Supara Janchitfah*
Bangkok Sep (Focus-on-Trade) -- Nine years ago, landless Soy Onthai of Nakhon Sawan had to move from the province to find jobs in the big city. She thought she was fortunate to get a job at Par Garment in Rangsit for 45 baht a day.
Last March, she was receiving 162 baht a day for the work that she has been doing for nine years now: sewing 400 pieces of parts of various brand name shirts for the world market.
"Export competitiveness is an important potential tool to reduce poverty in developing countries, as it can lead to higher economic growth and can increase the likelihood of lower prices and better products for consumers," says J. Shivakumar, the World Bank's Country Director in Thailand.
"World-wide experience has shown that inward-looking strategies of countries eventually fail, for such policies almost always result in low- quality, high-cost products, in greater poverty, in disadvantaged consumers, and with only a well-connected and privileged minority benefiting. Export performance is thus a key ingredient of Thailand's recovery and growth strategy," said Mr Shivakumar. If Mr Shivakumar is right, Ms Soy and millions like her powering Thailand's teeming export companies should have better lives after they joining the export workforce.
But Ms Soy's hard life is an illustration of factual truths: it's been nine years but she still has to eat the cheapest meal she could: five baht of sticky rice and some grilled chicken bone.
"We cannot eat much. I have to keep some part of the money for housing, for electricity, for water and to save some to send home," said Soy. According to the Department of Export Promotion, Thailand's exports last yearamounted to 2,248.08 billion baht. The past four years totalled 6,938.46 billion in exports. If the labourers that bring this much money in do not seem to benefit, who does?
Soy and many other Thai workers nationwide are living a little above poverty line, more often than not deeply in debt. Most are farmers who are being pushed to produce more for export under the World Bank's Countries Assistance Strategies (CAS).
Item 84 of the CAS states the objectives of rural development are to improve the competitiveness of agricultural exports and import substitutes, continue commercial agricultural productions and rural restructuring to improve farm incomes, improve irrigation for high- quality export rice and diversified high-valued exportable crops.
Soy used to grow in her 30-rai ricefield. Her family had to invest in fertiliser, chemicals, and eventually sank deep into debt. They were forced to produce more than her family needed in order to feed the market and the world. Her family lost their land and Soy became a waged earner.
Worse still, when the economic crisis hit Thailand in mid-1997, Soy and hundreds of thousands of Thais who went to work for export companies lost their jobs. One of them was Mrs Pramorm Chombud, who worked for the Thai Melon factory for 26 years. While the government has been attempting to solve the problems of
financial market instability and loss of investor confidence by implementing economic policy remedies prescribed by the International Monetary Fund (IMF) and the World Bank, Pramorn continues to buy the cheapest bones and vegetables for her children to eat. Will they benefit from the government's actions?
How? When?
At fleeting times, Pramorm, 51, thinks about those questions, but she has to go out and find a job. Her husband is paralysed. Her mind has more than enough worries to examine, and she doesn't have the time to dwell on the state of the nation's finances. She does odd jobs and earns less than 100 baht a day. She wants to go back to Lop Buri province. That's where she was born. But even in her hometown, there is no place for her. Her old friends are just as hard up as she is.
In June 1998, the World Bank published its Country Assistance Strategy (CAS) for Thailand and announced a US$300 million Social Investment Project (SIP) loan. In May 1999, the Bank announced a strategy for rural development in Thailand.
The NGO Coordinating Committee on Development (NGO-COD) invited the World Bank's Thailand Country representative to brief NGOs,
academics and community leaders on CAS-Thailand last month.
Enthusiastically responding to NGO- COD's invitation, the Bank sent a group of eleven people to the meeting, led by the country director, Mr J. Shivakumar. Despite the long association between the World Bank and Thailand, this was the first time that Bank officials and Thai NGOs have formally met with each other. In the
past, Thai NGOs and local communities has resorted to campaigns against the Bank's funding of socially and ecologically destructive projects and policies including large dams such as the Pak Moon, against the export-led agriculture policy, against chemical-intensive agriculture, and against proposed resettlement of forest-dwelling communities.
The World Bank officials spent half of the meeting to explain its stand, and the intent of the CAS. Academics and NGOs criticised the CAS as not designed to benefit the majority. In response, Bank officials insisted on explaining once more "who we are and what we are doing here." This information is available on the website and in books. The critics recognised it as an evasion tactic.
The straightforward questions raised by the Thai NGOs were not adequately responded to at the meeting:
What legitimacy does the World Bank have in influencing Thailand's national policies?How will the World Bank, and its executive board, respond to the public's growing criticisms of its aid strategies?How does the World Bank plan to deal with its past mistakes?And if its proposed social restructuring programme incurs adverse consequences, will the Bank be willing /ready to take responsibility?
How can the public regulate the Bank's activities?What are conditions for the World Bank's loans? What will happen if the government fails to fulfil the requirements?Rhetorical strategies sound beautiful but hard to attain. For instance, the strategic theme for the World Bank's social and environmental programs in Thailand is "sharing growth and ensuring quality of life with the focus on people." The World Bank aims to "protect the vulnerable, target poverty, redress rural-urban imbalances, build a viable social security system and protect natural resources and the environment."
