Studies in Regional Science, Vol. 41, No. 3, 2011, 585-597.

A Provincial Comparative Study on One Village One Product (OTOP) Movement in Northeast : Implications for Japanese OVOP Cooperation toward Africa

Kiyoto Kurokawa＊

Abstract The Japanese government announced commitment to African growth including support for the OVOP movement, which originated in Oita Prefecture, at TICAD (Tokyo International Conference on African Devel- opment) VI in 2008. At present, twelve African countries including Kenya, Tanzania and Malawi are expand- ing the OVOP movement. The Thai government introduced the OVOP movement and scaled it up to a One One Product (OTOP) movement, strongly guided by government initiative. In this paper, we examine the impacts of the movement in the Northeast . OTOP encourages cottage producers through integration of power from all related government agencies. The movement was started by government initiatives, but gradually brought the concept of “self reliance” to the village people. In addition, OTOP has provided an “OTOP five star logo” so products gain new markets. The authors conducted field surveys in Northeast Thailand to understand the effectiveness of the move- ment. This paper presents the survey results with the specific data and interview responses from the OTOP producers. Finally, we identified some important factors in the movement. Simple regression analysis revealed a strong correlation between OTOP income level, member’s age, car ownership and strong leadership. How- ever, no significant relationships between income and education level or motivation of participation were observed. These findings are indispensable as policy implications for the African OVOP movement.

JEL Classification : R58 Keywords : Endogenous Development, Wealth Measurement in Poor Country, One Tambon One Product (OTOP) Movement, Immigrant Worker, Strong Leader

Introduction Foreign tourists, investors and manufacturers in Thailand were deeply disappointed with the political confusion, which involved demonstrations to protest against Thai Prime Minister Thak- sin. Nevertheless, the rural life in Thailand is said to be still stable. Thaksin was still very popular, because he was the first politician, who contributed rural development in Thailand. “Thaksin’s local economic development policies have also been widely portrayed as populist handouts. Populist is a word used in Thailand to refer to policies that allocate resources outside and bypass the usual elites.” (Walker [15] 2007)

* Senior Adviser, Japan International Cooperation Agency (JICA) 10-5 Ichigaya Honmura-cho, Shinjuku-ku, Tokyo 162-8433, JAPAN Tel+81-3-6850-5214, Fax : +81-3-3269-2054 E-mail : [email protected] Received : 18th January 2010 Accepted : 29th April 2011 Ⓒ日本地域学会 (JSRSAI) 2011 585 586 Kiyoto Kurokawa

Nevertheless, Thai OTOP movement is very popular among developing countries, because it was the first OVOP movement outside Japan. The Japanese government adopted OVOP as part of its pol- icy for African development that was announced by the then Prime Minister Junichiro Koizumi during the G8 summit in July 2006. (JICA-ODI [5] 2008) In this paper we have examined whether Thai OTOP movement was an effective solutions for rural economic development or not. In other words, the motivation for this research lays in the fact that Thai OTOP was started under strong initiative of Thaksin, but it is still active as an endogenous movement. Why is it happened in Thailand ? To answer this question, we have examined present development of OTOP movement in North- east Thailand. We started this survey from July 2008 and at that time, we had no intention to look for Thaksin’s popularity in this survey instead we simply selected Northeast Thailand, because it is the poorest area in Thailand. The structure of this paper is as follows. Chapter One examines the historical development of Thai OTOP, Chapter Two describes our field survey methodology and collected data in province and Sakhon Nakhon province. Chapter Three presents survey results. Chapter Four describes our final conclusions and policy implications. The rationale of the study is to provide evi- dence of the effectiveness of the movement to potential stakeholders worldwide.

