The Genesis of a Shadow Government:
The Story of Klong Pia Saving Group,
Songkla Province

6:30 PM

Ampon Duangpan hangs up the phone - just as he would with a telemarketer - as he finds it to be just another annoying threat call from the local mafia. He has been receiving this type of calls for over 20 years; ever since he founded the community saving group.

“Some loan sharks have lost their businesses because of it,” he says. “And they are not too happy about it.”

His community saving group is not a small domestic affair; it has over 7000 members; boosted a 200 million baht saving pool; and it gives collateral-free loans to the villagers. It also provides its members with free health care and education, and its budget is the size of a small city government. This is not what the Mafiosi hope to see.

Uncle Ampon – as he is often called - is a lean 65-year-young man with a sharp set of eyes that seems to peer out from behind his dark brow like a falcon. Not particularly fond of bureaucracy and governments, he dropped out of school after the 4th grade and continued to study on his own. He is an avid reader; and there is a large collection of books lining the walls of his small cottage. He has also written many books and articles; some were published in local newspapers; some made it to national headlines; some were translated into other languages; but most of them remain unfinished; and the pile has taken over his entire writing desk.

“The whole thing (saving group) got started because of debt; the state doesn’t understand the villagers. They asked us to plant rubber trees and now we’re totally dependent on them for income; we could no longer grow our own food and survive like we used to.”

His large active hands grab a thick photo album from the bookshelves and place it on a small coffee table which now acts as a substitute for his writing desk.

“You see, the experts simply imposed their vision on us. They told us what to do, what to study, what sort of education we should get, but their education doesn't serve our needs.” He pours his coffee and starts flipping through the photo album.

“Look here,” he points to an old photo of farmers harvesting their crops. “This is 30 years ago; the villagers were living together on a self-sufficient economy. If your household had fish, you could trade that with rice from another household of farmers. If you’re a carpenter and you’d helped a family of boat-makers built their house, they would in exchange, lend you a free boat. Various social festivals were used as a way to build community; we would build houses, temples, boats, Buddha statues – we would even help farmers harvest their crops during these events. They were all done without monetary exchanges.”

“But that has changed,” I interject.

“Yes, all we have now is rubber trees.” He looks out the window.

The sun is setting. Silhouette of tall rubber trees can be seen from a distant; swaying against the bright orange sky.

We could see students hanging out at a nearby village school. It’s a two story building with large tinted windows, air conditioning, an exterior walkway and stairs. It was painted sky blue - or purple, in the light of the sunset. The teenagers are now talking among themselves at the foot of the stairs; they have just finished an evening class. Several of them are holding brightly colored CD-R discs in their bare hands. They are discussing things in a strange encrypted language.

“We are teaching computer here. We couldn’t wait for the state to provide us with computers; so the saving group decided to build this school along with a computer center,” says uncle Ampon. “We now have over 60 computers completed with internet access in both of our schools.”

He says that the villagers do not have much choice on how to make a living. They could go to the cities; live in shantytowns and slums. They could make ends meet by laboring and selling items on the pavement, on 3rd class train cabins, in traffic-jammed streets, in soccer fields, and – if they are attractive - in the bars.

Having computer skills could help catapult a villager from the above mentioned careers to a white-collar job in an air-conditioned office of the 21st century.

"But most students here do not seem to have the urge to leave the village; they continue to stay. It’s strange,” he gesticulates.

“You know, at first, the saving group was initiated by the government itself,” he says. Years ago, state officials came to tell him about the virtue of having a saving group; and how it could help with the debt issue. But they told him that the saving must be placed in a commercial banking account; and that the saving group should not give out loans to people. If the villagers wanted to borrow money, then they must go to the commercial bank and use the saving group’s money as collateral for the loan. Over time, however, membership in the saving group started to dwindle as they received less interest from the saving group as they would with an individual account at the commercial banks.

Uncle Ampon was alarmed as membership in his saving group had shrunk to a mere 24 people. He called up a meeting. And at this fateful meeting, he told the remaining members that the saving group should start giving out loans to the villagers; loans that do not require the use of collaterals. Then he said that they “should forget about the state’s development guidelines.” From now on, the saving group would be creating their own guidelines.

State officials were shocked after they had heard the news.

