Foreign investors who can't read Thai are often perplexed as to what the sufficiency-economy initiatives mean for business. Many ask The Nation if these initiatives mean that Thailand is turning inward and no longer welcomes foreign investment.

The recently published English version of the United Nations Development Programme's (UNDP) Thailand Development Report 2007 - subtitled "Sufficiency Economy and Human Development" - goes a long way to explain what has become Thailand's guiding philosophy for national and business development.

 The sufficiency-economy initiatives advocate growth with economic stability over rapid and unbridled growth. "It emphasises sustainable development, sound macroeconomic policies and the equitable sharing of economic prosperity. At the same time, it shuns excessive risk-taking, untenable inequalities and the wasteful use of natural resources," Prime Minister Surayud Chulanont says in his introduction.

The sufficiency economy emerged against a background of social and economic change, the report says. During the past half century, the country was transformed by sustained economic growth that multiplied average income more than sevenfold. "The success however came with severe costs, including a growing sense that people had lost control over their own lives and futures," it says.

The unprecedented 1997 economic crisis served as an impetus for the sufficiency-economy philosophy's emergence throughout society. His Majesty said sufficiency meant having enough to live on and one must lead a reasonable and comfortable life without excess or overindulgence.

As the economic crisis solidified its devastating hold, His Majesty's statements were clarified and codified. From 1999-2000, the sufficiency-economy approach was applied to every level of society, from the individual through the family and community to the management and development of the nation.

"It promotes a middle path, especially in developing the economy to keep up in the era of globalisation," the report says.

The initiatives are grounded in three basic components - moderation, wisdom or insight, and the need for built-in resistance against the risks arising from internal or external change. "In addition, planning and implementation theories require great care and good judgement at every stage," it says.

The sufficiency-economy initiatives exhorted everyone in the country - especially officials, intellectuals and businessmen - "to develop their commitment to the importance of knowledge, integrity and honesty, and to conduct their lives with perseverance, toleration, wisdom and insight, so that the country has the strength and balance to respond to the rapid and widespread changes in the economy, society, environment and culture in the outside world".

In accepting the sufficiency economy's basic philosophy, leading economists concluded the country had clearly ignored moderation prior to 1997 by overindulging in consumption, which reduced savings and increased reliance on foreign debt.

"Corporations ignored the need for immunity by carelessly favouring debt financing over equity and failing to insure themselves against volatility," it says.

A review of recently published corporate annual reports indicates that most companies are being restructured to ensure sustainable growth, good corporate governance and global-standard risk management processes and procedures. Each one of these initiatives can be tied in with the basic sufficiency-economy philosophy of operating with moderation, wisdom and knowledge and self-immunisation against risk.

The UNDP report indicates that the sufficiency-economy philosophy takes local corporate responsibility to a new level. It raises the commitment to long-term profitability in a competitive environment and forces corporations to adopt new disciplines to ensure that profit and growth are sustainable.

It also forces them to adhere to new risk-management procedures, stakeholder appreciation initiatives, and good corporate governance and corporate social responsibility practices.

The sufficiency approach is compatible with and supportive of these systems, but also adds two extra dimensions, the report says.

Initially, it offers a process for planning and implementing business strategies with the goals of sustainable profit and social responsibility. "The three sufficiency principles provide an integrated framework for devising strategies that build internal protection against risks, observe governance and are careful of the impact on the community, society and environment," it says.

Secondly, the sufficiency approach represents a level of commitment that goes beyond the observance of rules and codes.

"Major Thai firms have found that building their corporate philosophy around sufficiency principles, and sharing that philosophy with employees and stakeholders, creates a culture that is conducive to long-term corporate success," it says.