A community currency developed in a district of Northeast Thailand. But then the powers-that-be stepped in

Printing our own money: it was a significant success story: a community currency developed in a district of Northeast Thailand. But then the powers-that-be stepped in

Jeff Powell

AT first glance the small village market looks just like any other. A large tent shades hawkers and their wares from the searing intensity of the early morning sun. Goods are displayed on tables set out neatly in rows or on grass mats laid on the brick-red soil. Potential customers squeeze past one another to haggle over fresh fruit and vegetables, eggs, soy milk, processed foods and locally woven cloth and baskets. But that’s where the similarity to other markets ends.

`How much is that bottle of liquid soap?’

`It’s made right here,’ chirps the vendor. She sits behind the table and casts a broad grin, her teeth stained red from chewing betel-nut. Then she adds: `Thirty baht and five bia.’

The official Thai currency, the baht, is well known, especially after the spectacular economic crash which the country, experienced in 1997. But what on earth are bia?

Buatong Boonsri, manager of the local Bia Bank slips out of the crowd to explain. Bia, she says, is the name of a new `community currency’. It’s equal in value to and can be used together with the Thai baht.

`Members in the Bia Bank can borrow up to 500 bia,’ says Ms Boonsri. `They must pay back the bia. But there is no interest charged on the loans or paid on deposits made to the bank. Only members can borrow bia, but other villagers can use the currency too, simply by accepting it from their friends or neighbours.’ The currency use is restricted to six neighbouring villages, she adds.

The first community-currency system was born in Canada in 1983. Since then the concept has spread to more than 2,000 communities across North America, South and Central America, Europe, Africa and Asia. The mechanics of these systems change to reflect individual circumstances. But the basic concept of an interest-free, community-controlled exchange medium has remained the same.

The Thai Community Currency Systems project (TCCS) began in 1997 as a collaboration of various Thai agencies with Canadian and Dutch volunteers acting as advisers. Villagers had been puzzling over ways to make sure that income from the co-operatively owned rice mill stayed within the district. Maybe, they reasoned, a community-based exchange system would help them do just that. In September 1998 four villagers from the Kud Chum district attended a workshop in Surin. Afterwards, they contacted organizers to discuss starting a community-currency system in their region.

Initially, TCCS staff spent several months in the area learning about the villagers and the local economy. An organizing committee was formed with two people from each of the six villages. Monthly meetings were held to discuss the details. And workshops were organized to allow villagers to study local resource flows — where income was coming from and what it was being spent on. Gradually the group became clearer about what kind of system would work in Kud Chum.

There was a debate over whether to use paper currency. But eventually that got the nod over a ledger system of credits and debits with which villagers were less familiar. It was agreed that one bia would be equivalent in value to one baht. (`Bia’ is the local name for a type of shell that was used as money before the introduction of coins and notes.)

The money for printing the bia notes (about $700) came from a Japanese funding agency. And the same grant also paid the salary of workers like Buatong Boonsri for the first year of the project. From year two onwards members were to pay a small annual fee partly in baht and partly in bia which would be deducted from each member’s account.

The introduction of the bia was also accompanied by efforts to encourage local production and trade — mainly through weekly markets. The first one was timed to coincide with the launch of the new currency last March.

As the system moved closer to reality villagers began to understand better where their money was going. In Santisuk people were shocked to discover they were spending more than 3,000 baht per year on kids’ snacks, things like puffed corn, potato chips and sweets. This was both an economic and a health issue. Most of the junk food was produced by foreign companies based in Bangkok, so the money was leaving the community and quite possibly the country.

In addition, the processed snacks were the main cause of tooth decay among village children.

So why not produce snacks for kids locally? Within a few days, the group from Santisuk was ready to sell khanom dork jork, a locally made snack. Price? Four baht, one bia (about 13 cents). People then began to investigate how to create and support the purchase of other local products. By the market’s opening day, locally made soap, shampoo and detergent were ready for sale, priced partly in baht and partly in bia. The baht income allowed the group to recoup the costs of ingredients purchased from outside the community. While labour and profit were earned in bia which would recirculate in the community. By the end of the first day 112 households (out of some 600) had joined the currency system. And more than 8,000 bia ($200) had been loaned out, interest-free.

