KUALA LUMPUR - Thailand has taken a landmark step by allowing refugees from Myanmar to work legally in the country to ease aid cuts and labour shortages.

The move, which came into effect in October 2025, signals a departure from its decades-long policy of confining refugees to camps along the border with Myanmar.

It also highlights a pragmatic shift as international assistance dwindles and Thailand seeks to stabilise its workforce.

Aid Dependency Pushes for Change

For more than three decades, about 87,000 refugees living in nine border camps have relied entirely on foreign aid for food and daily necessities.

The United States had been among the largest donors, but its withdrawal earlier this year left a severe funding gap.

Léon de Riedmatten, executive director of the Border Consortium (TBC), said Thai authorities had been forced to acknowledge the limits of outside support.

“The Thai authorities understood that there was no other government willing to replace the Americans supporting food and cooking fuel in the camps.

“They also didn’t have the means by themselves to replace the Americans,” he said.

Following United States President Donald Trump administration’s aid cuts, TBC could only assist the most vulnerable, while the International Rescue Committee (IRC) shut down its health facilities.

The reduced funding has intensified calls for self-reliance among displaced people, who now face growing uncertainty about basic survival.

Work Permits as a Pathway to Stability

In August, Thailand’s Labour Ministry passed a resolution to grant work permission to eligible refugees in an effort to avoid burdening the Thai government alone and support the country’s economic growth, address labour shortages and promote human rights.

Under the new scheme, refugees must apply for work permits and undergo health screening before being matched with employers approved by camp authorities.

Many of the available jobs are expected to be in agriculture and manufacturing, where labour shortages are most severe.

An estimated 42,600 refugees will qualify for the programme, almost half the current camp population.

Bway Say, general secretary of the Karen Refugee Committee, said the policy marked a significant shift for refugees who have long been restricted to camps.

“In the beginning, refugee people cannot go outside the camp. Now, they (allow) refugees to work outside. This is very good,” he said.

Still, he said there was anxiety among refugees about their readiness for employment.

“Right now, however, all of the information isn’t clear and individuals are worried about their lack of Thai language or whether they’ll have the skills for the available positions,” he added.

Labour Shortages Driving the Reform

The new policy also responds to mounting labour shortages across key industries.

Thailand’s workforce has been weakened by an ageing population and by the departure of around 520,000 Cambodian workers after a renewed border dispute escalated into military conflict.

Cambodian migrants had made up about 12 per cent of the workforce, mainly in construction, agriculture, fisheries and manufacturing.

Their exit created immediate pressure on Thailand’s labour market, prompting the government to rethink its restrictions on refugee employment.

Roisai Wongsuban, a consultant with the Migrant Working Group, said the move was long overdue and reflected the convergence of multiple challenges.

“These combined waves of pressure have now positioned Thailand as a leader in managing displaced populations,” she said.

Integration Challenges and Administrative Hurdles

While the decision has been widely praised, integrating refugees into Thai society presents a complex challenge.

Camp residents will need support to adapt to local norms, workplace expectations and legal frameworks outside the camps.

Workers are expected to receive identification documents and access to banking, enabling them to send money home to their families still in the camps.

Wongsuban said coordination between the government and humanitarian organisations remained a work in progress.

“We met the ministry of labour last week and they were new to working with the refugees, and there were some issues that were unforeseeable from their end,” she said.

De Riedmatten said the initiative would likely face difficulties at the start but could succeed through collaboration.

“There will probably be difficulties and surprises as the new initiative unfolds, but as long as the authorities, welfare organisations and refugees work closely together, it can be a success,” he said.

A Regional Model in the Making

Humanitarian agencies believe the initiative could become a model for refugee management in Southeast Asia.

Tammi Sharpe of the United Nations High Commissioner for Refugees (UNHCR) described the reform as a turning point in the region.

She said the results of Thailand’s scheme could redefine how protracted refugee crises are handled.

“We’re really hoping that we move from a situation of aid dependency for decades into self-reliance,” she said.

If successful, the policy could influence neighbouring countries to pursue labour-based integration instead of prolonged camp confinement.

The World Bank and UNHCR are closely tracking the outcomes to assess its long-term impact.

For Thailand, success would show that humanitarian responsibility and national interest can coexist under a coherent labour framework.

Balancing Compassion and Pragmatism

Despite the optimism, the government faces potential domestic criticism from groups concerned about migration control and job competition.

Supporters, however, argue that the initiative is a realistic response to simultaneous humanitarian and economic pressures.

By legalising refugee labour, Thailand may begin dismantling the restrictive structures that have defined refugee life for generations.

If the programme works, it could usher in a new era in Southeast Asia, one defined by human mobility, productivity and dignity.

As global aid shrinks and regional conflicts persist, Thailand’s experiment offers a blueprint for resilience through inclusion rather than exclusion.