In my post of earlier today I discussed the emphasis placed in Thailand’s 2007 Human Development Report on “sufficiency economy.” As I work through the report I will provide a series of posts (as time permits) on some of its key issues. In this post I focus on Chapter 1 in which the key human development data are presented.
The message of this chapter is straightforward: Thailand has made “remarkable progress” in relation to human development but “this progress has not benefited everyone equally.” One indicator of the progress is the reduction in poverty – from 38 percent in 1990 to 11 percent in 2004. The report notes that Thailand is expected to meet most or all of the Millennium Development Goals in advance of the 2015 target. But the inequalities are stark. The report provides a ranking of Thailand’s 76 provinces in terms of their Human Achievement Index (HAI) Score. This HAI score provides a summary of a wide range of human development indicators relating to health, education, income, housing, community, communications and participation. Phuket rates the highest, followed by Bangkok. Of the other 10 top-ranked provinces five are in the central region. By contrast, Mae Hong Son in the far north ranks at the bottom. Eight of the bottom 10 provinces are in the North or Northeast. Two are in the South. In brief:
People in Bangkok, Bangkok Vicinity and other regional growth areas enjoy higher levels of human development than people in more isolated provinces. The North and the Northeast, as well as a few provinces in the deep South, are placed at much lower levels.
The report provides data and insights on various dimensions of this inequality. Compared to those in Bangkok people in the Northeast and North are more likely to be disabled and more likely to report physical illness but they have much lower access to health services; they also have lower access to education; they have lower standards of housing and living environment; lower access to mobile phones and the internet; and they are much more likely to be living in poverty. In brief the report provides a compelling account of Thailand’s regional inequality.
This chapter of the Human Development Report makes almost no mention at all of the “sufficiency economy” approach. This is unfortunate. It would have been very interesting if the authors had made some attempt to map some key indicators of sufficiency economy and see how these correlate with the Human Achievement Index. As I said in my previous post, superficial inspection suggests that there may be an inverse relationship between sufficiency economy and human development. To put it bluntly, I suspect Mae Hong Son (at the bottom of the HAI table) contains many more people living a sufficiency lifestyle than the high-ranking Bangkok or Phuket.
What could be some useful indicators of “sufficiency economy”? Perhaps the percentage of a province’s agricultural land devoted to subsistence crops. Or the percentage of provincial income derived from local production. Or the proportion of household income spent on basic consumption. All these may be possible proxy indicators for the presence or otherwise of sufficiency economy. Another may be the level of household debt, given that sufficiency economy is often presented as an antidote to debt-fuelled pursuit of economic expansion. Data on household debt (by province) is available in the Human Development Report (Table All4).
Taking the level of household debt by province as a very rough proxy for sufficiency economy (lower debt indicates more sufficiency economy) I thought it would be interesting to see how this correlates with the overall HAI rankings. I plotted the relationship in this graph (click it for a larger image):
The horizontal axis shows the level of household debt by province. Bangkok’s average debt is 351,000 while Mae Hong Son’s is 83,112. The vertical axis indicates the HAI ranking – those low on the axis rate low on the HAI (Mae Hong Son rates 76) while those high on the axis rate high on the HAI (Bangkok rates 2).
The result is interesting, though not compelling. It does suggest that there is some tendency for higher levels of debt to correspond with higher HAI rankings. Very generally, the less human developed provinces tend to have lower debt levels. And the more human developed provinces have higher debt levels. In other words, based on this very rough and limited calculation there is some suggestion that higher levels of sufficiency economy (such as in Mae Hong Son) correlate to some extent with lower levels of human development.
Interesting. And surely worth further investigation. Before Thailand goes too far down the sufficiency economy path it may be worth investigating the current distribution of key features of sufficiency economy and how they relate to other key measures of human development.
24 responses so far ↓
1 nganadeeleg // Jan 11, 2007 at 12:02 am
Lies, damn lies, and statistics!
If you taking gross debt, without reference to underlying assets, and income levels, then your analysis is meaningless in terms of the sufficiency economy.
