The Thai Financial Crisis And The Sufficiency Economy Philosophy

Abstract

This article revisits the financial crisis in 1997 using the sufficiency economy philosophy bestowed by His Majesty the King Bhumibol Adulyadej, shading some light on what went wrong, the lessons learnt, and possibly what can be done to prevent such crisis from happening again. The origin of the crisis was the fact that Thai economy grew too fast with the help of the financial liberalization in early 1990s. This rapid growth, however, violated the three elements of the sufficiency economy, which are moderation, reasonableness and self-immunity, in turns, exposed the country to trouble. On July 2, 1997, Thai land had to let the baht float freely, and that when the crisis started. More than ten years have passed, and we believe that we will not make the same mistakes again if we follow the sufficiency economy philosophy. The application of the philosophy is not limited only to the national level, but it is applicable to people from all walks of life at all levels. The philosophy can be boiled down to five axioms; (1) know what you are doing; (2) be honest and persevere; (3) take middle path; (4) be sensible and insightful in taking decisions; (5) build protection against shocks despite different applications, they all share the same goal of balanced and sustainable development.