1. Historical Development of Thai OTOP In developing countries, there are urgent needs to reduce poverty and wage gaps by revitalizing regional economy. Japanese ‘One Village One Product’ (OVOP) movement, which was originated in Oita prefecture, provides an important model of success in regional development policy. As part of the Aid for Trade initiative at WTO Hong Kong Ministerial Conference, Japanese government initiated the OVOP Campaign. We start our survey from the historical development of Thai OTOP. It was officially started in 2001. The OTOP Development Policy was initiated by the government under the strong leadership of Dr. Thaksin Shinawatra, the Prime Minister. The principal aim was to encourage the development of the rural economy by utilizing local resources with the participation of the community members. (Shinawatra [10] 2005) (Wattanasiri [14] 2005) However, JICA also conducted some technical cooperation related to the OVOP movement before official starting. Especially, Japan-Thailand Partnership Programme in Technical Cooperation in 1994 was a major turning point. These technical assistances made a good grounding in their capacity development. In addition, Japanese government had provided funds for BAAC (Bank for Agriculture and Agricultural Cooperatives) by Japanese Yen credit. (1991=47, 1992=28, 1995=83 hundred million yen (=million dollars)) This was the real start of rural development in Thailand. We have compiled a brief history of OTOP related assistance by Japanese government and OTOP related issues as Table 1. As we can see from Table 1, rural development became a key development issue year by year. Thailand has unique political history ; it is the only Southeast Asian country that was not colo- nized. For the introduction of OTOP movement, this political condition was crucial. “Until the 1990s, local autonomy in Thailand was established very slowly after democratization under the Consti- tutional Revolution that toppled the monarchy in 1932. It can be said that local autonomy in Thailand has been sustained for nearly 70 years.” (JICA [6] 2001) The democratization in Thailand politics A Provincial Comparative Study on One Village One Product (OTOP) Movement in Northeast Thailand 587

Table 1. A brief history of OTOP related assistance by JICA and OTOP related issues

OTOP related assistance by JICA OTOP and related issues (Italic)

1993 Yen Credit for BAAC(-1995)

1994 Japan-Thailand Partnership Programme in Technical Cooperation

1996 JICA Model Project for the Development of Hill tribes towards Self-Reliant Communities

1997 Thai New constitution (Start of de-centralization) Asia Financial Crisis

1998 OVOP official visit to Oita from Thailand

2000 JBIC mission to Thailand to promote Michi-no-Eki, ThaiTambon.com web site went online in June Miyazawa Fund

2001 Official start of OTOP movement, Village Fund (1 million Bahts / Village) Taksin became prime minister

2002 JICA SME promotion project (2002-2005) Seminar on “Product Development Targeted at the JETRO Thailand OTOP Sample Exhibition in Tokyo Japanese Market” on November 26, Ministry of (25-28 September) Commerce

2003 JETRO’s support on OTOP activities 1st OTOP product championship (Experts Visit to Thailand, Prototype Making) OTOP 5 star logo Establishment of ACMECS(Aeyawady-Chao Phraya- Economic Cooperation Strategy)

2004 Michi-no-Eki Workshop in Thailand 2nd OTOP product Championship, JICA Sustainable Rural Development Project (-2007) OVOP World summit in Bangkok (16 countries)

st 2005 Michi-no-Eki JICA training in Japan 1 “Africa year” by Thai government Japan Thailand Economic Partnership Agreement Re-election of Taksin

2006 3rd OTOP product Championship The Best OTOP Fair at Nakhon Ratchasima. Military junta overthrew Thaksin’s government

th 2007 Michi-no-Eki study tour by JBIC and Ministry of 5 OTOP city fair, Muang Thong Thani, Nonthaburi, Industry, Thailand from 14-21December. th 10 Thai National Development plan (2007-2011) “Green and Happiness Society”

2008 OTOP promotion strategy (2008-2012)

2009 OTOP KBO Contest, June 23-28 Thaksin supported anti-government protests against the Abhisit Vejjajiva government (Source : Thai.Tambon.com, JICA, JETRO etc. prepared by the author.) became inevitable and the promulgation after the introduction of the Constitution in October 1997. (Nagai, et al. [9] 2008) And Japanese “Miyazawa Fund,” which was allocated to each Tambon administration organization nationwide from April to September in 1999, promoted Thai decentralization. Thai New constitution in 1997 is said to be a starting year of de-centralisation and after that officials of Thai government vis- ited Oita, Japan to see the progress of OVOP movement in Japan. In addition, Thai government intro- duced michinoeki (Roadside stations) approach with OVOP and developed original endogenous community development OTOP. Some roadside stations introduced OTOP movement as well. And 588 Kiyoto Kurokawa

Table 2. Corruption Perceptions Index of Thailand (CPI)