A higher gross debt could still fit within the sufficiency model if that household also had high asset and income levels.
If the Household Debt axis in the above graph was actually Household Debt as a percentage of Assets or Income, then the graph would be more meaningful in analysing the sufficiency theory.
Andrew, it sounds like you have a problem with the sufficiency theory.
Here is a translation of the King’s 1998 speech which includes clarification of what he is talking about:
http://www.kanchanapisek.or.th/speeches/1998/1204.en.html
In the light of that clarification, what ecactly are your concerns with the theory?
2 nganadeeleg // Jan 11, 2007 at 12:07 am
Should say ‘exactly’ not ‘ecactly’ in last sentence of my post above.
Also missing the word ‘are’ after ‘you’ in the second sentence.
No edit capability so I must remember to check more carefully before I click ’submit’
3 Vichai N. // Jan 11, 2007 at 12:55 am
Still at it Andrew Walker? Trying with all your nonsense to equate HMK’s Sufficiency Economy to ‘poverty’?
Either you are being stupid or you are merely being malicious. Or your master has given you instructed to pursue this nonsense or you won’t get paid.
I already told you the first time I visited this forum when you made that stupid conclusion Andrew that it is too ridiculous to qualify as a blatant lie. I have not changed my mind a bit.
4 jeplang // Jan 11, 2007 at 2:19 am
I will put my money on there being no correlation between the 2 variables;not with an r squared of 0.18,indicating 82% of the variance is NOT explained by the regression line .
[A minor point-I thought "R" squared was reserved for non-linear regression.]
If the 95% confidence intervals had been drawn ,or better still ,the prediction intervals,,the straight line could have been drawn virtually anywhere except horizontally-slight exaggeration ,I know.
Even after reading the King’s speech referred to by nganadeeleg ,I’m still unsure what “sufficiency economy” means. Does it,in part,mean ways and means of reducing poverty?
This is the only speech of the King I have read,and I have been surprised ,enlightened and also dismayed,perhaps saddened would be a better word.And I think it is wise not to elaborate.
5 anon // Jan 11, 2007 at 5:16 am
You pencil-necked pin-headed development geeks think that happiness can only be measured with numbers.
Realize that the self-sufficiency economy isn’t about numbers and wealth – it’s about goodness and dignity. Without this fundamental understanding, Thailand will still produce another generation of Thaksins.
6 Bangkok Pundit // Jan 11, 2007 at 5:53 am
Thank you Nganadeeled for the link. I find the following interesting:
“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. This is another interpretation of the sufficiency economy or system.”
So if Surayud’s couple of a million baht in foreign watches brings him happiness it is ok. Now, if I understand correctly, if I have 10 billion baht and want to buy myself a fleet of Ferraris, it is ok within the sufficiency economy system as long as it is makes me happy and is within my means of the individual (I don’t borrow excessively?).
I don’t really see any limits to this sufficiency economy idea,* but then again as I have previously stated I don’t really see sufficiency economy meaning anything apart from being a rhetorical device.
Are there any examples of people who have not been in accordance with the sufficiency economy. Surely, Thaksin who brought debt down from around 57% of GDP to 41% of GDP didn’t break the sufficiency economy idea.
*How does one determine whether money borrowed is within the means of an individual? Is the government going to do this or just banks in accordance with normal lending criteria? If banks, what is going to change then?
7 Jon Fernquest // Jan 11, 2007 at 6:23 am
Case studies would be more useful than a bunch of statistics. Look at newspapers on Japanese funded Easy Buy in which the debtor can opt not to pay and the debt grows and grows. or the motorcycle dealerships that rake in cash by selling easily on credit in provincial villages and then repossessing with the help of the local mafia.
This all has nothing to do with His Majesty the King who sets an example. Of course some people won’t follow it. But it is a lot better than places that have no example at all like Burma.
“…the less human developed provinces tend to have lower debt levels.”
Here is another place where appearance does not meet reality. Have you ever heard of “Len Hun” ? There are extensive informal debt networks. I doubt whether they enter the stats.
