3.3 The Thai Business Initiative in Rural Development (TBIRD) ································································································· |
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TBIRD’s Mission
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Despite Thailand’s impressive rate of economic growth in recent years, wide income disparities remain between the urban rich and the rural poor. In the north-eastern part of the country especially, high levels of poverty, inadequate opportunities for local employment, declining agricultural productivity, lack of water and deteriorating environmental conditions, are resulting in continued migration to the cities – especially by the most entrepreneurial rural villagers – further undermining rural prospects and straining already overburdened urban infrastructure. In order to address this situation rural villagers need access to education and training, income-generating opportunities, credit, markets, basic services and support in institution-building and organisational skills. The Thai Business Initiative in Rural Development (TBIRD) was launched in 1988 to share the financial, technical and managerial resources of the private sector with government and community initiatives, in order to tackle this challenge. Today nearly 100 companies – ranging from medium-sized Thai businesses to major multi-nationals with investments in Thailand – are actively involved in TBIRD, which is run by the Population and Community Development Association (PDA). The programme is reaching villages throughout the country, improving the livelihoods and quality of life of thousands of rural inhabitants, and increasingly serving as a model for other countries in the region. Background TBIRD was the brainchild of Mr Mechai Viravaidya, Chairman of Thailand’s Population and Community Development Association (PDA), and well known throughout the country as “Mr Condom” for his leadership role in the country’s highly successful birth control programme. At the time of TBIRD’s inception in the late-1980s Mr Viravaidya was Deputy Minister of Industry and was very aware of the growing importance of foreign investors in Thailand’s economy. Whilst the growth in the country’s industrial workforce and output was concentrated in the cities, he believed that the foreign and Thai companies driving this growth had both the resources and the responsibility to participate in rural development. He convinced the government’s National Rural Development Committee to review the role that business could play in this process. Swedish Motors Co. were the first company to get involved with the project and in 1989, with government support, the PDA and the Thai Chamber of Commerce jointly launched TBIRD. |
We didn’t want to just give money to the villagers. The important thing was to |
TBIRD
is essentially a network of partnerships between individual companies and
individual villages, which is catalysed, facilitated, supported, monitored
and evaluated by PDA. With over 20 years of experience in rural grassroots
development, PDA has pioneered some of the most effective integrated
community-based development projects in Thailand, based on the principle
that local participation and initiative are essential for self-reliant
growth. Today it operates a range of programmes in water resource
development, vocational training, HIV/AIDS prevention, education,
income-generation, environmental conservation, population and primary
health-care from its head office in Bangkok and its 12 rural development
centres in north-east and northern Thailand. It is therefore an ideal
intermediary organisation to:
Most projects include income-generating activities – usually agricultural, cottage industries or small-scale enterprises which in some cases act as suppliers for the supporting company. Many of the projects also have a community development dimension, which can range from the establishment of small loan funds, to education support, vocational and computer training, environmental projects and local infrastructure development. The following three examples illustrate the variety: • One of the largest contributors to TBIRD has been PTT Exploration and Production – a division of Thailand’s petroleum authority. In 1995 it gave US$1 million to set up an endowment capital fund for TBIRD. It has also launched a landmark programme to implement TBIRD projects in 36 villages. These projects will include components such as: a scholarship endowment to enable rural students to gain access to tertiary education, based on the condition that they return to work for the villages when they have finished their studies; construction of community development centres; a school lunch programme where food is grown by teachers, students and parents; work to improve rice yields and production methods, in co-ordination with the International Rice Research Institute; an irrigation programme in several villages; and a loan fund for housewives to help finance their local silk production activities. • The Bata Shoe Company joined TBIRD in 1990 and its approach was to build a shoe factory in Buri Ram province. From small beginnings with a nucleus of five women, who Bata trained intensively in Bangkok not only to produce shoes, but also to manage the production process and to train and supervise others, Bata has subsequently set up co-operatively owned factories in three other villages. It owns and runs a training factory in the area, but the co-operatives are owned and |
operated
by the villagers themselves. Bata provides the raw materials and covers
the transportation costs, which the company says are offset by the high
quality of workmanship in the TBIRD/Bata factories compared to most
Bangkok-based shoe factories. The village co-operatives manage all aspects
of the production and pay all the other overhead costs. They are paid a
market-price by Bata for the shoes they produce, so Bata is not
subsidising the transaction which ensures a more sustainable commercial
relationship in the long-term. The co-operatives now employ several
hundred villagers, each making between 100-120 baht a day – three times
the average wage in the north-east and equivalent to wages in Bangkok. An
evaluation of the project has also shown that two-thirds of the women
employed in the co-operative factories are former migrants who have
returned from Bangkok once viable and healthy employment was available in
their home villages.
• Nakornthon Bank, one of the
smallest commercial banks in Thailand, joined TBIRD in 1991. After
consultations with the villagers of Ban Hua Krok, the Nakornthon task team
have helped to support training and study tours to other villages and
agricultural institutes; made sure that specialists from government
research centres make follow-up visits; funded extra training where
needed; helped to set up a revolving loan fund for the villagers; and made
regular visits to the village to explain basic concepts of money
management, marketing, bookkeeping and other business skills.
