Transcript Sufficiency Economy - Intranet

SUFFICIENCY ECONOMY
“Income Generation and Poverty Reduction for Development” Course
Mekong Institute
1 April 2009
Montree Boonpanit
Director
Northeastern Economic
and Social Development Office
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Contents to be discussed
1.
What is “Sufficiency Economy”
2.
How is S.E. importance?
3.
To what extent S.E. can alleviate poverty?
Sufficiency Economy
in the views of most Thais
Contradict to
capitalism economy
No need to work hard
to get more products
or to earn higher income.
One has to be enough
or satisfy what one has
Can not use luxury goods
or modern technology,
applies only primitive
instruments or things.
It is a
subsistence economy
or economy for the poor
Sufficienc
y
Economy
It is applicable
for agriculture only
Consumption and
economic will decline
Country development
will lag far behind
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What is “Sufficiency Economy”

“Sufficiency Economy” is a philosophy that stresses the middle

“Sufficiency” means
path as an overriding principle for appropriate conduct by the populace at
all levels. This applies to conduct starting from the level of the families,
communities as well as the level of nation in development and
administration so as to modernize in line with the forces of globalization.
moderation, reasonableness, and the need of
self-immunity mechanism for sufficient protection from impact arising
from internal and external changes. To achieve this, 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, academia, businessmen at all levels, adhere
first and foremost to the principle of honesty and integrity. In addition, a
way of life based on patience, perseverance, diligence, wisdom and
prudence is indispensable to create balance and be able to cope
appropriately with critical challenges arising from extensive and rapid
socioeconomic, environmental, and cultural changes in the world. 1
Notice 1 Unofficial translation of the Thai working definition approved by His Majesty and sent by His Majesty’s Principle Secretary to the NESDB on4
November 29’1999
Middle path
is a
Sufficiency
philosophy
Economy
Stresses
Appropriate conduct
by the populace at all level
Modernize
in line with globalization
Moderation, reasonableness, self-immunity
Protection
from internal and external shock
Sufficiency
means
Applicable of knowledge
with due consideration and prudence
Great care utilization
of theories, methodologies with great care
Moral
honesty, integrity, patience,
perseverance, diligence, wisdom
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Moderation:
- How many is considered moderation?
- Can we consume luxury goods?
(depend on each individual’s capability
so long as it harmless one-self & others or
not make trouble to anyone)
Knowledge condition:
(Know, prudence, great care,
due consideration)
- Concerning living and livelihood;
theories, methodology, technologies,
changing of environment, globalization,
local wisdom, socio-geology etc.
- Right and accuracy.
Moral condition:
(honesty, integrity, sincere,
diligence, perseverance,
Sharing)
- Lead to responsibility; one-self,
family, community, social and national
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Summary of the Philosophy of Sufficiency Economy
The Middle Path
Moderation
Self-immunity
Reasonableness
Knowledge Condition
Moral Condition
(Know, prudence, great care)
(honest, sincere, diligence,
perseverance, sharing)
Lead
to
life / economy / social
balance / stability / sustainability
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How is S.E. importance?

We are now in the globalization stream.


Changes are rapid and extensive.
Its effects are enormous and severe to the people’s ways of life.
S.E.
Lead
to
Balance
Stability
Aim to
S.E. is the
foundation of
life and
stability
of nation
Sustainable
Cope with changes:
Internal and external
Economic:
Economic groupings & changes
in global financial markets ;
(inter-country flow of capital,
goods and services)
Technology: Leapfrog advances in technologies;
communication, bio, material,
nanotechnology
Social:
Social changes: ageing society.
Environment: Changes in the environment
and natural resources :
climate change,
incident of natural disasters. 8
World Economy




World economy now is in the stage of recession, while last year it
grew 2.5 %., resulting in unemployment of 200 million person
worldwide.
European economy in 2008 was a lion share of world economy
account for 24.2 %.
U.S.A. Economy was the second of 18.3%, its GDP was about us$
143.0 billion.
Thai economy depends 70 % on export





Asian
EU
U.S.A
Japan
China
21.4% of Thai export
12.8% of Thai export
12.6% of Thai export
11.8% of Thai export
9.7% of Thai export
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Climate Change; global warming

Intergovernmental Panel on climate
change (IPCC) reported to UN.

This is the first time in 4,500 mil years that the earth has
tremendous changed by human being.

Before the industry revolution Co2 was at 280 ppm.

200 years after the industry revolution, Co2 in the
atmosphere has increased to be 380 ppm.

The critical point is at 450 ppm.

