Civil-Service Rebalancing a must

Reform seen as unavoidable given the ballooning cost and the painful lessons learned from the West

As major markets overseas sputter amid political power plays, Thailand needs to get lean and mean, and policy-makers are sharpening their knives to prune public personnel, who account for about 7 per cent of the country's workforce and, with their generous healthcare benefits, 41 per cent of the state budget.

However, the Civil Service Commission cautions that cost-cutting to avoid the problems facing the European Union must be balanced by the government's strategy for economic and social development.

"Any organisation is 5-20 per cent overstaffed, depending on efficiency," the commission's secretary-general, Nontikorn Kanjanajitra, said recently.

"But downsizing must be balanced with the mission. For instance, while some public services could be outsourced, some related to public health need staffing, as Thailand aims to provide better healthcare," he said.

The bloated public sector in several countries in the EU has been blamed for pushing up public spending and triggering the public debt crisis.

In Greece, the worst-hit country in the eurozone, public sector wages were almost 1.5 times higher than in the private sector. As a proportion of gross domestic product, public employee salaries and welfare benefits rose by 6.5 percentage points from 2000-09, while revenue declined by 5 points. Last year, public-sector wages accounted for 12.5 per cent of GDP, though this was down 16 per cent from the 2009 level.

In Thailand, the public sector employed 2.72 million staff and their compensation accounted for 8 per cent of Bt10.6 trillion in GDP last year.

Nontikorn said that with the associated costs continuing to climb, including for medical care for civil servants and their families, which have hit Bt60 billion-Bt80 billion a year, there's a dire need for a comprehensive plan to rein in spending before public finances are overstrained, as happened in the US and Europe.

Besides the Civil Service Commission, the Public Sector Development Commission, National Economic and Social Development Board, Finance Ministry and Budget Bureau must be involved. The strategy must be shaped first, and then the staffing and financing costs can be considered to execute action plans.

In some areas, there are no staff available for action plans, while redundancy prevails in other areas, as many government units are doing the same thing. Service procedures should also be reduced to increase productivity.

"The NESDB has a clear mission to craft Thailand's Asean strategy ahead of the Asean Economic Community, but execution remains a mess. The Civil Service Commission is tasked to handle training but the central budget is allocated to ministries and local administrative bodies. What should be done is while our training focuses on permanent secretaries, directors-general and governors, ministries should focus on officials in the lower ranks. Provinces then should focus on officers in their areas, like those working near borders," he said.

Some public services like healthcare and schooling are provided by central, provincial and tambon administrations.

"This should be realigned to a single layer to increase human resource efficiency. Redundancy is a cost," he said.

Service efficiency is another key issue. The government recently gave in to the demand of contract nurses for civil servant status to prevent a nationwide strike. With 160,000 civil servants already, the Public Health Ministry will have to add at least 10,000 more.

"Public health is rather labour intensive. The workforce keeps expanding, without any cut in service procedures. The workforce should not be increased without taking efficiency into account," he said.

Redefining service roles and reengineering the service process are considered the best ways to scale down the public sector as well as enhance efficiency. This will leave government units with only necessary tasks, while routine jobs are outsourced.

The Transport Ministry has been successful in using private garages to maintain the engines of its old vehicles. The Foreign Ministry's outsourcing of passports has reduced its workload while the public is satisfied. The Commerce Ministry's Business Development Department installed a computerised system that slashed business registrations from 30 days to 35 minutes. It retrained affected officials for other jobs and does not replace retiring personnel.

About half of the civil service now functions as facilitators and operators. Some tasks could be outsourced - like land surveys, rural education or testing services - if the government unit's labour cost is higher than the private operator's charges.

"Downsizing is not equivalent to layoffs, as that could introduce negative repercussions, as witnessed during King Rama VII's reign," he said.

"Crises in developed economies are leading to pay cuts and layoffs. This should be a reminder for Thailand. We need to emphasise costs and efficiency. It's not right to employ more just because of cheap costs. All government agencies have to think more about efficiency," Nontikarn said.

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Article source: http://www.thethailandlinks.com/2012/12/17/civil-service-rebalancing-a-must/