Country Country CPI Surveys Confidence rank score used range

2008 80 3.5 9 3.0-3.9

2007 84 3.3 9 2.9-3.7

2006 63 3.6 9 3.2-3.9

2005 59 3.8 13 3.5-4.1

2001 61 3.2 12 0.6-4.0

Source : Transparency International, Retrieved Saturday, August 29, 2009 from http://www.transparency.org/policy_research/surveys_indices/cpi

many local governments start their own OTOP movements under the new OTOP promotion strategy (2008-2012). It was a new challenge and seems to be a good start of endogenous movement in Thai- land. (Ministry of Interior, Thailand [8] 2007) For access to the funds, during Thaksin’s reformation program, Thai women got access to credits through the One Million Baht Village Fund. After imple- menting OTOP movement in 2001, BAAC amended their loan regulations and started new loans under OTOP members’ guarantees only. “In the year 2004, the total amount of credit provided was 6,316.85 million baht, of which 87.59% of the beneficiaries are women.” (Sutthawaree [12] 2006) These reformations dramatically increased the women’s participation into the OTOP move- ment. The successes of Thaksin’s rural development policy were suddenly handed over to the new government via military junta in 2006. Is that the end of OTOP ? No, he was accused of tax evasion and selling national assets to international investors. Between years 1932 and 1997 there has been 15 constitutions in Thailand, mostly invoked by those near the military juntas. Of course, in those eras a sufficient amount of open discussion could not take place. (Warsta [16] 2004) The political situ- ations became worse. As we can see from the Table 2, the Corruption Perceptions Index (PCI) index of Taksin’s era was much better than now. But, the good news is continuous development of OTOP movement, especially in northeast district. It was a sign of decentralization of OTOP. Next chapter, we will investigate the reason of the continuous activities of OTOP in the northeast.

2. Field survey methodology and collected data The motivation for this research lays in the fact that Thai OTOP was started under strong initia- tive of Thaksin, but it is still active even after Taksin’s resignation and it is said OTOP became an endogenous movement. Why is it happened in Thailand ? To answer this question, we have con- ducted field surveys in Northeast Thailand. The main reason of the site selections was the poverty level of the community. But after the field survey, we have also found Taksin’s presence in the region, because of his many photos among village people. For our project site selections, we have asked many local researchers’ opinions about the site of the survey. As far as we understand, OTOP movement in North district and Northeast district were both quite active. And it is said that in North district, food related OTOP activities are active and in Northeast district, silk related traditional OTOP activities are active. Actually, JICA has extended her cooperation toward Northeast district in the field of silk related industry by the technical cooperation A Provincial Comparative Study on One Village One Product (OTOP) Movement in Northeast Thailand 589

Nong Khai

Nakhon Phanom Loei Nong Bua Lamphu

Mukdaham Khon Kaen Amnat Charoen Chaiyaphum Maha Sarakham Yasothon Roi Et

Ubon Ratchathani Nakhon Ratchasima Surin Buriram Sisaket

Fig. 1. Field survey area (KhonKaen and SakonNakon) and irrigation project by Yen loan. (JBIC [4] 2006)

2.1 The Northeast region, called “”, incorporates 19 provinces, and diverse and beautiful land- scapes from mountains to plains, form national parks to agricultural land. Isan is rich in ancient tem- ples and archaeological sites. It has a unique culture and history. For OVOP movement, this unique culture and history said to be important, because the development of local resources is a key essence of the movement. And JICA has established so called “Sala Mai Thai” or Thai Silk Exhibition Hall with related government agencies including Office of SME Promotion, Ministry of Industry and National OTOP Administrative Committee. And former JBIC extended their loan project, “Project for Revitalization of the Deteriorated Environment in the Land Reform Areas through Integrated Agri- cultural Development”. (Total 3,617 million yen from 1998 to 2008) The objectives are to help them become independent, and strengthen the overall community through farmer group activities aimed at “capacity development (CD).” (JBIC [4] 2006) These facts attracted us to conduct field survey in Isan. The population of Khon Kaen is 1.75 million, of which 20% is in the capital city, making this the third largest province. It has a large labour force of 880,000 persons, and the minimum wage is 144 baht per day, or 20% less than in Bangkok (184 baht). In Isan, modernization began in the reign of King of the Charkri dynasty through centralized bureaucratic-administrative reform in 1892. Similar to many parts of the country, Isan was incorporated into the Siamese Kingdom and sub- jected to the ruling power in Bangkok by the early twentieth century. (Boonmathya [2] 2003) Thus, a specific development plan for Isan from 1962-66 was set up. This unique history could be very close to the NPC (New Plum & Chestnut) movement, which is the origin of Japanese OTOP. In 1961, against rice farming promotion of Japanese national policy and the community of Oyama town, Oita promoted to grow identical local products under the campaign of NPC with dream ‘Let’s plant plums and chestnuts to go to Hawaii !’ in 1961. And breaking through many difficulties, 590 Kiyoto Kurokawa gained success in income raising, community revitalization, and stopped depopulation. (Stenning, et al. [11] 2008)

