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A new paradigm for society and governance

Article - June 14, 2013
The King's philosophy for a Sufficiency Economy is an approach to life and conduct applicable at every level
A series of unsustainable economic bubbles that had been developing across Asia in the 90s, inflated by excessive levels of extravagant consumer and business spending and debt accumulation, finally popped in 1997, causing an Asian economic crisis that hit Thailand hard. Businesses went bankrupt, semi-constructed mega-structures left abandoned. In the aftermath of the crash, the indomitable, proudly never-colonised Thai nation took stock of the situation and heeded the call from their revered King Bhumibol Adulyadej to rebuild the country on foundations of self-reliance and sufficiency. Sixteen years later, Thailand has become the second largest economy in Southeast Asia and established itself as a lynchpin of the upcoming ASEAN Economic Community.

“Resilient is the term I often use when I describe this country,” says Asif Anwar Ahmad, the former British Ambassador to Thailand. 
 
Although King Bhumibol has promoted sustainability and self-reliance since the 1950s, it is widely accepted that his idea of a ‘Sufficiency Economy’ gained recognition and influence during the 70s. In a royal statement on December 4 1974, he expressed his concern that modern development which solely emphasised economic expansion may eventually lead Thailand into crisis, saying: “I ask all of you to aim for moderation and peace, and work to achieve this goal. We do not have to be extremely prosperous... If we can maintain this moderation, then we can be excellent...” 
 
The King proposed that the stability of the basic economy should be firmly established by first ensuring that the majority of rural people have enough to subsist. In this way, the country would have a more solid, even foundation on which to pursue a higher level of development.  
 
Sufficiency means to have enough to live on, to lead a reasonably comfortable life, without excess, or overindulgence.

King Bhumibol Adulyadej 
King Bhumibol’s Sufficiency Economy is based on three grounding principles: moderation, reasonableness and risk management. It asks that people try to produce or consume within the limits of their existing income or resources first, thereby decreasing dependence on external sources and reducing the risk of overspending beyond one’s means. “The Sufficiency Economy is about moderation,” explains Anand Panyarachun, Chairman of the Board at Siam Commercial Bank. “We all aspire to be more. The philosophy maintains that there should be a limit to what we desire and want. This adherence to the middle path is grounded in Buddhist teachings. The philosophy is more deeply rooted now in Thailand, particularly in rural areas.” 
 
The 1997 economic crisis highlighted the potential consequences of pursuing policies of excess and returned the monarch’s back-to-basics concept to the spotlight. During his speech on December 4 1998, the eve of his birthday, King Bhumibol stated: “I may add that full sufficiency is impossible. If a family or even a village wants to employ a full sufficiency economy, it would be like returning to the Stone Age... This sufficiency means to have enough to live on. Sufficiency means to lead a reasonably comfortable life, without excess, or overindulgence in luxury, but enough. Some things may seem to be extravagant, but if it brings happiness, it is permissible as long as it is within the means of the individual...”
 
The King asked for such virtues to be applied across the board, at all levels of society, including the government and private sector activities in areas such as commerce, industry and finance.
 
“The King of Thailand has been very attentive to the people of Thailand’s needs,” says Arsa Sarasin, the King’s former Principal Private Secretary. “He has introduced so many things, like forestry and irrigation projects, so that people can live and strive for their livelihoods. Research and development centres have been set up throughout the country, where people can come and learn, and take away the knowledge to help make a living outside of that centre.” 
 
      The King’s hands-on approach has “tangible” effects, according to MR Disnadda Diskul, Secretary General of the Mae Fah Luang Foundation. “We always ask what people get out of [what we do]. We look at the outcome. You want to measure it in terms of the environment, socially and economically, and last but not least, in terms of happiness.”
 
     The importance of agriculture as a key sector for Thailand’s sustainable socioeconomic growth was highlighted by the 1997 crisis. “Because of the rapid industrial growth that led up to the crisis, which then turned into a financial and later economic crisis, we suffered a retraction of about 10 per cent in 1998,” says Abhisit Vejjajiva, Leader of Thailand’s Democratic Party. “That usually comes with unemployment and unrest. But because we are still a strong agricultural economy, a lot of that labour can get be absorbed, and reduce the tensions that would have otherwise risen from the economic impact.”
 
The fifth biggest sugar producer in the world, Mitr Phol is helping boost the agriculture sector through its R&D centre and training farmers how to most effectively manage their farms, develop new varieties, irrigate and fertilise their crops, and handle their finances. “The partnership with the farmers is based on technical and knowledge assistance as well as management assistance,” says President and CEO Krisda Monthienvichienchai. 
 
The Government Savings Bank (GSB) also strives to educate people how to save and pay back loans. “We set up the People’s Bank, which lends to people who have no opportunity to borrow from the banking sector. In the past those people would have to borrow from the black market, paying back as much as 50-70 per cent interest per month. But the GSB will only charge them 1 per cent from the very beginning,” says Panee Sathavaradom, former Chairwoman of the GSB. 

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