Localism in Thailand
|This article's factual accuracy may be compromised due to out-of-date information. (November 2012)|
The chief proponent of localism in Thailand or moso (Moderation society) is King Bhumibol Adulyadej's "the philosophy of Sufficiency Economy". The foundations of King Bhumibol's theory included sustainability, moderation and broad-based development. The Learning Centre of King Bhumibol’s Philosophy of Economic Sufficiency claimed the concept focused on living a moderate, self-dependent life without greed or overexploitation of, for example, natural resources.
According to a leaked top secret telegraph from the US Ambassador in Thailand to the US Secretary of State, the tenets of Sufficiency Economy are "vague and malleable" and its popularity stems from "public reluctance to criticize anything associated with the revered King."
After a coup d'état, the military junta claimed that the policies of deposed Prime Minister Thaksin Shinawatra were inconsistent with the theory. The preamble of the junta's new constitution stated that promotion of self-sufficiency was one of the fundamental roles of the state.
The Junta-appointed Prime Minister Surayud Chulanont pledged to allocate 10 billion baht (almost US$300 million) for projects to promote well-being in line with King Bhumibol's Sufficiency Economy principle. He made the pledge while participating in King Bhumibol's 80th birthday celebrations.
In 2007, the Democrat Party-run Bangkok Metropolitan Administration gave away a million baht to each city community that joined the "Self-sufficiency Community Plan According to His Majesty the King’s Self-sufficiency Initiative."
Foreigners were, for the most part, left confused. After a meeting with Ministry of Finance officials where the need for more sufficiency was explained, Standard & Poor's director of sovereign ratings noted, "No one knows what [sufficiency economy] really means." The Asia Times noted that "There is a concurrent risk that the royal philosophy will be twisted by less scrupulous government officials as an opportunity to abuse their authority for rent-seeking and extortion, particularly among foreign-invested concerns". NGO activists hoping to use Sufficiency Economy theory to oppose the construction of large-scale dams were sharply criticized by Bhumibol, a long-time advocate of dam construction, who claimed that the deforestation caused by dams was necessary to provide consistent energy and water sources for farmers.
- 1 Philosophy
- 2 Criticism of the philosophy
- 3 Investment and Loan
- 4 Resource
- 5 Media Criticism
- 6 Note
- 7 Self-sufficiency as a Political agenda in Thailand
- 8 See also
- 9 Notes
- 10 References
- 11 External links
"...The development of the country must be fostered in stages. It must start with the construction of infrastructure, that is, the provision of food and basic necessities for the people by methods which are economic, cautious and conforming with principles. Once the foundation is firmly established, progress can be continually, carefully and economically promoted. This approach will prevent incurring mistakes and failures, and lead to the certain and complete achievement of the objectives..."
The Sufficiency Economy is not a theory about how the economy of a country works, but rather a guide for making decisions that will produce outcomes that are beneficial to development. Also, the NESDB defines the philosophy as: Sufficiency Economy is a philosophy that stresses the middle path as an overriding principle for appropriate conduct by the populace at all levels. This applies to conduct starting from the level of families to communities and to the nation in terms of development and administration, so as to modernize in line with the forces of globalization. "Sufficiency" means moderation, reasonableness, and the need for self-immunity to protect from impacts arising from internal and external change. To achieve sufficiency, an application of knowledge with due consideration and prudence is essential. In particular, great care is needed in the utilization of theories and methodologies for planning and implementation in every step. At the same time, it is essential to strengthen the moral fiber of the nation, so that everyone, particularly public officials, academics, and business people at all levels, adhere first and foremost to the principles of honesty and integrity. In addition, a way of life based on patience, perseverance, diligence, wisdom and prudence is indispensable in creating balance and in coping appropriately with critical challenges arising from extensive and rapid socioeconomic, environmental, and cultural changes in the world.
Criticism of the philosophy
There have been effort by the military junta government to incorporate the King's 'Sufficiency Economy' (Localism) in national economic policy. Thai critics are generally careful to direct their comments towards the military junta government, rather than the King, out of fear of prosecuation for lèse majesté. Consequently, such criticism is often phrased as ineffective application rather than disagreement in principle. Nonetheless, common points of disagreement include:
- The philosophy is not consistent with the reality of Thailand economic development, and
- Nobody understands it and there are several vague interpretations
Investment and Loan
Sufficiency Economy is designed to cover the weaknesses of capitalism (i.e. the philosophy cannot be used alone, but can complement capitalism.)
For example, the philosophy states that one must consider investment at low risk, that is, investment that possesses little possibility for over-finance. This idea is not new, being related to concepts in finance such as liquid ratio, acid ratio, debt-capital ratio, etc.
Further to the philosophy: one must save enough money before investing, must not invest such that one becomes deep in debt. Some believe this idea conflicts with the concepts of economy of scale and economy of scope and the exploitation of future demand.
Self-sufficiency economy (Localism) offers the idea of limited production in order to protect the environment and conserve scarce resources. Production should be aimed at individual consumption; the excess of the consumption will be for sale. This gives rise to the problems according to the three conditions of the availability of resources: abundance; scarcity; and nonrenewable resources.
Scarce resources and nonrenewable resources
The philosophy emphasizes these two conditions of the availability of resources. The philosophy implies that resources and production are for individual consumption, and the excess of the consumption would be for sale.
Social class and resource consumption
The philosophy holds that the rich can consume as much resources as they like as long as their consumption does not incur debt, and the poor should consume resources without borrowing.
