From the Sufficiency Economy Philosophy to Sustainable Development Goals November 17, 2017
Good evening dear Thai citizens.
The work of the government and the NCPO is based on building a strong foundation for Thailand’s development, which has involved proactive measures to address a number of challenges. In the past few years, the government has been working on sustainable approaches to several problems through short-term, medium-term, and long-term solutions, in trying to solves problems at their roots and prevent them from recurring in the future.
For issues that we are familiar with, such as floods and crop price slumps, it is important that our discussions to address them be based on reason and facts, to truly understand the nature of the problem and work together towards sustainable solutions. Many things have changed in today’s world. We have to work together towards these changes.
To address the rubber price slump, we have to understand the big picture first in order to come up with an effective solution. The prices of natural and synthetic rubber relate to global circumstances, such as global oil prices given that oil prices have an effect on the production costs of synthetic rubber, which can be used as an alternative to natural rubber.
Between 1997 and 2005, oil prices were very high, pushing up the prices of synthetic rubber in many countries including Thailand, which led to increased rubber farming in the country. When oil prices dropped, synthetic rubber prices plummet and supply exceeded demand in the market. Consumers then turned to synthetic rubber as opposed to natural rubber, which led to a further drop in prices.
The second issue is the quantity of rubber produced. Between 2011 and 2015, other countries grew less though Thailand grew more, due to the promotion of a rubber planting campaign. This increased the quantity of rubber in the market and caused an imbalance. In addition, Thai farmers grew rubber in the form of monoculture, thus making them even more vulnerable to price fluctuations. Therefore, when prices dropped, the impact was devastating, very much like what is happening now.
Unlike Thailand, other countries grow rubber as an alternative crop, along with other crops. For instance, Malaysia has focused on other economically viable crops like oil palm for the past 20-30 years, whereas Indonesia has adopted the sufficiency concept in its farming activities, which involved fish farming and other forms of agriculture. When rubber prices drop, they grow less and find other sources of income. In contrast, rubber planting is an alternative source of income in other countries. However, it has been a main source of income for many farmers in Thailand.
The third problem is the low demand for rubber in Thailand when compared to the actual production. The country produces 4.47 million tons of rubber, but only 0.60 million tons are consumed and the rest are sold overseas. Thus, domestic prices fluctuate in tandem with the global prices, while oil prices have further complicated the situation.
Thailand, Indonesia, and Malaysia are among the largest producers of rubber in the world, having a combined 50.23 million rai of land for plantations, which is equivalent to 62.09% of the global area used for rubber planting. Together, these nations produce 8.56 million tons or 63.27% of global production. With that said, rubber planting is not the main source of income in Indonesia as mentioned before. As for Malaysia, domestic supply and demand for rubber are almost identical, and they have promoted the production of oil palm and other crops. We have to consider these matters as well.
The fourth issue is the appropriateness of land used for rubber plantations. In 2016, Thailand had 20 million rai of rubber plantations, with an average production of 225-245 kilos per rai. Rubber plantations in the north produce 143 kilos per rai, whereas the plantations in the northeast produce 185 kilos per rai.
These areas are not compatible with rubber planting, because rubber trees need humidity and lots of water. This is why rubber production in these areas is lower than the average production. Another factor that drives up the cost is the transportation cost, given that most rubber products are transported to the central region.
Therefore, to address this problem in the long-term, the government has come up with the following solutions for sustainability. The first solution is to have rubber farmers earn income through other lines of work, such as the new agricultural theory and mix-and-match agriculture. For instance, along with rubber, they can grow fruit, vegetables, and other horticultural plants that are in demand in their community.
This way, farmers have alternative sources of income and can reduce their risks of experiencing a rubber price slump, as they would not have to rely solely on rubber planting. For this, the government has supported financial loans to farmers looking for alternative vocations. So far, more than 380,000 rubber farmers have taken on extra jobs, and in 2017, as many as 3,000 rubber farmers have turned to mixed farming, accounting for 7% of all farmers that produce and tap rubber. This number is still low and needs to increase, so that the government will be able to help in terms of marketing channels.