2.2 Sakon Nakohn province To understand the situation of Khon Kaen, we have selected another province from Northeast Thailand. Sakon Nakhon is in the upper Northeast part of Thailand and far away from the urbanized big city. It is on the Phu Phan mountain range and has many forest temple retreats for medita- tion. The population of Sakon Nakon is 1,040,766 (2000) at an average height of 172 meters above mean sea level, with a rich heritage in history, archaeology and folklore. (See Table 3) These under- developed situations were seemed to make a beautiful contrast with Khon Kaen province.

2.3 Preliminary Survey and survey hypothesis In July 2008, we conducted preliminary survey in Khon Kaen province to select our research part- ners and the samples of our survey. At the same time, we tested our pre-questionnaires to under- stand the feasibility of the questionnaire. We visited several OTOP producers’ groups and conducted interview surveys with officials from Industrial Promotion Center in Khon Kaen province. Our main findings at that time were : 1. Most of the OTOP producers are women and elderly people, 2. Many OTOP producers are located in remote area and have difficulties for marketing, 3. The leadership of the leader in the OTOP group seemed to be very important. And every OTOP group is located in remote area, accordingly most OTOP producers and farmers cannot understand English at all. Our research question is to examine whether Thai OTOP movement was an effective solutions for rural economic development or not. What are the determinants of their income level ? What kind of government interventions would be effective ? What is their motivation to the OTOP move- ment ? And we have established our hypothetical determinants for the income level of OTOP pro- ducers as follows ; 1. Family size and age of the family member will affect their income level. 2. Leadership is the essential factor to activate the movement.

Table 3. Khon Kaen and Sakhon Nakhon

Khon Kaen province

Population (2000) 1,733,434 1,040,766

Area (density) 10,886.0 km² (159 inh./km²) 9,605 km² (108 inh./km²)

Distance from Bangkok 449 kilometers 647 kilometers

Population growth & 6.5% 9.8% Family size (2000) 4.0 4.2

Traditional industry Mudmee Silk, Mudmee Cotton, Natural- Wood carving, Silk weaving, Woven dyed hand-woven cotton cotton, Pottery

Advantages in Infrastructures Nam Pong Airport (3 flight/day) Sakhon Nakhn Airport Highway to the Eastern Seaboard (1 flight/ day) Industrial Parks

(Source : isan.sawadee.com etc. Prepared by the author) A Provincial Comparative Study on One Village One Product (OTOP) Movement in Northeast Thailand 591

3. The wealth level of the farmers can be an important determinant for their income. 4. Their motivation for their own regional communities could be an important factor for their income level. 5. Education level could be an important determinant for their income. Considering our hypothetical determinants and geographical constraints, we established our inter- view survey strategy as follows ; 1. The interview survey should be conducted by Thai people without any interpreters and within 20-30 minutes per OTOP group. 2. The open-end questions should be limited instead we prepared categorical questionnaires, because we can reduce translation difficulties and misunderstandings of the questions between interviewers and interviewees.

2.4 Sampling method In the rural area of Thailand, there are many non-registered cottage industries such as food pro- cessing and silk weaving. Their production scale is very limited and no local government is recog- nized their activities well. Our original plan was random sampling among small community producers from both registered and non-registered. However, the identification of non-registered production groups was extremely difficult even by the local government. For OTOP group, the local government is trying to increase the registered number of the groups. In 2005, it was only 886 OTOP producers in Khon Kaen province. But it is increasing year by year. In 2006, they had additional 354 registrations and it was totally 1,240 OTOP producers. (Government of Khon Kaen [7] 2008) Accordingly, these registered OTOP groups became our main survey targets. In this survey, we have included some non-registered producers’ groups as well, but the proportion was quite small.

