Sustainable Development and the Sufficiency Economy: Role of Science and Technology

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Sufficiency Economy PhilosophyA Model for
Sustainable Development Mario T.
Tabucanon Visiting Professor, UNU-IAS Professor,
Asian Institute of Technology
Presentation at the 3rd ASEAN-Plus-Three
Leadership Programme on Sustainable Production
and Consumption 6-7 October 2010, Bayview Park
Hotel, Manila, Philippines
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The Sufficiency Economy Philosophy (SEP)

• His Majesty, the King of Thailand developed SEP
• HM introduced SEP in all Royal Projects in
  Thailand (Since 1974)
• SEP is a model for achieving SD
• SEP is the overarching principle in the 9th and
  current (10th) Thailand National Economic and
  Social Development Plans, 2001-2006 2007-2012

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Philosophy of Sufficiency Economy

• Sufficiency Economy is a philosophy that
  stresses the middle path as an overriding
  principle for appropriate conduct at all levels
  of society -. individuals, households, community,
  organizations or government

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• 1992 During economic boom, HM
• warned against hastily jumping
• into the wind of Asian NICs
• and Asian Tigers..
• 1997 Indeed, Thailand suffered
• during the Asian financial crisis.
• But due in part to the application of
• SEP, Thailand had recovered relatively
• fast.

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• Although His Majesty has been talking about
  sufficiency economy since 1974, it was only in
  1997 at the height of the financial crisis that
  HM began to use the term Sufficiency Economy.

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Components of SEP

• Sufficiency has three components moderation
  reasonableness and the need for built-in
  resilience against the risks which arise from
  unwanted internal or external change.

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Main Components of Sufficiency Economy
(1) Moderation
Sufficiency Economy
(2) Reasonableness
(3) Self-Immunity
Conditions SEP Will work best if there is (1)
Application of appropriate knowledge and
prudence (2) Adherence to morality
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Frameworks of the 9th 10th Plans
HM Kings Philosophy of "Sufficiency Economy
The Middle Path
Wisdom Condition (an application of knowledge
with due consideration and prudence )
Moral Condition (honesty, integrity, diligence,
patience, perseverance)
Life/Economic/Social
Balance/Stable/Sustainable
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GLOBAL KNOWLEDGE POOL
EXPLODED CONNECTED
KNOWLEDGE ACCESS KNOWLEDGE VALIDATION
KNOWLEDGE VALUATION
Ethical Values governing TECHNOLOGY
ASSESSMENT SUSTAINABILITY
KNOWLEDGE-BASED DEVELOPMENT
PROBLEM-SOLVING CONTEXT, SITUATION, LOCATION,
TIME DEPENDENT
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IMMUNITY ?
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CULTIVATE ETHICS MORALITY
Uneducated person can do petty
corruption, Educated can do deliberate ones.

• PROHIBITIONS
• Dishonesty, plagiarism
• 2. Academic lie

New Ethics eg. brain death, GMO, stem cells,
global warming, democracy, corporate social
responsibility
SUSTAINABILITY Natural resources
Environment Consumption Production
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How does SE relate to Neoclassical Economics?
Y
Max S (1r)-t EU(C,..,t) Subject to
Budget Constraints
Optimality
A
Preference
X
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How does SE relate to Neoclassical Economics?
Y
Satisfice S (1r)-t EU(C,..,t) Subject to
Budget Constraints
Middle path solution
A
Preference
X
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Difference between SE and Neoclassical Economics
Neoclassical Economics
Sufficiency Economy
Optimality
Middle path

• Depend on Preference, and Constraints to
  Maximize Utility

• Choose middle path based on moderation,
  reasonableness and self-immunities
  Bounded Rationality or Satisficing

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Applications of Neoclassical Economics
Neoclassical economics tries to understand human
choices and explains the observed pattern using
the optimizing framework
Risk Loving
Social Status
Lack of Self Discipline
Risk Averse
Addiction
Short-sighted
Long-sighted
Envy
Prudence
Human behavior
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SE and Human Behavior
Prudent Person
(1) Moderation
(2) Reasonableness
(3) Self-Immunity
The behavior of those who adhere to SEP will be
similar to the behavior of prudent persons.
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Misconceptions concerning SEP

• 1. Sufficiency Economy is about self-sufficiency
  This is a misconception.
• SE concept entails a two-stage process the first
  stage involves basic sufficiency, or relative
  self-sufficiency, and once a firm foundation is
  established, one can progress to a second stage
  of advanced sufficiency.