Moreover Mr Shivakumar points out that "the rapid growth has pulled millions of Thai people out of poverty every year." Civil society groups such as the NGO- COD point out that the Bank continues to use the free-market economic paradigm to support CAS-Thailand, and refuses to allow the people to take part in
preparing the CAS.
"In preparing the CAS, the Bank chose to dialogue only with elite groups: technocrats in the government sector, establishment economists supportive of economic liberalisation, and a number of NGOs uncritical about the World Bank's past performance in Thailand and in other developing countries," said Mr Srisuwan
Kuankachon of NGO-COD. To these NGOs and academics, the Bank continues to refuse to discuss alternative solutions to the crisis of economy in Thailand. Many insist that the export orientation is at odds with the self-reliance policy recently advocated by His Majesty the King himself.
The Bank continues to insist that the public benefits from this export policy. They also insist that its public legitimacy rests with the fact that it comes into the country at the request of the government, which is one of the Bank's stakeholders, and an elected governments represent the people's interest.
What the World Bank seems to ignore is that many groups feel that the government is made up of political parties formed to protect the interests of the political elite and big business. The Bank has also ignored the widespread public perception that the government therefore lacks the political will to translate into action its avowed principles of more equal distribution of income among different social classes.
Dr Worawit Charoenlert, political economist of Chulalongkorn University, says that "the aims of better distribution of wealth and improving the quality of life of the people conflicts with the Bank's `business as usual' nature. "That is because it requires the highest return from the loans it extends."
"It ensures high returns by attempting to pave investment opportunities in all the world's regions to benefit the economies of industrialised countries and the multinational corporations." For instance, the World Bank and the IMF have collaboratively pushed the government to sell key state enterprises, including the liquidity- scarce Electricity Generating Authority of Thailand (Egat). Egat's employees are currently opposing the
government's privatisation attempts.
Political economists and activists are concerned that key utilities will soon be transformed into the entities that profit multinational groups that will, at best, make token gestures to the plight of the poor.
"This privatisation policy would also be implemented in the country's educational system. This will make education unaffordable to the poor," said Dr Worawit. "Education should be subsidised by the government as an investment for human resources of the country," he said.
Over the past four decades, the World Bank has imposed free- market ideologies on developing countries. This helped to make economic disparity a global problem. For instance, many countries in Latin America, Africa and Asia that borrowed World Bank funds and complied with its policy dictates have become and remain heavily indebted.
Most of the World Bank's financial resources have been geared towards developing infrastructures such as highways, dams and power plants which mainly benefit the business sector rather than the poor, said Mr Srisuwan. In his opinion, these infrastructure projects destroyed and degraded natural ecosystems, as well as
economic and cultural ways of life of local communities.
Mrs Sompong Vienchan, a community leader in the Pak Moon dam area remains distressed over the loss of her livelihood after the dam, one of the many dams in Thailand financed by the World Bank, was built. Mrs Sompong demands the World Bank take responsibility for the suffering of hundreds of small-scale fishing communities in the Moon River Basin who continue to protest at the dam site in Ubon Ratchathani province.
The World Bank washes its hands off her sufferings, saying: "The Pak Moon dam project was closed by the Operations Valuations Department."The World Bank's completion report is satisfactory."
The fishermen of the Pak Moon River basin say: "We have been protesting against this project even before it was supported by the World Bank." "We submitted several petitions. We went to the World Bank office in Bangkok in 1991, but they chose to ignore us," said Mrs Sompong.
In response, a World Bank official said that "the World Bank is a bank, not a charity organisation." Many academics and NGOs see the World Bank as instrumental in the four-decade development process which expanded the bureaucracy and corruption, while decreasing genuine people's participation. Now, in order to
impose a "good governance" agenda, the World Bank blames inefficient, non- transparent and corrupt public institutions as responsible for the economic collapse.
Dr Worapol Promigabutr, Thammasat University sociologist, said that the World Bank's past dictates "created many problems, but now it returns to suggest ways to solve the problems it created."
Although its CAS states two ways to improve good governance; to increase private sector role and greater participation of civil society organisation. NGOs wish the World Bank could distinguish the differences between the civil society development (CSD) and the CSOs. As their working's philosophies are different.
In the effort to restructure the financial sector as part of improving Thailand's competitiveness, the World Bank's role resulted in the Financial Restructuring Agency taking over bad loans of now-defunct fiftysix finance companies. The World Bank and the IMF pushed governments of crisis-hit countries to guarantee private debts incurred from private international banks. This has been severely criticised as a method to transform a private debt into public or tax- payer's debt. "The ultimate beneficiaries from this process are the foreign financial institutions in industrialised countries such as Japan and the USA," said Dr Worapol.
The IMF and World Bank forced Thailand to maintain high interest- rates to cope with the capital flight and achieve short-term stabilisation. This resulted in rising manufacturing costs, increasing non-performing loans, and liquidity crunch. This caused thousands of firms to close down and almost all manufacturers to downsize. This in turn resulted in mass industrial lay-offs, shrinking incomes, collapse of domestic demand and further downward spiral of the economy. Labourers who wanted to return to farming could not do so due to low market price for agricultural products.
The World Bank rejects the subsidies policy for farm products saying that it will create dependencies. However, the World Bank pushes the government to subsidise the bad debts of financial institutions. If farmers can't profit, the Bank is not affected.
[* Supara Janchitfah is a journalist with the Bangkok Post. She wrote this article for Focus-on-Trade]