A Boon to Kut Chum

[GWR]

A system of tokens used in some NE villages for locals to exchange their own services without resorting to more normal monetary mechanisms. Is it still up and running? At one point in 2000, the Bank of thailand were investigating this currency with the thought that it might be infringing that hoary old chestnut 'National Security'. Images of the colorful tokens here. I suspect it was more to the point that So Sivaraksa - that bane of recalcitrant government officials - was involved: -

http://www.appropriate-economics.org/img/thailand.html


For more information, please contact:

Thailand Community Currency Systems (TCCS)
CCS Research Project
Dr. Apichai Puntasen
apichaipun@hotmail.com

http://www.rasmi-trrm.org
The Thai Community Currency Systems Project began in 1997 with the objectives of:

* Studying indigenous systems of non-monetary exchange,
* Disseminating the global experience of community currency systems with people's organisations in Thailand, and
* Initiating a pilot community currency system in Thailand.

"Bia Kud Chum", Thailand's first community currency system, began trading in March of 2000 in order to:
* Encourage local production and import substitution,
* Reduce the outflow of national currency from the community, and Revitalise local traditions of reciprocal exchange.

More on the BOT gripes here: -

http://www.appropriate-economics.org/asia/thailand/straitstimesmay23.html

A newsletter on the topic here: -

http://www.lets-linkup.com/LEISAmagazine.htm

[GWR]

This is a subject we have reported before, so I may add some archive links later: -

Villagers set for victory in campaign to use their own currency

Baht? We use Boon Kut Chum

Villagers in Yasothon's Kut Chum district are jubilant that their self-created monetary unit - the Boon Kut Chum - could become legitimate.

Following years of battle, their petition to have their own currency is being favourably treated. The Council of State recently ruled that the currency could be used in the community if it receives approval from the finance minister.

Chanchai Boonritchaisri, director of the Bank of Thailand's legal department, says that though the Finance Ministry has the authority to legitimise the currency under the Currency Act, it still needs to discuss the process and controlling measures with the central bank.

"If the village currency is to be legal, we need to control the combined amount so that it would not affect the overall economy," he said.

"If the combined amount is controlled, it would automatically limit the scope of area where the currency can be used. Meanwhile, we need measures to ensure that if the currency scheme flops or is aborted, it won't cause damage to bearers."

A mechanism would also be needed to ensure forgery protection and that villagers follow rules and regulations.

The effect on the overall economy should be tiny because the village currency would be circulated in a small community.

The central bank is open to similar schemes from other villages, but the applications would be screened on a case-by-case basis, Chanchai added.

The local currency was introduced in 2000 to reduce the villagers' dependence on the baht and to promote savings. But within weeks the Bank of Thailand banned it on grounds that it could breach the Currency Act.

"Everybody is delighted by the Council of State's ruling. There are now more transactions using the Boon Kut Chum inside the village," said Pranee Srimantra, chairman of a group advocating community development for self-dependence.

Pranee believed the use of the Boon Kut Chum would finally show whether a local currency could encourage a community to become more self-reliant.

"By using the Boon Kut Chum, transactions will be conducted among local people only. To deal with other communities, everyone will have to opt for baht. If local people stick to the Boon Kut Chum, they should be able to save money in baht and their community will become more self-reliant," she explained.

One Boon Kut Chum is equivalent to one baht. In the beginning, it was known as the Bia Kut Chum but was later renamed to avoid offending financial authorities. "Bia" was a unit of ancient Thai currency used in the Ayutthaya and early Rattanakosin eras.

Pranee's group issued 30,000 Boon Kut Chum in 2000. No more of the currency has since been distributed.

To accommodate the use of the currency, a cooperative was set up and each of its members was given 100 Boon Kut Chum for free. Under the concept, chicken egg farmers can barter for bananas at the same value of their eggs. If they want more bananas, they need to spend their Boon Kut Chum. If they do not have enough Boon Kut Chum, they have to spend baht.

Members are supposed to report to their cooperative with 100 Boon Kut Chum one year after they receive the currency. This was a measure to encourage local people to do transactions within their communities.

At its peak, the currency was circulated among more than 120 people in five villages in the Kut Chum district.