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Misconception

• 2. Sufficiency Economy is anti-globalization and
  leads to the closing-up of the economy This is a
  misconception
• The two-stage principle of Sufficiency Economy
  suggests that in order to cope with
  globalization, we first need to build a strong
  foundation for the country and proceed cautiously
  with an awareness of the risks involved.

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SEP strategic framework for a country in the
globalization era

• Build a strong domestic economy and improve
  networking at all levels (local, national
  global)
• Liberalization of key sectors has to be carried
  out in steps and to be consistent with the
  countrys state of readiness
• Proper supply-side management policy to help
  withstand the shocks and volatility arising from
  external factors

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Misconception

• 3. That Economy in the term Sufficiency
  Economy only refers to the conventional concept
  of Economics. This is a misconception.
• Economy in SE encompasses the triple bottom
  line Economics, Social Way of Life, and
  Environmental.

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Misconception

• 4. Sufficiency Economy is only applicable in the
  agricultural sector and rural areas This is a
  misconception
• Sufficiency Economy is a philosophy that helps
  guide the behavior of each individual and can be
  applied to all sectors of the economy

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Applications of Sufficiency Economy Philosophy
Sufficiency Economy
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SEP Applications to Daily Life

• As guiding principle in daily activities
• Especially in answering questions such as How
  should we act?
• Which items should we buy?
• How should we live our lives?
• Together, the answers to these questions will
  help define what it means to live according to a
  sufficiency lifestyle.

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Example Buying a House

• If we try to follow SEP, then we have to ask
  ourselves at least three questions
• First, whether this house is a suitably moderate
  choice, given limited resources.
• Second, whether it is a reasonable thing to do to
  buy a large house just to show it off
  occasionally to our friends.
• Third, whether the financing of this particular
  house will leave the buyer vulnerable to adverse
  effects that might happen in the future.

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CONSUMERS
AVOID EXCESSIVE OVERCONSUMPTION BEHAVIORS
UNNECESSARY DESIRE
NATURAL DESIRE Longest life Youthfulness
Beauty Ease of living Enjoyment Recreation etc.
Anti-oxidant food supplements/ potions/ drugs
Cosmetic surgery
Addictions drugs, non-drugs, sugar, lifestyles
Satiety for violence, sex, extremes
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CONSUMERS
KNOWLEDGE WISDOM For Rational Decision
IMMUNITY against seduction addiction
NECESSITIES IN LIFE Food Energy Water Transporta
tion Communication Housing etc.
AFFLUEZA
ELECTRICITY, FOSSIL FUEL, PETROLEUM
INFRASTRUCTURES
OBESITY
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OBESITY
In Thailand, up to 30 of adults and adolescents
reached obese range. From 1986 to 2008, the
situations were getting worse.
Change of food habits from rice, vegetables and
fruits to Western style of food food of high
fat, protein sugar
MOTIVATION
Public Exercise Programs
Prohibition of sale of junk food in schools.
Soaring sale of food supplements claimed to
control weight. Advertisement, promotion direct
sale
Booming of spa and exercise businesses
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Advertisement Luxurious houses From 18.5 million
baht
Advertisement Luxurious cars from 10 million baht
International Watch Fair over 1 million baht
Trade Fairs Trendy fashion
SUFFICIENCY ECONOMY
Individuals resisting me-too
temptation Society virtue of saving,
shame for showing off luxuries.
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DESIRE-BASED TRADE
BUSINESSES Cosmetics Health Health food Spa
Exercise Weight control Sport Lottery

Advertisement, Sale Promotion
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Spiritual Dimension of SEP

