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Justin Eppley, Thailand, Economics

My friend asked me point blank during a discussion about capitalism and Donald Trump what "it" was that "you people" [Americans] have inside that drives our ambitions. Exhausted from work and red-eyed from dust, I was not willing to start singing The Apprentice theme song we had bonded over my first nights in Kenya. His question was heartbreaking. With all of the blatant, horrifying poverty that surrounded me, this question was the most difficult and depressing for me. I surprised myself with my answer. I told him, frankly, that I believe it is hard to have ambition when you cannot expect a certain minimum safety net from your government. Even more horrifying; I told him that I understood the common desire to leave Kenya for good and I would want the same. It was a bit of harsh frankness that I developed towards my situation at work in Kenya starting a microfinance institution. This frankness was something with which I was very unfamiliar.

When faced with unchecked idealism regarding poverty during my senior year of high school, I took action by building a charitable coffeehouse for orphans in Africa. I had fun creating drinks, marketing the products, and accounting for growth, pretending I was my own little version of Donald Trump (just a bit nicer). I did not have to think much about where the resources were, what markets I would sell to, or how I could account for the growth. I was just having fun, and fun for an apparent good cause. It was around this period of my life that I made the surprising decision to pursue economics as a career. My desire to help others spawned a career track I had not intended. I had realized at that point how much I enjoyed the entrepreneurial spirit, the drive to succeed and grow.

Three years later, that decision has led to Thailand and microfinance. Between then and now, my coffeehouse ambitions have been thoroughly tested. They were tested when I had the honor of leading a presentation at a World Bank conference to alleviate extreme poverty, but where the frustrations of little field knowledge troubled me. They were tested when I lived in Thailand studying trade relations, but where a military coup led to a revolution. Finally, they were tested in a unique opportunity to initiate and run a microfinance agency, but where the political will of the organization was lacking. The more I experienced, the more I realized how important a dynamic relationship between these macro and micro occurrences was.

My internalization of these events in my life coincided with the development of a magazine business venture I started in 2005. Today, this venture remains in tact and strong as ever. Despite setbacks and surprises, entrepreneurship has remained an important passion of mine and each of these events has been successfully integrated in my life and business and has transformed me to be a person with big dreams, like the coffeehouse, but practical goals. I hope to apply these experiences and find what Thai entrepreneurs have also internalized by dreaming big but thinking small.

I use the case of my Kenyan friend to illustrate a common experience across developing nations and why cultural sharing is important between them. As an individual who has a working knowledge of Thai culture and government and experience in microfinance development practices in two other cultures, I feel that I am in a position to better understand such cultural nuances when studying successful Thai microfinance. It would also put me in a better position to apply my findings cross-culturally after completion of the study. This sort of experience would enhance my career and it would help me on the path to finding a more effective way to give my friend an answer to his question on ambition. Between all of us, we can begin dispelling the cultural misunderstanding and myth that ambition and entrepreneurship are only American.

Justin Eppley, Thailand, Economics

Microfinance-Funded Entrepreneurship and Thai Cultural Influences

In 2001, two innovative researchers gave birth to a small but growing field of literature on what distinguishes successful and failed microfinance activities. The two researchers, Paulson and Townsend, were specifically seeking to understand who becomes an entrepreneur and why. After reviewing their work and more general studies of microfinance in Thailand, I seek to expand on their rich base of information to study the business practices of these entrepreneurs in the context of a political and social rebuke of aspects of Western-style capitalism. According to recent field studies in northeastern Thailand, there exists measurable interest in entrepreneurial activities. This same study also points to evidence that much of this interest was unmet by existing microfinance institutions. Jonathan Morduch asserts that the explanation for this situation can be attributed to the existence of village banks in the same areas, prior to the introduction of the famous Grameen Bank-model of microfinance. The argument is simple: individuals who had access to village banks earlier have more capital and more income, and thus the ability to ask for larger loans once microfinance banks were established. These individuals will be more appealing to extend loans to, and the microfinance institution will create a barrier to entry for new borrowers almost by sheer existence, because new borrowers, who have no credit history, will be less attractive. This is an important variable to examine in the context of successful entrepreneurial ventures. Are existing businesses squeezing out new entrants with their ability to receive larger loans simply because they had access to village banks first? If not, what business practices are these existing businesses following that their peers, who have similar entrepreneurial ambitions, are not? The missing link in understanding this situation is culture.

