Thailand is somewhat in an awkward position currently, being left behind by the NICs, and being caught up by countries like China and Vietnam, to name a few. It is therefore important to extend efforts beyond market diversification to promoting higher value along the production chain, a task that both the private sector and the Government have a role to play. Especially with the rising FTAs as well as other regional integration and cooperation, notably among ASEAN, we must work to make sure that Thai producers and exporters can fully utilize the benefits from these arrangements. Fourth, prudent policy has obviously shielded us from the contagion of external developments so far. In addition to the importance of fiscal discipline and debt sustainability which I have already highlighted, I would like to stress that monetary policy has not and should not be used as an instrument to boost short-term growth. However, it can help cushion the economy against growth contraction in the short run, while ensuring stability in the long run. In this past crisis, the adverse effect led us to a series of aggressive rate cuts during December 2008 to April 2009 in order to help shore up the economy. The rate cuts were timely and turned out to be effective, in view of the momentum of economic recovery achieved. Regarding the framework of monetary policy, I should stress that the Bank of Thailand’s policy framework has always emphasized, not only monetary stability, but also financial stability.
Tarisa Watanagase: Enhancing Thailand’s resiliency against economic turbulence Address by Dr Tarisa Watanagase, Governor of the Bank of Thailand, at the 4th Annual Euromoney Thailand Investment Forum: The Economic Perspective, Bangkok, 6 July 2010. *  *  *  Prime Minister, Distinguished Speakers and Guests, Ladies and Gentlemen, First of all, I would like to thank Euromoney for the invitation to speak to this gathering of prominent members of public and business sectors. I welcome this opportunity to share with you some thoughts on Thailand’s economic and policy issues at this very challenging juncture. As we all know, the Thai economy has been through one of the most turbulent periods due to the global impact from the US sub-prime crisis and the European debt crisis. Despite the difficult external environment compounded by political problem and weak sentiments at home, it is clear that the Thai economy has been able to cope with shocks quite well. Thus far, what the economy experienced has been a mere cyclical downturn, in tandem with the contraction of global demand. The good news is that nothing about our economy amplified the impact of these external and domestic shocks and I call that economic resiliency. Unfortunately, the less good news is that a small open economy like Thailand will be prone to more shocks, especially through international trade and financial market linkages. So, we need to accept this fact and make ourselves as resilient as possible to ride the waves.