While several of these laws can have wide ranging effects on Thailand’s business landscape, for the ease of this talk, I will loosely categorize them into three groups, namely (1) laws that promote governance and improve the distribution of economic opportunity, (2) laws that support productivity enhancement, and (3) laws that strengthen macroeconomic stability. Let me start by highlighting a few laws in the first group that aims at promoting governance and improving the distribution of economic opportunity. The amended Securities and Exchange Act, which was effective since December last year, would boost governance in the capital market. In particular, enforcement mechanism to punish market misconduct will be more effective. The law expands coverage of wrongdoings and seals several loopholes of the previous law to prevent malpractices including front-running of client orders and usage of insider information. Moreover, a perpetrator is no longer subjected to only criminal punishment, but is also responsible for civil liability, which makes the punishment process more efficient. Overall, with this revision, investors should expect the Thai capital market to have better governance and fairer trading environment. Another sector undergoing significant governance upgrade is the State-Owned Enterprises or SOEs in short. It is important to acknowledge that SOEs are the driving force behind several strategic sectors of the Thai economy, including energy, transportation, and telecommunication – with a total annual spending budget twice that of the central government. There is no denying that improving the governance of the SOEs will lead to more efficient resource allocation in many sectors.

As central bankers, we want to generate growth up to our full potential while securing economic stability through the use of monetary policy. Nevertheless, monetary policy is half a story; fiscal spending also has a significant implication on economic sustainability. While 5  Thailand has never been in a sovereign debt crisis, we have had numerous experiences with inefficient uses of public resources, especially those related to open-ended populist policies. As such, it is important to have a solid framework that sets forth a good fiscal discipline. In this context, the cabinet approved the Fiscal Responsibility Bill since March last year, which is now being reviewed by the Council of the State. This bill imposes fiscal discipline through improvement in public spending transparency and better governance of overall fiscal management. One key feature of this bill is the formal establishment of medium-term fiscal framework that requires medium term projections of the fiscal position. Also, fiscal rules – some of which already in use de facto – will be legally imposed to ensure fiscal discipline. For example, the public debt ceiling will be set by law at 60 percent of GDP. More importantly, the channel to conduct open-ended populist policies will be more difficult to carry out as the law requires the government to calculate costs and identify sources of fund ex-ante. Although our debt to GDP ratio is currently at 434 percent, one should not be complacent. The government must have enough fiscal buffers to support the economy in time of need.