In Harvard Yard sits a statue of John Harvard, seated on a bronze throne, commemorating 1638, the year of the university’s founding. Tour-guides relish in pointing out that, in fact: No-one knows what John Harvard looked like, so it is unlikely to be a great resemblance of him; The college wasn’t founded in 1638, but two years earlier; And it wasn’t founded by John Harvard, but by the Court of the Massachusetts Bay Colony, which first voted to set up the university. The “Statue of the Three Lies” is part of Harvard legend. The Three Lies in question are harmless fun. But they should remind us how deeper untruths can persist, embodied in monuments or sustained by conventional wisdom and mores. We gather this evening almost seven years to the day that the failure of Lehman Brothers shattered conventional wisdom and laid bare three lies about finance. Unlike the statue’s three lies, those falsehoods have had lasting consequences. 1  So wrote F A Mackenzie, a Quebec-born writer and journalist who was the Daily Mail’s travelling correspondent in the Far East in the early 1900s. See Mackenzie, F A, “American shrines in Britain”, Chapter XLV in Hammerton, J A (ed.) (1926), Wonderful Britain: its highways, byways and historic places, Vol. 2.
Distinguished Guests, Let me first talk about the growth momentum and economic stability. In spite of the political transition over the past year, the Thai economy is expected to turn in a satisfactory growth rate in the range of 4-5 percent in 2007. This year, the main growth driver has continued to be exports. Domestic demand has however been affected by dampened consumer and investor confidence, linked primarily to political uncertainty. In July, private consumption remained close to the level recorded in the first half of the year. I am hopeful that once the general election date is scheduled and the cloud of political uncertainty has lifted, consumer confidence would rebound. Investment has shown signs of improvement during the second quarter of this year. There also appears to be a pent-up appetite for investment in view of the continued high capacity utilization of 75 percent as of July. Moreover, investment promotion applications to the Board of Investment have also pointed to a pick-up in investment once the investment climate becomes more favourable. I also expect investment to play a stronger role as growth driver, in line with the consumption recovery. This will be a welcomed development to promote a more balanced economy. The slower domestic demand has also been mirrored by moderate growth of private credits. Nevertheless, the banking system is strong, with the BIS ratio of 15 percent at end-July 2007, while net NPL amounted to 4.4 percent of total loans.