All these initiatives are key to ensuring our capacity to finance the two “Great transformations”, ecological and digital, that we will all have to pursue in the long run. Both require very significant investments in the coming years and hence a co-financing by the public and the private sectors: it is healthy to encourage convergence of private actors with policy goals set by public authorities on these collective issues. Allow me here to turn to some great economists of the last century to shed some light on these transformations. One of them is Joseph Schumpeter and his creative destruction, and the decisive role of private innovation. But we shouldn’t forget Karl Polanyi and his “Great transformation”, written in Britain and published in 1944. Polanyi warned of the dangers of changing a “Market Economy” into a “Market society”, and hence of purely self-regulated markets forgetting about social and political institutions. We might say that his ideas are the structural side of what Keynes wrote on cyclical policies. To succeed in the face of the challenges of both the modern economy and democratic discontent, we will need to reconcile the ideas of these three great thinkers. Page 6 sur 9 II. 20 years ahead: our two great transformations, ecological and digital 1/ I will start with the digital revolution, where Europe is still lagging behind the United States and China. Compared to the United States, we spend less on R&D, have fewer researchers and have filed fewer patents, particularly in biotechnology and in information and communication technologies.
Activities are increasingly active in the stock market and real estate market. We see more and more construction of condominium and residential houses in Bangkok, peripheral and major provinces around the country where prices of some of these projects have gone up rather fast. We also see household debt trending upward to over 70 percent of GDP. We will continue to be watchful and make sure that the situation does not get out of hand to threaten financial and economic stability. Ladies and Gentlemen, This leads us to the second part of my talk this evening. Given recent economic and financial development I have mentioned, it is clear that, as monetary policy maker, the Bank of Thailand is faced with a challenge to strike the right balance between economic growth and macro-economic stability. It is not easy to determine appropriate policy, thus policy decision has always been made with careful considerations, taking into account all economic and stability aspects. Last year, our main concern was about ensuring growth recovery from floods. Policy interest rate was cut twice with a view to providing an accommodative and conducive environment to growth. This helped accelerate recovery in the aftermath of the flood and support domestic demand in the face of global economic slowdown. At the same time, the Bank of Thailand had to make sure that core inflation remains within target and concurrently, ensure macroeconomic and financial stability. There has been continuous effort to enhance stability surveillance over the years.