Sufficiency Economy

UN Advisors Group | GSB Presentations | Sufficiency Economy | Comparative Cases | Empower the Grassroots | GSB Contents

C O N T E N T S

Main Sections
UN Advisors Group
GSB Presentations
Sufficiency Economy
Comparative Cases
Empower the Grassroots
GSB Contents

This Level
UN Advisors Group
GSB Presentations
Sufficiency Economy
Comparative Cases
Empower the Grassroots
GSB Contents

Next Level

Back
Home
Next

Return to
Reflected Knowledge
 

The Philosophy of Sufficiency Economy

First and foremost, to create an economic development strategy that is uniquely Thai, it is necessary to understand the special relationship between the people of Thailand and their monarch, His Majesty King Bhumibol Adulyadej. Through his caring leadership, His Majesty has earned the abiding love and profound respect of his people. Through his thinking, he has laid the foundation for and inspired his country’s development strategy.

Since the beginning of his reign, His Majesty has continually worked to enhance the livelihood of the poor. Royally-initiated activities include rural economic development projects, protection of critical natural resources, and resolution of urban problems such as water treatment and traffic.

In the midst of the economic crisis, in December 1997 and again in 1998, His Majesty King Bhumibol Adulyadej reemphasized a concept he has propounded since the 1970s: the philosophy of the “Sufficiency Economy” and urged all Thais to practice it to the greatest extent possible. Sufficiency Economy sets out to shield the Thai people and nation from adverse internal and external shocks by acknowledging the interdependency among people at all levels.

Sufficiency Economy advocates taking the middle path in life as the optimal route for personal conduct at all levels: individuals, families and communities. It counsels moderation, self-reliance, honesty and integrity, while exercising knowledge with prudence.

Sufficiency Economy posits that an individual should be able to lead a reasonably comfortable life without excess or overindulgence in luxury. That is, if extravagance brings happiness it is permissible only as long as it is within the means of the individual. As His Majesty stated in a Royal Speech on December 4, 1998, “If one is moderate in one’s desires, one will have less craving. If one has less craving, one will take less advantage of others. If all nations hold this concept of moderation, without being extreme or insatiable in one’s desire, the world will be a happier place.”

Implications of the Philosophy

According to Medhi Krongkaew, professor of economics at the School of Development Economics, National Institute of Development Administration (NIDA), “The economic crisis of 1997 affected everyone in Thailand, even His Majesty the King. Seeing many of his subjects suffering, he advised the Thai people to change their economic philosophy in order to cope with present economic adversity and withstand future economic insecurity.”[1]

While certainly complementary to the nation’s Buddhist heritage, Sufficiency Economy espouses a secular philosophy. It does not reject either economic theory or economic progress. Neither does it denounce globalization, as some have tried to interpret. Instead, the middle path the king’s philosophy speaks to a lifestyle governed by moderation and resilience.

Professor Medhi comments:

It is possible to see the Sufficiency Economy as consisting of two frameworks. One is the inevitability of facing the globalized world in which economic efficiency and competition are the rules of the game; the other is the need for economic security and the capacity to protect oneself from external shock and instability. Thinking within the first framework—the basic tenet of mainstream economics—we must realise the opportunity costs involved in every decision we make. We gain from specialization and division of labor because the opportunity costs of doing everything by ourselves is much higher. The laws of comparative advantage and gains from trade are at work in today’s world. But it would be foolish to pursue all-out specialization without basic security, especially in food, shelter, and clothing. This is where the framework of the new Sufficiency Economy comes in. This concerns the basic capacity of the people of a country to look after themselves. The optimization principle applies when we seek to answer the question: How much of our time and energy should be devoted to the first and second frameworks, respectively? In other words, how much resources should be allocated to producing for trade based on comparative advantage principle, and how much for basic security? The best mix between the two allocations would represent the optimal state of affairs, both in mainstream and Sufficiency Economics.

In 2001, the Sufficiency Economy Working Group (SEWG) was informally set up jointly between the National Economic and Social Development Board (NESDB) and the Crown Property Bureau to further interpretation of the Philosophy of Sufficiency Economy for application to the development process in Thailand, such as the current 9th National Economic and Social Development Plan.

In sum, Sufficiency Economy is a holistic concept of moderation and contentment. It sets out to shield the people and the country from adverse shocks, and acknowledges interdependency among people at all levels as an approach, against the backdrop of interdependence and globalization. It emphasizes the use of knowledge wisely with due consideration. Its values include integrity, diligence, harmlessness and sharing. Finally, it seeks to achieve balance and sustainability.

From Philosophy to Application

The concept of Sufficiency Economy offers solutions to problems in both large cities and rural areas. Linking the modern economic system with the cooperative system. In this connection,.

Applied to public affairs, including development and administration, the Sufficiency Economy approach is better able meet the challenges arising from globalization and realize sustainable growth, while keeping conservation and development in equilibrium.

The Thai Government has been applying this concept to its development process at the grassroots level, and the recovery and strength of the economy—with its social fabric intact—owes much to the application of this approach.

The GSB Work Spaces are related to Bank's consulting engagements with Reflected Knowledge. This is not an official or unofficial website of Government Savings Bank. Access is restricted to authorized personnel only except as determined by GSB. ©2005-2008 Government Savings Bank and Steve Barth. All rights reserved.