Celebrated Thai social activist Sulak Sivaraksa attended the market’s opening and spoke of the need for community self-reliance. Consumerism traps villagers in a never-ending debt cycle and is destroying social stability, he said. `Wealth does not mean that one owns many cars. True wealth is community stability. Sell-reliance means a return to the precepts of Buddhism. This process must begin with the community. It cannot be implemented from above.’

During the opening-day ceremony visitors from a farmers’ group in Khemmarat asked about forgery. Spokesperson Kriengkrai Boontaworn said forgeries were unlikely `because the bia can only be used within this community where everyone knows one another. You can’t buy a TV or jewellery with bia — only locally made goods. It wouldn’t be worth the effort and expense.’

`So is it legal just to make up your money like that?’

Mr Kriengkrai laughed: `Yes, absolutely. We consulted a lawyer in Bangkok about this. The bia is very different from the national currency, it can only be used for local goods and it is up to the recipient whether or not they decide to accept it.’

`That’s exactly the point,’ chimed in Pranomporn Tetthai, a member of the Bia Kud Chum working group from Kud Hin Village. `We are trying to reduce the number of things we buy from outside and encourage support of local goods and services.’

After an alms-giving ceremony, Pra Supajarawatr, abbot of Talad Temple, gave a sermon which touched on these same issues. The monk has been active in community development in the region for three decades. His efforts have helped to conserve forests, revive traditional medicine and preserve local culture.

`Our ancestors were self-reliant,’ he said. `They exchanged with one another based on kindness and mutual respect. The natural environment was abundant and community relations were strong. Today we are increasingly dependent on others with whom we have no community bonds, only commercial relations. Even within the community we take advantage of one another rather than supporting one another. The environment gets worse. Community relations break down. My hope is that the bia currency system can be a part of the process of reducing destructive dependence and strengthening our community.’


Shortly after the Bia Kud Chum currency system was launched, officials warned that the scheme `violated Article 9 of the Currency Act of 1958′ and said it `could pose a threat to national security’. It was even suggested that villagers planned to establish a rath isara or `free state’.

Rumours soon spread that anyone caught with bia in their possession could be arrested for threatening national security. The intimidation campaign was effective. The District Chief ordered the system closed and villagers effectively stopped trading in bia.

Four months later the Bank of Thailand announced that the bia was illegal. It violated the currency and banking acts and using the word `bank’ could `confuse’ villagers. In response organizers decided to change the name from the Bia Kud Chum Bank to the Community Development for Self-reliance Group. And they began to investigate the possibility of turning the whole scheme into a research project which would have a special place under the law.

An optimist might suggest this was simply a misunderstanding by the Bank of Thailand. Thailand has a history of dubious pyramid-loan schemes. Perhaps without clearly understanding the bia system the authorities felt they were acting in the public interest. Even so, they made a mockery of the democratic process.

But opposition, to the alternative currency system is also deeply political. Bureaucrats, in keeping with centuries of patron-client relations in Northeast Thailand, view themselves as guardians rather than as public servants. This view serves to justify the continued exploitation of farmers by State agencies. If villagers became more self-reliant this dependent relationship could be upset — to the disadvantage of the bureaucrats.

Equally telling were comments made by staff at the local branch of the Bank of Agriculture and Agricultural Co-operatives (BAAC). They were noticeably interested in the loan ceiling of the Bia Bank and were relieved to hear that members could withdraw a maximum of 500 bia, interest-free. If the amount were more, they confided, it might threaten BAAC loan programmes.

At such an early and fragile stage Thailand’s first community-currency system can hardly be deemed a threat to the powers of the State and other vested interests. But establishing more diverse production locally will increase economic stability — particularly in times of crisis. And the spread of such systems just might result in a reallocation of wealth, tilting the playing field ever so slightly towards communities and away from corporations.

And maybe, just maybe, there are some people in Thailand and elsewhere who don’t like the idea of village people doing just that.

COPYRIGHT 2000 New Internationalist Magazine

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