The second solution is that the government will shoulder 3% of loan interests for agricultural institutions and entrepreneurs involved with processing rubber. They can use the loans to streamline their operations, renovate buildings, acquire machinery and equipment, and increase their potential for export and processing.
The third solution is to promote domestic demand for rubber as raw material. In this case, government agencies and offices will be asked to consider buying and using rubber in their projects such as road construction, sports stadium, and glove production.
The fourth solution is to control and reduce the number of growing areas for rubber, with 400,000 rai of land to be reduced per year, while also considering alternative crops. This way, we can limit rubber production and maintain balance with demand. So far, we have been able to reduce 1.19 million rai of land for rubber, or the production of 0.27 million tons of rubber. This number is minimal because many farmers have yet to find alternative jobs. Therefore, we need to keep finding other jobs for them and this will help correct demand and supply issues for rubber, so that prices do not drastically fall.
Given this, we will focus on turning rubber plantations into other types of farming, especially in the north where many problems exist, such as water scarcity and high production costs. There are also 2 million rai of land used illegally to grow rubber, which is another major issue that has to be addressed.
The Rubber Authority of Thailand was established on 15 July 2015, following the promulgation of the Rubber Authority of Thailand, B.E. 2558 resulted in the combination of three agencies namely the Rubber Research Institution, the Office of the Rubber Replanting Aid Fund, and the Rubber Estate Organization.
Its purpose is to draft strategies to manage the country’s rubber production sector effectively. A number of initiatives a have been started and some have turned out better than others have. Therefore, it may be necessary to get the private sector to cooperate, with full transparency. The Ministry of Agriculture and Cooperatives has been assigned to look into the matter.
The next solution is to work with other rubber producing nations in this region, such as Indonesia and Malaysia, through the International Tripartite Rubber Council (ITRC), with emphasis on the Supply Management Scheme (SMS). This will allow rubber production in each country to be more proportionate. Mainly, the problem is in Thailand so we will have to produce according global demand. If prices plummet, there must be measures to control rubber exports such as the Agreed Export Tonnage Scheme (AETS) for instance. We have to consult with other rubber producers about the matter of pricing as well, even though they may be in a different situation to us.
I would like everyone and every sector involved in the rubber industry to have the same understanding. I ask that you be patient, adopt changes, and trust one another more. If you need to submit a petition, do it peacefully. You also do not need to travel all the way to Bangkok to submit a petition or voice a grievance, as you can submit your requests with community leaders. They will forward them to me.
I do not want this issue to become political. I understand that the economy is the most important issue. However, for farmers that only grow rubber and nothing else, you will have less income when rubber prices go down. On the other hand, if you adopt these solutions as suggested by the government, everyone will benefit, and people will have stable and increased incomes.
My fellow citizens, this past week, I attended the 25th Asia-Pacific Economic Cooperation (APEC) meetings in Danang, Vietnam. There, I met leaders of 21 economies in the Asia Pacific region to bolster economic cooperation and ties.
At the meeting, I presented our “Thailand 4.0” policy and Thailand +1 approach in restructuring the country’s economy through value adding and innovation in the agricultural sector. I told them about our efforts to turn farmers into smart agriculturists and to adopt the new agricultural theory and the Sufficiency Economy Philosophy of King Rama IX.
As for the production sector, I mentioned about the establishment of special economic zones and the Eastern Economic Corridor to enhance our industrial sector and our national competitiveness. Importantly, we have to be resilient, create innovations, and be highly competent. Otherwise, our products will not sell and this will cause problems for our production value chain. We also need to focus on human resources development, preparing our people for a digital society while at the same time enhancing the country’s ability to compete,
not to mention prioritizing the facilitation of business operations, especially the SME sector, by supporting them into the regional and global supply chains. This is why we had a number of bilateral and multilateral discussions. At the meeting, I also stressed the importance of connectivity in economics, trade, and investment, and between peoples. To create sustainable growth, we have to expand free trade.
In addition, the APEC meeting stressed its commitment to the Bogor Goals to achieve free and open trade and investment by 2010 for industrialized economies, and by 2020 for developing economies. Therefore, we do not have much time, only 3 years to go, and will have to mobilize all our sectors.
