Reduced Inequalities is one of the 10 goals of the Sustainable Development Goals, which aims to reduce inequality within and among countries.
On a day when we all hope that Covid is about to end, there is nothing better than to set our sights on the future after Covid, whether in terms of the economy, career or society. This is the origin of the conversation on the topic of “Reduced Inequalities”, which is the Sustainable Development Goal 10 (SDGs 10), which has brought leaders in each industry to talk through the following online platform.
- Ms. Ruenvadee Suwanmongkol, Secretary-General of the Securities and Exchange Commission (SEC)
- Dr. Wivat Salyakamthorn (Ajarn Yak), Chairman of the Dharma Business Advisory Board
- Mr. Pichet Tonitiwong, General Manager of Dharma Business Social Enterprise Co., Ltd. and
- Assoc. Prof. Thongthippha Wiriyaphan, Academic Advisor, Faculty of Business Administration, University of the Thai Chamber of Commerce
Inequality, a universal problem for people all over the world.
Assoc. Prof. Thongthippa opened the conversation by defining that inequality is a matter of inequality. The inequality in the distribution of resources to people is not equal. This is a question for both Thailand and other countries because humans are born with differences. Therefore, there will be inequality or inequality. However, situations can cause changes, such as the COVID crisis turning the rich into poor people. However, if we look at inequality compared to neighboring countries, Thailand is still at a reasonable level. For example, the wages paid to workers are still considered higher, which makes foreign workers, such as Vietnamese, Burmese, Cambodian, and Laotian, still want to come to work in Thailand.
SEC moves forward to allow all sectors to access the capital market
Ms. Ruenvadee said that the capital market is the mechanism of the country’s economy. The Thai capital market development plan clearly states that all sectors must be able to access the Thai capital market (Capital Market for All). From the issue of resource allocation, the Thai capital market will use capital market mechanisms to reduce inequality (Reduced Inequalities) and align with the national strategy, including the Sustainable Development Goals (SDGs). The Thai capital market and the SEC, which act as both a developer and a regulator, have jointly implemented 3 main tasks:
- Enabling small businesses, especially SMEs, startups and social enterprises (SEs), to have maximum access to capital markets.
- Expand financial literacy to regions and vulnerable groups such as people with disabilities, women, children and
- Creating stability for retirees
Under the crisis is an opportunity
Khun Ruenvadee would like to see that under the crisis is also an opportunity. She wants everyone to have the encouragement to overcome it together because there are people who are suffering and affected in every business sector, especially small entrepreneurs and employees. The SEC has been proactive in allowing SMEs to access the capital market more. In March 2020, the SEC issued criteria allowing SMEs to raise funds directly from a limited number of investors. Since the Civil and Commercial Code prohibits limited companies from distributing their shares, the Securities Act is used to allow businesses to offer shares or convertible debentures to a limited number of people, including offering securities to directors and employees under the Employee Stock Ownership Plan (ESOP), which is very much in line with the needs of startup businesses.
Unlock SE to revive tourism businesses
Ms. Ruenvadee emphasized that for Social Enterprises (SEs), which have a major issue regarding capital, in 2020, the SEC has issued criteria to help unlock the issue by opening opportunities for SEs registered with the Office of Social Enterprise Promotion (OSP) to raise funds through the capital market without having to apply for permission and file with the SEC. Currently, there are 2-3 places that have access to the capital market, so we would like to campaign for other SEs to raise funds through the capital market more, in order to have an opportunity to invest with major investors in the market, especially those who intend to do new businesses, especially those that support the bio-circular economy and address sustainability, so that they will have the opportunity to cooperate using various platforms registered with the SEC. The last point is the tourism business, which has been greatly affected during the COVID-19 period. Currently, the Bank of Thailand has issued an asset warehousing project to help business operators. At the same time, the SEC has used the capital market mechanism by issuing the “REIT buy-back” criteria to open up more options, as well as working together with the Thai Chamber of Commerce, the Thai Hotels Association, and the Federation of Thai SMEs. And the Bank for Agriculture and Agricultural Cooperatives, through the SEC, will be a partner for all businesses, making them accepted and trusted, and helping all sectors to truly drive sustainability and solve inequality issues.
Dharma Business: A Model Enterprise to Reduce Inequality
Professor Yak pointed out the urgency of the inequality problem as a huge and continuous trend, especially in the past when the world was disrupted, coupled with the COVID situation that had a chain effect, reaching the Sustainable Development Goal 2, which is hunger. He emphasized the importance of inequality or poverty, which is the work of His Majesty King Rama IX throughout his life. Or the example of Professor Yunus’ work, who established a bank for the poor and supported small investors, called SMEs or Start Ups, to occur in more than 17,000 places. For Thailand, the Economic Committee pushed for the Social Enterprise Act, which was the origin of the registration of Dharma Business Social Enterprise Co., Ltd., which the SEC allowed to raise funds outside the stock market as the first company. And then established 5-6 other companies, such as the company Loss is Profit, which comes from the words “Our Loss is Our Gain” of His Majesty King Rama IX, which was registered after Dharma Business, followed by Mabueng Co., Ltd., and the company Return Life to the Land. And many other companies, there are now 8-9 companies that are helping the poor, especially during the Covid period when people have no food, no shelter, people are unemployed or infected, which has mobilized food and medicine from existing networks.
