Siphon Suphapong

(Ed. Note: After a period known as the‘bubble economy’, Thai people, today, found themselves broke. The following is an excerpt from Siphon Suphapong’s reflection on how to counter the bubble economy with a self-sufficient economy. The author is the president of Bangchak Petroleum Co. Ltd. Translation from Thai to English by Anitra Moser Puangsuwan)

"To be broke in one’s own land" means we are not self-reliant. We cannot help ourselves. We have to understand the nature of this ‘bubble economy’ which tries to draw money from public sectors to fill up its bubble. The name of this economy system is, in itself, obvious that it is not substantial and therefore, cannot survive on its own. In the past, some money laundering businesses have laundered billions of baht out of Thailand, we still do not know what had happened to that money. The Thai government has tried to set up a rehabilitation fund with the country’s billions of baht to support such businesses, to pay back debts on behalf of those money laundress. The question is where does this money come from? When a businessperson has decided to speculate his/her market value, until it become unrealistic, or by not being honest in businesses, the Government must not lend its hand in helping such persons. By so doing, the Government would have to draw money from the public, from the taxpayers’ money or from privatisation of state enterprises. In other words, the Government takes money from the sustainable to give to the unsustainable. We should look at this scenario with a new set of eyes including the macrocosm of economy.

In the past, we enjoyed a high level of [garment] export, thanks to our cheap labour and natural resources. Our country was so attractive to foreign investors because of cheap children and women labour. Industrial plants could still discharge waste water without any treatment into the coast or mangrove forest. But now this situation has changed. Our natural resources have been depleted and our labour cost is not cheaper than those in neighbouring countries anymore. In fact, when we were competing in the export business, we did not have enough raw materials so we had to import them. We have been suffering from a trade deficit all along because we imported raw materials more than we exported its product. We did not have enough local raw materials and capital to compete in this type of industry. Consequently, investors shifted their investment to our neighbours and we are pleading with them not to go away. Those investors even become our competitors. So, it is time that we change the way we engage ourselves in industry.

Building a Self-sufficient Economy

To begin with macrocosm economy, we have to ask ourselves what type of product we can prosper with? But first of all we have to think of a self-sufficient economy which includes our own brand name, raw materials, labour and even technology. Rice is an example of our export without our brand name, without a controllable market. People in Hong Kong eat Thai rice without knowing that it is Thai rice because its package does not say so. This means we have to pay a lot to a middleman and yet we cannot control the market. So, agricultural products like food and rubber that we do not have to buy, and of which we have knowledge and a market, are the items that we should consider as a self-sufficient economy. This self-sufficient economy does not require high capital and import technology.

Self-sufficient economy in a macrocosm level means sufficiency in raw materials, knowledge, capital as well as a market. For example, we have a local market for rice, its export is just a bonus. If there is any changes in the world market, it would not be a complete loss for us. We should not depend on trade economy. We cannot take buying one’s asset and sell them to foreigners as real productivity. That is just an illusory convenience. And when the fundamental economy do not allow for selling and buying, the Government would take from the public in order to maintain this bubble which is impossible and immoral too.

In order to be able to survive, we have to depend on our fundamental economy with low capital. In fact, our self-sufficient economy is based on agricultural products and these are not the same old things. There are always new products, new raw materials and new ideas. Thai herbal plants are, for example, the raw materials locally grown that can be processed into a variety of marketing products and we need not buy from abroad. Moreover, if we look at our fundamental economy, which is the economy for the majority, we find that bankruptcy on macrocosm level has not just happened in Thailand. Our rural communities have been bankrupt for quite some time now. The urban sector, no matter what excuses they produce, merely heartlessly ignored them. Because the truth is, at the beginning of the national development plans 30 years ago, rural sector's and Bangkok income equalled to one and eight respectively. Thirty years later, rural sector's income equals to one while Bangkok accounts for 18. The gap is wider because the economy is not based on benefit sharing. The rural sector has always been deprived by the urban sector.

Today, when Thailand is encountering financial crisis due to the weakness of our banking system, the rehabilitation fund was set up with good intention to support the financial institutions. Unfortunately, it ended up helping people who have been cheated by unscrupulous businesspersons. Worse still, the agreement signed with IMF stipulated that the interest for paying back would have come from taxpayers' money and the national budget which was initially earmarked for education, children and the underprivileged. It further stated that the capital would have come from privatisation of state enterprises. The Government is quite concerned about this policy so it has issued bonds and has changed short-term loans to be long-term loans. However, somebody still has to pay back the debts on behalf of those unscrupulous businesspersons. If you ask me where should this money come from? I would say it should come from those cheating businesspersons. I think it is the right thing that the governor of the Bank of Thailand is going to take a legal action against those corrupt bankers and businesspersons. Despite the small amount of money that might be retrieved, such action would show that there is still justice in this society. It will also set a precedent for future financial management.

Community-based Organisations: Key to Self-sufficiency

Then, instead of privatising state enterprises or selling them to foreigners, the Government could sell some shares to the public. If the Government really needs to sell some shares to foreigners, it should sell only shares that would make no impact on the rural public and the poor. Governmental organisations i.e. state enterprises, especially the big and healthy ones, should be streamlined to be able to co-operate and co-work with community-based organisations in the rural areas. There are some community-based organisations, which have already been engaged in businesses and are fairly self-sufficient. If the Government wants them to expand their businesses to absorb the unemployed, it has to provide them with adequate capital and marketing. And so as to avoid exploitation by the state personnel, members of the community-based organisations should be invited to co-own and co-operate the business. The Nong Pho Dairy Co-op is one successful example from which we can learn. When these community-owned businesses become stable and make some profits, they need not depend on the government's subsidy. They can even pay tax to support the Government. The money-giving project from the Government or a protesting mob in front of the Government's house would become a history. Since whenever they have problems, they can call for a board meeting to solve the problems themselves.

Therefore, if the Government would like to facilitate rural community development, it should provide the rural communities with a sustainable occupation. Besides, which is important, the Government should encourage a governmental or business organisation to co-work with community-based organisations which cherish the concept of partnership in development between business and rural communities. When rural people have an opportunity to take part in operating a business, they, not only are happy with the profit, but also realise other values in themselves. One of which is to be able to contribute to their society. The society, in return, would create a type of social fund to support these community-based organisations while they support their members.

How do these community-based organisations support their members? When members of these organisations, who have grown from a self-sufficient economy, have enough for their own consumption, they would be organisationally powerful. They can organise themselves for community welfare, as well as for power of negotiation. This organised power of negotiation would bring about another type of values, which is sufficient benefit sharing. It would be different from the 'bubble economy', that only one person becomes wealthy while others are left suffering. Sufficiency for one and suffering for the rest is not the right system. Group sufficiency would bring about morality, which would also create a natural leader loved by members of the communities.

At this point, the middle class people can play a vital role in helping to revive the country's economy. They can do so by changing their consumer's values and attitude to buy locally produced product. An establishment of urban consumers' co-ops would be an ideal way to support rural communities. It would help our children to hold the right attitude regarding being economical and generous.

When all sectors in the society can work together and there is a sufficient benefit sharing, then, we can call it a civil society. A society where everybody joins hands in the process of working, learning, and decision-making.