“Our saving group started giving out 1000 baht (30 dollars) and 2000 baht loans to the villagers; they drafted their own loan documents stating reasons for borrowing and the expected date of repayment. The interest rate was 12% per year for a loan and it still remains the same today.”

“That was it,” he clears his throat. “There were no legal papers, just a document stating the reasons for borrowing the money.” He says that if the villagers should fail to pay back on time, the saving group would hold a meeting to see why they could not pay it back; they would, together, find a way for the borrowers to pay back the loan. There were no punishments or late fees as practiced by the commercial banks. This new approach was a huge success; membership in the saving group soared twofold, threefold, until it reached the thousands. “With such a large pool of membership, we were able to run a high interest saving group; with a rate of 4.5% payable to all members.”

“But there were many problems too. We operated on a totally informal manner; there was no legal protection at all. Some people felt that they shouldn’t risk their money on such an informal venture,” he says. “The old loan sharks were especially good at spreading this kind of fear.” But gradually people start to realize that the legal system itself could not give them a sense of security either; for the villagers the legal system is just another hurdle that must be overcome. Many of the villagers could hardly write down their own names not to mention preparing legal loan documents.

“So they start to see that financial security lies with the strength of the community.” Uncle Ampon flips through the black & white photos of men and women who have joined the saving group in the early days.

There are photos of a large group of people meeting - probably arguing - under the cool shade of a tropical orchard. There are photos of uncle Ampon speaking at various social events – even funerals.

“That’s how we spread our messages; we don’t need to use TV or radio; after we donate money for someone’s funeral, we are always invited to speak. And that’s one way to tell people about our saving group,” he says. “Sometimes we speak at school event, since the students were using money from our saving group for their education.”

“We have free scholarship for the students as well. Each year, we have 17 scholarships for the students. Each amount ranges from 500 to 700 baht,” he says. “But for the very poor students, we try to teach them here at our village ‘university’; it saves time and travelling expenses. It’s more effective to get the professors to come and teach here. It’s better than trying to send the students abroad; to faraway universities.”

I recall that during the Meji Restoration (late 19th century Japan), reforms were made to public schools and Universities throughout the nation; instead of sending students to study abroad – like Siam – the old Samurais hired western professors to come and teach in Japan. In terms of effectiveness, this system enabled Japan to modernize the entire nation; to be on par with its European counterpart within a time span of 20 years. Siam has been sending its students abroad for over a 100 years, and it is still struggling with its modernization efforts. Perhaps uncle Ampon had arrived at the same conclusion as those Samurais some years ago; so he built his village university along the same development line.

We come across a large photo of a sleek modern-looking factory - a fish sauce factory. In Southeast Asia, no cooking could be done without the fish sauce. To the Thais, it is an essential part of everyday life – like the olive oil is to the Italians. The factory was initiated by uncle Ampon’s saving group; again, attempting to create a measure of self-sufficiency within the community.

“The fish sauce factory became a success locally; then nationally. It tastes better than the commercial grade fish sauces because there’s no preservatives – none. Everything is fresh,” says uncle Ampon as he continues to show me pictures of the fish processing room and the fermentation room and the bottling crew that seems to be frowning – perhaps from the notorious smell of fermenting fish.

As often happened when the villagers hit upon an important innovation, the pious politicians came; posting for portraits and giving speeches. There is a picture of a visit by the billionaire telecommunication tycoon who was then doing business as the Prime Minister of Thailand. There is also a picture of some lesser known politicians standing next to the premier. They show their loyalty – as found in many other animal kingdoms - by standing up straight; covering their crotches with both hands. The fish sauce factory rests placidly behind their smiling faces.

“And who’s that?” I ask as we come across a picture of an earthly-looking young man singing on the stage.

“Oh, that’s Sanya; he is a local star here. Everywhere he goes, we see crowds of stampeding women and chaos.”

“Some sort of Frank Sinatra?”

“Yeah, he is our boy! We’d helped him years ago when he needed some cash to start up a singing career.”

“Your saving group gives money to singers too?”

“We always supported culture and festivities. You know, local festivals and entertainment often help create a stronger bond among the villagers – an important factor in making sure that people pay back their loans on time.” He laughs.

