there is a likelihood of a significant investor interest for such fund. this, however, does not seem realisable, if there is a negative carry that such funds could entail. further, it is not certain whether a private intermediary licensed by a central bank specifically for this purpose would entirely obviate the moral hazard, even in the absence of any explicit or implicit guarantee with regard to performance. in india, domestic mutual funds are permitted to invest in foreign securities, apart from adr / gdr of indian companies, up to an aggregate limit of usd two billion. in addition, a limited number of qualified mutual funds are also permitted to invest cumulatively up to usd one billion in overseas exchange traded funds ( etf ). more generally, the pace and sequencing of several measures of liberalisation of capital account take into account the degree of comfort as one of the relevant factors. third, an idea which received some attention in march 2002 during the gathering on ‘ finance for development ’ in monterrey, mexico, is that instead of holding the reserves in the us dollars, a new form of global money, akin to imf's special drawing rights, namely, ‘ global greenbacks ’ could be issued, which countries could hold in their reserves. the corpus would be created by countries setting aside a part of reserves every year as an insurance against contingencies. the amount of money held by these countries in ‘ global greenbacks ’ could be given to developing countries for financing their development programmes as well as global public goods like environmental projects, health initiatives, humanitarian assistance, and so on. for countries that receive less than the amount that they need to put into reserves, the new ‘ global money ’ would go into reserves freeing dollars that these countries would otherwise set aside. countries that receive more than they must put into reserves, could exchange the new money for conventional currencies. eventually, all the new money will find its way into reserves, which in effect represent a commitment by the countries to help each other in times of trouble. it has been argued that the global greenbacks proposal envisages flow of funds to poor countries according to their need while contributing to global economic growth, stability and equity. opponents of this move have argued that some countries will become “ greenback addicts ”, and when the handouts end, the economic withdrawal symptoms will be severe. fourth, in the aftermath of the asian financial crisis, two related developments took place. in the year 2000, asean +

the euro crisis. in fact, there are already signs that asian exports, thailand ’ s included, are slowing. amid a slowing global economy, this drag on growth is unavoidable in the short - term. to grow out of the crisis and survive the shocks from outside, thailand must look within and unleash domestic engines of growth. long - term investment in productive infrastructure is one key engine of growth. another is domestic structural change spurred by two drivers of change in the region. the first driver of change is growth in china and the attendant rise of the chinese middle class and demand for a broader range of imported goods and services. chinese exports will also grow in sophistication. the second driver of change is trade liberalization in the region – such as free trade agreements with china and india as well as the asean economic community, or bis central bankers ’ speeches aec. aec, in particular, goes beyond free trade and also has the potential to foster not only goods and services integration but also cross - border labor and investment flows. because of the sheer size of these markets – china, india and aec – the regional pattern of production will change considerably to cater to new demands while leveraging on new comparative advantages and supply chain synergies. uncompetitive firms have to either upgrade themselves, or close down and free up labor resources to more competitive firms. this reallocation process implies that the country makes better use of labor resources and achieves higher productivity. ongoing financial sector reform will also build financial sector resiliency. thailand ’ s financial sector master plan, now in its second phase, continues, and focuses on liberalization through increased competition, raising efficiency, and strengthening the financial infrastructure. our research shows that the gains from structural change can be considerable although adjustment costs, in terms of the reallocation of labor and capital, will also be significant. now we arrive at the third and final question. given the euro crisis and thailand ’ s prospects for growth, what should monetary policy do? the dilemma here is how to bridge short - term stabilization with long - term goals of structural change. the challenge for policy is to maintain an overall framework where the trend of increasing economic integration can continue while containing crises. given our baseline scenario of a prolonged recovery without a liquidity seizure we lean towards long - term goals – for example, maintaining capital flow liberalization, financial sector liberalization and market - led exchange rates – but with a readiness for monetary stimulus should