Grassroots policies getting a rethink
Beneficiaries say money was well spent
- Published: 23/12/2008 at 12:00 AM
- Newspaper section: Business
The priority task for the new government will be to assess the extent of a possible rise in joblessness and consider the appropriate assistance measures.
During the past eight years, governments led by the dissolved Thai Rak Thai and People Power parties embarked on many grassroots spending projects, ostensibly with the intention of supporting community economic development. They included the 70-billion-baht village funds, small, medium and large (SML) community development funds, entrepreneur creation under Otop (One Tambon, One Product), and farm debt suspension.
The programmes, all initiated by former prime minister Thaksin Shinawatra, were branded by critics populist and unproductive. Mr Thaksin and his allies defended the programmes as putting money directly into the hands of the poor, who would spend and thus lift consumption overall.
As the Democrat Party begins work as the new government after years in political exile, it is reviewing all of its predecessors' programmes to see which ones are worth keeping. Beneficiaries of the programmes have reasons to defend their merits.
Kasemsan Tiewkul, president of the Otop Northern Network of entrepreneurs, said that Otop, which began in 2001, focused on markets of community entrepreneurs rather than state provision of easy credit.
''I had set up my own business even before the creation of Otop. Otop just set a benchmark for product, created a market and assisted in exports of high-grade products. That some Otop product could not survive was not because of flawed policy or easy credit, but the business itself,'' he said.
Many Otop entrepreneurs have become strong businesses in their own right and all they want from the government these days is help promoting markets and demand. Government initiatives such as campaigning for more use of Otop goods as presents or Thai textiles in clothing are inexpensive and help entrepreneurs, Mr Kasemsan said.
''In a way, we have spent a lot of time building the Otop brand over then past seven years. No matter how the government wants to readjust it, it is not the entrepreneurs' faults. What it should do is to ensure the programme can go on by itself.''
A source who was involved in the previous government's grassroots policies said the new government should look at them as a strategy for poverty alleviation in the rural community because it creates supplementary income on top of agricultural earnings.
The government considers these projects based on their merits, rather than which party initiated them,said the source, who asked not to be named. The rural community will not enjoy healthy farm prices as it did during the 1997-98 economic crisis. And overseas labourers could migrate back to rural areas, creating a need to fill more jobs.
Natee Khlibthong, secretary-general of the National Village and Urban Community Fund Office, said the village fund project had focused on transferring know-how from the government, rather than just additional funds.
The project, in which the government allocated one million baht to each of more than 70,000 villages nationwide, has completed the first phase of implementation in strengthening accounting. The second phase is to integrate and upgrade funds and replenish certain losses. The size of the village funds have increased to 140 billion baht, including 60 billion derived from villagers' savings and borrowing from banks to fund investment.
''Most of the additional resources that we need are aimed at equipping personnel intellectually through training,'' Mr Natee said.
Fraud and non-performing loans of the village funds appeared to be low, he said. The office plans to encourage villagers to launch products and ask for the government to create markets. The plan will not overlap with Otop which involves larger enterprises.
The SML project, meanwhile, involved using state funds to build public assets within communities.
''We have been trying to educate villagers that the funds were from taxpayers' money and are meant to be revolving financial assets,'' Mr Natee said.
But Teerana Bhongmakapat, dean of economics at Chulalongkorn University, said the government should review all previous grassroots spending and gradually diminish populist projects that aim for political results.
Certain government projects such as low-cost housing were launched on a grand scale to excite people. Meanwhile, many Otop entrepreneurs failed because the government promoted the campaigns recklessly, he said.
About the author
- Writer: PARISTA YUTHAMANOP