Leaders of many powerful countries attended APEC, and I took the opportunity to emphasize Thailand’s role as a member of ASEAN and our vision for national development based on the principle of the Sufficiency Economy Philosophy, which has been complementary to sustainable development in the entire region.
Stability must be built from within, from its foundations, and in the case of Thailand, this will bode well for the region, especially when supported by sustained cooperation on trade and investment. I hope that we will be a window of opportunity for other nations and help each other raise our potentials so that our businesses can be supported and that technology will be transferred for the betterment of our production sectors. Ultimately, this will reduce the development gaps between nations.
After the APEC meeting, I traveled to Manila, the Philippines to take part in the 31st ASEAN Summit. It was a significant occasion given that it also celebrated the 50th anniversary of ASEAN. Since its inception, the member states of ASEAN have been in active cooperation. The total value of mutual trade in the beginning accounted for 10 billion US dollars. The value now stands at 23 billion dollars. Income per capita recorded between 2007 and 2014 expanded by as much as 63.2%, which was very high, but not enough because of the many differences in disparity levels among the countries.
One important issue discussed during the summit was the future of the ASEAN Community in terms of politics, economics, society, and culture. To be sustainable, it must be based on the rule of law and a people-centered approach for the maximum benefit for all citizens. We also discussed other matters such as key global challenges and the maintaining of the ASEAN centrality.
Leaders also touched on issues related to the three pillars of ASEAN – politics, the economy, and society and culture – including a more concrete plan to promote connectivity both inside and outside Southeast Asia, as well as other undertakings to achieve the 2025 ASEAN vision and the 2030 Sustainable Development Goals. Thailand also served as a coordinating country among member states.
On behalf of Thailand and the Thai people, I informed the 31st ASEAN Summit that we have to cooperate more to mobilise the ASEAN Community towards stability, prosperity, and sustainability in the next 50 years. Despite many global changes, we need to always be prepared to cope with risks and challenges. Therefore, we should focus on enhancing our potentials and innovations to mobilize our economies as a way of promoting human security.
ASEAN needs to expand its role in the global economy while connecting itself better with the Asia and Pacific regions, and the international community. There must be a systematic approach to bolster trade and investment, and we should also be a gateway to new markets in the region.
Meanwhile, ASEAN member nations need to be strong, especially in food and energy security, as well as the ability to deal with external threats through peaceful means and without conflict. We have the potential to be the leading producer of many things such as agricultural products and digital technologies. ASEAN countries will have to work together on these issues.
ASEAN is a large market with many consumers. Together, the ASEAN nations have more than 600 million people with enough purchasing power. We are also producers of quality products that can compete in the world market, especially with the use of digital technologies. These are the issues that we all should be thinking about – the government, the private sector, and our people.
When visiting another country, I would like the international community to see Thailand’s importance, and that we have the “Pracharat” mechanism, which is acknowledged internationally, as other nations have a similar concept that brings together cooperation from all sectors of society including the government, the private sector, and the people.
In addition, NGOs have also contributed. Concerning national development, there are many issues that we have to think differently about, otherwise, progress may be hampered, state budgets cannot be allocated, and budget disbursements may be slow, resulting in less money and jobs in the local regions.
Factor in problems of flooding, drought, and socials disparities, and weak sectors through an imbalance in demand and supply – all these matters require the Pracharat model to address and make progress according to our national reform plans and National Strategy. What is important and requires cooperation must be undertaken by all political parties and governments.
We must adjust ourselves to creative and constructive digital technologies while creating balance with the environment. We must also espouse the Sufficiency Economy Philosophy appropriately for every sector, because it was graciously bestowed to us for all groups and sectors, not just for agriculture.
Other than this, the government needs to accelerate cooperation in trade, investment, finance, and regional stability in order to expand markets for Thai producers. I have discussed with other countries on how to create a system where both parties can buy from each other.
We must also improve the rules and regulations, whether it be laws pertaining to taxation, incentives, border crossing, transportation, logistics, or even online trade. We must make all these things complement each other so that we can create more jobs and income, and elevate the standards of living for the people in all groups and occupations.
