"Thailand - A Monarchy in a Globalized World"

By H.E. General Prem Tinsulanonda
President of the Privy Council and Statesman

Washington D.C., May 24, 2001

Excellencies,
Distinguished Guests,
Ladies and Gentlemen,

I am deeply honored to be here in Washington DC addressing this distinguished gathering of friends of Thailand. For this privilege, I wish to thank our gracious co-hosts and organizers for the occasion: the Asia Society, the Bank of America and UNOCAL.

Our co-hosts all stand, in their own admirable ways, as living testimony to the mutually rewarding partnership between two firm friends and allies, the United States and the Kingdom of Thailand, which has been thriving for well over a century.

The subject I have chosen for today is one close to my heart. I hope to shed more light, from my own perspective, on my country's path of progress - social, political and economic, under the wise guidance of our beloved Monarch, His Majesty King Bhumibol Adulyadej. These will be but some thoughts on what we, as a nation, have achieved, how we fared in recent past and where are we heading for in the face of unprecedented challenges of the new global environment.

Ladies and Gentlemen,

Thailand has been able to keep a steady hand in steering a course through the devastating shocks of the recent financial crisis. Our social fabric has withstood the kind of forces and disruptions well capable of tearing it apart. Hard won democratic values and institutions, long and carefully nurtured, not only survived but became more firmly embedded and strengthened.

This resilience, tested and proven time and again, bodes well for the future development of our widely acclaimed open society and open economy. Ask any Thai you may come across, he or she will be emphatic in his or her conviction that our society and its resilience draw their strength and sustenance from the unifying role of our Monarchy.

In keeping with the traditional ideals of Thai Kingship, His Majesty has always been a leader of compassion who is alert to the needs of his people and conscious of his duty to guide them. His Majesty carries out this royal responsibility through a remarkable degree of personal contact and direct personal involvement in activities carefully crafted to promote the livelihood of His subjects, particularly the rural poor.

During over fifty years of His reign, His Majesty ceaselessly traveled the length and breadth of His Kingdom, defying physical discomforts and inconveniences, to ascertain for himself local conditions even in the remotest corner of the land. Central in His Majesty's approach to rural development was the desire for the rural community to be self-supporting. This has been achieved through the provision of basic facilities necessary for agricultural production such as secure water supply and effective irrigation. In addition, the local villagers have been introduced to the practical knowledge and appropriate technology of production through successful demonstration models. For the migratory hill tribes living in the mountainous region along Thai-Lao and Thai-Myanmar borders, His Majesty has initiated crop substitution programs to replace traditional cultivation of opium poppies, and located educational and medical facilities at their settlements. Through the successful Hill tribe Development Projects, His Majesty has given the hill tribes a real sense of belonging to the Thai society.

Indeed, the personal bonds of understanding and affection between the Royal Family and the Thai people never seem to wane but continue to grow closer and stronger. The modern Monarchy has proven to the Thai people its relevance and vitality. The Monarchy became the focal point that brings together people from all backgrounds and shades of political thought and gives them an intense awareness of their common heritage of being Thai.

It is this potent moral force residing in the person of His Majesty which has on many an occasion pulled Thailand out from the brink of disasters. The King has been the ultimate stabilizing force when the country faced critical moments of seemingly deadlocked political confrontation. The King granted advice that eased tensions and prevented more bloodshed. He provided equally wise counsel during Thailand's struggle against the insurgency, suggesting solutions aimed at relieving rural poverty and inspiring confidence in the government's constructive efforts. Each of these personal contributions of His Majesty stands as true milestones in the evolution of Thai democracy.

Ladies and Gentlemen,

For the past three decades, Thailand was one of the few economies growing at the fastest rates in the world. Income per head stood at almost 3,000 dollars in 1996, a big leap from less than 700 dollars in 1980. Then, in 1997, the crisis hit us with such a severity that went far beyond the bounds of our imagination and experience. As a nation, we were impoverished overnight. Hardest hit were those lacking the resources and social protection to fall back on - the unemployed, the poor, small businesses, and marginal farmers.

