Rural Thais urged towards self-sufficiency

The Super Blessing Motor­cycle Shop in the tiny north-eastern Thai town of Pa Tiew opened three years ago, and initially did a brisk business among villagers flush with cash and confident of their ability to keep up with monthly instalment plans.

These days, however, Nirut Pongsie, the manager, and his sales team have little to do, although the shop is full of stylish new Suzuki, Yamaha and Honda motorbikes in bright colours.

Sales have plunged to less than half of last year’s levels, while defaults are rising. The shop has a growing number of second-hand bikes seized from defaulters, or returned by villagers overburdened by monthly payments. “The economy is terrible,” Mr Nirut says. “Villagers are complaining they have less money than before, that they are having hard times, and they want to save money.”

The difficulties confronting Super Blessing and its erstwhile customers reflect deep pessimism in the Thai countryside, eight months after the military coup that ousted Thaksin Shinawatra, the controversial former prime minister.

Rural Thailand, home to 70 per cent of the population, was the main bastion of support for Mr Thaksin, who cultivated this constituency by pumping money into the long-neglected countryside. After the coup, the military-installed government quickly terminated most of Mr Thaksin’s signature programmes, criticised as little more than old-fashioned rural “vote-buying” dressed up as official policy.

The abrupt end of the populist programmes – including a rice price support scheme – brought a sudden rural liquidity squeeze that has demoralised villagers and stoked desires for the return of their exiled former leader. Adding to rural woes has been the sharp appreciation of the baht, which has also had some impact on the local currency price of rice.

All this has created new stresses for an administration that is publicly committed to a quick restoration of democracy, yet bent on preventing Mr Thaksin from returning to public life.

“Money that should be going to the grassroots was not going there, and they have been severely affected,” says Chalongphob Sussangkarn, appointed finance minister in March. “You cannot simply cut back quickly.”

To prevent rural frustration from boiling over, the current administration plans to take a page from Mr Thaksin’s book and pump money into the countryside, injecting up to Bt10bn ($300m) in development projects and aggressively stepping up rural lending by state financial institutions.

Mr Chalongphob says there is a distinction be­tween the new plans and Mr Thaksin’s schemes. “We want to get money down to the village level, but they should use the money for projects [to] strengthen their own communities,” he says.

During his tenure, Mr Thaksin pumped an estimated $1bn a year into the countryside through rural micro-credit, community improvement funds and discretionary funds. The money was ostensibly to be used to help villagers to start small enterprises, or other projects to boost their earning capacity in the long run.

But Daorueng Puetphol, a rice farmer who lives in the village of Kud Hin a few kilometres from Super Blessing, says many households used the borrowed funds to buy consumer goods.

“It seemed the government didn’t care much about what you did with the money,” he says. “People didn’t use the money to do anything that adds value.”

In contrast, the new administration has begun efforts to encourage rural dwellers to adopt the “sufficiency economy” philosophy of Thailand’s revered King Bhumibol Adulyadej. Villagers from Kud Hin were lectured by government officials recently on the principles of self-reliance and living within one’s means, and how to manage their farms in line with these ideas.

Authorities are also at work to create 38,000 “sufficiency villages”, where in­habitants will be encouraged to reduce unnecessary ex­pend­iture, boost savings, cultivate kitchen gardens and develop traditional handicrafts.

It remains to be seen how these teachings will be incorporated into the daily lives of Thai farmers, many of whom saw their debts rise during Mr Thaksin’s tenure. Sawat Kongchai, a rice farmer, says a seminar he attended on sufficiency principles left him with concerns about the bottom line.

“It seems quite good, but it was quite vague about the budget,” he says. “There is no specific time frame when it will start, or when the money will come. They want us to try to help ourselves as much as we can.”

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