Prime MinisterMinisters,

Excellencies,

Distinguished participants,

Ladies and gentlemen, 

Minasan Konnichiwa (สวัสดีตอนกลางวัน)

It is my great pleasure to be in Tokyo today, especially to address this distinguished gathering of prominent leaders, businessmen and investors from around the world. Before I begin, I would like to convey the regret of Prime Minister Abhisit Vejjajiva, for not being able to attend this conference himself. Despite his absence, Prime Minister Abhisit offers his best wishes to all of you, together with his special thanks to the participants and the organizers for the successful conclusion of this conference.                       

Today I will take this opportunity to provide you with the first hand information, so that you know, how Thailand is coping with the global financial crisis, and how it has been dealing with the internal political issues. After that, I will touch on ASEAN’s progress towards integration, and Thailand’s role as ASEAN Chair.   The present Thai government took office in late December last year, amidst growing political turbulence resulting from political division and conflict in Thai society. We, therefore, have no illusion that our political problems can simply be wished away.

However, we have made every effort, to ensure that we remain non-confrontational, and avoid violence that could provoke further unrests. Moreover, we have devised a roadmap for building confidence – inside as well as outside Thailand.  On the external front, the Prime Minister himself has made various trips abroad, starting with Davos Meeting. Then, he visited Japan in February, and I was with him on this trip. Our meeting with Prime Minister Aso turned out to be very successful. After that we hosted a successful 14th ASEAN Summit in February at Cha-am and Hua Hin. The Prime Minister went on to England for a bilateral meeting, and two weeks later he attended the G20 as Chair of ASEAN. Things were looking quite good and we were on-track in restoring confidence according to the set-out plans, at the time. 

 As we are all aware of at the beginning of the year, the out look of how the world can get out of the economic crisis was quite dim. While many countries around the world are suffering from the current global economic crisis, I would never say that Thailand has been doing quite alright. We have had a very tough time as well.For the first quarter of 2009, export fell by 20%. The drop in the number of tourists is about the same magnitude. The first quarter experienced a 6-7% contraction of GDP, while the unemployment rate increased from 1.4% at the end of 2008 to over 2%. The situation is probably the same as what everyone else is facing.  What we decided to do then was to come up with a short-term Stimulus Package to protect the least fortunate and sustain the buying power of the Thai people. In targeting the least fortunate, we aimed at the lower income sectors both the farmers and industrial sectors. We also provided training programs for the unemployed to help them find jobs when the economy picks up. 

Meanwhile, we took this opportunity to build up the social safety net for the elderly and our children. The elderly are now receiving monthly income support, starting from last April. For our children, we have implemented a 15 year free education scheme which started this month. In stimulating immediate consumption, we had a cash handout program of about 5,500 yen to 9 million low income earners in Thailand.  This emergency stimulus package which came in the form of a supplementary budget amounted to 3 billion USD or 1.2% of GDP.     

Following the emergency economic stimulus package, we are now on our way in starting the medium and long term stimulus package, covering the next 3 years. This is what we called the ‘job creation program’ aimed at creating jobs and increasing Thailand’s competitiveness. The value of this package totals 15 billion USD a year or around 5% of GDP for the next three year.   We will focus on 7 key areas. Firstly, the irrigation system, to increase productivity of the agricultural sector. The aim is to retain Thailand’s status as the major food exporter in the world for products such as rice, tapioca, rubber, and so on. We will also invest significantly in crops to be used for alternative fuel. The second area is the logistics infrastructure which includes double-track rails and a number of rural roads as well as the extension of the mass transit program.

The third and the fourth areas are targeted at the services sector, improving tourism and creative economy are the fifth and sixth areas. The last we will focus on is the social safety net,  budget will be spent on education and healthcare projects, includes a special economic zone in Thailand's deep-south. From this second stimulus package, we hope to create additional 2 million jobs.  We are on track and, on time despite, all the political difficulties that we faced over the last 4 months.Let’s go back to the issue of the political situation that I touched on earlier. Despite the successes we had in international road shows at the beginning of the year, the ASEAN Plus 3 and Plus 6 meetings in Pattaya did not turn out the way we had expected. I would like to take this opportunity to again express our sincere regret and apology. Things got even worse the next few days afterwards, and we had to declare a state of emergency to contain the situation. However, we were able within 48 hours to restore peace and order and within a week we were able to bring Thailand back to normalcy.     

Ladies and gentlemen, 

The government now has a road map to bring back political stability. The Parliament set up 2 special committees. One of them is to oversee all the events that took place, so anybody who has doubts about the way we handled the situation, whether there was extensive use of force, or whether we did anything illegal or unconstitutional, can bring up their cases, and the government will give them a transparent response. The other committee that was set up, which is equally or even more significant, is tasked to look for a ‘political solution’ to the trouble which has affected Thailand for the last 2-3 years. This would mean looking at issues like constitutional amendments, political reforms or other proposals for reconciliation. In doing this, we are relying on the parliamentary mechanism which involves government MPs, opposition MPs, senators, and outsiders from various political perspectives. 