“How so?” I ask

“Well, if you’ve no friends at all - and you take out 10,000 baht loan and runaway with it – nobody would care. But if you know 50 people in the community; you partied with them; you go to the temple with them; and you default on the loan, they would spread the news of your treachery all over the village. The monks are professional gossipers! Having a close-knit community could give you great supports, but it could also keep a watchful eye on all your activities,” he explains with a thin smile.

We pause for a few seconds.

“And who’s that?” I point to a photo of a wirely man lying in a hospital bed.

“That’s Than. He is a Burmese migrant worker who came to work in one of those factories without a permit," explains uncle Ampon. "After he got his monthly pay, he went to visit a friend out of town and was caught by the police. They were going to deport him, but they’d found that he had 5000 baht in his pockets so they abandoned the idea. Instead, they relieved him of 4900 baht; leaving him with 100 baht. By the time he got sick later that month, Than had 17 baht in his pockets. You can’t even pay the taxi to get to the hospital!”

“So how did you get involved?” I ask.

“A village monk told us about him; so we took him to the hospital the next day.”

We can now hear someone knocking on the front door. From our back window we can see that he is an unkempt young man who seems to be in a great hurry to get in.

“What do you want?” shouts uncle Ampon.

“I need to take a leak in the restroom! Please let me in,” says the young man.

He turns out to be one of the students from the computer class; staying late, learning the Java codes. Uncle Ampon shows him the restroom in corner; “next to the kitchen,” he says.

While doing his business in the restroom, he overheard us talking about the threat calls from the loan sharks and is somewhat eager to make a comment about it.

[Sound of flushing toilet]

“These guys (the Mafiosi) are just like the government,” he says. “When we have one authority, we call it a ‘state.’ But when we have many authorities, we call them ‘criminals’. Tell me why?” He shrugs.

The young man does not seem to wait for our answers as he leisurely walks out the door.

We sit silently; as he leaves. It is getting late and our thoughts are not clear enough to handle complex rhetoric. Perhaps the Mafiosi exist because of the state’s failure to meet the need of the poor. Perhaps they are indeed ministers and high priests of the shadow government. In some countries – where the government allows its citizens to die from illness – the Mafiosi pay for their medical bills; saving their lives. When the poor are dying from hunger; the Mafiosi give them food. When they need money - and are being told by the government that they are lazy and have no accountability - the loan sharks lend it to them.

Uncle Ampon’s saving group may have all the attributes of a shadow government; but instead of selling drugs or running a casino, it provides funding for schools, health care, festivals, and computer centers - completed with the smell of fermenting fish. Instead of providing dope, it provides hope for the villagers. Beauty – it seems – lies in the gray area between the movement of light and the play of shadows.

Social Services Provided by Uncle Ampon's Saving Group

1. Free Health Care: 100% reimbursement for all hospital visits

2. Natural Disaster Relieve Fund: Up to 50,000 baht per household

3. Continuing Education Fund (adults): For various seminars, lectures, and training

4. Educational Scholarship: A total of 17 scholarship; 700 baht each

5. Educational Assistance Fund: For very low-income students; they could get free tutors for their school work at the Village University

6. Festivity Fund: 10,000 baht per year; to be used for the cost of running traditional social festivals.

7. Funding for the Arts: Provides financial assistance as needed to local artists and musicians.

8. Social Infrastructure Fund: Such as building a new community park, or providing drinking water for social activities.

9. Business Development Fund: Provides financial subsidies to local business such as the fish sauce factory and the rice mill. The fish sauce is sold for a mere 25 baht per bottle – providing poor folks with high quality product at a low cost. A litre of rice - from a local rice mill that has joined the group - costs 8 baht (the market price is 10 baht).

10. Retirement Fund: Each member receive 5% of the group’s profit per year. The longer a member remains in the group, the greater his pension will be.

11. Fund for Abandoned Seniors: Poor seniors with no one to look after them. Although this is the norm in most Western countries, it is still alien in Thai culture where sons and daughters are expected to look after their aging parents. There is no limit to the amount of money; it depends on personal need.

12. Mechanical Maintenance and Electricity Fund: Many community-owned factories and mills have large machinery that must be maintained along with their electrical costs.

13. Funding for People with Hardships: Offers 10,000 baht per person, for people with hardships and disabilities.

14. Funeral Fund: 7000 baht per person