interviews revealed, without the deliberate effort to strive for and attain the truth called for in the Noble Eightfold Path. Consequently, it may be referred to as everyday Buddhism, which is the daily response to issues that relies on initiation to Buddhist ideas and practices from an early age and occasional engagement with them subsequently It is sufficient to contribute towards resilience but does not assure it.

Conclusion

People have been facing difficult times around the world throughout history and so it is not very surprising that a small number of reliable strategies for coping has been devised and are consistently used. Those same strategies are evident in the sample of respondents interviewed for this project. However, there was also evidence for two other strategies which are not regularly discussed in the literature about personal resilience. These are the flexible size of the household and the use of everyday Buddhism to cope with loss and lack. If the threat of deglobalization does become a reality to any significant extent, then these are the ways that it might be expected that Thai Buddhists in general will respond to adversity. Presumably there is a level of adversity so great that these strategies will break down but this has not been reached yet.

Having made a claim about generalizability, it should at once be acknowledged that this is a work of qualitative research and claims for generalizability are always problematic. However, the prevalence of basic resilience strategies employed through the ages suggests that there is some commonality across time and space in this case. More research is required to determine whether responses to the downturn in fact is consistent across different societies facing broadly similar circumstances.

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