Excellencies,
Distinguished Guests, Ladies and Gentlemen,
I would like to thank
the Council on Foreign Relations and the Asia Society for
hosting this reception. I also would like to thank all the
distinguished guests for honoring me and my delegation with
your presence here this evening.
I am very delighted to be back in
the United States, back to a great country that has always
held a special place in the hearts of the Thai people.
Ours is a friendship
which goes back 165 years, back to 1833 when Siam became
the first Asian country to establish diplomatic ties with
America. It is a friendship which has withstood the challenges
of time, distance and differences. It is a friendship which,
over the years, has become a partnership for peace and prosperity.
And, I am proud to say, it is a friendship which is now
based upon a growing convergence of values, especially those
related to democracy, freedom, social justice and the rule
of law.
Last year has seen
a dramatic reversal of East Asia's fortune. In the space
of a few months, many of the region's "miracle"
economies became embedded in crises or near-crisis situations.
Almost overnight, optimism was replaced by prophecies of
doom. Unfortunately
Thailand was the first country to experience this reversal
of fortune. And presently, we are going through a very difficult
period of adjustments.
But from day one of
my present government, I have insisted that responsibility
is the key. I have insisted that we must be brave enough,
courageous enough, to face up to our responsibilities. We
must know what we did wrong, and we must seek to put things
right. Nor can we put things right, if we do not help ourselves
first and only expect others to help us.
What went wrong?
During the period of
rapid economic growth, we were too complacent. In the good
times, we forgot many important truths and neglected many
important tasks.
- We opened up our
economy, but our stated plans to pursue discipline were
not followed up;
- We attracted massive
flows of cheap foreign capital, which we did not always
spend or invest with enough prudence in spite of our original
plans to channel funds to productive investments;
- We created wealth
but were perhaps negligent in creating competitiveness;
- We were successful
in our economic performance, so much so that we did not
examine the fundamentals of our politics and governance
or tackle issues such as the bureaucratic inefficiency,
lack of transparency and lack of accountability;
- We became a part
of the globalized world and felt proud to belong to the
twenty-first century, while much of our law and governance
and many of our instruments for macro-economic, financial
and business management are waiting to be modified, modernized,
and upgraded to international standards and practices.
There is immunity in
success. As long as we continued to succeed, this complacency
could go unpunished. But once the cracks appeared, we compounded
the mistakes by committing much of our fiscal reserve to
shore up insolvent finance companies and our foreign currency
reserve to defend the baht. Naturally, we were quickly and
severely disciplined by the market.
When my Government
took office just over four months ago, my colleagues and
I were fully aware of what we were up against. Yet we never
felt that our cause was hopeless.
We knew that there
was much that was right and still is with our country: constitutional
monarchy; democracy; free press; social stability; a strong
and competitive agricultural sector making us one of the
world's five net exporters of food; a very large pool of
experienced managerial talents and potentially dynamic entrepreneur
ship; an adaptable and hard working labor force; a good
natural resource base; and networks of friends and partners
both in the region and beyond.
And we knew that there
are very few things in life which hard work and honesty
cannot accomplish.
Of course, we are not the
best judges of our own performance. But I honestly feel
that in the last four months we have moved in the right
direction. Our
relationship with the International Monetary Fund is key
to the revival of market confidence and economic recovery.
We see commitment, consultation and transparency as the
cornerstones of this relationship.
We have fully met the IMF's
requirements to strengthen our fiscal, monetary and financial
discipline, by making the tough decisions to reduce our
expenditure, to raise taxes, and to close more than half
of all our finance companies. Preparations are also underway
for the further recapitalization and regulation of the financial
and banking sectors, as agreed upon. In some areas, notably
on reducing the current account deficit, we have even exceeded
the set targets. The Finance Minister has kept the IMF fully
informed of our progress, providing its officials with all
the necessary facts and figures. On the basis of such consultation,
the IMF has only last week approved our third Letter of
Intent, which outlines modifications of budgetary and other
provisions to make them more consistent with changing domestic
and regional realities.
Knowing that that
reforms entail a painful adjustment process and that these
reforms, together with the economic downturn, will have
adverse social impacts, my Government has also worked closely
with the World Bank, the Asian Development Bank and other
institutions to strengthen our existing social safety nets.
Measures include a number of provisions for extensive retraining
and retooling programmes. With unemployment certain to rise
in the short term, we can not depend only upon the cushion
provided by our traditional extended family networks and
the absorptive capacity of the agricultural sector. Special
consideration has therefore been given to the poor, the
unemployed, and the disadvantaged.
