The coal and iron deposits found here were critical to the Industrial Revolution, and it was the output of nails and bolts, screws and fasteners produced from those ceaseless blast furnaces that made the Black Country synonymous with manufacturing prowess around the world. But that is not the whole story. Just as important were the innate qualities of doing it yourself and perseverance which characterise the Black Country. There is no finer example than the Iron Bridge – the world’s first – at Coalbrookedale, built in 1779. As one commentary noted, it stood as “indisputable proof of the abilities of our mechanics and workmen”. It reflected not just the local availability of coal and iron, but also the skills of those who built it. And it is those same skills that we celebrate tonight. Local business success, recognised by these ‘Best of the Black Country Awards’, is the story of the Black Country being born again. The products of the 21st century may not be the nails and bolts, screws and fasteners of the past, but they will require the use of manufacturing know-how and business ingenuity to service the needs of consumers. I have been struck, as I travel to a different part of the country each month, by how many firms are producing imaginative and innovative products for which there is a real demand around the world. By this I do not mean that all successful firms are making high tech products.
For the recovery to be sustained, the economy must eventually be supported by a pickup in private capital spending. Thailand is no exception. It is understandable why private investment so far has not contributed much to the economic recovery following the 1997 crisis. With about half of industrial capacity lying idle at the trough of the situation as a result of prior over-investment and demand contraction, there was very little incentive for firms to spend further on capital accumulation. Thus, the share of real private investment to real GDP fell from the average of 33 percent between 1990 and 1996 to just 11 percent in 1999. The collapse in private investment is also reflected in the large and persistent saving-investment surplus, which has thus far narrowed only slowly despite the strong recovery in GDP. These symptoms show that a recovery in private investment has lagged substantially behind the overall economic recovery and that there is still much room for private investment to catch up and close the existing saving-investment gap. The good news is that we have already begun to see a gradual pick-up in capital spending. Private investment growth that was at a modest 4.7 percent in 2001 has accelerated to 13.3 percent in 2002 and 17.5 percent in the first half of this year, and the share of real private investment to real GDP has also risen to 16 percent last quarter. But will this trend continue long enough to provide the needed fuel to sustain the current expansion?