Self-sufficiency economy by own money

by Sanitsuda Ekachai,
Bangkok Post, Sept 7, 2000

So much for state hype about a self-sufficiency economy. When the villagers from Kud Chum in Yasothon province experimented with a community barter system to strengthen the village economy and community self-reliance, the Bank of Thailand just killed it off.

The Bank of Thailand said it was illegal to issue monetary tokens without permission from the finance minister. It also was illegal for the Kud Chum barter group to call itself a bank. Only commercial banks can do that.

The central bank's action highlights the need to re-think our centralised monetary and banking systems.

Something is seriously wrong when big banks can freely use villagers' savings to bankroll urban investments while it is a no-no for villages to manage their own savings or set up a barter system for goods and services to increase community businesses and savings.

The Kud Chum Bank worked this way: A member got a certain amount of tokens called "bia" which he/she could use in exchange for goods and services produced by other members. There was no interest attached to the bia. There was only the members' commitment to produce more produce on their farms or to offer their skills and labour to keep the exchange system running.

In a mainstream market economy, the villagers have no power to set prices. The widening gap between rising production costs and declining commodity prices account for severe rural indebtedness.

The Bia Kud Chum system allowed members to determine the value of the goods and services themselves. The valuation system, apart from being participatory, was based on the usefulness of those goods and services, and accorded special value to the preservation of community health and family togetherness.

It was no co-incidence that this community barter system took place at Kud Chum. The villagers' self-reliance efforts date back two decades, long before self-sufficiency became a buzzword.

Like other rural villages, Kud Chum was nearly bankrupted when it followed the state promotion of mono cash crops for export. Disillusioned, the villagers found the soil was dying from chemicals and they themselves were plunged deeper into debt.

Under the moral leadership of a Buddhist monk, Phra Kru Supajarayawat, they came to realise that they were being misled by the state development propaganda that money could buy happiness. So they tried to cut down their dependency on money, starting with self-care through the revival of traditional medicines.

Renewed community confidence and camaraderie led to other achievements, including a village business in herbal medicines, natural rice farming and a community-run rice mill for organic rice. Kud Chum was ready for a new tool to increase self-reliance when the idea of a community barter system came its way.

The villagers believe the more they can produce basic goods and services themselves, the safer they are from market economy fluctuations. And they believe that bia, which is essentially a token of mutual trust and commitment to produce and exchange more locally, can help them do just that.

The Bank of Thailand order that Kud Chum stop its community barter system arose from an empty fear.

To start with, the system only works with groups with strong mutual trust. This is a constraint on quick expansion. Also, it's impossible for the tokens to replace the baht simply because the community cannot produce everything the villagers need.

But what it can do is improve a community's financial immunity while reviving the moral values of contentedness-the secret to happiness.

Isn't that what our country needs to emerge from the economic crisis with grace?

N.B. Original title is Token effort is nipped in the bud. It is changed to make more understanding among students