Lámina de fieltro geotextil:

In Thailand, MEs have historically been recognised for their role in domestic economic activities and particularly as a large provider of employment opportunities as well as income generators. Wiboonchutikula (2002) noted that MEs accounted for 60-70% of industrial firms nationally between 1987 and1996, as reported by MOL13. In 200614, nearly 70% of all firms in Thailand were MEs and, furthermore, they were responsible for nearly 21% of national employment. When considering either historical or recently collected data, it can be seen that MEs are a key part of the Thai economy.

Micro-enterprises in the Northeast region account for nearly 40% of the national total, as surveyed in 2006. In this region, the highest number of MEs was reported in Khon Kaen with approximately 54,288, creating employment for nearly 95,000 people (TDRI, 2008). It should be noted that information reported by the TDRI (2008) was provincially based and it was not clarified in terms of sub-districts and villages. Not all MEs surveyed by the TDRI were registered with the Thai government authorities (TDRI, 2008). Therefore, they are regarded as being ‘informal’ within the formal economy or systems, despite the fact that commercial registration legislation exists (enacted in 1956 A.D. or 2499 Buddhist Era (B.E.)), which requires the registration of all enterprises15that earn at least 20 baht ($NZ 1) per day. The legislation also includes enterprises that have at least 500 baht of ($NZ 25) inventory goods. Many MEs have the impression that their operations are too small for them to bother with any registration or legal involvement. However, there are no reports relating to any enforcement of the legislation by the authorities (TDRI, 2008).

Micro-enterprises in Thailand can be classified into three key sectors16: (i) manufacturing, (ii) services and (iii) wholesale and retail (trading) (TDRI, 2008). These sectors account for

13_{Note that the total number of industrial firms documented in 1987 and 1996 was 44,000 and 93,000,}

respectively

14_{This is the most up-to-date available data in Thailand, collected by the TDRI. The number of MEs and}

total industrial firms is 1,547,078 and 2,287,072, respectively.

15_{These do not include make-shift retailers or vendors (TDRI, 2008).} 16

Classifications utilised by the TDRI are referred to as those people employed by the National Statistical Office (NSO). The NSO fundamentally follows the classifications proposed by the International Standard Industrial Classification of All Economic Activities (ISIC).

approximately 30.2%, 28.9% and 40.9%, respectively (Figure 2-2). It can be noticed that the wholesale and retail sector appears to be higher in proportion compared to the others in most regions. This information appears to be consistent to that reported in other countries (such as the USA) because retailing activities, for example, may not require high capital to operate, in addition to there being low barriers to entry (Barton, 1997; Kevane & Wydick, 2001). 1 16, 795 1 16, 109 2 40, 317 3 7, 570 49, 296 2 1, 866 1 82, 429 8 4, 607 1 14, 006 3 9, 464 8 4, 569 14, 647 2 14, 3 90 1 19, 291 1 89, 9 03 6 3, 714 8 4, 157 17, 755 0 50,000 100,000 150,000 200,000 250,000 300,000

C en tral reg io n N o rth reg io n N o rth east reg io n S o u th reg io n B an g ko k K h o n K aen N u mb er s o f en ter p r ises

M an u factu rin g S ervices T rad in g

R eg io n al P ro vin cial

Figure 2-2Number of enterprises in Thailand recorded by regions and provinces using Bangkok (the capital of Thailand) and Khon Kaen (where the research was conducted) as illustrative examples (modified from TDRI 2008).

In Figure 2-2, the manufacturing sector is found to be relatively high in the Northeast. It should be noted that the manufacturing sector classified by TDRI (2008) includes cottage industries, for example, silk or cotton fabric weaving and dress tailoring. Such cottage industries are highly represented within rural household, partly because rural females traditionally make their own fabric and clothes (Obhasanond, 1996). Information on MEs recorded in both Bangkok and Khon Kaen is shown in Figure 2-2. Trends of types of MEs appear to be similar to those reported in the regions and, particularly in Khon Kaen where the proportion of manufacturing MEs is slightly higher than that of wholesale and retail enterprises. Khon Kaen is renowned for its outstanding silk weaving and fabric making

Chapter 2: Context of Thailand and its rural microenterprise development 23

fabrication. Micro-enterprises operating such activities, therefore, essentially contribute to such a high manufacturing proportion within Khon Kaen. TDRI (2008) reported that, amongst these enterprises (Figure 2-2), nearly 70% were headed or owned by females. The key activities of individual sectors are summarised in Table 2-1. The types of activities shown in Table 2-1 appear to be similar to those reported by Paulson and Townsend (2004) and ILO (1999c).

