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1 Introduction

In 2003, Thailand introduced the Baan Mankong (secure housing) slum upgrading programme, taking a participatory approach to slum upgrading, by putting the communities at the core of the process, from starting savings groups to negotiating secure tenure, and planning and building new homes. A key organization in the implementation of Baan Mankong is the Community Organisations Development Institute (CODI), a public organization with a strong belief in the ability of community people to take charge of their own development.Footnote 1 Since the programme’s inception, over 90,000 households across Thailand have benefited from gaining security of tenure and improved living conditions.

At the core of the Baan Mankong process are urban low-income communities (Boonyabancha 2009). Often, the threat of eviction or an associated shelter problem will galvanise one or more communities to organise themselves as a network and carry out a survey of the housing situation in their area, including mapping land ownership and available land for resettlement. A survey is then done of all the communities to build up a database regarding community problems, type of tenure, existing savings, and collective activities. From this database, a plan of action is drawn up, prioritising communities to upgrade on the basis of need and willingness to embark on the project – these communities can then serve as learning opportunities for others in the city, through information exchange and study visits. As communities upgrade, networks can be built up. Throughout this process, the communities may work with and be assisted by other stakeholders such as municipal officials, NGOs, and academics to draw up a city-level plan to improve housing and integrate communities into the city.

At the community level, the process of upgrading requires the formation of a committee in charge of managing the Baan Mankong process and setting up collective savings activities. Communities are entitled to government loans and subsidies for upgrading, administered by CODI, but to qualify for the housing and land loans – totalling a maximum of 300,000 baht per household, to be repaid over 15 years – each community needs to save a 10 % deposit of the total loan amount. The loan is to be administered by a cooperative established at the community level. Community residents must either negotiate for secure tenure in their current site or purchase or lease land elsewhere for relocation. As well as the land and housing loan, the community is entitled to an infrastructure subsidy. Additional subsidies are available, such as for temporary housing during the construction process or to install sewage treatment systems.

Communities should decide collectively what type of upgrading to undergo and how to carry out the upgrading process: whether to hire contractors or do the construction themselves. Decisions will depend on the financial burden each household is willing to accept. For this reason, a survey is carried out by the community residents of each household’s income and expenditure, to ensure that the loan taken out can be repaid.

The participatory upgrading process leads to social change, in that the urban poor gain new skills and confidence in various areas, from finance to project management to construction. Another key outcome of the programme has been the creation of the National Union of Low Income Community Organisations (NULICO), a network of community members who are actively involved in the scaling up of Baan Mankong upgrading in communities across Thailand, through the process of community exchanges and learning by doing. NULICO has emerged as a new actor in the community sector and, by working closely with CODI, has become a key actor in changing the role and position of the urban poor in the development of Thailand cities.

Beyond this, Baan Mankong has given rise to further innovative and community-driven solutions to the needs of urban poor communities. A key need for the urban poor, that is, for a flexible financial tool which is accessible to those living and working in the informal sector, is now being addressed by the formation of community development funds (CDFs) at the city and national level, which allows the urban low-income groups to manage funds to carry out their own projects, beyond Baan Mankong (Archer 2012). By pooling together their resources at the city level, for example, by contributing a portion of monthly savings, the communities gain financial empowerment and freedom, as well as a negotiating tool which can draw in other actors, from city authorities to businesses and philanthropists. From the CDFs, or through them, communities can also establish welfare funds, as well as other funds to meet their needs, such as healthcare, education, housing, and disaster relief, funds which can allow revolving loans or grants to address needs. A “Decent Poor” Fund has also been created on a national scale, providing grants for especially vulnerable households, as identified by fellow community members, who may not otherwise be able to participate in community upgrading activities, whilst a community insurance scheme has been established. This chapter examines how Baan Mankong, as a participatory housing project, has catalysed social and structural transformations with regard to the role of the urban poor in Thai cities and filled a number of gaps in the provision of both housing and other services.

2 Participatory Processes for Change

As Baan Mankong is a participatory project, the social relations of those involved in the process are necessarily of relevance, at all stages of the process: before, during, and after upgrading. Somsook Boonyabancha, the former director of CODI, herself said that: “What we need to be stronger … is the sense of power: the sense of politics that how things have been changing. … We can understand why the people’s process is important only if we understand this power issue” (ACHR 2008: 9). Participation is seen as part of wider institutional changes, and it is increasingly being related to the rights of citizenship and democratic governance. Community participation should not only serve immediate physical goals but also fulfil broader social development ideals, by strengthening community bonds and demonstrating to the participants what they can achieve themselves, creating opportunities for partnership with the state. Community-managed financial tools, from savings groups to CDFs, allow this to happen on a larger scale and under the control of the people.