2.5 Data collection and interview method The interview survey sheets were prepared according to the previous interview survey results in July 2008. To avoid confusions among interviewers and translation difficulties between Thai and Eng- lish, we introduced principal components analysis (PCA). PCA is a useful method to measure peo- ple’s standards of living by asking simple questions. In developing country, income statistics are not available instead this kind of research can reveal their income level as well. There are many wealth researches in Africa. For demographic and health survey by the government of Ghana in 1993, the surveyed family assets were bicycle, horse and cart, radio, tractor, motorcycle, television, refrigerator, car, video recorder and their flooring options. (Burger, et al. [3] 2008) In our survey, we have asked their assets such as refrigerator, television sets, radio, car or pick- up truck and personal computer. A car or pick-up truck seems to be strongly associated with a high position on the scale of this latent valuable. (See Table 5) For the actual level of family income, we have asked their components of income carefully. We have prepared three components of family income, agricultural income, non-agricultural income and OTOP income. For agricultural income, their main product was rice and sometimes they do not have any knowledge about the price level. At that time, we have calculated their production level into money by market price. 592 Kiyoto Kurokawa

Table 4. OTOP groups’ history, size of members and distribution by sex, age.

OTOP Sample Establish Members registration Male Female Groups (Average) (Average) (Average)

Khon Kaen 58 1999.46 2003.51 28.56 171 1,381

Sakon Nakon 31 1998.52 2003.43 31.38 390 1,036

Total 89 1999.13 2003.48 29.51 561 2,417

(Source : JICA-ODI joint survey conducted by the author in November 2008)

3. Survey results 3.1 Descriptive statistics According to the survey, the characteristics of OTOP groups can be described as follows. From this observation, OTOP in Thailand can be described as follows ; i) Most members are women and elder people,

30-39

20-29 Men 561 40-49 -19 Women 2,417

50-

Fig. 2. OTOP distribution by age Fig. 3. OTOP distribution by Sex In Khon Kaen and Sakhon Nakhon In Khon Kaen and Sakhon Nakhon Source : JICA-ODI field survey, conducted Source : JICA-ODI field survey, conducted by the author in November 2008 by the author in November 2008

Table 5. Basic economic conditions of OTOP members

Q1 Q1-8 Q2-1

Number Average Sex Education Family Total Refrig- Televi- Radio Motor- Car Personal OTOP Non- Agricultural of age (Female) P4 level number annual erator sion cycle or Computer income(%) Agricul- income observa- (Primary income truck with tural tions school) (Thai internet. income Bhats)

Khon Kaen 251 50.03 96% 52% 4.47 121,648 94% 98% 81% 93% 24% 7% 28.63% 44.43% 28.14% Province

Sakon 141 49.62 89% 52% 4.17 81,688 91% 99% 96% 91% 26% 2% 23.13% 38.13% 38.76% Nakon

(Source : JICA-ODI joint survey in November 2008)

ii) Size of the members for each group is around thirty, iii) Before OTOP, most of the groups were existed, iv) Younger generation under 30 years old is very limited. The following circle graphs indicate distribution by age and by sex. (See Fig. 2, 3) From this observation, basic economical condition on OTOP can be described as follows ; i) Motorcycle is very popular, as more than 90% of households are using it. A Provincial Comparative Study on One Village One Product (OTOP) Movement in Northeast Thailand 593

OTOP working insentive by income level in Khon Kaen OTOP working incentive in Sakhon Nakhon

Others 3 Others 15 15 15

Work with 31 Over average Work with 5 Over average Community Community 52 Under average 21 Under average

Making 45 Making 32 Money 103 Money 55

0 50 100 150 0 20 40 60 person person

Fig. 4, 5. OTOP working incentive by income level. Source : JICA-ODI survey in November 2008

Women’s usage in Khon kaen just for women’s Women’s usage in Sakhon Nakhon just for women’s pleasure pleasure

8 for savings for savings 0 8 2 1 2 23 for family such as 17 for family such as 56 higher educational higher educational needs 36 needs 7 for repayment of loans for repayment of loans

