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Keynote Speech by Mr. Abhisit Vejjajiva,
Prime Minister of the Kingdom of Thailand,
"Restoring Confidence and Moving Thailand Forward"
at Mansion House, the City of London
on 13 March 2009
Alderman Ian Luder, Rt. Hon the Lord Mayor of the City of London,
Mr. Robert Barnes, Managing Director, UBS,
Distinguished Guests,
Ladies and Gentlemen,1. It is a great pleasure and an honour for me to be here today. I wish to express my sincere appreciation for the kind words of introduction made by the Lord Mayor of the City of London. Although this time I’m in London in a rather unfamiliar setting, led by a motorcade and police, London still looks vibrant and inspiring from a different viewpoint. Of course I’m just using the tubes and the buses in the past. But I’m pleased to be back here again, and I know I’m standing in front of people who we call old friends of Thailand---partners in our development and in bringing prosperity to our people.
2. I know that many of you would have been worried by the recent developments in Thailand, particularly over the past three years, which will be an understatement to say that it has not been easy. But my message to you today is clear and firm – Thailand is back in business. Thai politics is now back on its proper course, and I can assure you that my Government will be guided by the principles of democracy, good governance, transparency, respect for justice, and the rule of law.
3. And I firmly believe that those are the very principles on the path of true reconciliation. Any of you who had the opportunity to visit Thailand today, or in the last three months, would have felt a world of difference---to the picture that you see maybe through the foreign media over the last year.
4. We will continue through the path of reconciliation, and there is a sense of stability and confidence also from our friends over here. And I do that by working closely with all sectors of society, whether it’s the opposition party or civil society. I therefore greatly appreciate the invitation of your prime minister for me to be here today. It’s not just a personal honour, but more significantly it’s a signal that your government has clearly placed high confidence in Thailand. With this confidence we are ready to move forward together.
Ladies and Gentlemen,
5. Perhaps an even greater challenge facing my government, like all other governments today, is the global economic downturn. Although we have been through the financial crisis as recently as in 1997, necessary measures to recover from that crisis have enabled our financial institutions to withstand the crisis as far as the fundamentals of our financial institutions are concerned. But we have been clearly affected by the crisis. Our exports and tourism have inevitably been affected. The numbers for the last quarter of last year and also the numbers for January show a big drop in exports—almost 30 percent in January, and also a drop in tourism of around 18 to twenty percent.
6. But since I took office, we have taken decisive and swift decisions to implement measures that are necessary to sustain purchasing power in the country, while of course we cannot expect a swift recovery in exports, although tourism has picked up quicker than most people anticipated. We will have to do whatever we can to make sure that our domestic economy can sustain some purchasing power to perhaps ease the effects on our domestic industries. Which is why the package that we’ve put in includes programs that will make sure that the people who are the hardest hit, particularly the poor, are well looked after. The program is of course not as comprehensive as in European countries and in the UK. For the agricultural sector we have made sure that there is enough support so that our farmers continue to get good prices for their crops, and we also have rural funds that will be set up in all villages, so that they may generate some jobs and also opportunities for longer term sustainable development. For the unemployed or those at risk of being unemployed, we have a comprehensive training program aimed at least at 500,000 people where they will be retrained for new jobs or even start up new enterprises, preferably backing their rural, local areas. For low income earners we have a program that has cash handouts which will be distributed at the end of this month, and also we are supporting free education programmes, special funds for senior citizens, as well as some of the public health volunteers and staffs all over the country.
7. These measures are aimed at short term stimulation of domestic demand to sustain us through what we feel as the most difficult period which will be the first three quarters of this year. Of course, come the fourth quarter, we will be able to set our new annual budget with more stimulus packages and also in the hope that the situation in the global economy will have been stabilized and the other stimulus packages in other countries would have been set to work. But even so, we remain cautious; we know that there may be more downward revisions on global demand. Given the strengths of our reserves, we will be able to tap into financial markets. We will also be seeking loans from international financial institutions, not because we lack reserves, but because those reserves cannot be used for development and infrastructure projects, according to our laws. But we want to make sure we have enough generation of demand and purchasing power and also continue on developing projects. Of course we are not alone in this and we see similar packages now being implemented by a number of our neighbouring countries. We hope that with better coordination, especially after the G20 meeting which I will speak more about later, that this will make sure that there is a concerted effort on the part of the Asian economies to target positive growth and lift the global economy out of the crisis.