• If one is moderate in ones desires, one will
  have less craving. If one has less craving, one
  will take less advantage of others. Sufficiency
  means to have enough to live on. Sufficiency
  means to lead a reasonably comfortable life,
  without excess, or overindulgence in luxury, but
  enough. (Royal Speech, given at Dusit Palace, 4
  December 1998)

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Agricultural and Community Development
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Thai agriculture in the recent past - Monoculture

• Problems from Monoculture
• Problems from Supply/Demand Adjustment
• Weather
• Debt Problem- Migration and weakness of the
  villages

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New Theory of Agriculture

• Emphasizes diversified farming techniques and the
  need to develop the communities, stage by stage,
  by laying down a firm foundation first.

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New Theory for Agriculture
1. First step The aim is to let the farmers be
able to support themselves (self-sufficiency)
especially concerning rice. If the main problem
is water then they should dig a pond in their
land to make sure that they have enough water for
farming and household usages which they might
need support from the government or private
sector in digging the pond. (30 water, 30 rice,
30 vegetables/fruits/livestock, and 10 house of
the total area)  
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New Theory

• 2. Second step Farmers should work together and
  create a cooperative to reduce the cost of
  production and for saving purposes as well as
  social security and together they will also have
  more negotiating power in selling their products
  to the markets.

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New Theory

• 3. Third step For developed communities,
  further expansion of the production process and
  commerce such as cooperative stores or rice
  milling factories can rely further from the
  cooperation from commercial banks in improving
  their livelihood.

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Procedure of the New Theory
1st phase Implementation / Production
Advising/ Experimenting
Getting results
Implementing
Support from outside
2nd phase Expansion / Marketing
Joining forces
Better living conditions
Production / Marketing
Support from outside
3rd phase Advancement / Processing /
Adding Value
Cooperation/ Capital
Sustainable development
Quality of life
Support from outside
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Benefits of the New Theory
Steady and higher income margin
Farmers and their children have better
education opportunities
Agriculture in accordance with the New Theory
Better learning/ education
Advice, consultations Farmer-farmer Official-
farmer
Knowledge and learning on the job
Monitoring of news and information on farming
practices
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Farm Families and Communities Socio-economic
Impact
Job available the whole year round
Work in the locality
Family members joining activities, spending more
time together, taking good care of children and
the elderly
Diverse activities, perennial trees, fruits,
vegetables, livestock
More frequent harvests
Steady and higher income margin
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Strengthened Community
Members of working age are kept in the locality
Working force is available for community work and
other communal work in the rice fields and
plantations
Diverse activities, perennial trees, fruit
trees, vegetables, livestock
Steady incomes Higher incomes Equitable distributi
on of income
Strengthened community
Different harvest times
Increased and diverse production
Organizing as groups Or cooperatives for
production, marketing, welfare
Sufficient food
Resources in the rice fields are better utilized
in turn
Dependence on outside sources is reduced
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Business Practices
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For the Corporate Sector SEP suggests

• Greater emphasis on
• good risk management,
• well thought-out business plans,
• sustainable investment,
• good corporate governance,
• good corporate citizenship in terms of taking on
  corporate social responsibilities (CSR).

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Siam Cement Case

• Decided to adopt SEP as its guiding principle. It
  restructured and refocused its activities on its
  core business, where it has strong
  competitiveness, and put more emphasis on risk
  management to build greater resiliency.

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Siam Cement Case

• It now gives priority to its human resource
  development program to build a quality workforce
  that will provide the firm with greater immunity
  to future uncertainty
• It also engages in a wide range of corporate
  social responsibility activities such as
  community development and environmental
  protection, as well as supporting other social
  causes.