There must be facilitation for large, medium, and small businesses both domestic and abroad. Thai and foreign businesses operate under the same laws, taxes, and incentives so that there is access opportunities in an equal and fair manner.
I would like to talk about several examples of expanding cooperation between countries in the region, particularly through the use of technology to increase opportunities and efficiency while reducing costs, in order to mobilize Thailand and the region towards a digital society. These include,
1. Cooperation between the Bank of Thailand and the Monetary Authority of Singapore in developing and modernizing the transaction infrastructure of both countries. Thailand had its head start with the PromptPay system that I talked about earlier.
A similar system is used in Singapore called Paynow. This cooperation enables financial transactions between the two countries to be conducted safely and conveniently through mobile devices.
Both banks have jointly conducted studies for appropriate solutions that meet the needs of both countries. In the next phase, we may expand this effort throughout the region.
2. The cooperation between the Thai government and the Chinese private sector to make Thailand a hub for product distribution in Southeast Asia and to connect the transportation and value chain systems through a digital ecosystem which includes e-commerce, e-logistics, and e-finance technologies.
This includes developing telecommunications technology, which this government has mobilized in order to improve upon online trade, which will lead to new opportunities both domestic and abroad.
This cooperation includes opportunities to share technological expertise and open new doors for communities across the country, thus helping to expand knowledge and skills as well as sales channels for OTOP, GI, SME, micro SME and Startup products.
These developments will enable Thai producers to access information on the demands of foreign markets, not only for 600 million people in ASEAN, but also for over 1.3 billion people in China, not to mention the international market and India, which are our major trade partners.
This will benefit production, planning, and product design to suit the needs of various markets.
Accordingly, this government will accelerate the expansion of online connectivity through projects such as the Pracharat internet program, while improving our international networks.
What is important is having the ability to adjust our strategies to accommodate these new systems and laws. We have been able to move forward with several issues, while some are currently facing obstacles, which means that we must continue to push ahead with cooperation so that everyone benefits and not just the rich or large investors. We must not forget that we are all part of the same value chain.
We have hundreds of thousands of SMEs, whether it be in the agriculture, industrial, tourism, or services industry. Each sector has tens of millions of people in its value chain and we must make sure that everyone understands the importance of ensuring that everyone in the value chain benefits.
In the past, we may have focused a lot much on the bottom level, and perhaps not enough on the big picture, which includes providing support for all levels. We must bring everyone under the same rules and ensure that people truly benefit. This is what we must help each other to do, along with developing our own selves.
Dear fellow Thai citizens, the connectivity between Thailand and ASEAN and the world community, especially with various major powers, has important implications for us, whether it be politics, security, economics, society, culture, and the environment.
Apart from the cooperative frameworks that I had mentioned earlier, I also placed great importance on domestic and international markets, which are connected, and directly affect our well-being.
This is because markets are the birthplace of human interaction through trade and social communication, which involves a country’s grassroots economy.
I have therefore issued a policy establish Pracharat Markets to provide more sales channels for OTOP products, SMEs, community enterprises, cooperatives, vendors and sellers.
This includes assisting struggling businesses that lack sales outlets, by reducing their rent and marketing costs and reducing the cost of living in communities.
This will be done by establishing new markets or expanding on existing markets through cooperation in the Pracharat framework that I had mentioned in my speech on November 3.
Following the registration for vendors in these markets, up to 30,000 vendors have registered to reserve their spots in markets across the country. The Pracharat Thai Yim Dai market, which has over 2,000 locations, can accommodate up to 20,000 vendors. Over 17,000 spots have been reserved so far.
The Pracharat Tong Thin Suk Jai markets in 3,800 locations have had 13,000 of its spots reserved from its 40,000 capacity.
The program continues to accept registrations until the end of November without closing during government holidays. I have mentioned this issue 3-4 times already so please go and find out if you are able to be a part of this.
If you are able to adjust yourselves and offer good products, you will be able to sell them. Old methods may no longer work. Businesses must therefore analyze themselves and find their unique sales points.
People can also register at Darmrongtham centers across the country.
In Bangkok, people can register in all its 50 districts. The qualifications of applicants as well as the conditions can be found through the following channels that are listed on the screen. These markets are scheduled to open on December 5th.
