Lack of Asean standard will limit movement of labour in AEC

The AEC is expected to feature freer movement of capital, investment, services and skilled labour within this region of 600 million people.

Tan Hui Yee | Thailand Correspondent

Published | Oct 8, 2015, 5:00 am SGT

A weathered Myanmar man hobbles by on the footpath dressed in a crisp shirt and longyi as several portly Middle Eastern women in abayas clamber out of a car. By the driveway next to them, a warden directs a seemingly endless stream of cars and the odd ambulance turning up at one of the most profitable private hospitals in Thailand.

Bumrungrad International Hospital in central Bangkok is sitting in a pretty good place. It reported a 43 per cent year-on-year growth in earnings in the first half of this year and a net profit margin of 20 per cent. But it is not resting on its laurels.

As South-east Asia gets ready for the official introduction of the Asean Economic Community (AEC) on Dec 31, the hospital is positioning itself to increase the traffic of wealthy Myanmar patients to Bangkok by building a diagnostic and primary care facility in the neighbouring country’s commercial capital Yangon.

The AEC is expected to feature freer movement of capital, investment, services and skilled labour within this region of 600 million people. Asean member states are expected to allow foreign ownership of up to 70 per cent across more than 100 business types. On paper, eight groups of professions will enjoy easier access to regional talent: Engineers, tourist professionals, dentists, architects, surveyors, accountants, nurses and doctors.

But Bumrungrad’s corporate chief executive Dennis Brown does not foresee a sudden spike of foreign doctors joining Thailand’s lucrative medical tourism sector. Despite the mutual recognition agreements that commit Thailand to recognising the qualifications of professionals from other countries, doctors and nurses, for example, still need to obtain a licence by taking examinations in Thai.


    Professional associations also need to link up with professional associations in other countries to think about (common) standards.

    MR SHABIH ALI MOHIB, a Bangkok-based World Bank senior economist, on how regulatory standards are not completely within the control of governments

“There are still some remaining hurdles,” he tells The Straits Times. “This is Thailand, people here do speak Thai, you would expect the doctor to speak Thai. I have no problem with that. But Thai is not a widely spoken language.”

A qualified medical doctor from any foreign country who wants to practise in Thailand will need to take a three-part examination: Two theoretical sections in English and a practical section in Thai.

“We think communication is important,” says Medical Council of Thailand’s president Somsak Lohleka. “If you don’t understand, how do you examine the patient?”

Dr Somsak says the medical licence examination has been tweaked over the years to ready it for new conditions under the AEC. The entire examination used to be conducted in Thai, he pointed out.

But the numbers of licences handed out indicate just how high a hurdle the test still poses. Thailand has some 50,000 fully licensed doctors, out of whom only 200 are foreign nationals. The last one who qualified did so in 2010, and he was a Japanese national.

This partly explains why, despite lingering concerns about the threat of increasing competition from the AEC, doctors in Thailand “don’t worry too much”, says Dr Somsak.

“They think they will earn more, and expect more patients to come to Thailand to be treated.”

Regulatory hurdles are by no means limited to the medical profession.

Mr Shabih Ali Mohib, a Bangkok-based senior economist with the World Bank, points out: “Asean doesn’t have an Asean standard which is recognised by countries that would allow architects from, say, Singapore to come and practise or work with agencies directly… Even though the barriers to entry have been reduced, the qualification to meet the accreditation standards is very difficult, for a non-native speaker.

“Consequently, not a lot of mobility is expected immediately.”

The irony is that the Thai state has ploughed billions of baht in recent years into promoting the AEC to its citizens. Billboards proclaiming the country is “Ready for the AEC” or “Welcome to AEC” are ubiquitous at prominent traffic junctions around the country, while various organisations trot out a steady stream of AEC-related seminars.

Businessmen pontificate openly about whether their industries are ready for the AEC while educationists fret that the country’s rote-learning methods will leave Thai children flailing behind their more savvy Asean counterparts.

DFDL Legal and Tax, a law firm that operates across many parts in Asia, noted in a commentary late last year that “Thai professionals are unlikely to benefit from the liberalisation of labour”.

This is because “many young Thai professionals… lack the interest of working abroad (and) possess fewer language skills than their counterparts in other Asean countries”.

In international rankings, the kingdom has consistently fared lowly for English proficiency in Asean.

Dr Somsak quips that when the medical council started using English in certain portions of the medical licensing examination, “we worried that Thai medical students may not be able to pass their exams because they don’t have competency in English”.

Asean gauges that it has achieved about 80 per cent of the AEC targets so far. But experts say that figure understates the difficulties ahead because the trickiest and most contentious barriers between Asean member states have been left untouched.

Regulatory standards are just one example of such barriers and they are not completely within the control of governments. Licensing is often carried out by professional associations, says the World Bank’s Mr Shabih. “It’s not (only) the government that needs to be in the driving seat,” he says. “Professional associations also need to link up with professional associations in other countries to think about (common) standards.”

Consequently, few observers expect Asean’s member states to fulfil all the AEC obligations by Dec 31.

Officially, the Thai government says it is confident of meeting its targets this year. The Kingdom has implemented its eighth package of commitments – out of 10 – as part of the AEC. According to the Ministry of Commerce’s Department of Business Development, it now allows up to 70 per cent foreign ownership in 83 business categories, like six-star hotels.

But the last package was implemented in 2013 and each package requires the approval of different layers of authority right up to the Cabinet. In between then and now, the country has been roiled by street protests and rocked by a coup and is now run by a military government. With just a quarter of this year left, what are the chances that it may miss the deadline?

Ms Prattana Hasamin, a director in the department, smiles quietly as The Straits Times poses the question.

“We can make it,” she says. “The preparation is done, but we need to run through the process.”

• S.E.A. View is a weekly column on South-east Asian affairs.