Following the ban by the Bank of Thailand, local people turned their back on the Boon Kut Chum. But in 2003 the north-eastern office of the central bank said it understood the concept of a local currency. So about 20 local people in Santisuk Village resumed the use of the Boon Kut Chum.

"We believe the use of the Boon Kut Chum will not threaten the baht because it is just a local currency used among very few people," Pranee explained.

She added local currencies were used in some parts of Canada, the United States, Japan and Indonesia without causing any problem.

Chutima Muangman, who heads Rak Thammachat Club rice mills, hoped the use of the Boon Kut Chum would be widespread enough to provide proof of whether a local currency could sustain a community's self-reliance.

Chularat Saengpassa, Anoma Srisukkasem

The Nation


http://www.nationmultimedia.com/2007/02/15/headlines/headlines_30026917.php

And there are other self-reliance programs underway in the area: -

Self-reliant community

How local people of Tambon Naso in Yasothon's Kut Chum district have adopted and nurtured their community's self-reliance.

1980 - 57 local people established the Soke Khum Poon Village Development Fund Shop with a Bt3,800 budget to reduce the community's dependence on three grocery shops which enjoyed a virtual monopoly and overcharged people. Today, the shop operates at a profit and has more than 200 members.

1983 - With support from Kut Chum Hospital and the Komol Keemtong Foundation, local people founded a club for traditional-medicine practitioners and herbal enthusiasts to reduce medicine costs and to conserve herbal medicines.

1989 - Locals started turning to herbal farms after many of them developed illnesses relating to farming chemicals.

1990 - The club for traditional-medicine practitioners and herbal enthusiasts was upgraded to a health centre, distributing herbs and herbal products.

1996-1997 - Rak Thammachat Club opened two rice mills. At the beginning, the mills suffered cash-flow problems and then started a community bank. This bank offered a higher interest rate for savings than commercial banks.

1998 - 16 residents contributed Bt1,000 each to a fund that offers farmers soft loans with the annual interest rate of one per cent.

1999 - After nearly one full year in operation, local people convened a meeting to discuss the fund. At that meeting, two foreign volunteers under the Canadian University Service Overseas were also present.

With their help, the Thai Community Currency System (TCCS) was introduced. Under this system, a form of local currency known as Bia Kut Chum (later renamed the Boon Kut Chum) was to be used as money within the community.

2000 - Local people started using the Bia Kut Chum. Weeks later, the Bank of Thailand suspended the use of the Kut Chum" currency in the district on grounds that it may break the Currency Act.

http://www.nationmultimedia.com/2007/02/15/national/national_30026914.php

[GWR]

Archive info on the alternative currency used in Kut Chum/Kud Chum: -

A system of tokens used in some NE villages for locals to exchange their own services without resorting to more normal monetary mechanisms. Is it still up and running? At one point in 2000, the Bank of Thailand were investigating this currency with the thought that it might be infringing that hoary old chestnut 'National Security'. Images of the colorful tokens here. I suspect it was more to the point that So Sivaraksa - that bane of recalcitrant government officials - was involved: -

http://www.appropriate-economics.org/img/thailand.html


For more information, please contact:

Thailand Community Currency Systems (TCCS)
CCS Research Project
Dr. Apichai Puntasen
apichaipun@hotmail.com

http://www.rasmi-trrm.org
The Thai Community Currency Systems Project began in 1997 with the objectives of:

* Studying indigenous systems of non-monetary exchange,
* Disseminating the global experience of community currency systems with people's organisations in Thailand, and
* Initiating a pilot community currency system in Thailand.

"Bia Kud Chum", Thailand's first community currency system, began trading in March of 2000 in order to:
* Encourage local production and import substitution,
* Reduce the outflow of national currency from the community, and Revitalise local traditions of reciprocal exchange.

More on the BOT gripes here: -

http://www.appropriate-economics.org/asia/thailand/straitstimesmay23.html

A newsletter on the topic here: -

http://www.lets-linkup.com/LEISAmagazine.htm

http://www.angkor.com/2bangkok/2bangkok/forum/archive/index.php/t-1829.html

[Scuba22]

For more on alternative currencies and local development, check out:

http://www.complementarycurrencies.org/

Cheers,

Scuba