Protecting intellectual property rights and minimizing regulatory burdens for businesses are the two key areas that continue to require reform efforts. I would like to note that several moves in the right direction are already in place. Government’s massive investment plan in water management and long-term infrastructure is one of them. At the very least, the attempt has managed to elevate the urgency of infrastructure upgrading to the status of a national reform agenda. On a related note, the government also has the plan to push Thailand toward an innovation-driven economy. While these are laudable initiatives, challenges still remain in the implementation phase, and more work remains to ensure that we get the biggest bang for the baht and that fiscal discipline is respected. (3)  Leveraging existing opportunities around us  Ladies and Gentlemen, The third ingredient I would like to discuss today is the importance of identifying opportunities surrounding us and leveraging them. Upgrading efforts that I spoke about at length should put the country in a better position to reap benefits from these opportunities, which can make the route to prosperity less arduous. The timing is still on our side. First is China’s changing role in the international trade – from a large manufacturer of export goods to a large import country of the world. Even with signs of losing some steam, one should not forget that even a 6-to-7 percent growth of today’s Chinese economy still adds far more to global demand than the double-digit growth of the past decade.

Some concerns that I have about the outlook, however, are the possibility of continued sluggishness in private demand, and the possibility that supply-side constraints – both in the labor market and the production sector – could hold back the future potential of investment and exports. Through this turbulent time, the Bank of Thailand has been steering its monetary and financial policies with prudence. The flexible inflation-targeting framework succeeds in anchoring inflation expectation, thus fostering continued growth and stability. The managedfloat regime accommodates baht movements that are in alignment with fundamentals, with policy instruments ready to curb excessive speculation and overshooting if needed. The strong international reserves position, at the same time, helps cushion against sharp flow reversals. Efforts have also been expended on financial liberalization and regulatory reforms under the Financial Sector Master Plan. And for the banking sector, banks’ capital bases have been strengthened well above international standard, while granting new subsidiary licenses for foreign banks will ensure that the future banking system stays competitive and vibrant. C.  Lifting barriers to sustainable growth  Distinguished audience, Sound macroeconomic and financial practices have been instrumental in safeguarding economic stability and helping the country weather through numerous shocks that have come its way. Sufficient policy spaces in monetary and fiscal policies provided buffers amid intense headwinds and supports in the times of need – notably in the aftermath of the global financial crisis and the flood devastation in late 2011.