8. But of course, the most important lessons we learned over the last decades is that the government is not the real driver of the economy. It’s the private sector, and Thailand has benefitted so much from keeping the economy open and welcoming foreign investment, which means that when we look into the medium and longer term, your partnership with us will be absolutely essential to create further prosperity in the country. Which is why while we set the short term measures to work, we already have an eye on our medium and longer term strategies. First of all, we see that we need much more development projects, particularly infrastructure. And we know that the mode to implement that is through Public Private Partnership (PPP). The government has set up a new committee to look into the possible revisions of various laws that are needed to facilitate PPP so that we can engage in more infrastructural investment.
9. Secondly, as the Lord Mayor has already mentioned, we have adopted a position on the Foreign Business Act, which for the past two or three years may have been a concern that we might be tightening or be more restrictive in foreign investment. That is not the direction that this government will take. On the contrary, we will see what mechanisms in the Act will enable us to liberalise some of the sectors to ensure that there is fair competition, advocate transparency and promote a favourable investment climate.
10. As I said, we are also looking at the medium and longer term strategy. This will be based on three areas. First, we will tap into Thailand’s economic strength that lies in our agricultural sector. We continue to be one of the countries that still enjoy a food surplus, so that we can feed our people as well as export to other countries. Furthermore, we have enough resources to use our agricultural products not just for food, but also for alternative sources of energy, namely the development of ethanol and biodiesel. It is one of our national priorities to mitigate our dependence on external energy sources and ensure energy security. We are confident that our strong agricultural base will enable Thailand to pursue this path without adversely affecting our ability to produce food, or adversely affecting the environment. Moreover, Thailand’s abundance of ethanol supply means that we are well-positioned to serve as a regional hub for ethanol production and export.
11. Secondly, the service sector. Many of you who are familiar with Thailand will know that the Thai people are extremely service-minded. What has surprised me is that our service sector has no grown fast enough in tandem with our economic development. Its proportion of GDP is too low considering its potential and services industry is an area we should be able to excel, as we have a cost-effective workforce known for trainability and adaptability. What we will look into is fresh opportunities and also possible liberalisation for the service sector to grow.
12. In particular, the tourism industry has been very important to us. The number of British tourists who travel to Thailand, at almost 900,000 persons a year, means you are one of the highest numbers of visitors from the EU. In this area we also have fresh opportunities in terms of medical tourism and also the holding of conferences, meetings and exhibitions.
13. Even prior to the introduction of the latest measures, which are aimed at stimulating the tourism industry, including lower landing fees and waiving of tourist visa fees for three months and also discount to national parks, the latest results from the UK Post Office® Holiday Costs Barometer show that Thailand has “unbeatable value for money”. From this survey, costs in Thailand are under half the price for meals, drinks and other tourist items than the most expensive of the Euro zone, and 41% less than the lowest priced in the Euro zone. I am also pleased to share with you that Thailand has recently been given in Oslo, Norway, the Grand Travel Award 2009 as the Best Tourist Destination for the 6th consecutive year. In addition, Sweden has also given Thailand the same award as the Best Tourist Destination.
14. Later today I will have the opportunity to address the Travel Thailand Campaign and hope to be able to convince our valuable British travelers that Thailand still welcomes tourists to its variety of destinations and attractions.
15. Finally in the industrial sector, I wish to highlight the importance that the government attaches to building a creative economy. Education is high on the priority of the government despite the focus on economic recovery, and we hope that when we seek to develop our innovation capacity to drive growth, there will be support for creative businesses, small and medium enterprises, and cultural organisations that will catalyse growth through innovation and lead to higher value-added products from Thailand. And in that respect it would mean that we would have to protect intellectual property rights as they should be.
