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Inaugural Speech by Prime Minister Abhisit Vejjajiva on “Thailand’s Economic Development Roadmap”At the International Conferenceon “Asia Beyond the Economic Horizon”

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    Inaugural Speech by Prime Minister Abhisit Vejjajiva on “Thailand’s Economic Development Roadmap”At the International Conferenceon “Asia Beyond the Economic Horizon” Inaugural Speech by Prime Minister Abhisit Vejjajiva on “Thailand’s Economic Development Roadmap”At the International Conferenceon “Asia Beyond the Economic Horizon” Document Transcript

    • Inaugural Speech by Prime Minister Abhisit Vejjajiva on Thailand s Economic Development Roadmap At the International Conferenceon Asia: Beyond the Economic Horizon (15/10/2010) Inaugural Speech by H.E. Mr. Abhisit Vejjajiva Prime Minister of the Kingdom of Thailand on Thailand s Economic Development Roadmap At the International Conference on Asia: Beyond the Economic Horizon 15 October 2010 at 09.00 am, Shangri-La Hotel, Bangkok Inaugural Speech by H.E. Mr. Abhisit VejjajivaPrime Minister of the Kingdom of Thailand on Thailand s Economic Development Roadmap At the International Conference on Asia: Beyond the Economic Horizon 15 October 2010 at 09.00 am, Shangri-La Hotel, Bangkok --------------------------------------------- Dr. Supachai Panichpakdi, Secretary-General of UNCTAD,Chairman and President of Thai Airways International, Excellencies,Distinguished Guests,Ladies and Gentlemen, It is a great pleasure for me to join all of you here today. I am touched by the warm reception and the large turnout by our friends from various sectors of society -- representatives of the government and business sector, media and, of course, staff from Thai Airways International. With the range of subjects and the list of speakers for this conference, I am sure that we are going to have a very constructive and fruitful conference. Let me at the outset take this opportunity to congratulate Thai Airways for its 50th anniversary. For five decades that Thai Airways has served as our national carrier its job is not only to bring passengers from one place to another, but also to demonstrate Thainess at its best. Passengers perceive Thainess from the first moment they step onto a Thai aircraft, and the hospitality and service provided by Thai Airways
    • serves as a window to Thai culture, tradition and rich national heritage. For this, I commend every staff of Thai Airways for helping to create a good image of our country, culture and customs. The conference today is addressing the issue of Asia: Beyond the Economic Horizon and I have been asked to share my thoughts on Thailand s Economic Development Roadmap . It is an opportune time to look beyond the current environment where the global economy has just recovered from one of the severest financial and economic crises it has ever seen. And for Thailand, we are on our way to recovery. We are also in the process of drafting our 11th National Economic and Social Development Plan. So it is a good time to take stock of what we have been through and set some clear goals and targets as to where we want to go. Emerging from this crisis it is clear that Thailand has once again shown our resilience, reflecting strong strength and fundamentals that we possess as far as the economy is concerned. I don t need to go through all the facts and figures to support the claim that our economy is well on the way to recovery, enjoying for the first half of this year more than 10% growth, targeting about 8% growth for the whole year with, of course, very low unemployment, no real threat of inflation continuing to run a current account surplus and the debt GDP ratio that is stabilising at a level below 50%. Many countries around the world would envy of these sets of figures. And it suggests that once again we are able to deal with crisis and volatility that stems from the global economy. Even tourism, which has been affected not just by the global economic crisis and also, of course, by the political events of the last few years, we are also beginning to see quite a strong recovery. By the end of the year we still hope to have, may be, more than 15 million tourists coming to Thailand this year, which is an increase on last year. So before I talk about the future, the goals and the direction that the economy should take, let me share with you some thoughts on what I feel are the key lessons of our past success, about the challenges that we faced throughout not just this crisis but the previous crises so that we can learn from the decades of
    • economic experience, to show us the way to how to move forward. And for me, there are four key factors that I think we should always keep in mind. First, the success of our economic development has been tied to the fact that we have always maintained the stance of being an open economy. This, despite the fact that increasingly in the global economy there will be volatility and therefore ups and downs, and often crises in financial and economic nature. But the fact of the matter is there is no way that the Thai economy could have made progress and the Thai people would have attained this level of prosperity had we closed ourselves to the global economy. It is an important lesson that we must keep in mind and it is all the more important because the forces and the engine of growth for the future of the global economy will continue to be international trade. The strong recovery that Thailand has seen over the last year has been due in no small part to the fact that our exports have been able to grow at the rate of around 20-30%. And that is also directly a result of the fact that, despite the crisis, we never pursued any policy that would close ourselves off, never had any protectionist measure and more importantly we actually continue on seeking further liberalization through free trade