• In 1995 the Australian Agency for International Development (AusAID) agreed to fund a one year Australian-Thai Business Initiative in Rural Development (RooBIRD) aimed at getting the many Australian companies with investments in Thailand mobilised to support the programme. This approach has interesting implications for the other bilateral donor agencies operating in the country, where their national companies have a presence. • Many other inspiring examples exist: 3M in Thailand has established a company task force which is working with a group of villagers in the Buri Ram province to improve the production of silk – using the skills of an agricultural consultant – and the marketing of the silk products – using the expertise of 3M staff; Bristol-Myers Squibb have helped villagers to access the skills and resources they needed to improve agricultural techniques and to set up a “vegetable bank” – a model which has now been replicated in over 40 other villages; and the Singer company in Thailand, well-known for its production of sewing machines, has established two centres in Khon Kaen province to provide training in commercial sewing skills. The centres are not only being used by local villagers, but also by others involved in TBIRD projects.
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Conclusions
and Success Factors
In 1993 The United
Nations Economic and Social Commission for Asia and the Pacific (ESCAP)
awarded a Certificate of Merit to TBIRD for its success in alleviating
rural poverty. It also co-funds an international training course on the
TBIRD approach which it has nominated as a key strategy for improving
human resources in Asia. Harvard Business School have also written a case
study on the TBIRD approach as an example for their courses on corporate
social responsibility and private investment in developing countries.
Some of the key factors underpinning TBIRD’s success have been: • the individual vision and leadership of the project’s founder Mr Mechai Viravaidya; • the vital intermediary role played by the PDA as a link between the companies and the villages; • the emphasis placed on companies not just giving money, but also encouraging their employees to get involved. Many of the participating companies believe that this has given their mostly urban employees valuable first-hand experience of the rural realities in their country, increased morale and been beneficial to the company’s reputation; • government endorsement and support for the programme, emphasised by the fact that all project expenses to TBIRD are tax-deductible; and • a high-profile campaigning element – supported both by donor funds and the role played by individual corporate “champions” who are often prominent business leaders. In the last couple of years PDA’s international training unit – The Asian Centre for Population and Community Development – has organised study tours and training courses on the TBIRD concept for participants from a number of other countries around the region, including Cambodia, Laos, Vietnam, Nepal, Sri Lanka and China’s Yunnan province.
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TBIRD’s Five Steps to Corporate-Community Partnership
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At the outset of TBIRD in 1989 a group
of PDA staff and Harvard Business School graduates worked together to produce a 10-step plan for
company-village partnership. Today this has been refined to the following five-step approach: 1 TBIRD Presentation PDA and TBIRD staff present the TBIRD concept to potential corporate partners, complemented by slides, examples of on-going projects and project documentation. 2 Task Force Formation |
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Village Visit The task force visits potential project villages to meet community leaders and villagers. Discussions, facilitated by the community development experts from PDA, allow villagers and the company task force members to assess village needs and potential and to discuss possible income generation and community improvement activities. 4 Project Planning After agreeing on a partner target village, the task force and villagers develop a simple work plan detailing project goals, activities, responsibilities, timeline and budget. This must be mutually agreed by both the villagers and the task force before the project proceeds and is therefore regarded as an informal contract of co-operation. 5 Corporate Approval |
A sample of member companies: 3M • American Express • American International Assurance Co • Australian Stock Exchange • Bangkok Glass Industry Co. • Bank of Asia • Bata Shoe Co • Berli Jucker • Body Shop • Bristol Myers-Squibb • Capital Nomura Securities • Carnaud Metalbox • Castrol • Design 103 • Diethelm & Co • Dusit Thani Hotels • Embassy of Australia • Embassy of Japan • Ericsson • Gemcrafts • IBM • Industrial Finance Corp of Thailand • International Herald Tribune • Lever Brothers • Mobil OIl • Nakorhthon Bank • National Australia Bank • Nestlé • Oriental Hotel • Pacific Islands Club • Pan Asia Footwear • PTT • Rotary • SC Johnson & Son • Scandinavian Airline (SAS) • Schering • Shangri La Hotel • Siam Agroforestry • Siam Occidental • Siam Unisys • Singer • Swedish Motor Co. • Thai Bridgestone • Thai Farmers Bank • Thai Fuji Xerox • Thai Invest & Securities • Thai Oil • Unocal • Upjohn |
The above material is extracted from chapter 3.3 ("The Thai Business Initiative in Rural Development [TBIRD]") of: Business as Partners in Development: Creating wealth for countries, companies and communities Jane Nelson/Prince of Wales Business Leaders Forum [now International Business Leaders Forum], in collaboration with The World Bank and The United Nations Development Programme , 1996, pp. 258-261. © 1996 the Prince of Wales Business Leaders Forum |
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