laggednature of monetary policy transmission, and the need for targeting stability to effectively anchor long - term inflation expectations. to this end, coordinating with the fiscal authorities in setting a target aims to ensure that monetary policy is aligned with the country ’ s overall economic policy direction. by the end of this year, the bank of thailand ’ s monetary policy committee, jointly with the minister of finance, will be required to set an annual target for monetary policy for 2009. more importantly, this understanding must also be shared with the public at large – that the only long - term role for monetary policy is in creating an environment of price stability which would help support sustainable economic growth. ladies and gentlemen, in raising the economy ’ s potential output, it requires that we pay attention to our capacity. i would like to raise two important areas of commitments that all economic participants together can help the economy build strong capacity. these are greater energy efficiency and advancement in education. on the commitment to improve energy efficiency, we must reduce our dependence on imported oil from the present net oil imports ratio to gdp of about 8 percent, which is the highest in asia. this can be done through investment to modernize new energy - efficient machinery and technology used for production. importantly, price and tax mechanisms should foster energy saving. as for the commitment to help upgrade education to increase labour productivity, reform in the education system should focus on raising the standard and quality of education for future generation of labor force. skill specialization must be shaped to complement for thailand ’ s competitiveness in the world market. indeed, better education would also improve financial literacy and access, which will, in turn, allow more efficient allocation of consumption and investment. in sum, no matter how fast the economy manages to grow, at the end it is merely numbers. the development makes a real difference only when we are committed to building strong fundamentals to support long - term growth to ensure that the people are really better off on a sustained basis. moreover, as we move toward an ageing society, fiscal policy is able to ensure a sound social safety net system to accommodate for an increase of elder population in the future. meanwhile, the monetary policy takes care of price and financial stability. ladies and gentlemen, after a rather heavy presentation, i would like to end my talk on a lighter note. i trust that during your years in thailand, you may have come across some fortuneteller stalls packed with worried - looking customers. in finding out what lies ahead, these customers

to achieve price stability and sustainable growth in the long run. by old book, growth comes from utilization of the country ’ s resource endowment with available technology. however, with the advent of global economic and financial integration, growth is no longer constrained by endowment. in today ’ s world economy, outsourcing for inputs abundant in other countries and exchange of technology and skills allow for lower production costs and greater potential to grow. potential output in this era is thus free from conventional hindrance. from the bank of thailand ’ s latest research, the thai economy has a potential output growth rate of around 5. 5 to 6. 0 percent per year from 2008 to 2015. this is based on an assumption that investment can grow at the same rate as the economy, and therefore, the ratio of real gross investment to real gdp needs to increase from 22 percent today to 28 percent within the next 8 years. prior to 1997, thai economy grew satisfactorily on the back of high level of investment as well as increasing utilization of labor. during this period, sufficient capital formation allowed for an increase in labor productivity. however, in the post crisis era, potential output gradually declined as real investment did not fully resume its pre - crisis level, which was 31 percent of real gdp. meanwhile, labor productivity has been dwarfed by the lack of capital and lagged behind the regional standard. on the overall picture of employment, thailand has had very low unemployment but room to increase productivity remains in the area of reducing underemployment. let me discuss an example of the agricultural sector. this sector has seen a steady decline of its share in gdp from 1980 to 2007. in contrast, its share in the country ’ s employment remained high, though reducing from 65 to just about 40 percent of total labor force during the same period. meanwhile, yield of major crops per unit area is significantly lower than yields in other agriculture exporting countries. in fact, foreign agricultural service of usda, estimated that thailand produces rice yield about 430 kilos per rai compared with the world average rice yield of 653 kilos per rai. there is thus ample room to increase productivity in this sector through better land and water management as well as a more systematic farming. going forward, the problem of labor scarcity, though not unique to thailand, will also become more of our concern as we are moving into aging society, while population growth remains low. increasing productivity is therefore the solution to sustain potential growth as well as competitiveness