The inclusion of state institutions is desirable in participatory approaches, to ensure the more efficient delivery of development and empowerment. Participation itself, through community-driven projects, can be seen as part of a shift towards a “broad-based participatory and decentralized system of governance” (Mansuri and Rao 2004: 25), and therefore part of wider institutional change. The problem is how to do this without the state viewing the communities as a threat to local political interests. The solution is to draw in government authorities as a partner or collaborator, by involving them in all steps of the process and giving them the opportunity to contribute, whether material resources or technical assistance or through an advisory role.

Concurrently, local participants need to be made aware of their importance to the project, as the motivation of the participants and intended beneficiaries is vital for the success of projects. As Appadurai explains, “to break structural inequities in social relations and achieve equitable development it is important to build the ‘capacity [of the poor]’ to aspire” (quoted in Mansuri and Rao 2004: 27). This necessitates the building of “equality of agency”, to create environments to equalise the relational and group-based structures that influence individual aspirations, capabilities, and agency (Mansuri and Rao 2004). This is less likely to occur with a rapid scaling-up process. Community-based development can serve as a rebellion against traditional systems of social organization, which have evolved to manage resources in a manner serving the purposes of entrenched elites (Mansuri and Rao 2004). With regard to housing, it means that they are locked out of access to formal means of finance and hence from secure housing – so community-managed financial tools like community development funds allow a scaling up of the process that remains controlled by the grass roots.

Mitlin (2008: 339) defines co-production as a “strategy used by citizens and the state to extend access to basic services”, through the joint production of these services. Co-production can be used to achieve public goods and services and hence higher levels of welfare, when public organizations and citizens share one or more stages of production. Because co-production presents entry-level opportunities for citizens to engage with and influence the state, it is relevant to discussions of community participation. Mitlin believes that co-production is increasingly being used explicitly by grass-roots organizations as a way to strengthen their political position and increase their negotiating power. Baan Mankong can be regarded as an example of co-production in the provision of housing and infrastructure services, and the formation of networks of Baan Mankong communities presents potential for these networks to strengthen the position of the urban poor with the state. Where CDFs successfully lead to the leverage of resources from the state or other actors, they can also be regarded as a tool allowing co-production.

Community participation and collective action for a common goal are more likely where social capital is high (Krishna 2002). Community-driven development, with its emphasis on community participation in decision-making and project implementation, is inextricably linked with social capital. The definition adopted here follows Putnam’s (1993, 1998) conception, as used by the World Bank, that social capital is composed of the norms and networks that enable people to act collectively (Woolcock and Narayan 2000; see also Chaps. 4 and 17 in this volume). Specifically, the concept of social capital can be divided into three parts, representing the three levels of analysis: bonding, bridging, and linking social capital (Woolcock 2001). Participation cannot occur without ties between people, whether these ties are horizontal, such as bonding and bridging ties, or vertical, in the form of linking ties. Community finance, in the form of savings groups to CDFs, is a way of strengthening bonding social capital, by gathering people and building trust through the savings process.

Social capital is perhaps the most accessible asset for the poor, as it arises out of social relations, and being part of a social network can be vital to ensuring a better quality of life. Those on low incomes have limited endowments and assets, and therefore sharing assets between neighbours or a community can create community-level assets, and it also makes self-help possible. This mutual aid and cooperation creates bonding social capital within a community, which can be an essential lubricant for self-help. Bridging social capital extends beyond a community, through horizontal ties to like persons, whilst linking social capital can provide vertical ties to persons with power and resources. Thus, whilst bonding social capital may be sufficient to survive, bridging and linking social capital provide opportunities to improve one’s situation both economically and socially.

Although community participation at the local level may deal with physical improvements, it ultimately links up to wider institutional change in governance and in how ordinary citizens are perceived and treated by government institutions. The citywide approach to networking and upgrading adopted by Baan Mankong addresses this, by recognising that the city level is the strategic level at which governance issues can be addressed and citizens can play an active role. Citywide networks of communities can actively negotiate with city authorities, all the more so when they have the financial freedom afforded by a community development fund as a bargaining tool.

