TAKES A VILLAGE
Officials will fine-tune the Village Fund’s role from that of a lender to a tool for economic development at the local level.
The global lockdown has disrupted activities related to exports and tourism, mainstays of the Thai economy comprising over 80% of GDP. This underscores the importance of a local economy-driven growth model.
To support the shift to a domestic demand-led growth paradigm, the National Village and Urban Community Office plans to fine-tune the Village Fund’s role from that of lenders replacing loan sharks to a tool for economic development, said Rakpong Sengcharoen, the newly appointed head.
Villages are the smallest division of Thailand’s administrative system. Village Funds can be the main mechanism to strengthen the local economy if the government manages to directly transmit stimulus policies to villages, Mr Rakpong said.
Being an institution for local development is one of the Village Fund’s objectives, but it has not been prioritised, he said.
For instance, the government can provide a budget to Village Funds, which can develop their communities as tourist destinations to build up the local economy.
Village Funds can be a means to upgrade farm products or bring local goods to the world through online platforms, Mr Rakpong said.
Moreover, Village Funds can act as shareholders in community-based power plants.
Part of the government’s
400-billion-baht scheme for economic and social rehabilitation through projects is aimed at creating jobs, strengthening communities and building infrastructure will be allocated to Village Funds for local development to comply with Deputy Prime Minister Somkid Jatusripitak’s push towards the domestic-led economic growth model.
The 400-billion-baht scheme is under the 1-trillion-baht borrowing plan to blunt the fallout from the outbreak.
A source in the government who requested anonymity said that as much as 40 billion baht is expected to be allocated to Village Funds, though the final amount rests on the government’s decision.
To reprioritise Village Funds’ roles, the government needs to change its mindset, the source said.
Even though the Government Savings Bank and the Bank for Agriculture and Agricultural Cooperatives have tried to play a crucial role in developing the rural economy, they are not on par with Village Funds as the responsibility does not fall under either state-owned banks’ objectives, said the source.
Given that there are nearly 80,000 Village Funds covering 75% of the country’s total households across the country, with a combined capital of 200 billion baht, bartering can cut down costs, particularly fees that are paid to modern trade operators when products are sold on shelves, Mr Rakpong said.
A prime example is the existing bartering system between two Village Funds. Tongkung Village Fund in Ayutthaya province recently traded 300 packs of rice worth 37,000 baht in exchange for dried fish and squid from Tongkung Village Fund in Samut Sakhon province.