Khon Kaen takes future development in own hands
Growth predictions are falling to under 2.5% and Bank of Thailand interest rates have been slashed to 1.5% as the Thai baht enters a currency war. Economic activity in Bangkok is faltering in the face of weaker fundamentals.
The Bangkok slowdown is affecting the 14 million people, 22.2% of all Thais, who live in the Bangkok metropolitan region, a socio-economic area covering over 7,700 square kilometres. Asean's largest capital, Bangkok embodies both the best and worst of Thainess — performances of high culture and sites of renowned cultural heritage are juxtaposed with slums and gross wealth inequality.
All Thais know Bangkok can be a source of problems and solutions. For Thais from other regions, Bangkok has been both a means of earning an income and a partial solution to the problems of poverty, and, on the other hand, a source of their economic woes, especially a Byzantine bureaucracy.
In particular, the lives of those in the Northeast, where regional poverty is over 16%, have become interwoven with the lives of Bangkokians. Some northeasterners move there permanently to work in the service industries. At the same time, the World Bank has estimated that Bangkok consumes more of the northeastern provinces' taxes than it actually allocates to the region in terms of grants to local government and development projects.
This unequal interdependency breeds complacency and does not address the "Isan Problem" — the Northeast's infrastructure requirements, social inequity and political tensions.
The issue has been the focal point of Thai development planning since the late 1950s and has been a priority for both military and civilian governments. In particular, irrigation, infrastructure and education have been prioritised, with the Northeast now being home to multiple dams, a decent road network, and a flowering university system, though much still remains to be done.
In particular, there is a lack of vision, of focused development and of political stability. To address these issues, Khon Kaen is taking its future into its own hands, empowered by the 2013 Private Investment in State Undertaking Act and encouragement by the Ministries of Finance, Transport and Science.
Khon Kaen is already a hub for education, logistics and business. Moreover, it is the nexus of the North-South and East-West super-corridors designed to link Asean countries with each other and with the rest of the world.
In response, Khon Kaen people have created a private special-purpose vehicle to develop a Provincial Infrastructure Fund and raise six billion baht for a mass transit system linking the city's northern and southern limits, and connecting Khon Kaen University to the urban community.
This tram system will be Thailand's first community-driven mass transport project, and will be similar to the Bangkok Mass Transit System but with all infrastructure and track costs borne by a limited liability company.
One of the aims of the company is for Khon Kaen citizens to become shareholders as well as concessionaires via the city government. As such, they will be able to check progress against the plan with their own eyes and conduct social audits both through the regular meetings of the civic council and through networked pressure on the company to succeed.
A policy of the company is that it is rejecting any expressions of interest from politicians to remain politically unbiased. Furthermore, as well as conventional accounting, the company intends to be guided by a gross domestic happiness index and a well-being audit and is developing mutually beneficial research with KKU's faculties.
Crucially, a major international partner has been lined up, with the deal involving full technology transfer. This allows for other northeastern cities to follow similar development pathways.
Although this development is helped along by Khon Kaen's unique geopolitical position, the city has also been nationally recognised as a model of socio-cultural integration, being home to a range of mutually-respectful ethnicities, and it is a shared aspiration that Khon Kaen should develop as an economic centre.
From a national perspective, such locally-driven projects drive the engines of commerce, such as Thailand's market capitalisation, making the country more attractive to prospective inwards investors. Thus, provincial cities can grow, network and mobilise the true potential of Thailand's economy.
One year after its commencement, the Khon Kaen project provides a plan for environmentally friendly and socially responsible urban development that avoids the "spore growth" Bangkok has experienced. This vision ultimately aims to create a more prosperous Northeast and a more equitable Thailand by empowering local people to overcome bureaucratic inertia.
Of course, there are risks. Multiple levels of international auditing, including by the Stock Exchange of Thailand, together with the multi-dimensional involvement of the community, significantly reduce risks.
However, in countries which local governments are allowed to realise their own potential like Japan, the central government has guaranteed the bonds of urban development corporations, for example in Kobe. Bangkok is actually the most primate city on earth, 40 times larger than the next Thai city. Given the structure of local government and the overriding power of a Bangkok-based authority that is restrictive rather than permissive in nature, policy support is the minimum the central government can do to support the bottom-up development approach.
Peerasit Kamnuansilpa, Phd, is founder and former dean of the College of Local Administration, Khon Kaen University.