3 Networks of the Urban Poor as Key Development Actors

The multitude of community networks arising out of the Baan Mankong process were formalised as the National Union of Low Income Community Organisations (NULICO) in September 2006, with CODI’s backing. The network is active at multiple levels – city, province, region, and nation – and has two core aims:

  1. 1.

    To solve the problems of community organizations of the poor in cities

  2. 2.

    To collectively push forward policy changes with the state

NULICO works through specialised “teams” who can advise communities: management, information exchange, social welfare, construction, infrastructure, inspection, and finance. NULICO puts into practice the Baan Mankong ideals of information exchange and learning by doing. As community residents who have already completed upgrading and know best what the experience entails, they are better placed to inform their counterparts than government bureaucrats who view things from afar. NULICO also runs meetings, in conjunction with CODI, providing training for communities in how to prepare funding applications and their component parts, such as new community layout plans.

For those who actively volunteer in NULICO, it can be a full-time role, undertaken for a number of reasons. One of these is a desire to help fellow urban poor to develop strong communities and by extension to change government policies. The key role played by NULICO reflects the gap in service provision by other actors in resolving housing problems and empowers them to take an active role in improving not only their own communities but also the wider network of communities within their city and province. NULICO is the agency through which co-production with state agencies can be facilitated.

Forming NULICO has helped to institutionalize the role and position of the urban poor in the Thai social fabric, and its formation was timely, coming when the country’s political situation was unstable, and the policies introduced during the Thaksin Thai Rak Thai government were not guaranteed continuation (see Chaps. 10 and 12 in this volume). This instability means that it is the poor themselves who have to ensure they stay on the government’s agenda and continue to be allocated funding for the Baan Mankong scheme, by lobbying and negotiating at various levels, from local to national government. Most importantly, NULICO plays a vital role in forming bridges between communities and putting into practice the Baan Mankong requirement of learning exchange. Networks enable communities to support each other, and they promote access to information, which is vital to achieving empowerment through local organizations (Harriss 2007). NULICO embodies norms which make up social capital, by creating an identity for the urban poor, through a sense of solidarity between communities. This network can do much to bring the urban poor into the wider democratic processes, by encouraging grass-roots groups to make their voices heard, not only through demonstrations where necessary, but by showing to society what they are capable of achieving by themselves. Social movements such as these can cement the legitimacy of the Baan Mankong project and the position of the urban poor in the city. The networks also have a policing role, in ensuring that the government delivers on its promises. Community networks increasingly have the capacity to take over from NGOs as the link between the state and communities, and because they are internal to the communities, unlike NGOs, they know exactly what their needs are and what they are capable of achieving. The interaction between the communities and state agencies presents a chance to rectify the imbalances in power which exist in the vertical relationship between these two parties, creating linking social capital in the process. Thus, Baan Mankong, through NULICO, represents an opportunity to bridge the public-private divide.

4 Flexible Finance for Community-Driven Projects

A key problem faced by the low-income communities is access to formal sources of finance, such as loans and mortgages, arising from the informal nature of the assets owned and jobs worked by this sector. The Baan Mankong programme was a response to this, by allowing state-sponsored housing and land purchase loans to low-income communities by making the loans collective. The collective systems of trust arising from social capital within communities serve as the loan guarantee in lieu of title deeds of wage slips, thus addressing the issue of housing finance. However, Baan Mankong loans are only for land and housing-related activities, are limited by the CODI revolving fund for the programme, and require the whole community to be ready to undertake upgrading on a collective basis. It is for this reason that it is preferable, wherever possible, to establish community-managed systems of finance which extend beyond the level of individual community savings groups and are accessible to all communities within a city.

In 2009, an innovative approach to community-based finance was developed, known as city community development funds (CDFs). Whilst CODI can be regarded as a national fund for development, city CDFs are formed by the pooling together of community savings groups on a citywide basis. Each community can retain one portion of savings at the community level, whilst putting another portion into a city fund, creating a city-level revolving loan fund under the control of the communities. The CDFs are managed by a CDF committee which usually comprises representatives from the communities and the local authority and possibly NGOs or other stakeholder organizations. CDFs can be an ideal way to draw in local authorities into community activities, by demonstrating the ability of community groups to manage finance for their own projects, and hence open up opportunities for leveraging contributions to the fund, allowing co-production. Even where local authorities may not have the capacity or the willingness to contribute financially, they may support activities by providing facilities and equipment or by playing an advisory role.