Much soul-searching followed the crisis, and, with it, also a search for a new way. We found inspiration in the philosophy of "Sufficiency Economy" which His Majesty synthesized from his lifelong work and experience in development. For the nation, Sufficiency Economy represents an enlightened way forward, as a feasible approach to achieving the common objective of a stable, equitable, and durable development for all the people and communities in our land.


Ladies and Gentlemen,

Since the crisis, globalization has often been seized upon by some as the ready scapegoat for the havoc created in its wake. In this new era, spurred on by information technology, borders have become less significant leading to an increasingly integrated global economy. Globalization confers benefits on countries adept at taking advantage of opportunities, but at the same time it exacts heavy punishment from countries caught unprepared or treating it lightly.

Countries, large and small, can be highly vulnerable to external shocks, be it volatility in capital flows, exchange rate risk, export competitiveness, and contagion risk. Thailand was no exception. Having benefited greatly during the previous three decades of rapid growth, Thailand let down its guard and left itself badly exposed to those risks.

For Thailand, the severest external shock was the massive capital inflow. By the end of 1996, private sector short-term foreign loans reached the unprecedented height of 70 billion US dollars. Such flows were a double-edged sword. While it fueled the burgeoning economic growth, it also engendered latent hazards in the mounting current account deficits. The exit of capital flows proved faster than its entry, following the "herd behavior" in the loss of investor confidence, which led to the severe liquidity and currency crises.

Sadly, opportunities were squandered when borrowed capital was channeled into non-productive sectors. Economic development was defined and understood too narrowly, which resulted in extremes and excesses. Economic growth, higher incomes and material accumulation were being pursued increasingly as ends in themselves. Conspicuous consumption was being confused with economic development itself, as were prestige projects and prestigious material trappings. The needed sense of self-reliance and prudence as collective values were gradually cast aside.

In our headlong rush for overall growth, we downgraded the one key essential in economic and social development, namely, alleviation of poverty. I have long held the view that poverty is the root of all problems facing our nation, and most of my life in public service has been dedicated to the task of alleviating poverty, in the firm belief that it would help solving each and every one of those problems. But this crisis made the yawning gap between the haves and have-nots widen even further, against a background of searing costs and disappearing social warmth. Unrelenting quest for material wealth seemed to have undermined compassion and caring, which in turn weakened the social fabric, community bond, and traditional values.

Ladies and Gentlemen,

Lest it be misunderstood, globalization, in my mind, can be a force for good and is above all a stark reality that cannot be wished away, nor can it be stopped. We have no choice but to integrate ourselves into the new global environment. In this task it is imperative for us to find a way to make the most of the opportunities while shielding ourselves from the negative aspects of globalization.

On the brighter side, I fully agree with those who say that we have managed, with much personal sacrifices and despite the social costs, to achieve a turn-around from the 1997 crisis. But, clearly, we should draw some lessons from our unhappy experience. We simply cannot go on with our old ways and old habits as if nothing has happened.

Over the years, His Majesty the King has graciously reminded us constantly not to lose our bearings, not to be lured by the glitter of empty labels: being hailed as a "tiger economy" or a "newly-industrialized country", as it turned out, had little meaning or substance. As the whole nation was laboring under hardships brought on by the crisis, his subjects derived encouragement from His Majesty's observations on how to conduct oneself in the face of such adversity. Our Monarch gave us a number of principles contained in His philosophy on "Sufficiency Economy".

I do not pretend to have a full grasp of the principles involved in all their profundity and intended intricacies, but I do know that it is surely in our best interest to make the effort, however modest, to understand and draw inspiration from the wisdom of His Majesty.

Sufficiency Economy has as its thrust "the middle path as the overriding principle for appropriate conduct by the populace at all levels". The middle path, when practiced at the level of the individuals, families and communities, as well as collectively in the choice of a balanced national development strategy, will provide a firm foundation for all in standing up to the trials and challenges of today's world. Sufficiency for the individual means to lead a reasonably comfortable life, without excess, or overindulgence in luxury, but enough. Sufficiency is moderation in all human activities, reining in craving and greed to within the bounds of self-support and self-reliance, having enough to live on. If one has less greed, one will not take advantage of others in the fulfillment of one's desires. It thus lessens human proneness to the extremes and excesses, both in our insatiable appetite for wealth and wasteful consumption, which marked the period leading up to the crisis.