Table 2-1Key micro-enterprise activities of manufacturing, services and wholesale and retail (modified from TDRI 2008)

Sectors Key micro-enterprise activities

Manufacturing x Food production and processing

x Wooden product manufacturing

x Costume and tailoring

Services x Personal services, such as laundry, hair dressing and traditional massage

x Hospitality and restaurants a

x Maintenance works, such as cobbler, motorcycle repair

x Workshop and garment repairs Wholesale and retail x Retailing restaurants b

x Groceries

x Clothing shops

a

Service restaurants refer to restaurants that provide tables and chairs for customers to eat on-site

b

Retailing restaurants refer to ‘take-away’ restaurants

Based on preliminary fieldwork17, several retailers were also food processors. They often cooked food at home and sold this food at the local markets. Some people sold their products as vendors, pushing their carts to nearby communities. Some retailers prepared essential elements and cooked the full dish when these items were ordered by customers. Food retailers sometimes provided a few chairs for their customers to sit down on and eat their food. In this service style, customers generally hold their plates with one hand and used a fork or a spoon with the other. Although this practice may not be considered

sufficiently hygienic, because there are no sanitation stations, such as sinks for hand- cleaning or toilets18, Thais have got used to this style of eating.

As noted earlier, the number of micro-enterprises in Thailand has continuously increased, over the past two decades (Wiboonchutikula, 2002). According to a national survey in 2006, nearly 50% of surveyed entrepreneurs had not changed their practices or managerial approaches to operating their enterprises over the previous three years (i.e. since 2003). Furthermore, these entrepreneurs had not improved (or researched) the quality of their products and/or services (TDRI, 2008). This information appears to be consistent with the findings that micro-enterprises in Thailand are principally operated at a subsistence level and entrepreneurs are not likely to change or upgrade their enterprises (Paulson & Townsend, 2004). As noted by Wiboonchutikula (2002), there were a number of micro- enterprises that had been transformed into small and medium enterprises (SMEs); however, such transformations were documented during a high industrial growth period of the Thai economy (i.e. during 1987-1990). In contrast, the trend was reversed during the period between 1995 and 1996 (considered a slow economy growth), which was the period immediately prior to the financial crisis of 1997. There was an increase in the number of micro-enterprises and small enterprises as a result of the downsizing of medium and large enterprises. These downsizing approaches contributed to retrenchment and/or the laying- off of former employees. Most of these people later set up their own micro-enterprises (Wiboonchutikula, 2002).

As noted in the previous section, micro-enterprises in Thailand are either individual entrepreneurs (IEs) or community-based enterprises (CBEs). By definition, CBEs are described by the Thai government as enterprises established by communities, in order to systematically manage the ‘capital’ of their community (SCEB, 2005). This capital not only refers to ‘finance’ but it can also include people, knowledge, local wisdom, natural resources and the communities’ products and services (SCEB, 2005). CBE activities are fundamental to the basic incorporation of community members to jointly establish and

18

New Zealand’s Food regulations require so-called restaurants (hence service restaurant) to offer sanitation procedures or hygienic practices for their customers. Restaurants without toilets, amongst others, can only sell food as ‘take away’ and the owners cannot set up tables and chairs for their customers.

Chapter 2: Context of Thailand and its rural microenterprise development 25

operate enterprises, which can respond to both the needs of its members and/or the

community as a whole (SCEB, 2005). Local wisdom, knowledge, skills and the knowledge of community members can be utilised in the process of transforming the essential capital into products and services which are primarily used within these communities for

minimising dependence on the outside (Suntornpithug & Suntornpithug, 2008).

In 200619, there were nearly 30,000 CBEs officially registered with the Department of

Agricultural Extension (DOAE)20. Approximately 480,000 community members were

associated with these CBEs. In Roi-et, Chiengrai and Chiengmai provinces, there were 1,300-1,400 registered CBEs. Roi-et is in the Northeast region of Thailand, but the other two areas are in the North. In Khon Kaen, there were reportedly approximately 1,100 registered CBEs. Females are the majority members of CBEs, both in Khon Kaen and in other provinces with most leaders of CBEs, in fact, being female. Since members are mainly represented by females, CBEs are commonly referred to in Thai as ‘Goom Mae Baan’ (meaning ‘a group of housewives’21). The key activities of national CBEs can be classified into five categories including (i) food processing (~6,174 CBEs); (ii)

horticultural/crop production (~5,538 CBEs); (iii) fabric weaving and dress-making (~5,052); (iv) animal husbandry/production (~4,687 CBEs); and (v) raw material production (~2,504 CBEs).