In view of this deficiency, the Central Bank stepped in 1998 to introduce a forward sale contract system to ensure an agreed price for the major agricultural crops produced by the farmer community. The enforcement of the forward contracts was done in terms of the provisions of Sale of Goods Ordinance enacted during the British Period. In terms of this law, people could get into sales contracts and violation of the contract by either party was considered an offence which would permit the aggrieved party to seek redress through courts of law. While the Central Bank provided the guidelines and the mechanism of the system by connecting the farmers to the would-be buyers of products, commercial and development banks functioned as facilitators, financiers and guarantors of the contracts. Initially, the major crops such as paddy, corn, onion, ginger and sesame were brought under the system. The success of the scheme could be gauged from the very negligible incidence of violating the contracts by either the farmers or the buyers during this whole period 27 . The system of forward sale contracts has led to the improvement of the quality of products as well. Since the buyers stipulated the quality specifications in the contract itself, the farmers had to change their production methods to meet the required quality standards. This change has specifically occurred in the case of producing paddy for seed paddy purposes and corn for producing nutritious pre-natal food requirement of pregnant mothers.

In addition, sufficient digital infrastructure should be put in place as it will considerably strengthen other modes of connectivity. The internet and mobile communication connectivity will radically change the ways in which businesses operate and people interact, as they drive productivity and efficiency of all sectors. It will also facilitate financial, transport and logistics services, as well as open door to knowledge sharing for people across the subregion. While digital technology is rapidly improving in some GMS countries, there remains large “digital divide” both within and between countries that should be narrowed. BIS central bankers’ speeches  1  The second aspect is trade and investment connectivity. Intra-regional trade and investment activities have continued to flourish, mainly thanks to complementarities among GMS economies. Many GMS countries have varied and abundant natural resources, young population and low labor costs, while the others can offer technological know-how and financing. With varying industry specializations, the diversity among GMS members has contributed to stronger regional supply chain network, and in the future should magnify national strengths towards a higher competiveness of the whole subregion. Amid thriving trade and investment, Thailand is well-positioned to serve the whole subregion, owing to our established legal framework, financing facility, infrastructure, logistics and IT capability. This can be seen by prospering business activities along the Thai border with other GMS countries. Last year, Thailand’s 25 border customs checkpoints with Myanmar, Laos and Cambodia registered impressive trade flows of more than 500 billion baht.