Thailand has been considered a member of the Asian tigers, a designation bestowed upon several Asian countries that were experiencing extraordinary rates of economic growth. A large part of this growth stemmed from foreign direct investment, an opening up of trade. Many individuals, however, including a contingent of prominent academics in that nation's capital, were critical of aspects of this movement towards pure Western capitalism, as Thailand is a Buddhist nation, which influences their views on many issues, including economics. Thais are proud of their culture, which includes an emphasis on good deeds, an attitude of mai pen rai (no worries), and strong family ties. Many aspects of their values are at odds with the pure capitalism that has been introduced. For instance, when I studied in Thailand, an argument advanced in my Thai International Trade and Cooperation class at Thammasat University posited that Thais were simply left out of fair trade negotiations primarily because of these values and their conflict with, say, American ones which guide the training of negotiators very differently to represent their interests.

Nonetheless, many have argued that the introduction of Western capitalism has helped to accelerate the development of the nation. But, at what cost? How far have some of the culturally incongruent values of capitalism seeped into the fabric of Thai society? It is often recognized that major Thai cities have welcomed Western capitalism. It is not as obvious what rural microfinance activities portend for the story. Microfinance-funded businesses will provide an opportunity to see the ways in which traditional Thai values are woven into micro lending and to simultaneously see what capitalist values have been internalized. Contrary to typical Western portrayal of Buddhism, we find that Buddhism indeed recognizes the gain of wealth as one of life's fundamental activities. The emphasis, though, is on the purpose of wealth and how one acquires it. Material security is only the foundation for higher goals: well-being and inner freedom. Instead of the acquisition of wealth being the goal, as is often the case in Western capitalism, in Thailand it is the means to accomplish more important goals. Studying if these Buddhist teachings influence real world business operation is the key to understanding if ideals of capitalism have become pervasive across small, microfinance-funded businesses.

September 2006 may have provided a sign that capitalism had become too pervasive, as the former Thai Prime Minster, Mr. Thaksin Shinawatra, was ousted from office by military coup on charges of corruption. Also ousted were his economic policies known popularly as Thaksinomics. He introduced programs, such as One Tambon, One Product, which advocated production and specialization of one product for export from each tambon (village). Despite near universal support for the coup after it was staged, rural voters were once Thaksin's most ardent supporters. What perceptions do microfinance-borrowers have of Thaksin's programs? How do villages in general perceive their overall "Thai-ness" since introduction of such programs? These are significant and direct questions to ask in the era following the removal of Thaksin and his policies that were closely aligned with strict capitalist principles.

Despite the political volatility that Thai governments have experienced, this long history of economic openness means that Thailand offers a longer, more successful track record to study these unique problems than nearly any country. Studying successful microfinance institutions in Thailand will afford me the opportunity to work to understand why similar programs elsewhere are failing, and how Buddhist principles are affecting their successes. Combining my previous experience in establishing a microfinance agency and studying in Thailand during the military coup mentioned will be an excellent guide to complete my research.

In the intervening time, I will be working with several Thai students on language acquisition as an International Student Exchange Ambassador to ready myself for my field work. I will be able to build upon basic competency gained from my former classroom experience studying at Thammasat University. I will also be completing an Honors Econometrics class that will develop my skills in running regressions and I will take an Anthropology class on Southeast Asian Cultures.

If given the opportunity to complete my work, I plan to pursue it in consultation with economics professors at Thammasat University in the heart of Bangkok. I hope to strengthen my relationship with the Dean of the Economics Department, Ajarn Nipon Poapongsakorn, whose class, Thai Economy, provided important insights about Thai political and economic fusions before and after the coup. I will also have continuing instruction in the Thai language with Ajarn Pornthipa Tawasonga. I believe with the help of these individuals, who I have worked with before, I can create a culturally-sensitive questionnaire that will assess individual entrepreneurs' business practices and their perceptions of business and economics based on the questions posed here. If we can identify commonalities amongst those who persevere, we can help others learn those strategies in other countries that are less developed than Thailand.

Thailand is an area of the world I can thrive in, and, an ideal site for my study that will contribute to the world knowledge of microfinance. Increasing my personal knowledge of how businesses operate in this cultural environment will make me a more effective citizen and a better public policy professional in the future international arena.