Now we annually generate 2 ppm of co2 to the air

So we have 35 years left to solve this problem.
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What we are facing in the complex
modern world or globalization



Food insecurity
Massive environmental destruction
Growing inequalities in distribution of income

Crippling financial crisis


Market failure
Poor people increase
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Three Major Problems Threatening
World Survival and Limit to Growth
world
past
Economic
Development
Present & Future
- Food shortages
- Energy shortages
- Lack of resources
Economic
- etc
Development
adhere to capitalist
without sufficiency
Amount of
Resources
Food and
Energy
Environmental
Quality
1.
Economic Development without CSR
2.
shortage of natural resources
3.
Environmental degradation
Quantity of
Resources
Food and
Energy
-
income disparity
migration
terrorism
communicable
deceases
Environmental
Quality
- water pollution
- soil degradation
- air pollution
- over garbage
- slums
etc
- climate change
- deforest, flood
- ozone layer destruction
- acid rain
- decease from pollution
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Extreme and Middle Path of Economic System
Mainstream
Capitalism economy
Alternative stream
Socialism economy
Understood
human nature
Globalization
- Borderless even in the space
-Looking to occupy other planets
Accept limitation
(Sufficiency economy)
Aware of
danger
Trade economy
(Greed economy)
Inefficiency
Lack of goods
Unwillingness sharing
Indicate weaknesses
Slow progress
Lag far behind
Can’t catch up with
new knowledge
Self-sufficiency economy
- Self-reliance 100%
- Close the country
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C.E. VS S.E.
Capitalist Economy
Maximize profit
Maximize production
Maximize consumption
Greed
Sufficiency Economy
Abstemious use
of resources
Moderation
Risk
Self-immunity
Work for self-interest
Work for oneself & Others

Create the poor

Joint activities , Joint consumption
at the expense of others (Less
CSR)
Give away part of their wealth
Income concentration
Income distribution
Short-term profit
Long-term profit
Aims at wealth
Aims at happiness
Adam Smith’s work
“The wealth of Nation”
Adam Smith’s work
“The Theory of Moral Sentiments”
(free market, greed, the role of self-interest)
(conscience will lead us to do what is right)
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3 Stages of Sufficiency
1.
Sufficiency at family or farm level
“Stage of self-reliance”
2.
Sufficiency at community or organization level
“Stage of cooperation among people/famers”
“cooperative, community enterprise”
3.
Sufficiency at the national level
“Stage of cooperation among cooperative”
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3 steps for country development
1.
Individual or
family level
(self-reliance)
* Building a good basis or infrastructure
for enabling people to have enough to
live on or enough to eat.
* People join hands in various activities
2.
3.
Community
level
(cooperative)
National level
(cooperation among
cooperative)
(in the form of group or enterprise)
* Participate in decision making process
* Develop mutual learning processes
* Appropriately apply the uncomplicated
technology in development
* Serve domestic demand first
* Enhance cooperative networking
* Promote holistic development processes
to create balance
* Take into account country’s capital;
social, economic, resources
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Application of S.E.



Cost reduction in stead of targeted earning.
Increasing income together with reducing
expenses
Reduce risk :



Sources of income earning have to diversify
Cope with the changing world through the process of
learning together & working together
Expanding opportunity together with
preparing the people with appropriate
knowledge & know-how
(for instance village fund)
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Factors give rise to poverty
Behavior in spending
High cost of living
High dependency ratio
Physical or health problem
Over expenses
Poverty
Low income
Low endowment; asset, capability etc.
Low education
Low quality & less products to sale
Behavior; not persevere, lazy
Lack of opportunities
Non pro-poor policies
to access, to acquire
Capital
Soft loan
High income job
Land
Public services
Education
Health services
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S.E. & poverty alleviation
Reduce Expenses
Change behavior
New Theory
Agriculture
Increase Income
S.E
Change behavior
OTOP
Generate Opportunities
community enterprise
Government Intervention
Provide soft loan
(village fund)
Tuition-free
Education
Treatment-free
for hospital visit
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New Theory Agriculture: NTA


Main purpose is to make farmers more self-reliant through an
integrated management of their land, living harmoniously with
nature.
NTA has 3 stages
1. Create self-reliance at the household level; in term of food, healthy
and income from extra crops.
Do mixed farming by dividing land into 4 parts with proportion of
30/30/30/10 for rice cultivation, garden crop, a pond and
housing respectively.
2. Create self-reliance at the community level;
Based on cooperative activities among members within
community based on a concept of sharing excess resource of
each household. It can be community enterprise.
3. Advance stage;
The community expands their activities through reaching out to
other communities, cooperatives as business partnerships.
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What is Community Plan

A plan that is formulated for
the development of
community by community
and for the community itself

A participant from members
of the community in the
process of formulation

Self-reliance

Local resource and wisdom
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Principles of Community Plan

“explode from within" / “knowing oneself”

Area-based/Community based development: for by and of the
community: not for the government or NGO agencies

Participation from all sectors

Other levels or agencies support but not guide/control

Community Information “know oneself”: reduces expenses,
increases income and generates opportunities
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Community Development Plan
Formulation Processes
1.
Meeting to share the understanding.
•
Purpose
•
Benefits
•
Application
2. Explore the information by community member.
•
Income
•
Expenditure
•
Natural resources
•
Public utilities
•
Etc.
3.
Meeting for presenting & discussing.
•
Know one self
•
Form a share vision
•
Form development plan
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S.E. business practice

Appropriate use of technology:
use of inexpensive but technically
sound technology

Appropriate manufacturing capacity: consistence with business
ability to manage

Focus on long term profit:
moderate profit

Emphasis on honesty:
fair to consumers, customers,
workers, suppliers

Risk management:
diversification, various
products, ability to adjust

Don’t create unmanageable debts

Respond respectively
to local, regional, domestic and
international market.
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