An alternative approach to development: A case study of the Bangchak petrol stations, Dr Supriya Kuandachakupt, Thailand
Thailand adopted its First National Economic and Social Development Plan (NESDP) in 1961. From then to the current Eighth Plan, it has undergone many changes in its economic and social structure. Thailand was formerly an agricultural society; now it is partially industrialized. Thailand's overall economic growth rate was maintained at a high level and had reached double-digit levels in 1988-90, before the present economic crisis. However, during that time -which seemed to be the growth period of the country - the income gap between rural and urban sections had been worsening. Past development has clearly resulted in a growing dual economy. Although general welfare has improved, social problems have appeared to increase substantially and an alarming decrease of society's morale is being witnessed. In rural areas, families are fragmented, weakening family ties due to rural-to-urban migration. The market economy of major cities and consumerism extending into the village, falsely understood as development, has changed the values and lifestyle of villagers. Rural areas are losing their identity and the basic institution that underlies rural society, i.e. the family. In the process of development, Thai society changed from self-reliance to dependency, seeking employment instead of farming, buying instead of producing, making money at the cost of ecological degradation and exploiting natural resources instead of preserving resources and the environment for sustainable use.
Counter to this trend, some villagers found a way out by creating a group and working on virtues of trust, sharing and cooperation; and virtues of small-scale community business. To make this alternative sustainable, the villagers know that they have to be self-reliant. The problem is their lack of control over productive resources.
The purpose of this study is to look at one model of rural development, which starts from the initiation of the civil society organization, then getting help from a donor corporation to attain self-reliance and sustainable development. The model follows the concept of the New Theory of Development, by H.M. King Bhumipol Adulyadej of Thailand and the Theory of Balance. The study concludes with the observation that sustainable development can be achieved through self-reliance, and that all agents involved in the process of development will profit by mutual cooperation and benefit-sharing in terms of co-investment, co-management and profit sharing between community and business. In the long run, with the help and cooperation of business, the strength of the civil society organization will increase. Instead of being a threat to business corporations, this will expand their business and their profit in the long run.
Bangchak community petrol station in Nakorn Prathom Province is a case study. A comparative study of four Bangchak community petrol stations and four privately-owned petrol stations in the same location by pairs was carried out in 1997. Bangchak community petrol station is a programme launched by a petroleum company with the objective of doing business as well as helping communities to develop themselves. The company jointly invests in the petrol station, provides training and shares the profit. The company then allows the cooperatives to buy off the company's share and the community group eventually owns the petrol station.
The four agricultural cooperatives that were studied are the Bang Lane Cooperative Group (BL), the Don Toom Cooperative Group (DT), the Nakorn Prathom Cooperative Group (NP) and the Kampangsan Cooperative Group. Facing the same kinds of problems - poverty, low-income, lack of control of factors of production - they were determined to escape these problems. They formed a cooperatives group working on trust and moral code of conduct. The most important and needed factor of production was low cost capital for investment. All started as small groups of farmers setting up savings cooperatives for production. They have survived through trial and error, but it was difficult for them to gain higher income from farming alone. To gain higher income, they needed to expand and diversify into community business, i.e. to do marketing and distributing products to outsiders. To be able to do this, they needed outside help and cooperation.
In the old paradigm, business is about competitors, exploitation, profit and taking full advantage of others. This case study provides a new paradigm for business: strengthen the community, develop by sharing profit, train for local operation, management and employment; preserving the environment; developing reasonable business contracts for community business to grow, so that business will yield better returns to the community in the long run and contribute to its sustainable development. What has been learned from the case study is that the rural development process has to be step by step, according to the New Theory. Thus, sustainability can be achieved through interdependency, cooperating equally between community and business and a new "balancing" business paradigm.
Thailand adopted its First National Economic and Social Development Plan (NESDP) in 1961. From the First to the current Eighth Plan, it has undergone many changes in its economic and social structures. Thailand was formerly entirely agriculturally oriented, with more than 80 percent in farming. Now it has become quite industrialized with about 60 percent of the population in agricultural sector. The age share of agricultural product in GDP has declined while that of industrial product has substantially increased, and is now more than double the agricultural product. (Table 1) The rate of growth of the industrial sector is higher. (Table 2) In addition, the income from exporting industrial products has increased at a faster rate and is higher than that from agricultural products.
The overall economic growth rate has been maintained at a high level and reached double-digit levels during 1988-90, before the decline due to the present economic crisis. However, during the time, which seems to have been the country's primary growth period, the income gap between rural and urban sections worsened. Average incomein the farm sector declined, from one-sixth of the non-farm sector in 1990 to one-twelfth in 1995. The top 20 percent of households earned 58.74 percent of total income while the bottom 20 percent earned 3.48 percent in 1995 and expected to be even lower in the year 2000. (NESDB, Thailand 2000, 1997) Past development has clearly resulted in an increasingly dual society, caused by the centralization of economic and political decisions and the concentration of resources and benefits in Bangkok and a few big cities. Migration to big cities for higher income and social status has created problems in both rural and urban areas. In rural areas, families are disintegrating' workers are losing family ties. The market economy of big cities and consumerism extending into the village, falsely understood as development, has changed the value system and the way of life of the villagers. Rural areas are losing identity and the basic institution that underlies rural society, i.e. family and community ties. What is happening is that Thai society has changed from self-reliance to dependency, seeking employment instead of farming, buying instead of producing, making money at the cost of ecological degradation and exploitating natural resources instead of preserving resources for sustainable use.
Counter to this trend, some villagers realized the root of the problem and found a way out by creating a group and working on virtues of trust, sharing and cooperation and virtues of small-scale community business. Community business means businesses that are operated by local communities and benefits are shared among villagers in terms of membership and low interest loans for investment. To make this alternative sustainable, the villagers know that they have to be self-reliant. The real problem is the lack of control over productive resources. To overcome this problem, they have land and labour, what they need are low interest capital, technology, expertise in management at a low cost and low transaction costs. Various types of savings cooperatives have been set up, some have become very successful, proving the management capability of the villagers, but some have failed and need outside help to restore them. As for other productive resources, villagers have to seek from outside sources as well. The problem is where? And at what cost?
The purpose of this study is to look at one model of rural development, the process of which starts from the initiation of civil society organization, then getting help from a big corporation to become self-reliant and sustainable. The model follows the concept of the New Theory of Development, of H.E. King Bhumipol Adulyadej of Thailand and the Theory of Balance. The study illustrates that sustainable development can be achieved through self-reliance, and all agents involved in the process of development will profit by cooperation and benefit sharing in terms of co-investment, co-management and profit sharing between community and business. In the long run, with help and cooperation from business, the strength of the civil society organization will increase. Instead of being a threat to business corporations, this will expand corporate business and profit in the long run. This is the survival path of both agents in the long run and therefore the sustainable development
What is the problem in rural areas?
From the Socio-Economic Survey of Agricultural Households conducted by the Office of the Agricultural Economics, Ministry of Agriculture and Cooperatives in the crop year 1995-1996 we obtain the general characteristics of agricultural households as follows. The majorit