Reducing inequality through self-reliance
Mr. Pichet, General Manager of Dharma Business, added that inequality is inaccessibility, which is knowledge. He told us about Dharma Business’s first step in providing knowledge to people, which began in 2013 by building a training center in Sanpatong, Chiang Mai, transforming vacant land into a farmland and completing it in 2016. However, it began offering training and selling shares in 2014, starting with a group of Ajarn Yak’s students. However, this was a method that violated the Securities Act, so it had to stop and try to set up a community enterprise. They requested permission to sell shares and started listening to ideas until the SEC announced the Social Enterprise Act on February 1, 2020. Originally, they avoided using the word “coin-money”, meaning that it was a donation but could be returned. In reality, it was shares. In 2019, they had to coin-money because the foundation at Chumphon Cabana was going to be auctioned off. They had to find money to pay off 120 million baht to creditors by December 5, 2019. If they hadn’t used the word “coin-money” at that time, Chumphon Cabana would not have been preserved.
Mr. Pichet continued that Chumphon Cabana is a good example of educating people to reduce inequality because there have been more than 70 training sessions with more than 7,000 participants. In 2020, the business expanded with the Dharma Business’s mobile food truck system, delivering rice, vegetables, eggs, processed products, and seafood to people’s homes. There is a natural market and a giant restaurant with Joan. During COVID, sales increased by 3 times because people seek food to make their bodies strong. It turns out that the inequality of the poor in the city and the inequality of the rich in the city are equal in access to safe and nutritious food. What Dharma Business has continued to do during COVID is making the Seven Angels herbal drink to distribute to the homeless, which has made the inequality even clearer and greater.
The future of SMEs in the capital market
Ms. Ruenvadee said that Dharma Business is a model for SEs entering the capital market, allowing small people to access the capital market without having to hire financial advisors by using the fundraising channel through crowdfunding platforms, such as SMEs in Malaysia who are more familiar with Crowdfunding than the stock market by borrowing a small amount through this platform, approximately 30,000 baht, instead of borrowing from a bank. Currently, Crowdfunding in the form of securities in Thailand, which is supervised by the SEC, is starting to be known.
Currently, there is a total of Crowdfunding in the form of securities, both stocks and bonds, with approximately 110 SME startups raising funds using this method, with a total fundraising budget of approximately 1 billion baht. It was also revealed that the SEC, together with the Stock Exchange of Thailand, is currently preparing a third board, from the original for large companies and MAI, which may be added for SMEs. In the first phase, funds can be raised, and later, there must be liquidity to be able to trade, but it may be different from the main board or MAI because SME stocks are at a higher risk. This board allows SMEs that have grown to a certain level to be able to create liquidity and access the capital market more, provided that SMEs are in the system, have accounting standards and pay proper taxes, and finally, the SEC continues to promote sustainable capital markets throughout the system.
In particular, the support for fundraising instruments to support social and environmental businesses or projects such as sustainable bonds, which have attracted attention from both the public and private sectors, as they help promote the allocation of funds to economic activities that take into account the environment or help vulnerable groups and develop society, such as the National Housing Authority issuing Social Bonds to invest in the development of housing projects for low- and middle-income people, or a commercial bank issuing Gender Bonds to support lending to female SME entrepreneurs. In addition, the SEC also follows developments abroad to study new financial innovations, such as Social Impact Bonds (SIBs), in England, where funds are raised through SIBs to implement projects to reduce the rate of re-incarceration of prisoners, or the collaboration between the public and private sectors in South Korea, where SIBs are used to raise funds to implement projects to develop the potential of children with intellectual disabilities. All of these can help reduce inequality without having to rely on the government budget, but by using capital markets to raise funds, which is considered a solution to the issue of reducing inequality and making funds reach the hands of those who truly need them.
“Sufficiency CSR model” a tool to reduce inequality
Assoc. Prof. Thongthippa shared her academic perspective that she has driven this issue together with the Thai Chamber of Commerce, believing that if we have sufficiency in life and business, we will definitely survive. She applied CSR, which is a tool to reduce inequality that the private sector can participate in, to develop the “CSR Sufficiency Model” and put it into practice in Sap Phut Village, Phetchabun Province, a village that has not had water for 50 years. They have restored the forest and drawn water from the forest to use as the village waterworks. A private company supported the laying of pipes, enabling agriculture and promoting local wisdom to transform products, adding value, until this village is strong and can stand on its own.
