Our research shows that the gains from structural change can be considerable although adjustment costs, in terms of the reallocation of labor and capital, will also be significant. Now we arrive at the third and final question. Given the euro crisis and Thailand’s prospects for growth, what should monetary policy do? The dilemma here is how to bridge short-term stabilization with long-term goals of structural change. The challenge for policy is to maintain an overall framework where the trend of increasing economic integration can continue while containing crises. Given our baseline scenario of a prolonged recovery without a liquidity seizure we lean towards long-term goals – for example, maintaining capital flow liberalization, financial sector liberalization and market-led exchange rates – but with a readiness for monetary stimulus should a clear need arise. Let me discuss the policy tools at our disposal and how they fit into our overall policy objectives. On the interest rate, the policy rate has been on hold at 3.00 percent since January this year. At the moment we view it as supportive of growth amid global risks and consistent with our inflation target. However, I must stress that the interest rate is poised to go either way depending on developments in the advanced economies, in particular the euro area and the impact on the overall Thai economy. We recently saw how the impact of the euro crisis is spreading to Asia in the form of a broad-based slow-down in Thai exports.
The one thing I strongly desire is the involvement of as many domestic and regional researchers. I would like to guarantee all the interested persons that we are open in this direction. On the other hand, I am confident that the collaboration we made official today, shall provide a sensitive contribution towards the education and establishment of professional capacities at national level. Please allow me to close my speech returning once more to the argument of professional technicians. I still think that   We need to educate our technicians;    Furthermore, we should make them independent financially and politically;    And afterwards, we should educate them again. On the other hand, the building of capacities is not an “individual” issue; it is an institutions’ issue; in fact it is a process independent from human resources. This because capacities should be based on “processes” and not on people, for long-living. The good anchors are not used only from institutions which relate policies with them. They are instruments in the hand of public, as strong arguments to encourage government’s agencies towards the compilation and implementation of long term sustainable polices. I believe that the European values may play decisive role in this direction, by strengthening and supporting the establishment of respected institutions, where the criticism occurs  4  BIS Review 117/2010  independently from the political processes and targets. That is the reason we have chosen the collaboration with the Oxford University. BIS Review 117/2010  5