Many years ago I saw IQ test results that reported a substantial fraction of northerners were mental retarded. The test was given in central Thai and there are a lot of hill tribes and Kham Meuang speakers. Statistical studies like this should be taken with a grain of salt.
8 nganadeeleg // Jan 11, 2007 at 9:43 am
Unfortunately, there is a tendency to treat the King’s ideas as some sort of prescriptive formula for the economy.
It is easier for critics of the junta or the ‘palace system’ to score points if the sufficiency economy is seen to be prescriptive/formulatic, and it appears the junta is playing right into their hands.
I see the sufficiency economy theory as guidance from HMK for people to think about the way they live, and to apply some moderation in their business and personal activities.
(I also agree with comment #5 above by anon – very well said)
Pundit: I’m sure we can all find examples of excesses that appear to show particular individuals are not practising ’sufficiency economy’.
An alternative way of looking at it would be like followers of the Buddhist religion – they all believe in the religions ideals, but various individuals are further along the Buddhist path than others. Some (or most) may never get there in this lifetime, but they can still be on the path to enlightenment.
9 nganadeeleg // Jan 11, 2007 at 10:28 am
This overview in The Nation by Dr Chris Baker might also be helpful in understanding the thinking behind sufficiency economy:
http://www.nationmultimedia.com/2007/01/11/opinion/opinion_30023814.php
(Dr Chris Baker is the principal writer and editor of the United Nations Development Programme’s “Thailand Human Development Report 2007: Sufficiency Economy and Human Development”)
10 anon // Jan 11, 2007 at 10:41 am
nganadeeleg, don’t you know sarcasm when you see it?
I was trying to say that “sufficiency economy” is like “ariyasaj 4″ – it sounds nice and is undoubtedly true. But it shouldn’t be used as the basis for ruling a populace or managing an economy.
11 Bangkok Pundit // Jan 11, 2007 at 12:42 pm
It is easier for critics of the junta or the ‘palace system’ to score points if the sufficiency economy is seen to be prescriptive/formulatic, and it appears the junta is playing right into their hands.
I see the sufficiency economy theory as guidance from HMK for people to think about the way they live, and to apply some moderation in their business and personal activities.
Your talk of the junta and the Surayud government and its use of sufficiency economy is what concerns me. Any policy of Thaksins they don’t like is labelled as not being in accordance with sufficiency economy, but then relabelled and extra money spent money and suddenly it is in accordance with sufficiency economy. Crispin touched on this in October when he said:
“There is a definite risk that Thai bureaucrats may overplay the sufficiency concept in expression of their loyalty and affection for the monarch. 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.”
Thai TV is now riddled with vague references to sufficiency economy (ie doing x is not in accordance with sufficiency economy). The principle behind sufficiency economy of living within one means is so vague that it is easily subject to abuse. The new measures of capital controls and amendments to the Foreign Business Act have one large beneficiary rich Thais, particularly those with local monopolies.
The second problem I have with sufficiency economy is, as I believe Republican pointed out in another post, that analysing the concept is very difficult because of lese majeste. You can’t criticise the concept only in Thai society without risking bringing trouble to yourself.
Finally, HM the King is not just suggesting a model on how people should live their personal lives, it is about changing the economy with fewer exports and an economy which is 25% self-sufficient.
btw, HM the King has given one of few explanations I have seen of the “share game” which is extremely prevalent in Thai society. I lived in Thailand a while before I heard anything about this.
12 Srithanonchai // Jan 11, 2007 at 2:34 pm
In an article in today’s The Nation, Chris Baker refers to himself as the main writer and editor of the UNDP’s “sufficiency economy” report. The link is http://www.nationmultimedia.com/2007/01/11/opinion/opinion_30023814.php
His article makes one wonder whether there are actually two Chris Bakers in Bangkok.
13 anon // Jan 11, 2007 at 4:13 pm
The King’s in-depth knowledge of “share” schemes is probably due to his wife’s involvement in “Mae Chamoy’s” share scheme.
But the King is a brilliant man, and his family didn’t loose a single Baht in that scandal. He is truly a genius!
