In the wake of Thailand’s 1997 financial crisis, Siam Cement Group, for example, decided to pull out of non-core businesses to boost its competitiveness after diversifying into several industries beyond cement and building materials, petrochemicals, and pulp and paper.
In other words, Siam Cement and other Thai conglomerates apparently over-invested during the economic boom years prior to the 1997 crisis, resulting in heavy debt burdens, especially in foreign currencies.
There were many corporate bankruptcies due to the sharp baht devaluation at that time, which led to big increases in corporate debts when paid back in the local currency.
The 1997 crisis also prompted many Thai companies to reduce their debt-to-equity ratios or financial leveraging.
These moves demonstrate that the philosophy of sufficiency economy is not about “self-sufficiency”, as is sometimes assumed.
The King said that businesses ought to make reasonable profits, but not excessive profit at the expense of others, while borrowing ought to be for productive activities.
In fact, sufficiency economy doctrine is business friendly since it encourages cash-rich enterprises and individuals to invest or spend their money according to their risk capabilities.
At the basic level, people should be financially independent, while farmers should turn to co-operatives to boost their collective bargaining power when dealing with other businesses.
At the advanced level, His Majesty cited the Pasak Cholasit Dam as an example of his doctrine. Originally, it was a project under the Royal Irrigation Department. But its sheer scale and the heavy investment required meant other agencies had to get involved and a big loan had to be arranged to finance the project.
The implementation of the project exemplified inter-agency cooperation as well as other features of the philosophy of sufficiency economy.
Several countries have also adopted the “green” economy concept which underlies sufficiency-economy thinking as exemplified by HM the King’s initiatives for artificial rain-making projects, and development of bio-fuels and Chaipattana aerators, among other Royal inventions.
These initiatives are aimed at protecting the environment as well as tackling social and economic problems at the grass-roots level.
In the era of digital economy and tech start-ups, the sufficiency-economy philosophy can also be applied in nurturing entrepreneurs and ensuring they are capable of recovering from failures and starting in business again.
The Royal initiatives are also consistent with the United Nations-sanctioned sustainable development goals as well as Western concepts of good corporate governance and corporate social responsibility.
Overall, these concepts are aimed at social well-being and environmental protection, while the Royal initiatives on the philosophy of sufficiency economy extend into the realm of spiritual well-being.