Optimizing ODA Funding in Southeast Asia -- Local Development Institute, Thailand

Dr. Pimjai Surintaraseree has extensive experience as a consultant, educator, researcher and practitioner in development.
This case study was published in 2001 and made possible by the generous support of the Sasakawa Peace Foundation.


"Social bridging or social interweaving is the only way to solve social crisis…LDI has been playing the role of a bridge both in strategizing and putting the strategies into practice...It attempts to bring about a civil society or society with peace and righteousness as its basis."
-- Dr. Prawase Wasi, president of the Local Development Foundation in Seven Years Local Development Institute, LDI,  January 1999.

During the 1970s and 1980s, a flow of overseas assistance came to Thailand to support development in a number of areas such as infrastructure, education, agriculture, and health. The Department of Technical and Economic Cooperation (DTEC), based in Bangkok, is the Thai government agency responsible for overseeing and monitoring bilateral funds coming to Thailand. Most bilateral funds were allocated to government offices and academic institutions while very little went to nongovernmental organizations (NGOs).

In 1981 the Canadian International Development Agency (CIDA) established a long-term program of development assistance to Thailand. CIDA placed an emphasis on distributing funds to the local level for community development and poverty alleviation. After consultations with prominent government and NGO leaders in Thailand, CIDA established the Local Development Assistance Program (LDAP) in 1984 as a mechanism to channel resources to the grassroots level. LDAP's purpose was to strengthen Thai development organizations by funding local projects, providing training in project management and implementation, and building national and regional networks of NGOs.

Over LDAP's lifespan (1984-1989), the project extended 100 million baht (US $4 million) to support 55 grassroots projects. Support was provided in three forms: grants, revolving funds, and collateral for commercial banks making loans to poor people. LDAP also funded NGO networking activities, which ultimately resulted in the establishment of the NGO Coordinating Committee on Development (NGO-COD) and its four regional chapters: Northeast, North, Lower North & Central, and South. LDAP further played a key role in institutional capacity building for Thai NGOs in the 1980s. NGO staff enhanced skills in many areas including project planning and management. LDAP's success in grassroots project support, NGO networking, and organizational capacity building encouraged CIDA to initiate similar models in other Asian countries.

LDAP represented a new model of bilateral funding in Thailand. Prior to LDAP, the Department of Technical and Economic Cooperation and the donor agency were the sole bodies to assess and approve grant applications. Funding was typically channeled to government organizations or large registered NGOs, or academic institutions. By contrast, LDAP included a wider range of actors in the grant application and approval process. A Project review committee that included members of the Thai NGO and academic communities reviewed proposals. This innovative strategy ensured that people with extensive knowledge and experience in development assessed all proposals and that all proposals had equal access to funding support. This system opened opportunities for small grassroots organizations at the local level to receive funding.

This system nonetheless had several limitations. Under the LDAP framework, Project review committees forwarded recommendations to the Canadian Ambassador for final approval.

Projects were required to be compatible with Thai government development priorities. CIDA and the Thai government could intervene in LDAP's work at any time. Furthermore, LDAP could not provide support to grantees for more than four years because the LDAP project period was for five years. Most projects that LDAP funded would not have been financially self-sustaining after LDAP ended support.

As a result of these constraints, LDAP's founding members and other key development stakeholders initiated a planning process with CIDA for a new project that would institutionalize LDAP's work with a higher degree of autonomy. As a result of these consultations, CIDA agreed in 1991 to sponsor the establishment of the Local Development Foundation (LDF), an autonomous organization with a wider mandate than LDAP. Operating under Thai law, LDF's work has been undertaken through its operational arm, the Local Development Institute (LDI). The LDF/LDI project became central to CIDA's rural development program during the period when CIDA's bilateral assistance to Thailand was gradually phasing out. It also fit with CIDA's strategy to shift the donor-recipient relationship with Thailand to one based on partnership.

LDI's work has covered three phases. During Phase I (1991-1994) and Phase II (1994-1998), LDI channeled approximately 151 million baht ($6 million) of CIDA funding to support 117 development projects. During these phases, LDI also worked in collaboration with credit institutions to provide 50 development-oriented loans throughout the country. Direct financial support from CIDA ended in 1998, as LDI entered Phase III (1999-present). Repaid interest and principal from loans made during Phases I and II were transformed into a 30 million baht ($660,000) endowment that LDI uses to support ongoing operational expenses. During Phase III, LDI has also able to attract over 100 million baht ($3 million) from international and local donors.

LDF/LDI has been able to consolidate the linkages and mechanisms established by LDAP while providing leadership and support for the Thai NGO community and grassroots networks. LDI has also expanded the scope of LDAP's work to include policy-oriented research, national-level networking, and linkages with commercial enterprises to provide loans for community-based businesses. In addition, LDI has supported Thai development by initiating dialogue with politicians and government officials on issues affecting rural and urban communities, including the use and allocation of natural resources, environmental degradation, women and development, AIDS, and civil society. These efforts have prompted the Thai government to acknowledge the importance of cooperating with NGOs and community-based organizations.

In the course of Phases I and III, LDI's scope has steadily broadened from the community level to provincial and national levels. LDI's campaigns have resulted in a strengthening of community resources, expansion of grassroots civil society networks and increased importance to national policy formation. Beginning in 2001, LDI began exploring ways to bring its work to the next level by initiating multilateral programs with neighboring countries, including Cambodia, Laos, Vietnam, and Myanmar.

The Local Development Foundation/Institute is a unique organization. It is rare to find a Thai development institution that can bridge government, civil society, and grassroots organizations. As a result of this ability to bring multiple stakeholders together, LDI has played a key role as a catalyst for development and reform. This openness to partnership and collaboration is part of LDI's basic character as an institution. In large measure, this character was shaped by the Canadian International Development Agency's emphasis on trusting relationships, participation, and partnership.

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About the Author

Dr. Pimjai Surintaraseree has extensive experience as a consultant, educator, researcher and practitioner in development. Among many projects, she has been training coordinator for the US Peace Corps in Thailand. Dr. Surintaraseree completed undergraduate and master’s degree studies in agriculture, aquaculture and development communications in Thailand, and then pursued doctoral studies in sociology from McGill University in Canada. She received her PhD in 1996.