14 just for daily life just for daily life for investment in for investment in OTOP production OTOP production 135 activity activity 61 Others Others

Fig. 6, 7. Women’s usage of OTOP income Source : JICA-ODI joint survey in November 2008

ii) One fourth of households are using a car or truck, iii) Personal computer use with internet connection is still very low, iv) Most households are using basic electrical appliance. For working incentive, we have asked the following question ; Which is the main reason of work- ing in OTOP groups, working with community or making money ? Most of them work for making money rather than working for community. Only higher income groups in Khon Kaen, about half of them answer work for community. (See Fig. 4, 5) We asked also about spending plans of women, we have asked their plan of spending. They spent for daily expenses, but around a quarter spending it just for daily life. But about a quarter, they spend it for family such as higher educational needs. (See Fig. 6, 7)

3.2 Results of estimating determinants The results of estimating determinants are presented in Table 6 for Khon Kaen and Table 7 for Sakhon Nakhn. Regression analyses were used to quantify the effect of family numbers and ages of the family members on the differences in income among the provinces. It also examines the robustness of the explanatory variables to determine determinants of income level of the OTOP families. We examined total family income. This is due to the tax deduction system for dependents. And they are just spending the income for their daily life. (See Fig. 6, 7) Firstly, we made a regression of log income on family number and age of the family. Column 1 of Table 6 shows that an increase of family number reduces family income in Khon Khen. On the con- 594 Kiyoto Kurokawa

Table 6. The determines of successful OTOP in Northeast Thailand

Province : Khon Kaen province

Dependent variable : ln Incom 1 2 3 4 5 Independent variable Familiy Number －0.08278 －0.07846 －0.08511 －0.08272 －0.08255

t-value (－1.86)* (－1.78)* (－1.9)* (－1.85)* (－1.85)* Age －0.01928 －0.01951 －0.0196 －0.01929 －0.01815 t-value (－2.49)** (－2.55)** (－2.52)** (－2.49)** (－2.28)** Strong leader 0.377433 t-value (2.38)** Car ownership 0.102174 t-value 0.59 Motivation (MakeMoney) －0.00393 t-value －0.03 Higher education 0.11005 t-value 0.6 Number of Observations 242 242 242 242 242 R-squared 0.0371 0.0596 0.0385 0.0372 0.0386

(Note : Robust t statistics in parentheses) (*=Significant at 10%, **=Siginificant at 5%, ***=Significant at 1%) (Sorce : JICA-ODI field survey, condacted by the author in Thailand in November 20) trary, column 1 of Table 7 shows that an increase of family number increases family income signifi- cantly in Sakhon Nakhon. The biggest difference is the income level of the household between Khon Kaen (Bahts 121,648) and Sakhon Nakhon (Bahts 81,688). In Khon Khen, we can observe rapid urbanization. We have re-examined our data and found out two kind of OTOP groups in Khon Kaen. The urban OTOP groups near the city can enjoy good access to the big market. Accordingly, their income level is relatively high. According to our open-end questionnaire, about one fourth of households in Khon Kaen are working at OTOP to make money for their children’s’ higher educa- tion. But rural OTOP groups were relatively big families and were still lower income. In Sakhon Nakhon, this implies all the grown-up farmers are working at the community. The study shows that age of the family members is also robustly related with income level in Khon Kaen. As far as we observed, many OTOP workers are women and elderly people and the big- gest advantage of the OTOP production group for women and elderly people is its flexibility for work- ing time and place. And many elder people are working at OTOP as they like. This means their productivities will be reduced according to their ages. Secondly, we included some determinants such as strong leader, car ownership, motivation and educational level. “Strong leader” is significantly important determinant for their income level in Khon Kaen. The main products of the OTOP groups were handicrafts, local sweets and silk products. They are upgrading their marketing activities by linking with other groups. By formulating cluster, they can correspond to the huge amount of orders. However no significant result was seen in Sakhon Nakhon. This means that they were less developed stage. “Car-ownership” is significantly important determinant for their income level in Sakhon Nakhon. This is due to the less population density, 47% less than Khon Kaen. (See Table 3) A Provincial Comparative Study on One Village One Product (OTOP) Movement in Northeast Thailand 595

