Finding new ways for government to support communities at scale


In the early 1990s, Thailand was enjoying the bounty of ten years of economic boom, but the urban poor were not receiving enough support.  Their housing conditions had deteriorated and their settlements increasingly faced the prospect of eviction, as land prices and demand for central city sites increased.  To better understand the situation, a study team was set up within the National Housing Authority (NHA), led by Mr. Paiboon Wattanasiritham.  The study brought together community groups, activists, slum federations, NGOs, civic groups, entrepreneurs and key government people to share ideas and to develop a new process to address urban poverty.  It was a huge undertaking and represented an unusual degree of collaboration, participation and pragmatism.


The team analyzed the successes and failures of past experiences and identified potentials in ongoing initiatives.  What they found was that poor community organizations in Thailand were already doing a lot, and had the potential to manage their own development.  What was missing, though, was access to resources – particularly accessible, affordable credit – and a more participatory support mechanism to help strengthen and link those scattered efforts.  The study findings were presented to the government, along with a proposal to establish a new program to improve living conditions and strengthen the organizational capacity of urban poor communities, through the promotion of community savings and credit groups, which would be supported by a revolving loan fund.

The Urban Community Development Office (UCDO) was established in 1992, with an initial grant of 1.25 billion baht (US$ 34 million), as a special revolving fund to support urban community development activities and provide low-interest loans to community organizations for housing, livelihood and other purposes.  This new fund was to be accessible to all urban poor groups who organized themselves to apply for loans to finance their development projects.  To allow the work to begin immediately, a decision was taken to set up the UCDO under an already-existing institution.  Though technically under the NHA umbrella, UCDO had it’s own development process and its own board of directors.  That separate management system gave the UCDO considerable flexibility to operate in new and innovative ways.


Eight years later, a substantial number of Thailand’s urban poor communities, in 50 provinces, were linked with UCDO and linked with each other in 103 networks, through a broad range of community development activities, including housing, livelihood, environmental improvement, community enterprise and welfare.  The UCDO’s national experiment was demonstrating that flexible finance and people-driven development could be an efficient, scalable and cost-effective alternative to conventional top-down development delivery paradigms.

  

Then in October 2000, the process got a big boost, when the UCDO was officially merged with the Rural Development Fund and renamed the Community Organizations Development Institute (CODI).  Besides merging the urban and rural funds into a larger development resource, the royal decree which brought CODI into existence allowed UCDO’s urban development activities to continue, but greatly expanded the organization’s scope to include both urban and rural communities, and paved the way for big changes in how it supports community organizations around the country.  By making CODI an autonomous legal entity, with the status of an independent public organization (under the Ministry of Social Development and Human Security) the decree provided greater possibilities, greater access to government budgets and more freedom than a conventional government institution.  And the CODI fund grew and continued to be the institution’s chief financial tool.

 

BOX:  What being a “Public Organization” means

When the royal decree transformed UCDO into CODI in 2000, the organization underwent an important change of status.  As a special project under the National Housing Authority (NHA), UCDO had no legal status of its own, and all its regulations had to be under NHA.  But as a public organization – a special new category of government institution created as part of governance reform efforts – CODI has more opportunities and more independence to operate within the government system with more flexibility.  CODI is still a government organization, though, under the Ministry for Social Development and Human Security.  As such, its policies and budgets must pass through layers of assessment and approval, its work must comply with government rules and its programs are subject to scrutiny and annual audits.

As a public organization, the government funds which CODI receives for its work come under a special fiscal category called “General Subsidy”, which allows for greater flexibility in how the funds are used.  This is extremely important for Thailand’s people’s processes because it means CODI can direct those resources directly to communities on the ground.  CODI can also help coordinate or take subcontracts to operate other development projects being funded by the Thai government or by outside agencies.  CODI can also channel government resources into new funds to address specific development issues such as welfare, disaster rehabilitation and community product promotion.  These funds and special projects add to a growing list of tools available to communities and community networks, to strengthen their collective capacities to develop their own solutions to a range of problems.

The public organization status also gives CODI the capacity to provide status to the informal community organizations it supports.  In the absence of laws governing their registration or recognition as legal entities, community organizations in Thailand have long found themselves beyond the pale of legitimacy.  For the most part, this hasn’t been a very big problem, but as community organizations and community enterprises take on greater roles in managing financial resources and forming working partnerships with other formal bodies, this kind of recognition becomes crucial.

 

LINKS TO DOCUMENTS ABOUT CODI AND UCDO:

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