The first two CDFs were established in 2009 with a seed fund from the Asian Coalition for Housing Rights (ACHR), in the town of Chum Pae in Northeast Thailand, as well as in the Bang Khen district of Bangkok (Archer 2012). Since the inception of these two funds, Thailand now has 62 CDFs across the country in operation, whilst 243 are being established, as the value of these funds to local communities is increasingly being demonstrated. Each city uses its CDF in a different way and prioritises different activities, depending on the particular needs of that city, as would have been identified by a citywide survey carried out by the city’s communities.

Chum Pae town is the first in Thailand to have achieved the goal of citywide upgrading and hence a city without slums. With a population of approximately 30,000 persons, 5,380 were identified as urban poor. A survey carried out in 2004 by community members and municipal officials revealed 18 slum communities, of which 8 have been upgraded through Baan Mankong and 4 are in process, representing 995 households in total. The communities within the Chum Pae network considered how they could continue to address their housing problems without being entirely reliant on receiving CODI funding for Baan Mankong and agreed to establish a CDF. The CDF would initially focus on resolving housing issues and also assist those outside the Baan Mankong target group, such as families that own land but live in poor-quality housing, as the CDF, being community managed, has the flexibility to address needs as identified by the communities. All 995 households are members of the CDF and have contributed over 52,000 USD to the fund, complemented by a 30,000 USD seed fund from ACHR. As of November 2011, the Chum Pae CDF had provided loans for land purchase to two communities totalling 51,735 USD, benefiting a total of 293 households, at a rate of 4 % over 15 years, allowing households to take a CODI loan for housing only. Of the money earned from interest, 35 % goes directly back into the fund, 25 % into the town’s network welfare fund, 35 % supports network activities, and 5 % goes back to members as dividends. The CDF also provided grants to three poorest households in one community so that they could also participate in housing improvement projects – this is part of the Decent Poor programme for assisting vulnerable members of the community as identified by their neighbours, so that they are not left out of projects. One characteristic of loans given by the CDF (as well as CODI loans) is that they are not given to individuals, but to a collective, which functions as a group guarantor.

In addition to addressing housing issues, the Chum Pae CDF also addresses other priorities – one of which is food security. As a result, the CDF purchased a rice paddy field which is a collective resource for all CDF members. The CDF also has its own welfare fund at the city level (in addition to the welfare funds which most communities will run within their communities) arising from a yearly 30 baht (1 USD) contribution per member, which functions as a community-based social security system. A proportion of the CDF also goes towards an education fund and a livelihood fund. As the CDF resources are used by the communities who manage the fund, they have the freedom to adjust the priorities as necessary.

The fund is managed by a joint board, with nine members including community network leaders, municipal officials, representatives from CODI, and professionals such as architects. The joint committee meets monthly to approve loan applications and manage the fund. The CDF is viewed as a tool for facilitating Chum Pae’s communities’ development, not just with regard to housing but also wider social issues. The Chum Pae communities also benefit from a close relationship with the city administration, being able to use municipal facilities for network meetings, as well as borrowing equipment such as machinery for construction and getting the municipality’s backing for their projects.

The case of Chum Pae, as one of the first two Thai CDFs, demonstrates how the fund operates as a flexible tool to meet the communities’ needs in various areas, beyond simply land and housing, whilst also reducing the reliance of urban poor communities on CODI loans. Other examples of city funds being tailored to local needs include those of Rangsit, which is focussing on supporting the most vulnerable households within the city, whilst in Udon Ratchatani, the CDF provides loans to stateless households where the government fails to acknowledge them. As the urban poor within the city see the outcomes of using the CDF funds (for housing, land purchase, welfare purposes, or other uses), they will be drawn into also joining the fund, hence increasing its capital base and thus its ability to provide more loans and grants, in a virtuous circle. In addition to this, the larger the size of the fund, the more likely it is to leverage capital from other potential financial donors, either local government, NGOs, or even from the finance sector, as these actors witness the community capacity to manage a large fund for their own development purposes.

Another community financial service which has emerged as a result of the Baan Mankong project is community land and housing insurance, which was launched in October 2010. An annual contribution of 200 baht (6.5 USD) per household will provide insurance to protect housing and land loans, as well as in the case of disasters, from fires to floods. For example, should a person get sick or become injured and lose his or her job and hence the ability to repay the monthly Baan Mankong loan, the insurance scheme will provide a proportion of loan coverage for a certain number of months, depending on the particular situation of the affected family. In the case of disasters, the insurance will cover both borrowers and non-borrowers. The flexibility of this insurance system derives from the fact that it has been developed by community groups for their own use in order to meet their specific needs. Whilst the insurance fund is currently centrally managed and backed up by a CODI guarantee fund, it is planned to decentralise the insurance fund to city CDFs, in order to allow more localised management. The insurance fund is also beneficial to CODI in that it reduces the risk of nonperforming loans (NPLs) and thus helps to maintain a revolving fund for further land and housing loans to other communities wishing to upgrade.