Table 7. The determines of successful OTOP in Northeast Thailand

Province : Sakhon Nakhon province

Dependent variable : ln Incom 1 2 3 4 5

Independent variable Familiy Number 0.107747 0.104327 0.107305 0.108044 0.107551 t-value (3.62)*** (3.46)*** (3.66)*** (3.6)*** (3.6)*** Age －0.00168 －0.00193 －0.00055 －0.00168 －0.00156 t-value －0.48 －0.55 －0.16 －0.48 －0.45 Strong leader －0.0945 t-value －0.8 Car ownership 0.235974 t-value (2.34)** Motivation (MakeMoney) 0.013052 t-value 0.14 Higher education 0.086473 t-value 0.63 Number of Observations 138 138 138 138 138 R-squared 0.0924 0.0967 0.1279 0.0925 0.0951

(Note : Robust t statistics in parentheses) ( *=Significant at 10%, **=Siginificant at 5%, ***=Significant at 1%) (Sorce : JICA-ODI field survey, condacted by Kurokawa in November 2008)

More useful policy implication is a provision of attractive auto loan to the rural people. At pres- ent, car loan rates are 2.85-3.50 percent annum. To use the auto loan, 10-20% down payment will be required. Auto loan and down payment can reduce the burden of monthly repayment of car pur- chase. For instance, if we purchase a pick-up car in total 547,000 Baht, the monthly payment can be minimized to about 9,600 Baht by 10% down payment and 5 years repayment. There are also syner- gies effect between VRF (Village and Urban Revolving Fund) and BAAC loans (Boonperm, et al. [1] 2007) So, we should harmonize these financial tools. We could not see any significant values for other components such as educational level and moti- vation for work. Educational level could be relevant to the income in younger generation, but nearly half of the OTOP group members were over 50 years old and had only primary education. The required skills for the OTOP such as handicraft, local foods and silk can be provided among kin- ship. However, some active OTOP groups are trying to export their products by formulating net- works. In advanced groups, education can be relevant. Motivation for OTOP could be important. But for poor people in rural area, agricultural income is not stable. They do not have proper irrigation systems. So, they were already well motivated to make money.

4. Conclusions and policy implications In this paper we have examined whether Thai OTOP movement was an effective solutions for rural economic development or not. To answer this question, we have examined present develop- ment of OTOP movement in Northeast Thailand. We visited about 100 OTOP groups in Khon Kaen and Sakhon Nakhon province. From our initial observation, we can easily understand the OTOP activities quite suitable for women and elderly people. (i) The activities are based on out-put bases 596 Kiyoto Kurokawa instead of hourly payment, so that they can keep their own way and can work to stabilize the family income. (ii) They can work in their home and community with child and elderly care. (iii) They seemed to be enjoying their works along with His Majesty’s words, the Philosophy of . This must be the real empowerment of the community. And finally, we conducted inter- view surveys and collected about 400 answer sheets. The survey revealed that the OTOP effectiveness. We have found the main facts as follows ; 1. An increase of family number, means rural family, reduces family income in Khon Khen. 2. An increase of family number increases family income significantly in Sakhon Nakhon. 3. The age of the family members is also robustly related with income level in Khon Kaen. 4. “Strong leader” is significantly important determinant for their income level in Khon Kaen. 5. “Car-ownership” is significantly important for their income level in Sakhon Nakhon. Our conclusions can be summarized as follows ; 1. OTOP provided local employment opportunities and empowerment of the community. 2. The strong leader can increase their OTOP incomes by introducing network activities such as joint marketing and division of labor. 3. The wealthier household will use the money for higher educational needs. 4. On the contrary, poorer households can increase their income by increasing family num- bers. This implies the importance of reducing immigrants via OTOP movement. 5. OTOP movement can be suitable for women and elderly people. This is because of their advantages of access and flexibility of working conditions. 6. “Car-ownership” is significantly important for their income level especially in remote area. The Japanese government announced its ODA operations toward Africa via OVOP movement at TICAD IV in 2008. (TICAD [13] 2008) Accordingly, the policy implications can be summarized as fol- lows ; The government interventions should be increased in the field of ; 1. Preparation of special trainings course for OVOP leaders, 2. Provision of financial assistance for car ownership with synergies effect among VRF and BAAC loans. 3. Promotion of participation in OVOP movement to reduce emigrants.

References

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