Tarisa Watanagase: Thailand's weathering the global downturn Address by Dr Tarisa Watanagase, Governor of the Bank of Thailand, at a Luncheon with EU Ambassadors, Bangkok, 3 February 2009. *  *  *  Your Excellency Ambassador Hotek, Excellencies, Honourable Guests, Ladies and Gentlemen, I am delighted to join this luncheon gathering of prominent Ambassadors of the Council of European Union in Thailand, under the presidency of Ambassador Ivan Hotek of the Czech Republic. Indeed, I would like to extend my sincere appreciation to Ambassador Hotek for his kind invitation for me to update Excellencies from the EU countries on recent economic developments in Thailand and the prospects for 2009. Let me begin with the overview of Thailand's economic performance. The Thai economic performance was satisfactory for 2008 as a whole. GDP is estimated to grow by around 3.6 percent, driven by the growth momentum during the first three quarters of the year. Notably, from October 2008 onwards, economic developments have been deteriorating. During the fourth quarter of 2008, exports weakened considerably, falling by 9.4 percent from the same quarter of the previous year. Since October, exports showed large reduction in manufacturing products, especially high-technology products. On the domestic side, demand as well as consumers' and investors' confidence have deteriorated as evidenced by several indicators reported by the Bank of Thailand, including the Business Sentiment Index, which fell to the lowest level at 34.4 in November last year.
Growth is concentrated in the largest cities like New York and San Francisco, and those who benefit the most are those who already have high incomes.2 A large part of this is because current economic conditions favor highly skilled workers who tend to flock to cities. These big metropolitan areas are successful, but they also suffer from some of the starkest wage inequality in the country. By contrast, upstate New York is less unequal, but the disappearance of manufacturing jobs has held back growth. More equal wage growth is only good news if people have jobs. But many have found themselves in the position of leaving the area in which they grew up to look for work. The Albany area has bucked this trend. The mix of colleges and universities specializing in innovative subjects like nanotechnology, and high-tech businesses, alongside its position as a state capital, has created a real economic success story. I know there are a lot of students in the room, and choosing SUNY was a wise move. Investing in an education that equips you for the future will pay off over the long term. The Tale of Many Economies So what can the Fed do about this complex picture—the tale of many economies I’ve talked about today? 2/3  BIS central bankers' speeches  Monetary policy is an important tool, but it alone cannot address all the economic issues that we face.