, which is a prerequisite for economic sustainability, by gearing our economy towards operating at the potential level. second is to raise the people ’ s standard of living by expanding the potential growth rate of the economy. third, to maximize inclusiveness, we have to ensure the equal exposure to economic opportunities for all. ladies and gentlemen, let me start with the first success factor, namely economic sustainability, which i consider to be thailand ’ s most important strength. after the 1997 crisis, thailand has no longer experienced the current account deficit problem. inflation averaged 2. 6 percent over the past decade, or about half of the 5. 1 percent average rate during the 1990s prior to the bis central bankers ’ speeches asian crisis1. meanwhile, our unemployment rate has been low at around 1 percent. the banking sector, severely affected by the 1997 crisis, has been safe and sound, minimally affected by the global financial crisis ten years later as a result of strengthened risk management and governance. despite ongoing net capital inflows into thailand, there appears no sign of asset price bubble while the degrees of leverage in the corporate and household sector are still low. overall, i believe that the thai economic stability has strengthened continuously. this achievement has been attributable to sound fiscal and monetary policy, together with appropriate and market - friendly regulations, aimed at keeping the economy operating close to its potential. suffice it to say that the bank of thailand has fulfilled our responsibility to help achieve the economic stability. under the inflation - targeting framework, the policy interest rate is the main instrument used to influence saving and spending in the economy so that demand matches potential supply. this economic balance has, in turn, produced a low and stable inflation environment necessary for the sustainable growth. in addition to the interest rate tool, the central bank also has regulatory tools to prevent undesirable accumulation of financial imbalances. indeed, the so - called “ macro - prudential policy ” has been used as a complementary policy tool to the interest rate policy long before the sub - prime crisis. to give you a few examples, the bank of thailand has imposed a cap on loan - to - value ratio on high - end real estate loans since 2003. we also tightened credit card and personal loan regulations in 2004 and 2005, respectively. these pre - emptive measures helped reduce balance sheet vulnerability and ensure thailand ’ s resiliency against and fast recovery after the sub - prime crisis. nevertheless, despite the success so far

supply and has to employ immigrant workers from neighboring countries. this tight labor market phenomenon creates incentive for firms to shift factor of production from labor to capital. this shortage of labor will then accentuate my second implication of a strong baht, since the shortage of labor, in addition to cheaper capital goods in baht term, gives incentive for investors to make imported - capital investments. this is the part where the private sector role is essential, especially as thailand has benefited from immense foreign direct investment in which japan played the top role. ladies and gentlemen, let me now turn to the last success factor : inclusiveness, which is probably the weakest achievement among the three success factors so far. however, inclusiveness is something that has increasingly gained attention from thai policymakers in recent years, as it was part imd, 2010. bis central bankers ’ speeches of the root cause of political unrest. i believe that inclusiveness will be one of the long - term solutions for thailand political stability. yet, i should stress that inclusiveness has a different concept from equality. it focuses on creating equal opportunity rather than equalizing income. income equality ultimately means that the reward system is independent of performance which erodes efficiency. inclusiveness, on the other hand, refers to having equal opportunity which still preserves efficiency through reward incentive system while allowing the rich and the poor to have the same economic opportunity. as such, inclusiveness refers to equal access to public infrastructure such as education, fair competition and equal treatments of law and regulation to all. in this way, inclusiveness will provide equal exposure to yield the benefits from economic prosperity. improving inclusiveness in thailand will be a long process but some initiatives have already been put in place. these include decentralization of public spending, better access to education, informal sector debt alleviation, and better credit access for low income group. while these initiatives bode well for inclusiveness, the government must be careful not to excessively gear government spending towards populist policies that eventually add financial burden to the already - tight budget and sovereign debt in the future. in particular, it is important that the government prioritize and balance between public consumption and public investment accordingly. more importantly, efficient management with good governance will be the key ingredients to policy success in this regard. for our part, the bank of thailand has also put inclusiveness as one of the main agenda in the financial master plan ii, other than efficiency and provision of financial infrastructure. the objective is to provide financial