Asia Times Online has published an article that analyzes the Thai military junta government's economic policy that is fully influenced by the King's self-sufficient philosophy . The article notices the unexpected, rather bold step in Thailand economic development of the military junta government, endorsed by the King, that willingly responds to the King's philosophy. The article criticizes the philosophy as being so new as to have no academic ground and no empirical approval. As a consequence, any misstep, whether improper interpretation of the philosophy as economic policy or the unaudited practices, would have caused the Thai economy's demise. The article also claimed that the protectionism that the Thai government has used will disperse foreign investors and reduce short term cash flow from outside the country.
The article emphasizes the contradiction between capitalism and self-sufficient economics, which favors long-term economic alignment with what is environmentally friendly, this being the main principle in the philosophy, particularly in less-regulated markets. The Thai model of sustainability is slightly different than Western sustainable development models. In the Western concept of sustainable development, the force that drives the will to protect the environment comes from society's long-term needs. In the Thai model, the driving force comes from the basic human psychological state of need. This psychological state of need can be refined through a far-sighted government education of the public. The other name for localism in Thailand is called "Buddhist Economics" .
The philosophy has been demonstrated by Pridiyathorn Devakula, Thai Minister of Finance, who proclaims he is a supporter of the King's self-sufficiency economy, or Localism. Examples of his policies that follow the King's philosophy of sufficiency economy are: limiting foreign company investments, a practice that enormously reduces the liquidity of the Thai economy; regulation and investigation of foreigners' sources of funds; and capital controls that allegedly destroyed US$20 billion of market value in one day. As a consequence of capital controls and investigations into foreign investors, the World Trade Organization (WTO) sent negative feedback to Thailand which cast doubt on the ability of Thailand to continue to be a WTO member . The prime minister Surayud Chulanont, who also proclaims the King's localism, has called for the former minister of commerce Somkid Jatusripitak, who is pro-capitalism, to return to the service of the country.
An article appearing in the Bangkok Post on 22 February 2007 noted that Somkid Jatusripitak, who had been the finance minister in the previous Thaksin-led government, resigned his new position as spokesman for the Sufficiency Economy within days of being appointed. His appointment to the position had been heavily criticized, and Mr. Somkid said that he resigned in order to prevent ongoing divisions in Thai society.
The Bangkok Post reported on 23 February 2007 that there is now discussion about whether the committee drafting the new constitution should include language defining Thailand's economic policy. The previous constitution, drafted in 1997, had identified capitalism and free markets as the Thai economic philosophy.
One example of the Thai government's application of the self-sufficient philosophy is in promoting the use of local currency. The use of "Bea-Kud-Shum" as a local currency in specific parts of rural Thailand was endorsed by the Thai government in August 2006, in spite of the fact that the use of this currency instead of the standard Thai 'Baht' had been deemed illegal previous to this. This example also shows the difficulties of applying the philosophy, in that by using local currency such as "Bea-Kud-Shum", the currency itself is exempted from tax collection and can therefore interfere with the tax system.
The Asian Times's article "the King's 'Sufficiency Economy' (Localism)" may be misunderstood. "Sufficiency Economy" calls for partial localism - a quarter - not the whole. In other words, "sufficiency economy" is meant to be "partial" localism. It is true that many parts of Thailand still enjoy capitalism. "Sufficiency Economy" calls on those to practice "some" localism particularly those in the rural areas. However, the oppositions see no difference between "Sufficiency Economy" and "Self-sufficient economy", i.e., they are the same as Localism . Kevin Hewison describes the self-sufficient political agenda in Thailand as Populist Localism.
Self-sufficiency as a Political agenda in Thailand
Self-sufficiency is being strengthened through the link between nationalism and the King. Criticism over the King's philosophy would be a demonstration that the critics do not respect the King. The philosophy itself is often portrayed as a national barrier that guards Thailand from evil foreign, greedy, scheming capitalists.
After the ousting of former Prime Minister Thaksin, the Thai government under the Prime Minister Surayut began a political campaign that under King Bhumibol's Localism is the new Utopia. Thus, Localism is used as a political tool to counter Thaksin's proposal of Thaksinomics. The King's philosophy had been introduced to Thailand before Thaksin was prime minister. In fact, for the celebration of King Bhumibol Diamond Jubilee, Thaksin's government organized public exhibitions commemorating the event, one of the major exhibitions being sufficiency economy.
- Embassy of the United States Bangkok, Thailand, 06BANGKOK5706 WHAT IS THE "SUFFICIENCY ECONOMY"?, 15 September 2006
- "Rebranding Thaksinomics", The Economist, 11 January 2007
- Asia Times, In Thailand, a return to 'sufficiency', 5 October 2006
- "PM earmarks B10bn for well-being", Bangkok Post, 10 March 2007
- "Sufficiency Economy :implications and applications". NESDB. Retrieved 6 May 2010.
- "Sufficiency Economy :implications and applications". NESDB.
- ^ Thailand's new economic logic, Shawn W Crispin, Asia Times, 2 February 2007.
- ^ Buddhist Economics, George Wehrfritz, Newsweek International Edition, 22 January 2007.
- ^ WTO doubts Thailand, Prachachat business newspaper, 19 April 2007.
- ^ Bea-Kud-Chum as a new currency, Prachachat business newspaper, 15 February 2007.
- ^ Localism in Thailand a study of globalisation and its discontents, Kevin Hewison, 1999.
- ^ Bilaterals, FTA BACKLASH: Farmers petition the King, 7 July 2004
- ^ Thaingo.org, 31 March 2007
- ^ Self-Sufficiency Economy Topic, Chaweewan Saiboa, Prachachat Newspaper, 8 February 2007.
- ^ Thailand's Royal Wealth, Asia Sentinel, 1 March 2007.
- Sufficiency Economy, the Chaipattana Foundation Journal
- New Mandala interview with Professor Kevin Hewison where he discusses sufficiency economy