Sufficiency Economy does not advocate isolationism but presupposes the inevitable process of increasing global interdependence. What it does envisage and promote is the way towards a smoother, and more successful, integration of the Thai economy into the sweeping and stormy process of globalization. Moderation could be the means by which the sail of interdependence can be trimmed and adjusted so as to prevent the boat from being capsized by over-dependence. We all have seen how over-dependence made us extremely vulnerable to the whims of international capital which, on its part, was not immune to the influence of herd behavior.

Knowledge is an integral component of Sufficiency Economy. Our successive Chakri Kings have over the centuries placed great importance on learning from the outside world in ensuring the survival and the modernization of our country. Today the acquisition of knowledge, not just in the sciences and the technologies but also of other nations' experiences in development and reforms, continues to play a central role in capacity building and in charting the course of our own national development. Here, His Majesty urges prudence in the application of knowledge, "in particular, great care is needed in the utilization of untested theories and methodologies for planning and implementation". The question which I have often asked myself in this connection, albeit with the benefit of hindsight, is whether we have been a little too unquestioning and a little too fast in embracing forces of the market from outside? Could we have been more discriminate and selective in our approach?

Sufficiency Economy seeks to strengthen the symbiosis and harmony between man and his natural environment. The crisis has brought into sharp focus His Majesty' s lifelong work in agriculture and conservation, built up over the years with a great number of the Royally-initiated projects. Agriculture, the mainstay of the majority of the Thai population who are still toiling in poverty, can serve as a buffer against external shocks, testifying to the value of "getting back to basics". For too long, the growth-oriented strategy has led to the rapid depletion of environmental assets priced cheaply at below their replacement cost. Conservation is but an integral part of sustainable development. His Majesty has truly been teaching us by example, be they His projects to restore watershed areas through reforestation, or to reverse desertification or to harness the sometimes destructive forces of nature such as flooding, benefiting at the same time from power generation and irrigation.

Towering above all else as a constant in any overall equation is the need "to strengthen the moral fiber of the nation, so that everyone, particularly public officials, theorists and businessmen, adheres first and foremost to the principles of honesty and integrity". It is true that at times people were badly demoralized on being turned into paupers overnight. Each, out of necessity, went his own way, caring little, if at all, for his fellow men. Moral fiber, gradually reinforced, contributed to the collective national resilience, and seemed to be the single most important factor that kept us afloat and pulled us through the crisis.

His Majesty's "Sufficiency Economy" was timely in pointing the way forward. It gave heart to His people when they were in dire need, and was so well received that it now provides the foundation for the formulation, now in progress, of the Ninth National Economic and Social Development Plan (2002-2006). And, beyond the national context, "Sufficiency Economy" has been acclaimed by the international community at the Tenth United Nations Conference on Trade and Development (UNCTAD) in February 2000 which expressly recognized His Majesty as "the Developer King".

Permit me, here, to draw on the tribute paid to His Majesty in the Statement of the UNCTAD X Conference, and I quote "This remarkable resilience reflects the strength of the Thai nation. And that strength has been nurtured and developed by His Majesty King Bhumibol Adulyadej, the King of Thailand, who is the soul of his nation. Through his caring leadership, His Majesty has earned the abiding love and profound respect of his people, and through his thinking he has laid the foundation for and inspired his country's development strategy. His Majesty's philosophy of a "Sufficiency Economy" now lies at the heart of Thailand's development thinking….The experience of Thailand offers fundamental lessons to all of us and the Thai nation is living testimony to the efficacy of the King's actions and boundless compassion."

Ladies and Gentlemen,

It has always been - and, in my view, always will be, the case that Thailand's destiny is firmly tied to the wise leadership and unifying force of our Monarchy. During the over fifty years of His reign, His Majesty has more than demonstrated the relevance and vitality of our supreme institution, guiding us through the difficult but steady transformation of Thailand into the modern nation that it is today.

Thank you.