agreements at the level of country and also at the level of ASEAN with our dialogue partners. Secondly, our success has been driven by the private sector by the fact that the Government allows the dynamism and entrepreneurship of our people to function by creating the right environment, by creating the right incentives, by putting in good regulations and by making sure that trade and business is free and fair. We have been able to tap into the most important source of energy that drives economic growth and development -- that is private sector dynamism. Again, we must keep this in mind as we move forward to make sure that we continue to tap into this great potential of the private sector. Thirdly, our ability to weather a number of storms, to go through many crises and emerge stronger has been too due to the diversity that exist in our economy, and I mean diversity in a number of senses. First, in terms of the production sector, we possess some fundamental strength that allows us to develop agriculture industry and our service sector all at the same time. We continue to be one of the few countries that have the surplus of food, still has abundant resources in agriculture which, if put into good
    • use, would only contribute to our ability to deal with the problem of food security not only for ourselves but also contribute to the solution of the problem of food security at the regional or even at the global level. We have steadily, through many years, built up a strong base for key industries such as automobiles and electronics. And of course, as far as the service sector is concerned, we are famous for our service- mindedness, our rich cultural heritage which enable us to have a strong tourism and service sector. Likewise, when we look at trade there is diversity in markets, there is diversity in products which means that we do not put all our eggs in one basket and, therefore, are able to have some kind of insurance in diversity to weather through some risks and problems from the crises that occur in various sectors every now and then. And finally, the fourth important lesson is that the issue of governance is all important. Transparency, participation of stakeholders is key to dealing with all the problems that occur in the market economy. And one clear example that has proven this particular point has been the remarkable turn around of Thai Airways International over the last couple of years, where only two years ago people were even questioning whether the company would survive but now we are looking at the possibility of making substantial profits. And that turn around has come basically from dealing with the governance issue, reducing or eliminating political interference, allowing professionalism to take root, and most importantly the participation and sacrifice of stakeholders, particularly the staff, has been key factor to this remarkable turn around. So with these four key lessons in mind, the Government is aiming to take the Thai economy to the next stage, setting three clear targets. First, we want the Thai economy to take the full advantage of increased global integration that will continue. Secondly, we will want to strengthen our domestic economy. And thirdly, we want an economy that is fair so that all Thais can share the benefits of economic development, which is the most fundamental factor that would contribute to sustainability.
    • And to achieve these three goals, let me just map out some of the actions that we are taking. First, on the global integration, it is clear that the Asia-Pacific and Southeast Asia will be the regions that provide the main engine of the economic growth at the global level. This is clearly reflected in the increased interest of other regions in engaging with us. I have just come back from Brussels where we had a meeting of Asian and European leaders and you would be interested to learn that for the first time it is the European Union that now wants to join the East Asia Summit. In fact, that request was made and there was an attempt to put that in the chairman s statement of the meeting but the Asian leaders are still considering the proposal. This is quite a change from previous times where we had seen a number of Asian leaders aspiring to emulate the kind of integration cooperation that we see in Europe. As you know, in a couple of weeks time I shall also be in Hanoi where the East Asia Summit that used to comprise of ASEAN as its core plus six partners China, India, New Zealand, Australia, Korea and Japan will now be admitting two further members Russia and the United States. So it is clear that the centre of gravity of the global economic development is shifting into this region. And Thailand must take full advantage of that. To do so, that means we have to be a very active player in terms of economic integration and regional cooperation architecture, and we do this as a country and through ASEAN and also other sub-regional cooperations such as the countries in the Mekong sub-region. And we do this through a number of measures such as putting emphasis on the issue of connectivity both physical and also virtual networks that would enable our businesses and our people to take full advantage of a bigger market and also of greater competition. But being an active player is not enough. We also have to tackle the basic issues and factors that affect our competitiveness, and we are doing this through investment. The most important of which is the investment in our people. I am glad to hear the Chairman talking about knowledge as a key factor for
