Recently jolted out of the easy-to-understand, marketing-led economic policies of the Thaksin period, the business sector and public are confused by the country's new economic path.

The difficulties were evident last week when Deputy Prime Minister and Industry Minister Kosit Panpiemras visited the Stock exchange to lecture a group of investors and the media on the sufficiency-economy concept.

Although it has been the talk of the town for some weeks, the sufficiency economy has still not been fully understood, with some analysts fearing it will simply be a U-turn of the pro-business policies and populism championed by ousted Prime Minister Thaksin Shinawatra.

When Prime Minister Surayud Chulanont announced the policy, some saw it as a move towards a closed economy and frugality. The government was quick to address those concerns by changing the original translation from "self-sufficiency" to "sufficiency" economy. Even then, Deputy Prime Minister MR Pridiyathorn Devakula said the translation was not a perfect description of what the government had in mind.

The philosophy needs some time to be digested. In this resgard, as in many others, it is unlike the easily understood and populist economic initiatives of the former government - such as the Bt30 universal healthcare scheme, the Village Fund, the One Tambon One Product scheme and the mega-infrastructure projects.

Populism tends to make people feel good, because it promises economic growth while prompting them to spend beyond their means. The sufficiency economy, on the other hand, is a more abstract concept, positing a blend of moderation, risk immunity and, most importantly, productivity.

Kosit explained that a sufficiency economy was aimed at allowing Thailand to "catch up with the changing environment of globalisation" while providing immunity from the risks inherent in this pursuit.

Kosit said he was frequently asked whether the concept was "inward-looking" and opposed to a liberalised market. On the contrary, he explained, a sufficiency economy went well with a liberal market. But he said virtue was needed to control the market, similar to the way good governance was needed to make a market efficient, and catching up with globalisation was not an inward-looking policy.

Kosit said that in the past, Thailand's economy had grown without concern for productivity, which was not a sustainable form of growth. A sufficiency economy proposes growth, perhaps at a slower pace but without economic bubbles and with careful risk management.

He said that for many years, the Thai economy had grown without any measure for assessing productivity, although some research by the Thailand Development Research Institute had made a partial measurement of economic productivity.

However, while Kosit tries to explain why Thailand needs to pause and review its economic platform, in order to allow the country to factor productivity into its growth, audiences regularly pose the question of how he sees the country competing with Vietnam and China.

Clearly, many remain unconvinced that Thailand needs to review its economic strategy so that increased productivity will be a vital element in future growth. Kosit said such reflection would be worthwhile, even though Thailand might risk losing some investment opportunities. He said the outcome would be sound, sustainable growth.

"We have implemented [recommendations from] a lot of foreign textbooks, but we have failed to implement some important parts. There is no productivity measurement in Thailand. Our knowledge and intelligence has been very low, although we have accepted a lot of foreign direct investment," he said.

Recent research sponsored by the World Bank and the National Economic and Social Development Board has supported Kosit's contention that Thailand's growth is denominated by increases in employment and capital stock. Productivity growth has made only a small positive contribution to economic growth. The country's total factor productivity grew at a modest rate of 1.7 per cent from 1975 to 2003.

The research not only reflects the fact that Thailand's productivity growth is too low, but also justifies the need to review the country's economic strategy.

However, the public may not be that patient. The previous government built up huge stockpiles of low-quality rice by offering good prices to farmers, no matter what. Under the sufficiency model, farmers should improve their productivity before expecting good prices.

Last week, Pridiyathorn signalled that the new government might not continue the populist and highly subsidised farm programme, which served to create contentment at the receiving end, in the countryside. That brought an outcry from farmers.

Such a negative response is understandable. No one would be enthusiastic about seeing a decline in material gains. But in fact, the sufficiency economy is a concept that follows the teachings of Buddha, about the virtues of choosing a moderate path.

Perhaps it is time for Thais to be patient, digest the concept of the sufficiency philosophy, forget the easy catch-phrases and follow-the-leader style of populism policies.

Jiwamol Kanoksilp

The Nation