Ladies and gentlemen,

This is the first time that we are able to get people with different political views to sit together and talk in order to help restore confidence of investors within a 3 – 6 month timeframe. The committee will come up with recommendations, and the issues that remain contested may be solved through a referendum. We are working on reconciliation at the national level.      

This might not be a major achievement, but it has been accomplished only over a month after Pattaya and subsequent events. If any of you had a chance to visit Thailand during the last week or two, you would be able to see for yourself that the streets in Bangkok are completely back to normal. Thailand has also proved that it is ready to host international events with the holding, on 7 – 8 May, a meeting of the ASEAN+3 health ministers. I am glad to say that the meeting went very well even though it was being organized at a short notice. The meeting itself proves that ASEAN, as a group, was ready to be united to meet any common challenge that may arise, in this case, the new type of influenza – flu 2009 H1N1. So, I am proud to say that the meeting went smoothly, without outside interference and disturbances.      

The most formidable challenge remains the current global economic crisis. In this respect, I would like to reaffirm to you all that Thailand remains committed to open trade and continues to welcome foreign investors. Japan, in particular, is our number one trading and investment partner, constituting 40% of total foreign direct investment and second to none on number of tourists arrival in Thailand.                          

Moreover, as part of the world community, Thailand fully recognizes our commitment as the Chair of ASEAN.  We successfully held the 14th ASEAN Summit last February in Cha-am and Hua Hin, and, of course, when October comes, we will be hosting the 15th ASEAN Summit, Summit with our key dialogue partners, and the East Asia Summit.                         

We all realize that the current global crisis facing us requires coordination and cooperation within the region. We have a couple of successes that I wish to mention. Last month, the ASEAN Finance Ministers agreed to establish the Credit Guarantee and Investment Mechanism as a trust fund of the ADB with an initial capital of 500 million USD, which could be increased once a demand is fully met. The objective of this trust fund is to support the issuance of local currency-denominated corporate bonds in the region. This initiative would help to develop the regional bond market.                       

Another success is the Chiang Mai Initiative, which is aimed at increasing short term liquidity in the region. The ASEAN nations have agreed to raise the foreign reserve of this region from 80 billion USD to 120 billion USD. ASEAN member countries will contribute 20% of the total, while the Plus-3 countries -- Japan, China and South Korea -- will finance the remaining 80%. We have reached an agreement on all the main components, including the individual country’s contribution, borrowing accessibility and the surveillance mechanism. I am pleased to tell you that the Finance Ministers have agreed to implement the Chiang Mai Initiative before the end of the year. In the meantime, they are working out the operational details and implementation plan.  Japan, as PM Aso mentioned during last night speech, will provide 40 billion USD                         

With regard to trade and investment, I am delighted to tell you that the necessary domestic procedures have been completed, and Thailand has already endorsed the Comprehensive Economic Partnership between ASEAN and Japan (AJCEP). For Thailand, this agreement will enter into force on 1st June 2009. This is in addition to Free Trade Agreement (JTEPA) which has been implemented since November 2007.                        

Thailand always sees Japan as her true partner, bilaterally and regionally, as well as in reaching out on a sub-regional basis. The Mekong-Japan Cooperation for greater prosperity of the region is the one I would like to highlight. In particular, this year marks the Mekong – Japan Exchange Year. To mention a few, Thailand and Japan will provide help to the CLMV countries in order to develop the effectiveness of product distribution along the East-West Economic Corridor and the Southern Economic Corridor with funding of 20 million USD from Japan Atomic Industrial Forum (JAIF). This is in addition to the existing mechanisms like the Greater Mekong Sub-region (GMS) and Ayeyawady - Chao Phraya - Mekong Economic Cooperation Strategy (ACMECS).       

Another area of common interest lies in new opportunities in producing alternative energy. Thailand sees energy as an important engine of growth. Our trade surplus is constantly being wiped away by the import of crude oil which is equal to 15% of our GDP. We are therefore working on reducing crude oil dependency. This is in line with Japan’s commitments under the Kyoto Protocol.   Thailand is also working on a couple of initiatives that are related to energy. Let me elaborate on them. First, we want to change energy demand patterns to reduce consumption and increase efficiency by measures such as, encouraging a switch to public transportation or better management of peak load energy demand for electricity. On the renewable energy front, we are focusing on bio-ethanol and bio-diesel.  We have a plant to promote E85 including production of flex fuel vehicle to start domestically by year 2010. We are working at increasing productivity of sugar cane and cassava.                             

Last but not least, investment in education remains our top priority. Our Stimulus Package includes 15 years free education for 12 million students nationwide, and school modernization program like procuring computers for 17,000 schools, building and renovating 1,700 libraries among others.                        

In closing, let me assure you that Thailand is now ready to move ahead as a country, as part of a regional grouping and as a responsible member of the global community. The global economic crisis has once again reaffirmed that transnational problems need to be resolved by collective responses.  And by doing your part, however little it is, it all adds up to the global solution -- and hence the benefit of all.

Domo Arigato Gozaimashita! (ขอบคุณ)

Thank you.