THE FARMER AND THE BANKER:

IMPACTS OF GLOBALIZATION ON RURAL THAILAND

 

 

~ Introduction

 

 

The purpose of this paper is to highlight the different components of globalization and the effects that these issues have had upon Thailand’s disadvantaged populations in rural areas.  When examining the issue of globalization in Thailand, the Asian financial crisis of 1997 must be considered.  Although the financial crisis was mostly an event that took place in the urban sections of the country, its reverberations were felt throughout the entire nation, most significantly effecting rural areas and catapulting them onto the global forefront.

 

The first section of this paper will present an overview of this phenomenon known as globalization and ways in which it manifests itself in our world.  In order to explain how the crisis was brought on by globalization, the first section will offer a summary of the 1997 Asian financial crisis and its impacts.  Manifestations of globalization in our world and the ways in which globalization effects our lives will be broken down into 4 separate categories.  These categories will be the units of analyses to prove that globalization in the form of the Asian financial crisis has had the most significant effect on the rural areas of Thailand. 

 

The second section will provide the analysis of how the Thai rural communities have been effected by globalization.  The impacts will be arranged and detailed within the four categories.  This section will prove that although the main players involved in the financial crisis were urban, the rural areas were most effected by the crisis, in turn forcing these communities onto the global landscape.

 

 

 

 

~ Section 1

 

            Globalization is the growing interdependence of this world’s nations upon one another as we as become more interconnected through the advance of information technology, foreign trade and investment.  Globalization can have many different reverberations on a country, however, the effects that are the easiest to measure and analyze on a macro level are:

• Culture- the loss of a country’s identity and the aspects of that country that make it unique for the adoption of a dominant culture’s practices
• Poverty- the growing disparity in income distribution and a country’s growing population of poor
• Environment- the degradation and exploitation of a country’s natural resources
• Health- the proliferation of poor health not only in the spread of terminal diseases such as AIDS, but also in the everyday low quality of health due to unhealthy living conditions

 

In July of 1997, the Asian financial crisis began in Thailand.  The country’s international financial debt was half of its GDP and its trade deficit was rising.  Thailand was forced to devalue their currency forcing other South East Asian countries into a series of devaluations of their currency.  This sparked a major sell off of Asian currency and a decline in the value of Asian stocks and real estate.  In addition to Thailand, other Asian countries affected included: South Korea, Indonesia, Malaysia and the Philippines. Economists have surmised that the reasons behind this crisis were the recently relaxed controls in Asian countries on international borrowing - a product of globalization.[1]   

 

Thailand, more specifically, Bangkok, was the birthplace of this financial crisis.  Thai businessmen, excited with the prospect of this newfound wealth from overseas, started a multitude of new companies and suddenly the urban landscape of Bangkok was literally transforming.  Buildings sprouted up one after the other until the money ran out and the party was over.[2]  The crisis began in the urban epicenter of the country, which received all the benefits of the development that took place; however, the entire country felt the consequences when the baht was devalued, the bottom fell out and unemployment soared.  The rural northern part of the country indeed felt these consequences as many city inhabitants returned to their villages and as the agricultural sector was relied upon to prevent the country from spiraling into a food-importing emergency.[3]  The following Thai country-western song, which was popular around the time of the financial crisis, highlights the difference between city inhabitants and rural Thais’ views of the event.  It also offers some evidence of rural dwellers’ mindset before the financial crisis forced them to become more globally minded:

 

Farmer: "I never listen to the radio. I never read. I'm not interested in this story. I only watch Thai kick-boxing and the soccer championship."
Banker: "Please give some thoughts and concerns to the problems of the country."

Farmer: "I am afraid that the Thai kick boxer will lose his championship to the foreigner. Isn't that something to worry about?"
Banker: "Don't you know our country has borrowed huge sums of money from abroad?"

Farmer: "How huge?"
Banker: "Great loans, huge loans, you moron. You don't understand a word I am saying, do you? When you borrow this money from abroad you have to pay it back."

Farmer: "Shouldn't the man who borrowed the money have the right to enjoy it?"
Banker: "You are part of the family who is responsible for this overspending. We are all in this together."

Farmer: "Oh, but I'm not married and I have no family." [4]

 

As evidenced by this exchange, the rural community was not in tune with Thailand’s standing in the global playing field.  By using the four previously mentioned categories of globalization as an analysis framework, the next section of this paper analyzes how this ultimately had to change.