14 Vichai N. // Jan 11, 2007 at 9:06 pm
Anon why don’t you go ahead and complete your innuendos about Mae Chamoy and the King.
If you don’t I am certain Andrew Walker or Republican will gladly do the work for you.
15 nganadeeleg // Jan 12, 2007 at 10:24 am
It’s those lese majeste laws again – it seems everyone wants to use them to get what they want – politicians, media barons, supporters of the palace, and surprise surprise, even critics of the palace system.
Pundit: Do you seriously think that rational criticism of the sufficiency economy theory will be taken to be lese majeste?
In any case, there is no need to worry about lese majeste on this site – I’m sure the palace and the junta will not be able to find any Anon, Republican or Bangkok Pundit in the phone book, so feel free to provide constructive criticism of the sufficiency economy theory.
Most of the criticism I have seen has been concern about possible manipulation & abuse by bureaucrats etc, rather than real criticism of the concept.
Anon: I cant help it if your sarcasm rings true!
It is apparent that many posters on this site have very fixed views about the Thai political situation, and it is a shame that the level of debate cannot seem to rise above those existing biases.
I am quite happy to declare my position:- I believe the country is better to have HMK offering advice and a steadying influence than it would be if the politicians were left to their own devices (or vices).
Also, I am not so naïve as to think that there are no behind the scene relationships involving some people close to the palace. Rather, I accept that those types of relationships exist virtually everywhere, including in western democracies that are supposed to be our salvation (Halliburton etc)
Such relationships existed before, during and after Thaksin, and the only thing that changes is who is in and who is out at a certain point in time.
16 New Mandala » A royal project // Jan 12, 2007 at 10:45 am
[...] This is my third post on the 2007 Human Development Report for Thailand. Regular New Mandala reader Vichai reflects on my motivation for writing these pieces: Either you are being stupid or you are merely being malicious. Or your master has given you instruct[ions] to pursue this nonsense or you won’t get paid. [...]
17 New Mandala » In-sufficient analysis // Jan 12, 2007 at 11:02 pm
[...] Second, there is discussion of various corporate initiatives in relation to sufficiency economy. Siam Cement (in which “the Crown Property is a major shareholder”) will appreciate the publicity and strong endorsement. There is a lot of good common sense advice about how principles of moderation and integrity can improve business performance. Interestingly, a corporate “Sufficiency Alignment Index” is proposed. As I stated in a previous post, it would be interesting if indices could be developed for other aspects of sufficiency economy and some consideration given to how these correlate with other aspects of human development. [...]
18 Taxi Driver // Jan 15, 2007 at 6:13 pm
A more accurate English translation of “Sethakij Poh Pieang” may be “Moderated Livelihoods” rather than “Sufficiency Economy”.
Reading the King’s 1998 speech (thanks Ngarn for the link)which was delivered one year after the 1997 crisis (an important historical context to keep in mind when reading the speech today) it is clear that His Majesty was referring to problems of excessiveness and over-exposure (including excesstive borrowing, over speculation, etc that led the country down the path towards the 1997 economic crisis).
Sethakij Poh Pieng is sounds like risk mitigation advice, rather than a proposal for some agrarian economic model. It is a moralistic piece of advice (from someone whose job it is to provide it, I reckon) about how to conduct one’s livelihood with a degree of risk mitigation (no excessive gearing, diversification of source of income, etc etc). It is not a rejection of the free market at all.
The problem is not the advice or the advice giver per se. The problem instead are the no-hopers in the NSC and the inept Rachakarn who have no clue about economic management, latching on to the idea and trying to turn it into economic policy.
19 nganadeeleg // Jan 15, 2007 at 7:57 pm
Thank you, Taxi Driver, for an objective analysis.
I, too, am not comfortable with the way the King’s theory is being adopted by the junta and the bureaucracy as some sort of magical formula that has to be strictly followed to achieve economic nirvana.
I would much prefer if it was just left as guidance from a wise elder for people to think about how they live, irrespective of whether they are rich or poor, city or rural dweller.
