'Tonkla Archeep' will cut unemployment: FTI

The government's "Tonkla Archeep" project will likely reduce Thailand's unemployment level from an estimated 1 million workers to 600,000, says the Federation of Thai Industries.

Vice chairman Thaveekij Jaturajarernkul said he believed this despite the fact that the situation for small and medium-sized enterprises was expected to remain critical throughout the rest of the year.

Speaking yesterday at the signing of a memorandum of understanding for the project, he said the industrial sector remained in danger of laying off many more employees in the second half of the year, because most of their orders were for the short term.

"The economic crisis in the United States and Europe will grow worse if their economies contract another 2 percentage points. Consequently, export-oriented SMEs will face a tougher situation the rest of the year and may finally end up closing down," Thaveekij said.

He believes the "Tonkla Archeep" project can be an important factor in reducing unemployment if the government can foster a better understanding of it among its target group.

He said only 24,000 people joined the project this year, far fewer than the target of 200,000, due to slow procedures by the government.

The project plans to use Bt1 billion of its Bt6.9-billion budget to keep 100,000 participants employed by providing allowances for those participating in training courses next year.

Deputy Prime Minister Korbsak Sabhavasu said the project would focus on helping SMEs in the tourism, automotive, and electronics sectors, including exporters hit by the global recession.

"We consider the lower-than-expected number of participants in the 'Tonkla Archeep' project a good sign. It could mean workforce demand has bounced back in some industries," he said.

FTI deputy secretary-general Sommat Khunset said small and medium-sized manufacturers were suffering greatly from a lack of liquidity.

"It seems like the government and banks are attempting to ease loan conditions. But in reality, SMEs are finding it more difficult to access loans, because banks require more collateral from them or reduce their loan limit," he said.

The FTI today will meet with the Export-Import Bank of Thailand and related agencies to seek a solution, he said.