I recently wrote a post about the diversification of livelihoods that has taken place in rural Thailand. From the informed comments received there appears to be general agreement that the move away from agriculture is strong throughout rural Thailand, though the extent and timing of this shift has varied from place to place.

In this post I want to raise a related issue. While this new(ish) rural economy is very diverse, it also seems to be somewhat hollow. In some (many?) rural areas it seems to be characterised by a profound lack of private investment. My perspectives on this is, I admit, strongly influenced by my very localised research in Ban Tiam, a village in Chiang Mai province. In the district of which Ban Tiam is a part, private enterprise is dominated by local construction contractors and they are hardly “private” because they primarily live off a stream of government contracts. Beyond that, private enterprise extends to shopkeeping, restaurants and money lending. Contract farming is also making some inroads.

A relatively low level of private investment in rural areas may be natural, even inevitable. But I get the impression that while many rural households in Thailand are moving away from agriculture (both out of choice and necessity) a good number of them are failing to get a firm foothold in other, more lucrative, sectors of the economy. In Ban Tiam it is the pipeline of government projects, programs and salaries that underpins much of the local economy.

In many parts of the world, rural industrialisation has been identified as making an important contribution to sustainable poverty alleviation and rising living standards. Does anyone have any good suggestions about data sources (or research) on the extent of private sector investment in rural areas of Thailand?