Especially during COVID, the community has income to support itself and is happy with the life it has. This is a work that proves that the Sufficiency Economy CSR model helps with self-reliance and when all sectors integrate cooperation, it is successful. The most important thing is that leaders and communities must be strong. It shows that if we want to create equality to reduce inequality, one thing that must be done is to strengthen the potential of the target group. Look at their behavior, attitudes, needs, environment and social context to see how they can rely on themselves and then promote them to that point.
Mini MBA for Social Enterprise: Arming Your Foundation with Knowledge to Turn It into an SE
Assoc. Prof. Thongthipa also mentioned the establishment of the Mini MBA for Social Enterprise course to change from working as a “foundation” to a “social entrepreneur” without any cost and teaching from the basics to know the principles of doing business with the concept that buyers must buy because they want to buy, not buy because they feel sorry for them because if they buy because they like the product, they will buy it forever. Therefore, it is a turning point for the 7 associations of disabled people to come and study. It can create change, awareness and prepare for various crises. And believe that everyone has hidden potential to change and develop themselves to a life without inequality. They can earn income, have a career and live happily. Just get up and fight. All sectors are willing to help as mentors. In addition, when there is a suitable mechanism, there will be development and change in various aspects and inequality will be reduced.
Create an entrepreneurial mindset, the heart of self-reliance
The conversation reached the halfway point, everyone agreed that self-reliance is the key to reducing inequality. Ajarn Yak further pointed out that to do so, we must create a new mindset about education, promote lifelong learning, make everyone participate in education management, and use real problems or situations of society as a basis for designing education, or what is called Problem or Situation-based Learning. The big common question is: How can we make Thailand have an economic system, a social system, and an education system that mainly relies on the country and less on foreign countries? Create people to help others with volunteerism by using 7 national problems as the starting point, such as inequality, hunger, drought, flooding, deforestation, and garbage problems. And cooperate with the Office of the Basic Education Commission to create a curriculum for solving problems from real practice, called Active Learning, to be used in 30,000 schools. Most importantly, we must create an entrepreneurial spirit for the new generation, instilling it in children from a young age, because any country that teaches children to be employees will have a hard time prospering. Or you can observe that it is very difficult for people who are laid off from work to change careers. In the end, they end up becoming farmers, which is harder than any other career. If there is a flood or drought, most people will go bankrupt. Today, the biggest thing that many sectors are helping to push for is to spread the concept of social enterprise. But the most important mechanism is education.
Drawing the future with knowledge, adaptation and network collaboration
Ms. Ruenvadee also expressed her opinion that continuous education or knowledge provision is as important as adaptation and the creation of an ecosystem to foster cooperation among networks, both in the capital market itself, such as the Association of Listed Companies or the Stock Exchange, as well as cooperation from foreign countries and other networks. She expressed her confidence that entrepreneurs in the capital market are ready to drive this issue and emphasized that in the future, Thailand will still be a country with abundant strengths. She asked everyone to be diligent, look for strengths in each area, and adapt to the changing environment. The capital market is ready to be a leader to truly become a Capital Market for All to show that we are ready to support and work together on this issue.
Unity is the strength that supports the Thai nation.
Ajarn Yak concluded by saying that while the whole world is worried about how to move forward in this COVID crisis, the question is, “How will Thailand survive?” Of course, we must retreat to our stronghold. His Majesty King Rama IX has already emphasized that we have a lot of wisdom, both in medicine, food, and even logistics. We do not need to rely on foreign countries. If we only think about relying on foreign countries, we are setting ourselves up for carelessness because the whole world will rely on itself for survival and will not let us rely on it easily.
In practice, we must struggle to rely on ourselves. This is the heart of the philosophy of sufficiency. Therefore, the first thing to do is to create people with a mind ready to stand on their own feet, which is called having the spirit of an entrepreneur or Social Entrepreneur. The second thing is to have the skills to learn from actual practice, called Active Learning, which requires creating an ecosystem to stimulate this process. The city and the countryside must support each other, not leave the city or the countryside to live according to their own circumstances. And the last point is SDGs 17 Partnership for SDGs to support Goal 2, which cannot happen without cooperation. Therefore, cooperation is the key, according to His Majesty the King’s royal speech that unity is the power that supports the land of Thailand.
Inclusive growth: Developing all sectors without leaving anyone behind
Assoc. Prof. Thongthipa concluded that it is time to transform Thailand, to let the new generation be the power of the future and to promote the new generation to have potential and efficiency by focusing on education, whether in terms of technology, changing oneself, changing mindset, developing management skills and being a social entrepreneur because they will be the ones who take care of society in the future, which is lifelong learning.
Therefore, children in this era are in the Agile era and must be ready to adapt. The new generation will be the group of people who create jobs and income to support themselves and the elderly. We must create a sense of responsibility towards the community and inclusive growth, which means developing all sectors together without leaving anyone behind.
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Episode “Reduced Inequalities – Reducing Inequality for Sustainability”
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