 

 

~ Section 2

 

 

ðCulture

            During the economic boom before the financial crisis of 1997, Thai government did not focus on the rural sectors of the country.  After the crisis took place and more importance was given to the rural economy, Thai government revisited its agricultural policies recognizing that agriculture and farmers are not only a reliable source of revenue but also a symbol of pride for the country.  Farmers propagate the Thai cultural and social traditions that are rooted in farming.[5]  Therefore by refocusing attention and funds into the rural communities after the financial crisis, this section of the country was able to have a more active and involved role in Thailand and Thailand’s place in the world economy.

            The reliance on agriculture to keep the Thai people fed and the Thai economy afloat after the crisis gave Thai farmers a sense of importance and pride in their trade.  So much so that they took to the global stage to defend one of their main products and cultural symbols- jasmine rice.  In October, 2001, Thai farmers participated in a rally in northeastern Thailand to protest the work of a Florida scientist trying to engineer a version of jasmine rice.  Rice is central to Thai culture in that it is served with every meal, the Thai word for rice- khao - also means food.[6]  Before the financial crisis, Thai farmers would not have been a part of this global debate about the rights to reproduce a region’s cash crop.

 

ð Poverty

            Although globalization and the financial crisis allowed the Thai people and officials to appreciate the rural sector and rely on the sustenance of the agricultural economy, this did not benefit the rural communities economically.  According to the World Bank’s Thailand office, poverty increased the most in rural villages between 1996 and 1999.[7]  In addition, the government reliance on the rural economy transformed into greed.  They began to push farm development practices that focused on the production of cash crops for exporting.  In order to make up for the lowered GDP that resulted after the financial crisis, farmers were encouraged to produce commercial crops that required sophisticated and expensive chemicals.  As a result, farmers took out loans to finance these projects, which amounted to $5 billion in debt amongst 3 million rural community households.[8] 

             The devalued baht resulting from the financial crisis allowed foreign exports of agricultural products to increase however, living conditions and income of farmers did not reflect this.[9]  Farmers still lived at a level just above the poverty line.  Despite the renewed interest in the rural sector and the sector’s contribution to the Thailand’s position in the global economy, the benefits once again did not reach the rural inhabitants whose work went into this outcome.

 

ð Environment

            The different ways in which globalization effects a country of course are intertwined.  Due to the increase in poverty levels in the rural communities, and the influx of city inhabitants who have moved back to rural villages, many people began infringing upon ecologically fragile land.  This disrupts the entire eco-cycle and not only harms the land but also the wildlife who rely on the land for sustenance.

            Farm development projects that seek to increase exportable goods by introducing new farming techniques are also harmful to the country’s resources and environment.  These projects to develop industrial rice farming involve the use of harsh pesticides and chemicals.  The impetus behind these projects is to maximize production of a crop in order to strengthen foreign trade revenues at the environment’s expense.  These projects also force farmers to give up the type of farming that allows them to remain self sufficient, and creates a dependency on the sponsoring companies.  Rural inhabitants transformed their lives and the way they have always sustained their being all for the greater cause of increasing Thailand’s agricultural exports in the name of globalization.

 

ð Health

            In order to reclaim the country’s standing in the global economy, Thailand has not only developed new farm projects but also has proposed the construction of pipelines in rural areas of the south to stretch across the South China Sea to Malaysia.  These pipelines would create energy for Southeast Asia and would further link the region’s economies to the global landscape.  Of course, installing pipelines in these areas would not only change the way of life of these villages but would also  pose some serious health risks to the inhabitants.  Villagers in Taling Chan feel that they are being asked to suffer the consequences of pipeline projects for the city people’s benefit.[10] The Petroleum Authority of Thailand has already instituted projects involving pipelines in small coastal communities, which have turned these small villages into polluted catastrophes.  Therefore, another instance of globalization benefiting an urban area while the rural community has to live with the consequences.

           

 

~ conclusion

 

Globalization continues not only in Thailand but also everywhere.  The Asian financial crisis has come and gone and some of the countries affected have recovered.  The rural communities of Thailand will never be able to return to the way of life they enjoyed before the 1997 crisis.  In some ways, it is a good thing that farmers are now able to converse with bankers about their cash crops and the GDP of their country; however, not if it is at the expense of their health and economic well being. 

            Globalization has not only impacted their lives in all of the four ways described but they have not been able to reap ANY of the short-lived rewards.  In Bangkok, the banker was at least able to live it up in the 1990s on the wealth of his financial ventures (albeit on borrowed money) before he felt the sting of the consequences.  The farmer enjoyed no such luxuries but still had to pay for these ventures in the form of more work, less money, defiled land and potential health threats.  In sum, the Asian financial crisis indeed catapulted the rural communities of Thailand onto the global playing field in that they were recognized for their income producing capabilities yet were forced to combat the complex problems that are intrinsic to globalization.