Definition: A self-sufficient economy does not trade with other countries because it can produce its goods and services using its natural resources, sustainable agriculture, and renewable energy.
What Does Self-Sufficient Economy Mean?
What is the definition of self sufficient economy? Self-sufficiency enables a country to be economically independent and stands on its own feet. In the context of a self-sufficient economy, the factors of production utilize the country’s natural resources and labor to produce goods and services that can satisfy consumer needs, and improve the living standards of the people. Furthermore, a self-sufficient national economy guarantees equality in economic affairs, sovereignty, and stable international relations.
Let’s look at an example.
Thailand is a prominent example of a self-sufficient economy.
During the Asian financial crisis of 1997-1998, the Thai economy was profoundly hit. In fact, the crisis started from Thailand with the collapse of its national currency and the default on speculative overbuilding. The 16% annual export growth in the period 1990 -1996 led to excess capacity due to aggressive investment in commercial and residential properties. On February 5th, 1997, the Thai stock market crashed by 45% following speculation that a few property companies would be forced into bankruptcy.
In spite of cumulative growth 9% of the Asian Tigers, namely Hong Kong, Indonesia, Malaysia, Singapore, South Korea, and Thailand, the Asian miracle abruptly crashed. On the other hand, people became more conscious of the need for reform. Unlike the other economies, Thailand worked towards becoming a self-sufficient economy. The low-cost labor was employed to the exploitation of the country’s own resources to produce enough goods and services to meet the people’s needs.
The philosophy of sufficiency economy reckons traditional Thai values. Through a self-sufficient economy, people learn to be independent and autonomous, self-reliant and persistent, thereby controlling any situation. Although Thailand has not refused globalization, it has focused on providing for everyone and protect its economy from future collapse.
Define Self-Sufficient Economy: A self sufficient economy is when a country is completely independent, produces its own goods, and does not import goods or services.