Sufficiency economy

Sufficiency economy () is the name of a Thai development approach attributed to the late King Bhumibol Adulyadej's "sufficiency economy philosophy" (SEP). It has been elaborated upon by Thai academics and agencies, promoted by the Government of Thailand, and applied by over 23,000 villages in Thailand that have SEP-based projects in operation.

History

Soon after ascending to the throne in 1946, King Bhumibol toured the country and became aware of the hardships facing Thai farmers. At that time, the per capita GDP was about US$200. He took a keen interest in rural development, and instituted a number of royal projects to help the lot of the rural impoverished.

The sufficiency economy philosophy was elaborated upon in the king's speeches to students at Kasetsart University in 1974 and Khon Kaen University. To the latter he said, "Development of the country must proceed in stages. First of all, there must be a foundation with the majority of the people having enough to live on by using methods and equipment which are economical but technically correct as well. When such a secure foundation is adequately ready and operational, then it can be gradually expanded and developed to raise prosperity and the economic standard to a higher level by stages."

Sufficiency economy came to prominence during the 1997 economic crisis when the king told a nationwide television audience, "Recently, so many projects have been implemented, so many factories have been built, that it was thought Thailand would become a little tiger, and then a big tiger. People were crazy about becoming a tiger...Being a tiger is not important. The important thing for us is to have a sufficient economy. A sufficient economy means to have enough to support ourselves..."

The sufficiency economy

Three interrelated components and two underlying conditions are central to SEP's application. The three components are ''reasonableness'' (or ''wisdom''), ''moderation'', and ''prudence''. Two essential underlying conditions are ''knowledge'' and ''morality''. In contrast to the concept that the primary duty of a company is to maximize profits for the benefit of shareholders, SEP emphasizes maximizing the interests of all stakeholders and having a greater focus on long-term profitability as opposed to short-term success.

The Chaipattana Foundation says sufficiency economy is "...a method of development based on moderation, prudence, and social immunity, one that uses knowledge and virtue as guidelines in living."

A chapter entitled " Buddhist Economics" in E.F. Schumacher's 1973 book, ''Small Is Beautiful'' provides much of the intellectual underpinning of King Bhumibol's sufficiency economy theories. The king was moved to translate it—it is not clear if he translated only the chapter or the book in its entirety—into the Thai language. Schumacher was a Christian whose thinking was influenced by what he observed in Burma and India.

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. According to Thailand's National Economic and Social Development Board:

The Oxford Business Group's 2016 report on Thailand says "the sufficiency economy concept puts sustainability at its very core" and "is now seen as an important contributor to the UN's international development goals...advancing a different approach from short-term shareholder value-centred ideas of economic development."

Self-sufficiency economics promotes the idea of limited production in order to protect the environment and conserve scarce resources. Production should be aimed at individual consumption. Production in excess of consumption may be sold. The philosophy holds that the rich can consume as many resources as they like so long as their consumption does not incur debt, and that the poor should consume resources without borrowing.

Translating philosophy into action

The Thai governmental organisation most responsible for implementing the sufficiency economy is the National Economic and Social Development Board (NESDB). The NESDB's primary tool for mobilising action is the publication of the ''National Economic and Development Plan''. The latest (twelfth) version of this plan covers the years 2017-2021.

After the 2006 coup d'état, the military junta claimed that the policies of deposed Prime Minister Thaksin Shinawatra were inconsistent with the king's philosophy. 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 (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.

''Pit thong lang phra''

''Pit thong lang phra'' ( th, ปิดทองหลังพระ; ; ) is a Thai idiom meaning "to eschew