Critics question whether Pracha Rath project can deliver benefits to locals

PRACHA RATH, or “state of the people”, began as something of a daydream, but is now turning into reality by the setting up of a company in the resort town of Phuket. 

Once it is up and running smoothly, “Pracha Rath Rak Samakkee Phuket” will focus on the province’s strengths, such as tourism, agriculture and locally produced goods under the One Tambon One Product (Otop) banner. 

If the venture is successful, it will become a model for several more across the country. 

The project’s ultimate goal? Boosting the local economy and, hopefully, local capacities through a model “company” run as a collaboration by the government, the private sector and communities. It also aims to strengthen the overall grassroots economy, which can then strengthen the nation. 

While those at the helm of the “company” cannot provide concrete answers as to what exact benefits local communities will gain, experts wonder whether this business model will actually open loopholes allowing big companies to exploit local resources, or if it will really boost communities’ capacities and give birth to successful grassroots economies. 

According to Poldej Pinprateep, who is part of Pracharath Rak Samakkee as well as a member of Deputy Prime Minister Somkid Jatusripitak’s economic team, the Phuket company is only one of various forms such tripartite projects will take. He said the crucial difference between the models would be the degree of participation each party has, which will also be based on the local context. 

To start with, the first form of Pracharath Rak Samakkee is being steered by a private firm, and in the long run this private entity is meant to slowly withdraw once local communities are strong enough to run the business themselves. 

Poldej added that other forms could be social enterprises or cooperatives with more shares being held by local stakeholders such as local businesses or even entire communities. He said the business structure would depend on each organisation’s goals. 

Phuket’s Pracha Rath Rak Samakkee will be overseen by Interior Minister General Anupong Paochinda and Thapana Sirivadhanabhakdi, CEO of Thai Beverage, while local representatives will participate to ensure that local residents benefit from the venture. 

However, dividends will not be paid to shareholders, but instead reinvested in the venture. This rule, authorities say, will ensure that communities are not exploited. 

Yet with big shots from the private sector getting involved, it is understandable that the public is casting doubt on the project. Poldej has tried to downplay such ideas by saying that everybody should be given a chance to do good deeds. 

“We have good communication, and hold regular updating and brainstorming sessions. We also hold public forums to educate people nationwide,” Poldej said, when explaining some key factors the civil sector has to deal with. 

Sontirat Sontijirawong, adviser to Industry Minister Atchaka Sibunruang and a member of Somkid’s economic team, said private-sector giants do gain something from running this government-initiated business model – a better reputation. 

He explained that companies could save millions and also build their names by participating in the Pracharath Rak Samakee project as they would not have to invest in separate corporate social responsibility (CSR) endeavours. 

Also, the fact that the project is transparent will stop companies from exploiting local communities, otherwise they stand to lose their good name, Sontirat said. 

The operation could also be controlled by regular reports submitted to Prime Minister Prayut Chan-o-cha, he said, adding that participants would not be required to have specific qualifications. 

“They all want to give us a hand because we can all see that Thailand has been suffering from long-standing problems,” Sontirat said. “With globalisation at our doorstep, if we don’t reform Thailand now, when will we do it?”

He also justified the use of the Pracha Rath business model, saying a foundation only serves social purposes and is rarely involved in the business side of things, while cooperatives take care of stakeholders and have little capability to drive a business compared to a company. 

This is the crucial reason why a company model is best to help to steer local economy, he said, adding that the government was now working on a community enterprise bill to help cement the Pracharath Rak Samakkee idea.

Sontirat also said that this company model has a bottom-up approach by “listening” to what local people need so it could develop business strategies, market places, and science and technology. 

“We have to admit that communities do not have business knowhow,” he said. “The private sector knows this side of things even better than the government does. That’s why they have been called upon to help.

“Please wait and see if this will eventually lead to local economic growth and sustainability. I assure you that we are all here to do good deeds,” Sontirat said. 

However, Viroj Naranong, research director at the Thailand Development Research Institute, doubts if this non-profit company can prosper sustainably. 

He said the Pracha Rath company model is designed in a very top-down manner and will be implemented very rapidly across the country. When looking at Otop enterprises or small businesses, he added, only those flourish that are in suitable conditions. 

Many local non-government organisations have also voiced doubts about the venture and have not shown much interest in participating. 

“The Pracha Rath Rak Samakkee blueprint has far too many flaws, which will make it very difficult to work and become sustainable in the long run,” Viroj said.