This accounts for around 80% of total trade volumes between Thailand and these three countries. In this respect, it is important that GMS governments harmonize rules and regulations for trade and investment transactions, both within each country and between countries, with a view to improving ease of doing business and lowering trade and investment transaction costs. Ladies and gentlemen, Connections in physical infrastructure and thriving trade bring people together and that comes to the third aspect, people-to-people connectivity. Close proximity, improved infrastructure, and economic connection in the subregion have brought people to connect, either through labor movements or tourism. At present, it is estimated that above 2 million foreign workers in Thailand are from CLMV countries, contributing in various sectors. Each year, based on official records, they remit over 10 billion baht back to their home countries. With regard to tourism, around 2 million visitors from CLMV have made Thailand their destination every year. In the future, people connectivity should not be confined only to labor movement and tourism, but should develop into strengthened knowledge-sharing networks. GMS economies are in need to move up and integrate our value chains, and it is the people with skills, knowledge and innovative spirit who can make this happen. Strengthening knowledge networks for tertiary education, knowledge creation and knowledge sharing among industries will be a bedrock for building the subregion’s capacity, and help harmonize different rules and regulations. For Thailand, I am glad to see that we have increasingly offered educational training to citizens of the GMS.

In poor and vulnerable countries where financial development is weak and sovereign indebtedness with the banking sector is predominant, the feedback effects between the deterioration in public accounts and rising debt, on the one hand, and liquidity, or even solvency of the banking system on the other, also foster the propagation and amplification of shocks. The current terms of trade shock thus highlights the excessive dependence of vulnerable and poor countries on commodities. 2. How to mitigate terms of trade shocks? On this subject, it seems essential to distinguish two types of objectives: the objectives of economic and financial stabilisation on the one hand, and the objectives of prevention and better resilience to terms of trade shocks on the other. As regards economic and financial stabilisation, macroeconomic policies, in particular fiscal policies, play a central role in this field. Of course, in order for these to be implemented, it is necessary to have sufficient countercyclical room for manoeuvre. Consideration should also be given to how fiscal consolidation policies can preserve investment priorities for sustainable development, based on the development of infrastructure and human capital (health, education). The effects of fiscal consolidation can thus be mitigated by changes in the composition of government revenue and expenditures, more favourable to long term growth. As regards the exchange rate, the optimal policies to be put in place in developing countries facing exogenous shocks are the subject of debate.