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Grassroots Economic Development in Thailand

Mr.Chirapun GullaprawitSenior Adviser

National Economic and Social Development Board (NESDB)

November 25, 2013, Imperial Queen's Park Hotel, Bangkok, Thailand

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Outline for Presentation

Grassroots Economic Development Policy for Poverty Eradication

2Government Policy3

Evolution of The National Economic and Social Development Plan

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Evolution of The National Economic and Social Development Plan

Gold Era of Planning Democracy Era Paradigm Shift

Plan 1 (1961-66)

Plan 2 (1967-71)

Plan 3 (1972-76)

Plan 4 (1977-81)

Plan 6 (1987-91)

Plan 9 (2002-06)

Plan 7 (1992-96)

Plan 8 (1997-2001)

Plan 5 (1982-86)Economic Growth and

Infrastructure Development Economic Growth

Led Development and the Beginning

of Social Development

Economic Stability and Social Development

People Centred Development

Paradigm

Participatory and Area-based Approach

Sufficiency Economy

Political Fluctuation

Plan 10 (2007-2011)Communit

yPlan

Plan 11 (2012-2016)

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Grassroots Economic Development Policy

Improving access

to domestic &

international markets,

including

sub-district

websites

Human Resource Development

Strategic Interventions

Income generation

Redu

cing e

xpen

ditu

re

Increasing opportunities

Coordinating withChamber of Commerce

To Solve Poverty Problem

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Fix-it centersFix-it centers

Land reform & landentitlement process

Land reform & landentitlement process

One Tambon, one productOne Tambon, one product

Improving access

to domestic &

international markets,

including sub-

district

websites

Debt suspension programDebt suspension program

Housing scheme for the poorHousing scheme for the poor

Free schooling & Lending bicycle for school children

Free schooling & Lending bicycle for school children

Village revolving fundVillage revolving fund

SML fundSML fund

Strategic Interventions

Income generation

Redu

cing e

xpen

ditu

re

Increasing opportunities

Managed by:CBOs

Coordinating withChamber of Commerce

Universal health insurance

Universal health insurance

Strategies & Specific Government Interventions for individuals, families and people groups

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People Groups formation

Occupational

Group

Saving Group

Older Person

Group

Welfare

Group

Women Group

Community Plan Group

Youth

Group

- Establish various people groups

I . Building capacity for individuals,families and people groups

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- Strategic Management

Targeted Interventions/Areas

GovernmentInterventions

CommunityPlan

Improving Efficiency

&Effectiveness

Com

mun

ity-le

d

Soluti

ons f

or

Develo

pmen

t

Change Role/Paradigm

II. Building capacity for communities

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External Support

CommunityInvolvement Communit

yPlan

Community’sInitiatedInterventions

Community’s Strengthin Development

Local Authority&ProvincialPlans

Support fromDev. Partners

Linkage

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Com

mun

ity D

evel

opm

ent

Stra

tegi

es &

Spe

cific

G

over

nmen

t Int

erve

ntion

s

Capacity Building & Opportunity

Local authorities insure Education and life long learning Opportunity

Free Schooling & Lending bicycle for school children

Social Protection & Safety Net

Universal Health Insurance

Cash Transfer to Elderly & Disable persons

Housing & Shelter, drinking water

Macro& Micro Economic Management

Debt Moratorium for Small farmers and Agricultures

People’s Bank

Village Revolving Fund

One Tambon-One Product

Long-term credit facility, refinance loan from informal source

Changing Asset of the Poor toCapital

Streamlining Public Administration

Devolution of public resource management & responsibilities

Community Action Plan for Development

Natural Resource Management

Water Resource Management

Land Settlement and Reform

STRATEGIES: SELECTED INTERVENTIONS

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Income Generation

Increases Income of Farmers

Expenses Reduction

 Rice Pledgin

g

Increases Income of laborsMin. Wage

of ฿300/day

฿15,000

Salary for Uni.

