The Sufficiency Economy Philosophy is simple at its core but must be dissected. According to King Bhumibol Adulyadej of Thailand, we have to ensure that we interpret “philosophy” as truth and knowledge. “Sufficiency” is not self-sufficiency, but rather means prudence and a middle way of living, doing business and managing oneself. As for “economy”, historical context is important. The philosophy was increasingly relevant following the 1997 Asian financial crisis, when many companies closed. The king came up with this philosophy using economy to explain the situation in the context of the time. We can use sufficiency principles in life, family, community and the country, as the concept covers a wide scope, but the economy aspect is ever-relevant.
This philosophy has changed management at both the micro and macro levels. We must look at the anatomy of crises and break them down into three components, the first of which is pre-crisis, or preparation. The Sufficiency Economy Philosophy uses the term immunity to prepare for future crises: each company must build up strong immunity and strength to handle crisis when it comes. Post-crisis management is correlated with resilience. ASEAN is a region that has faced and will have to face many crises. The tsunami, the 2011 floods, extremism and other financial and non-financial crises impact our lives and economies as a region, and resilience is necessary to recover rapidly and fully.
Sufficiency is the mechanism for decision-making. Whether you are a student, father, CEO or prime minister, using the concept of sufficiency results in careful decision-making. The concept of moderation (not in either extreme, similar to the Swedish concept of lagom) should be practiced in every decision, large and small, with relevance to the situation at hand. Decisions in the future may be different due to changing status and conditions, and should be anticipated. Decision-making should also encompass reasonableness, meaning that it should be explainable on the basis of rule of law and morality, without jeopardising corporate soundness. The final concept is immunity, or strength, in material, social, environmental and cultural terms.
People, communities and companies must prepare themselves to use this philosophy by following three prerequisites. The first is morality, in training minds and hearts to be honest. The second is to recognise that in planning or doing any action, knowledge is most important. Last, one must be diligent in following through. What can we expect in applying this philosophy to companies? In peaceful times you can expect balance and self-sufficiency, while in times of crisis you can expect the ability to recover.
From my observation, too few companies have fully applied these concepts, and we need to broaden their application to more private companies. This philosophy can apply to both rich and poor, large and small. There is a misconception that the application of sufficiency economy will keep one poor, but in reality it is about planning and resilience. In designing successful systems for companies, good governance is very important – in their ownership, policy boards, chief executives and employees – as is quality of product and morality.
The Sufficiency Economy Philosophy is the basis of all these factors, and ensures effectiveness, efficiency, transparency and accountability. In Thailand, we believe that capitalism is good for the economy, but that it must be moral capitalism. The maximisation of profit at the expense of environment, culture and society is not a virtue, and nearly all financial crises in the past have come from this greed, often resulting in the poor suffering more than the rich.
More private sector entities need to apply this philosophy, and although there is no regulation regarding the application of the concept, it would make the Thai economy more sustainable and robust.
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