    • development and that is what this Government believes in; which is why, following up on our free basic education for 15 years programme, we are now putting emphasis on the quality of education, on life-long learning and on making sure that education is well integrated into the economic and social structure of the country. At the same time, of course, we need to upgrade and make key investments in physical infrastructure. The historic programme of upgrading our rail links, not just within this country but connecting up to our neigbours, the big investment on roads, the big investment on water resources, these are keys to improving our competitiveness so that we can advantage of increased economic integration. And with this in mind, we have indentified growth areas in agriculture where I have already mentioned that if we can improve our productivity in the agriculture sector we can do much to gain from the key challenges that the world faces in terms of food security. In industry we have identified that the best factor that would lead to growth is actually the knowledge and creativity so that we can create more value using the same amount of resources. And this creativity would also contribute to the growth of the service sector. And the other area that we have also identified as an important growth area is that of the green economy. While the Government has for the first time set clear priorities and made some hard decisions, for instance, on the development of the areas like our southern region where we say that tourism and green economy must come before any development of industry. That is what we are going to do to make sure that as Asia-Pacific and the Southeast Asian region grow and become a main engine of growth of the global economy Thailand would fully benefit. For the second goal, in achieving the stronger domestic economy, we are doing our best to increase the income and security of our people. We need to do this not just because we want to have more purchasing power in the domestic economy so that whenever the global economy slips into recession or even depression we have a minimum domestic economy standard of ensuring that there continue to be economic activities and transactions. And we do this through various schemes, the most important of which has been the initiatives that we have taken on an income guarantee for farmers the majority of our
    • people. For the first time, people who are in the agriculture sector, people who make up the majority of our people, would enjoy a certain amount of security, knowing that as they grow every single crop they will not be making a loss; and this would be able to sustain the purchasing power and economic activities in all rural areas. We are also in the process of building a welfare system that is sustainable. This would not only guarantee purchasing power within the domestic economy but also be an important preparation for an aging society that will be with us in the near future. There will be more initiatives to come from the Government dealing with the informal sector which is still a largely untapped sector within the economy that can make many many more contributions to the economic development. All this will balance some of the problems that we have seen in the past where the economy had been overly reliant on exports. The third goal that I have mentioned is the fair economy, and the welfare system that we are setting up is partly to deal with that. But there are also a number of issues that this Government has taken a grip with and will begin to take further initiatives to solve some long-standing structural problems. Tax reforms are on the card, the land tax, wealth tax should be put forward to the parliament next year. We have already passed a legislation in the first reading on the national savings scheme. We are also dealing with the issue of distribution of resources where new initiatives on issues like land and housing would help deal with the people who are landless or without houses, and we will take more and more initiatives to make sure that as resources are used for economic development we do listen to all our stakeholders, to all people who are affected positively or negatively by the process of economic development. We believe this is as essential as the other goals because it is the only guarantee for sustainability of economic and social and of course political development.
    • These are the goals that we have set out before we have even taken any initiative and we will keep on this course. And of course, in trying to attain these three goals once again the issue of governance will come to the centre. There is much to do still in terms of getting a grip with the problem with political system, particularly the issue of corruption and lack of transparency and accountability but the Government cannot work on this alone. We are now for the first time seeking cooperation from the private sector and all other stakeholders so that we would come up with an integrity pack which would be announced next month so that we can move forward to a new era where there is transparency in government s dealing with policies and also with the private sector. And this would also be a key part of our democratic development because democracy is not just about elections and majority rule but must also uphold the rule of law, transparency and accountability. This is the roadmap that we have set out. I can tell you one thing though that in traveling along this roadmap will certainly not be as smooth as silk . We are well aware of the enormous challenges that lie ahead. We are well aware that we live in an age where volatility has become the norm. But I believe that we have the political will and continued determination to attain these goals, and if we can unite the country for these common purpose these goals are certainly achievable, and that peace and prosperity which are the objectives of any country, of any people, will certainly be with us. So I hope that there will be many more ideas that would be shared and would contribute to the attainment and the success of this roadmap. Now I would like to declare open the international conference on Asia: Beyond the Economic Horizon and I wish you all great success. Thank you and Sawasdee Krub. ---------------------------------------