5 Discussion and Conclusion

Baan Mankong, by promoting ties between communities and state agencies, is helping to change relations at the city level, and the growing culture of collective action is reinforced by the financial empowerment of community groups. Baan Mankong connects citizens and public officials across the public-private divide, which is essential for mutual benefit. Upgrading has given residents legal status as tenants of the state or collective owners of a plot of land, and this legality is important for positioning them as members of the city, with a say in its governance and the right to demand services. Additionally, as the residents do the bulk of the upgrading work, they can regard themselves as partners of the implicated government agencies, ensuring that the land is well maintained and facilitating the municipalities’ roles with regard to providing sanitation and other services.

The government has provided an enabling environment with incentives for the poor to mobilise, and harnessing citizen action is beneficial for both the state and the people themselves. Participation is most effective if it is regarded as a form of social exchange by both sides, with reciprocity and balance of power (Bowen 2008), and government agencies are realising that it is advantageous for them to allow communities to provide their own solutions to problems, with the agencies providing a degree of support, such as contributing to CDFs.

The implementation of Baan Mankong still faces barriers, such as building regulations which are not suited to communities with very limited space. According to Fox (2005: 6), as well as the state’s role in reforming policy, organizations of the poor need to continue scaling up, horizontally and vertically, in order gain the bargaining power necessary to outweigh the “anti-poor elements embedded within the institutions”. The two processes can interlock to form a virtuous circle of “mutual empowerment between institutional reformers and social actors in the public interest” (Fox 2005: 6). The most obvious “institutional reformer” in the Baan Mankong case is CODI, which has always pushed the cause of poor communities with the government. It has been the catalyst for Baan Mankong, because of its belief in the power of the poor to help themselves. Increasingly, NULICO is able to take on this role, due to its large, broad-based membership of urban poor communities across the country.

NULICO, by giving the urban poor a chance to play a key role in the urban development of their cities, makes them aware of their importance to the success of Baan Mankong and gives them a forum through which to build upon their experiences, fostering bridging social capital. NULICO is also facilitating the creation of “equality of agency” (Mansuri and Rao 2004) by interacting with government agencies on behalf of urban poor communities, to build linking social capital, facilitated through tools such as CDFs which open up avenues for state participation.

Baan Mankong’s ideals of self-help, whilst promoting linkages and offering solutions to the way in which the poor have been marginalized, came at a timely moment in Thailand’s political development. The country is reflecting on the meaning of democratic politics and taking note of the social inequalities which have been exposed by the recent political turmoil. This is the right moment for the urban poor to use their capacity for collective action to push for policies which are beneficial to them. The political events in Thailand of the last decade can be regarded as a critical juncture for the country’s institutional structures, especially political ones, and the urban poor may have gained enough momentum through participatory projects to ensure that what Murphy (2009) terms mass-based democracy prevails over elite-dominated democracy where the poor have no power.

As Gaventa (2004: 27) states, “when participatory approaches are scaled up from projects to policies, they inevitably enter the arena of government, and find that participation can become effective only as it engages with issues of institutional change”. There has been a move away from communities being highly engaged with the state because they are marginalized, hence facing battles against eviction and to gain access to services, towards engagement because they enjoy complementary relations with the state (Woolcock 2001). These complementary relations arise through the cooperation fostered by Baan Mankong, and are especially evident between communities and CODI, and increasingly with municipal officials, through the joint operation of CDFs via joint management committees.

A project like Baan Mankong helps to create political capital, an asset linking individuals or groups to the power structure (Mosse 2005), facilitated by the creation of CDFs as institutions which provide opportunities for government actors to opt in. Thus, it seems that a participatory project can create long-term political value for the poor (Williams 2004), as actions which are not political in themselves have political consequences: self-help in upgrading is a signal from the poor that they do not want to wait for government assistance. The Baan Mankong programme and its associated outcomes (CDFs, community insurance, welfare schemes amongst others) demonstrate the capacity of urban poor groups to manage complex projects to fill the gaps in state and market provision, facilitated by the national NULICO network, which ensures that the interests of urban poor groups remain constantly visible at all levels, from the community, city, to province and nation.