Ladies and Gentlemen,
16. On the international front, I intend to make Thailand a responsible stakeholder in the region and in the world. Let me reaffirm to you our commitment to free and fair trade, intellectual property rights protection, peace and security, environment and energy security, protection of democratic values, promotion of human rights and humanitarianism.
17. Thanks to the significant structural reforms undertaken in the wake of the 1997 Asian financial crisis, most of ASEAN’s economies remain relatively healthy. Still, we live in a world of great challenges. At the recent 14th ASEAN Summit in Cha-Am/Hua Hin which Thailand hosted two weeks ago, it was important for the Leaders to send the right signals to the world. We reached decisions on key issues that will guide ASEAN in the years ahead with the entry into force of the ASEAN Charter with the aim of creating an ASEAN Community by the year 2015.
18. We held extensive discussions on the current global financial crisis, and issued a separate statement on the global economic and financial crisis. The statement was short but meaningful. We pledged against protectionism and reaffirmed our determination to ensure free flows of goods, services and investment capital, and to facilitate movements of businessmen and professionals. We also called for urgent reform of the international financial system with due consideration to be given to the developing nations’ interests. This will help us to achieve a more comprehensive, equitable and inclusive system.
19. Moreover, together with our partners in the ASEAN+3 – namely China, Japan and South Korea, will play an important role to contribute towards greater progress in economic development and prosperity in Asia and beyond. The grouping itself has a total population of over two billion and a combined GDP of 9 trillion USD, and foreign reserves of 3.6 trillion USD.
20. In this ASEAN+3 cooperation, our Finance Ministers met in Phuket in February, the Ministers agreed to expand Chiang Mai Initiative Multilateralisation or CMIM, which is basically a reserve pooling arrangement, from 80 billion USD to 120 billion USD, and develop a more robust and effective surveillance mechanism to support the Chiang Mai Initiative Multilateralisation operation. ASEAN Leaders welcomed this and tasked Finance Ministers to work with Plus Three counterparts on details to expedite the arrangement, which we believe could serve as a model for the rest of the world and that it is time for various regional groupings to set up their own facilities to complement the international financial institutions and complement individual country efforts.
21. At the Summit, we also discussed the importance of addressing the longer term challenges of climate change and the inter-related issues of food and energy security. We pledged to strengthen cooperation to enhance food security on both production and distribution fronts, as well as cooperation on the development of renewable and alternative energy. On my own, I have also voiced my opinions at the World Economic Forum in Davos that food security must be ensured, particularly with the removal of market price distortions.
Ladies and Gentlemen,
22. As Chairman of ASEAN, I appreciate the invitation extended to me by Prime Minister Gordon Brown to attend the London Summit to be held in less than three weeks’ time. At the forthcoming London Summit, I look forward to working with G20 members in tackling the effects of the global financial crisis. I hope to see a firm and collective pledge against protectionism. I have learned that it is not only ASEAN Leaders who have set an example during the 14th ASEAN Summit, but the EU Leaders have also made a similar call at their Informal Summit held in Brussels at the beginning of this month.
23. I believe that with convictions and a united stand from world leaders, we would be able to get through this global recession together, as well as see the Doha Development Agenda progress substantially. Even though Thailand has pursued regional initiatives on this matter, I am convinced that these initiatives are not substitutes for either individual efforts by all countries or a joint global effort.
24. The world is watching closely, and I know that there are expectations from the London Summit and we must produce tangible results. We must act fast and use necessary means to prevent the crisis from spreading to the poorest part of the world so as to avoid any flash points of conflicts. I believe wholeheartedly that it is our responsibility, of the G20 and international financial institutions, to have a collective responsibility to assist the poorest in the world and those affected the most by the crisis.
Ladies and Gentlemen,
25. I also strongly believe that as you look to the future, Asia will be an important player in the global economy. With Thailand strategically placed in Asia, and with the stability that we have now achieved, as well as an eye on the challenges that we face, during this economic downturn, and our determination to preserve our competitiveness, you as partners of Thailand can do much to achieve much much more. That is, not just to create opportunities for yourselves, but also contribute significantly to the prosperity of the Thai people, which of course is my number one objective as leader of the country.
26. Thank you very much.