Graduates

Increases Income of University Graduates

Allowance

for Elderly

Price support for

agricultural produces

e.g. cassava,

rubber, pineapple

Increases Income of Farmers

Provides Income Guarantee for Elderly people

Corporate

Tax Cut

First-Home

Policy

Support for Cost of Living

Support for

Energy Prices

Maintain the prices of energy in a affordable range

Maintain the prices of consumer goods in a appropriate range

Increase opportunity for home ownership

Provide opportunity for car ownership for personal & commercial uses

Increase competitiveness of private sector & prepare for AEC

First-Time-

Car-Buyers

Scheme

Government Policy

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Increase the Village and Urban Community Fund to 1 million Baht per unit.

Establish a fund to develop women’s roles with an average funding of 100

million Baht per province. Establish a fund of 1,000 million Baht for

participating universities to promote the creation of small entrepreneurs and enable them to borrow money supported by a “business incubator” service within educational institutions

and to create innovative enterprises which will drive the economy. Allocate funding to the SML fund for

community and village development tothe amount of 300,000 Baht, 400,000 Baht and 500,000 Baht, corresponding

with the village size in order for villages to manage for their own development.

Access to Credit measures: Improve people’s access to sources of funding

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2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Thai Government announced Poverty Eradication Strategy:

income generation, expenditures reduction, and opportunities

enhancement. OTOP development policy was endorsed

as poverty reduction strategy.

Concept: draw upon the local knowledge and ingenuity of Thai villages, regions, and the entire nation at large

encouraging the people to produce local products using their homegrown skills and expertise;

providing technical assistance and advice to enable them to produce their goods more efficiently and of higher quality that reach world standard;

marketing their goods throughout the country and around the world.

oSales of local products:o 2001= 215 mil. THBo 2002= 24 bill. THBo 2003= 33 bill. THBo export in 2005 (9 months) = 874 mil. USD

One Tumbon One Product: OTOP

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Government Initiatives: Fix-It Centre

Vocational Students

Local technician/ mechanic/

worker

Local people

Reduce expenditure Increase student capacity with the real life practice Community knowledge centre Cooperation between local vocational school and community

Note: At present, Fix-it centre programme is implemented by each vocational school as the school project.

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•Social Security Act•workers who work in the private-sector enterprises and must have contributed to the Social Security Fund for not less than 180 months, and that person will have aged at least 55 years and no longer working

Old Age Pension in the Current Social Security System

•original government pension plan for public servants (end 2037)•the Government Pension Fund Act of 1996: contribution of Government (3%) and Officers (3%)•The Government Pension Fund Office (semi public-private organisation)

Pension Systems for Government State Enterprise

Officials

•the employees will receive lump-sum payments at the time of their resignation or retirement: tax exempted on the part of employees, and tax deductible on the part of employer

•Employees’ contributions must be at least 3 % of wages but not exceed 15 % while Employer’s contributions must not be less than employees’ contributions.

Private Sector Provident Fund

System

•voluntary pension scheme: the latest addition to the old age pension schemes• It aims to provide a means of voluntary retirement savings to employees who are not in the Provident Fund, or who want to make additional contributions

Retirement Mutual Fund System

•Private Teachers’ Provident Fund system•enterprises’ workers are covered by the Provident Fund Act of 1987 and will receive lump sum payments upon retirement.

Other Old Age Pension System

Monthly allowance for all registered elderly particularly in the informal sector

(largest sector of Thailand)

Government Initiatives : Five Categories of (formal) Old Age

Security Systems

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Universal Health Insurance

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15 year free tuition fee: kindergarten to high school level

uniform school activities textbooks Tablet

Education Policy

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Housing Scheme for the Poor: Housing Security Project

958 communities: 52,780 HH (Sep, 2007)

Community Organizations Development Institute (Public Organization)

launched by the Thai government in January 2003 , as part of its efforts to address the housing problems of the country’s poorest urban citizens.

The program channels government funds, in the form of infrastructure subsidies and soft housing and land loans, directly to poor communities, which plan and carry out improvements to their housing, environment, basic services and tenure security and manage the budget themselves.

Instead of delivering housing units to individual poor families, the Housing security Program puts Thailand’s slum communities (and their community networks) at the center of a process of developing long-term, comprehensive solutions to problems of land and housing in Thai cities.

www.nesdb.go.th

Thank you