‘Enough to live on and enough to live for’ – Even the Republicans and Andrew Walker’s of this world should be able to accept the principle behind that statement.
20 anonymous // Jan 15, 2007 at 9:08 pm
Nganadirek, is your trust in HMK Bhumibol or the monarchy in general?
If Bhumibol were to pass away tomorrow, and his son appointed King (don’t forget, the King has to be appointed by the Parliament), would you trust him with the same powers the current King has? If the Kingdom becomes divided, would you let him choose who governs and who goes into exile? Would you trust him to keep tyrants in check, even if the constitution allows them to rule at will? Would you trust him to deal in a human way with Princess Sirindhorn and his ex-wives?
This is a very serious question. Trust in an individual and trust in an institution are very different things.
I, for one, think the King is decent enough to rule, but if his son were to be appointed King, I’d call for a republic.
21 nganadeeleg // Jan 15, 2007 at 11:31 pm
Good question, anonymous.
I have some concerns about the future – mainly because there are doubts about whether the son commands the necessary level of respect (irresepctive of whether or not he has the appropriate qualities for the job).
I agree that trust in an individual and in an institution are different – At this stage I am placing my trust in HMK and hope that he knows his children well, and provides the right guidance.
No matter what power the future monarch has, I cannot see the institution lasting long if the the monarch acts poorly.
An inappropriate monarch would probably be similar to a republic anyway – there would be no higher authority above politics, and the dust will just settle with the biggest tyrant attaining power under either system.
22 Taxi Driver // Jan 16, 2007 at 10:24 am
Ananymous’ questions goes to the heart of the problem. The Buddhistic Depotism we effectively have in Thailand is fundamentally due to reverence the people have of Bhumipol personally, not the institution he occupies. Vachiravudh does not and will probably never enjoy the same level of reverence from the people. Sirindthorn has a chance though – and this is where Handley’s theory re reason behind the coup (i.e. succession) may be prescient.
But that is exactly why the September 19 coup was a major setback for the country. The best guarantee we had for a secure future is the stregthening of democracy, not subversion of it and perpetuation of the system of Buddhistic Depotism. It was very sad to see the Millions in Yellow cheer on the tanks. It showed that the “social contract” required for democracy to reign still has not taken root in Thailand. The “social contract” is still with the King personally. But the King should have sided with democracy. He did try to steer the resolution through democratic processes, but other forces drove events towards the brink, which forced him react. We (and the coup plotters) know that when forced to choose between stability and democracy, the King always chooses the former.
23 New Mandala » Sufficiency going forward, diversity going backward // Jan 16, 2007 at 9:19 pm
[...] The Human Development Report makes a range of other recommendations relating to community empowerment, corporate responsibility, public administration, national immunity and education. But what is striking is that there is nothing in the “action points” that seeks to seriously address the basic problems of inequality identified in chapter 1 of the report. Remember the key finding from that chapter: People in Bangkok, Bangkok Vicinity and other regional growth areas enjoy higher levels of human development than people in more isolated provinces. The North and the Northeast, as well as a few provinces in the deep South, are placed at much lower levels. [...]
24 Historicus // Feb 4, 2007 at 5:07 am
Sufficiency economy is easy to understand. If you are poor, just accept what you have and try to make do or even do a bit better. If you are fabulously wealthy, then don’t flaunt it too much and try to make merit by being nice and content. All very simple and simplistic.
So the sufficiency economy is about poverty, but not necessarily doing anything about it.
The king came up with this idea in 1997, fearing social conflict after the crisis hit. He revised it in 1998. Attempts to link it to his earlier ideas seem to be intellectually weak, especially when seen in the context of the huge investments in infrastructrure required for irrigation and related dams. Sure, one may find earlier statements about being content with what one has (one’s karma, presumably). The idea was taken up in the 9th NESDB plan, but no one took any notice of that.
The problem now is that the military-backed government has elevated themoral and normative idea up as a way to organise the Thai economy, so someone needs to operationalise it. This is where it all gets very silly and uncomfortable, and it will go on for some time. This is especially the case as nationalism is fanned by the junta and its government.
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