we will put our best effort in considering its timing carefully. as for dealing with consequences of capital inflows, we see the current managed float exchange rate regime as appropriate and beneficial to the thai economy. we will continue to let the level of exchange rate be determined by market forces, but make sure that it is not too volatile to the extent that it will be too difficult for the private sector to adjust to. and to give the private sector greater flexibility to manage foreign exchange risks, last month we further relaxed restrictions on thai direct investment abroad and on the unwinding of foreign exchange hedges. these moves, which are parts of our ongoing capital account liberalization plan, will also make our capital flows situation more balanced, by facilitating two - way foreign exchange flows. on the fiscal front, you will agree that fiscal policy is one of the key instruments to support the economy during the difficult times when private sector growth engines have been impaired. however, the stimulus packages that the government announced last year, have been done on the assumption that thailand will face the most severe global recession in the last 60 years. but as it turned out, the global crisis was not as severe as thought. given that our economy is on the robust recovery path, the need for stimulus may be less. and the government should also find the way to normalize the fiscal policy stance at an appropriate time. here, the latest development on sovereign debt crises in europe underscores the importance of the restoration of our fiscal discipline. if there are no changes in our policy, the ratio of public debt to gdp will increase to over 60 percent by 2012. this will not only leave little room for the government to use more fiscal stimulus should there be a new crisis in the region or in the global economy but it could also put thailand in the spotlight of the foreign investors who have become much more sensitive to the issue of fiscal sustainability. this is why we have to rethink the stance of our fiscal policy once the short - term political and economic uncertainties fade away. furthermore, to ensure fiscal sustainability over the medium to longer term, thailand will need fiscal reforms that include : • continued fiscal consolidation ; • broadening of our tax bases ; • reforms to increase the efficiency and equality of the tax system ; and • greater allocation of public spending toward investment expenditures. indeed, the government realizes the need for fiscal consolidation and reforms. with the better - than - expected tax revenues, thanks to the solid economic recovery, the budget deficit for this

policymakers therefore will have to be watchful and well - prepared to implement appropriate policy to ensure continued growth momentum amidst these challenges. first, the global economic recovery, particularly those of the industrialized economies, remains fragile and subject to downside risks. in spite of the higher - than - expected growth in the fourth quarter of 2009, the us economy is still beset by high unemployment, continued deleveraging, and weak financial institutions. all of these will have dampening effects on domestic demand, especially consumer spending – the main growth driver for the us economy. at the same time, concerns on the eurozone ’ s sizable fiscal deficits especially those of the peripheral economies may trigger another round of confidence problems. furthermore, the exit policy especially of the major economies could spill additional risks to the ongoing global recovery. their timing and speed will be crucial. the action that is either too early when the economy is not sufficiently robust, or too late when inflationary pressure and / or economic imbalances have already been formed will have important implication on recovery, price and financial stability. second, emerging economies, thailand included, face the challenge of sizeable and volatile flows of capital due to their better growth prospect and sooner policy normalization vis - a - vis g3 countries. these flows could lead to volatility in foreign exchange markets and might potentially create financial imbalances. from the data thus far, we have seen sizable inflow of capital into some of the asian countries such as korea, taiwan, india, and china since the second half of 2009. and in the last couple weeks, this money started to flow into thailand. third on domestic front, as you are well aware, thailand also faces two major uncertainties : the problem of map ta phut and the on - going political unrest. i believe the “ map ta phut ” problem is of the most interest to japanese investors, and therefore i would like to say a few words. at present, the authorities have put all efforts to achieve the resolution of the problem, given its implications on the country ’ s future investment prospect, industrial practice, and economic recovery. so far, the processes of the eia, hia, and public hearing processes have been formalized and the government is now in the process of establishing independent agencies which will be responsible for evaluating all of the proposed investment projects. it will take some more time, but progresses are being steadily made. in my view, the “ map ta phut ” problem