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Examples (Applying Immunity)

• Thinking about others Saha Farm
• Self immunity Hana
• - Prudence and not too greedy
• Thinking about staffs Seven
  Eleven
• Cautious expansion Golden Place

Pricing moderately
Do not borrow unnecessarily
Empathy to your staffs
Building your foundation
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SMEs Sufficiency Economy
Pantasen, A et al Application of Sufficiency
Economy to Small and Medium-sized Industries, a
survey of 296 enterprises, 2003
Sufficiency Economy Indicators
6 groups of Industries
90 felt that Sufficiency Economy could be
applied to their enterprises.
Production plan in line with their ability to
manage, Honesty to customers and social
responsibility
Risk taking and outside financing is difficult
to avoid for medium-sized ones
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Government Policies
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Implications of SEP on Government Policies
1. Macroeconomic Management 2. Government Policy
Design 3. Alternative Development Strategy
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Implications of SEP on Government Policies
Moderation Reasonableness
Self- immunity
Adequate SavingEnergy Security National Risk
Manag..
1. Macro Management
Mega-project, Growth, Inflation, Budget Deficit
Design of governmental projects to make people to
be more sufficient (Village funds, Debt
forgiveness, Education reform etc.)
2. Gov. PolicyDesign
Balanced economic development frameworkRural
along side with Industrial development Strong
communities Quality growth No need to go fast
Emphasis on public well-being
3. AlternativeDevelopmentStrategy
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GOVERNMENT
Regulations Standards
Infrastructures services
transportation water
energy waste
management recycling
facilities
Pricing, Taxes, Choices, Sanction
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SEP as an Approach to Sustainable Development

• The SEP path of development emphasizes a balanced
  use of
• material resources,
• social capital,
• environmental reserves, and
• cultural wealth
• as well as the balanced preservation of these
  four kinds of resources at all stages and levels
  of development.

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SEP and SD

• There are two distinct characteristics of the SEP
  approach to development
• a consideration of society and of
• culture.

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SEP and SD

• The National Human Development Report 2007
  Sufficiency Economy and Human Development in
  Thailand -- has come up with six key messages
  for future action.
• Sufficiency Economy is central to alleviating
  poverty and reducing the economic vulnerability
  of the poor.
• Sufficiency Economy is a means towards community
  empowerment and the strengthening of communities
  as foundations of local economies

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SEP and SD

• 3. Sufficiency Economy takes corporate
  responsibility to a new level by raising the
  strength of commitment to practices conducive to
  long-term profitability in a competitive
  environment.
• 4. Sufficiency principles are vital for improving
  standards of governance in public administration.

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SEP and SD

• 5. Sufficiency Economy can guide national policy
  to immunize a country against shocks, to craft
  better policies, and to plan strategies for more
  equitable and sustainable growth.
• 6. Sufficiency thinking demands a transformation
  of human values, a revolution in the mindset,
  necessary for the advancement of human
  development.

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EDUCATION FOR THE NEXT GENERATION
EDUCATION
SUFFICIENCY ECONOMY 1. MODERATION 2.
RATIONALITY 3. IMMUNITY
FORMULATION Of PERSONALITY BEHAVIOR MINDSET
RATIONALITY (evidence-based, critical
reasoning) INQUISITIVE MIND, CRITICAL
MIND BROAD MIND, OPEN MIND REFLEXIBILITY
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References

• 1. SUFFICIENCY ECONOMY PHILOSOPHY AND
  DEVELOPMENT
• Chaiyawat Wibulswasdi Priyanut Piboolsravut
  Kobsak Pootrakool
• Published by
• Sufficiency Economy Research Project
• Bureau of The Crown Property
• Bangkok, Thailand
• Website http//www.sufficiencyeconomy.org

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References

• 2. Charas Suwanwela, Roles of Universities in
  Sufficiency Economy, presented at the 11th
  UNESCO-APEID International Conference Reinventing
  Higher Education Toward Participatory and
  Sustainable Development, 12 December 2007,
  Bangkok, Thailand
• 3. Charas Suwanwela, Sufficiency Economy
  Philosophy as an Approach for Sustainable
  Production Consumption, presented at the 2nd
  ASEAN3 Leadership Programme on Sustainable
  Production Consumption, Sirindhorn
  International Environmental Park, Cha-am,
  Petchburi, Thailand, 8 August 2009

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Thank You