We are monitoring developments closely in order to evaluate any potential impact on the housing market, financial institutions and the overall economy. The key role that housing has played during this recession and recovery makes it a timely topic for our regional economic briefing. Regional economic conditions (update since the July regional press briefing) Now, let me turn to regional economic conditions. Overall, the recession seems to have been less severe in much of our region than in many other parts of the country, though unemployment remains unacceptably high. As attendees at previous Regional Press Briefings may recall, the New York Fed produces Coincident Economic Indicators to help track the performance of the regional economy. Since July, these indicators point to recovery in New York State, and particularly in New York City. Although New York City and New York State are recovering, elsewhere in the region, the story is different. In New Jersey, although activity is no longer declining, there has yet to be a sustained recovery. New Jersey’s economy remains essentially flat. An index produced in Puerto Rico by the Government Development Bank shows that the pickup in economic  BIS Review 137/2010  3  activity there in late spring and early summer has retreated and activity in the past few months has again turned down. Now, let’s look at jobs, which are the key for people to truly feel the recovery in their lives.
This would help foster value-added characteristics of the Thai economy and increase opportunities for our people, businesses, and everything else that will bring about a better standard of living for all. The two mega-trends I have outlined, when combined with the flood crisis at the end of last year, mean that Thailand needs to quickly upgrade infrastructure to improve competitiveness. In particular, public investment in effective natural resources management system and improved governance of public administration will serve as an important driving force for sustainable economic growth. Evolution of economic activities in line with the changing environment While the immediate obstacles may have changed, the overall challenges that have remained require all parties to formulate a strategic framework and policy space, to enable the Thai economy to stride pass the transitional gateway smoothly. For the public sector, the implementation of policy that promotes investment and enhances competitiveness effectively relating to infrastructure, education, and governance such as reducing corruption and improving political resiliency would be an important impetus to boost Thailand’s position in the competitiveness race. This is because public investment attracts further investment from both private investors and foreign investors, the so-called crowdingin effect. For the private sector, the search for new markets, improvements of production efficiencies, creation of value-added goods and services, and effective risk management are things that the private sector can do to prepare for new challenges.