Dear Thai citizens, for the issue of water management, something that we must lace great importance on, I would like to provide additional information to create understanding and cooperation. We must acknowledge that this year has experienced heavy rainfall from approximately 20 storms.
These storms were the byproduct of La Nina and El Nino, which resulted in volatile weather conditions that have been hard to predict in spite of having satellite technology, thus resulting in announcements that have been either too late or inaccurate.
Residences, especially in areas prone to flooding, such as in the districts of Phong Pheng, Bang Ban, and Bang Rakam in Ayuthaya or in Chai Nat have historically been built on a raised platform.
However, in current times many houses are built on level ground, or have had the ground level converted for residential purposes. This change of behavior, coupled with more people from other provinces coming to live in these flood-prone areas, has led to the floods affecting more people than before.
To address this issue, King Rama IX benevolently commissioned the Bhumibol, Sirikit, and Pa Sak Jolasid Dams for the Thai people.
As well, the Royal “monkey cheek” dams and water irrigation systems have helped mitigate damage during storms and heavy rainfall.
However, there were times when the amount of water exceeded our water management capabilities, such as in 2011 and this year. We must therefore seek cooperation from all sectors in mobilizing collaborative efforts to address flooding and assist affected people.
Residents should also adapt to situations continuously and remain vigilant for future occurrences.
I would like to thank everyone who has participated and understood this matter. In the long-term, the government has created an integrated water management system, so that areas are able to better accommodate natural disasters. Measures will include investments into irrigation and transportation systems, particularly to make sure that these two elements do not conflict with each other, such as where roads are blocking water passages.
There are hundreds of locations that require solutions, and these efforts take a considerable amount of time.
The government is envisioning the construction of more water passages along with roads and railway tracks. It may be that we need to re-appropriate additional land or do so at one time to construct roads and irrigation passages concurrently, in order to mitigate adverse consequences.
The Ministry of Transport has been tasked with reviewing this, along with the Ministry of Agriculture and Cooperatives, to figure out a way that has the least impact. It is a difficult task because the construction of some water passages are located on private property.
The government has been constantly thinking how this will affect the people, and it has not been easy to do everything swiftly and at once. It requires patience and understanding in order to overcome challenges.
I am also reluctant on spending large amounts of money each year on providing relief assistance, as we need this money to assist the people in other ways. It is therefore necessary to have a water management system that is strategic and sustainable.
Drainage in the central region is still incomplete and I have instructed the Ministry of Agriculture and Cooperatives, the Ministry of Interior, the NCPO and other branches of the armed forces to ascertain the best way to drain the water out. We must decide between swiftly draining it all out to the ocean, or gradually irrigating the water so that some is stored in reservoirs.
People must make some personal sacrifices. Canals may not need to be large but planned out in a network system like a beehive, where water can be transferred from one place to another.
When there is rain in the future, the system would enable irrigation in less time while also retaining water. I have instructed the concerned agencies to consider this system and prioritize projects, as there are areas that require immediate assistance.
Finally, November 20 each year marks International Children’s Day and is the anniversary of the Convention on the Rights of the Child, which Thailand is also a signatory nation. This convention calls for the protection of 4 rights,
1. The right to live
2. The right to be protected
3. The right to receive development
4. The right to participate.
I hope that all parents realize the importance of developing our youth to become the country’s most vital asset.
I think that family activities play a key role in developing the knowledge, way of life, and personality of our children.
During this weekend, I also would like to mention some other activities that are taking place.
1. The Wisdom Goods Expo 2017, which presents products that are modified versions of traditional practices to meet the needs of people in a modern age, according to the Thailand 4.0 agenda.
2. The International Fleet Review, which will be joined by 40 countries and the Air Race One World Cup Thailand 2017
These events are rare and are educational activities that will benefit our youth. This is the first time that Thailand is hosting this event, so I would like to invite everyone to visit these activities. This year is also a year where we are promoting domestic tourism.
There has been an increase in tourists and tourism in communities, which includes farms and orchards. These activities generate income for local communities and families, so we should support them more. The aim is to spend quality time with your family.
Thank you and I wish everyone a happy weekend. Thank you.