Reform is not only
a matter of commitment to the IMF's conditions. It is also
for our own good in the longer term. To this end, we have
been making extensive preparations for strengthening and
modernizing the legal and institutional fundamentals of
our economic development. A number of legislations are being
processed. The new bankruptcy bill has recently been approved
by parliament and we are expediting bills on other issues,
ranging from better foreclosure procedures to the fight
against money-laundering and to the amendment of the alien
business law to make Thailand an easier place to do business.
A massive privatization of state enterprises is also being
accelerated. Moreover, plans are being implemented to upgrade
accounting practices and instruments for the supervision
and regulation of the financial and banking sectors to international
standards.
The most crucial component
of reform is, of course, political reform.
Clean politics is wise politics.
It enables the country
to avoid costly mistakes and to revive and sustain market
confidence. We believe that good governance, great transparency,
greater accountability, and greater popular participation
in public affairs are necessary to bring about, not only
economic recovery in the short term, but also strong, more
stable economic growth in the longer term. And while we
may not be able to make everyone equally rich and prosperous,
we can and must provide every one with equal rights and
opportunities, especially before the law. To this end, my
Government is going full steam ahead with the process of
political reform, which had been started by the passing
of the new Constitution in October 1997. By this year's
end., substantial progress will have been made in all the
draft laws required by the Constitution.
Yes, I believe we are moving in the
right direction. But reform, rejuvenation and recovery will
take time to complete. A great deal remains to be done.
At this juncture, the immediate priorities must be further
stabilizing the baht, creating liquidity for the private
sector, increasing foreign exchange earnings, and caring
for the poor and unemployed.
And yes, we must go
on doing all we can to help ourselves. For, as I said before,
we must have the courage to face up to our responsibilities.
However, it is a fact
of life that, in the globalized world we live in, the fates
of nations, the fortunes of societies, are inter-dependent.
No country can determine its own destiny entirely.
We will do our best,
but our best may not be good enough if our friends, partners
and allies do not lend a helping hand.
We need time and space,
time and space to work ourselves out of the present crisis
and to become once more a contributing force to global prosperity,
time and space which only our creditors can give us.
We need from potential
investors honest and informed appraisals of our present
and prospective performance, not those based upon hearsay
and emotions.
We need support for
retraining and retooling our labor force, so that the economic
and human costs of the present crisis can be kept in bound.
We need assistance,
so that we ourselves can lend a helping hand to those who
suffer most from the present crisis - the poor, the unemployed,
the less educated. And
we need all members of the international community, especially
members of the G7/G8 who represent much of the world's economic
might, to look long and hard at all the existing global
systems, so that they can be reformed and rejuvenated where
necessary to ensure that the new growth cycle will be equitable
and sustained.
To a certain extent,
countries in the Southeast Asian region have learnt their
hard lessons from the current crises. The so-called "penalties
of capitalism" have already taken their toll. They
are going through an adjustment process. However, their
fundamentals are still relatively strong. I believe that
eventually all of them will bounce back - although at different
paces, in slightly different ways, according to their respective
sets of circumstances. They are all determined to cross
over these "troubled waters" by accepting great
pains and sacrifices. They deserve your sympathy, your support
and your respect.
It is my hope that
East Asia's financial and economic crises do not spread
to other parts of the world, as they will surely do if left
untreated. The world is too inter-dependent for any one
to remain immune forever.
It is my hope that
the international community will use these crises as an
opportunity to learn, to gain valuable experiences, and
to make preparations to make sure that such tragedies will
never happen again so that liberalization, which I firmly
believe to be the right path, can proceed in countries like
Thailand in consonance with global trends.
It is also my hope
that our friends and partners will assist us during this
critical period of economic adjustment, building upon the
momentum we have already started as we turn the corner.
We in Thailand will play our part
in the making of a better world.
We are confident that
we can do so.
One of history's greatest
statesmen once said, and I quote, "The future is not
for parties playing politics... We are witnessing a renaissance
of public spirit, a reawakening of sober public opinion,
a revival of the power of the people, the beginning of an
age of thoughtful reconstruction... With the new age, we
shall show a new spirit."
The statesman was
President Woodrow Wilson. The year was 1910. The country
referred to was America.
I also believe that
President Wilson could have been talking about Thailand
in 1998.
Thank you.
For a biography of Chuan
Leekpai, visit the Thai Embassy's web site,
a comprehensive resource where you'll also find the latest
official facts and figures, policy descriptions and statements,
and links to other sites such as the Bank of Thailand, the
Ministry of Commerce and the Ministry of Finance.
