external demand was still weak, we saw the surge in public sector spending to jump start the economy and avoid a potential downward spiral in domestic demand. but, once global economy is back on a recovery track, our exports have started to grow strongly, in particular, in electronics, electrical appliances, and vehicles. in fact, our export sector has already recovered to the pre - crisis level. as the growth momentum gained strength, domestic consumption started to pick up. overall, the conditions for recovery look favorable enough and there is general optimism that the thai economy looks set on a continuous growth path. that said, a key weak pocket in the current recovery process appears to be the domestic investment climate but even that should get better as the external environment is improving. unfortunately, the political unrest during april – may had somewhat set back the recovery process. most activities slowed down during may on a month on month basis. the tourism sector, in particular, was hit hard. in may, the number of foreign tourist arrivals in thailand declined by 11. 8 percent year - on - year. correspondingly, hotel occupancy rate fell to 34. 9 percent, mainly from a significant drop in bangkok and the central region. nevertheless, the impact was rather confined. the occupancy rate in the southern region remained intact at 45. 5 percent, higher than the last 5 - year average of 42. 9 percent. on the whole, we expect that the second quarter gdp growth would be less buoyant than that of the first quarter. nevertheless, economic data during april – may came out better than expected, reflecting the ongoing momentum of the thai economic recovery led by exports. in fact, the export value in may continued to expand by 42. 5 percent year - on - year in line with favorable expansions in all export categories and markets. ladies and gentlemen, despite headwind from both external and domestic factors, it is now important to embark on policy normalization, both fiscal and monetary policies. as the thai economy is getting stronger, returning fiscal and monetary policies gradually to pre - crisis normal levels will not obstruct the recovery path. rather, it is essential to enhance our economic resiliency and save the policy space for the medium term. for our monetary policy, it has been extra - eased for quite some time and there is less need now. although the domestic inflationary pressure has been kept in check and we have not observed asset price bubbles at this time, the central bank is well

m r chatu mongol sonakul : national central bank and building world peace speech by mr m r chatu mongol sonakul, governor of the bank of thailand, at the 27th international conference on world peace “ building a culture of peace in the new millennium ”, held in bangkok on 1 december 2000. * * * members of the professors world peace academy, participants of the 27th international conference on world peace, ladies and gentlemen. the history of central banking is normally agreed to have begun around four thousand years ago in the greece, roman and other empires up to the middle ages when banks were put up primarily for the purpose of getting finance for governments to wage war. so the first period of central banking cannot very well be said to have been in conformity with the topic i ’ ve been asked to talk about here today, which is entitled “ national central bank and building world peace ”. but in the sixteenth and seventeenth centuries and especially later on when industrialisation began in earnest, there were great needs for finance for the many various industries that sprang up around that time. commercial banks and great finance houses became common but the limitations of the technology of that period of using precious metals as currency became quickly apparent. commercial banks began issuing their own paper notes, for the amount of the valuable metals that they had in stock being much more transportable. but human nature being what it is, they also began issuing paper notes equivalent to the value of precious metal which they don ’ t have in the vaults and the various currencies issued by the various banks became devalued very quickly. another aspect to the whole thing is that people do cash in paper notes at times and banks have to hold large reserves sometimes up to 30 % of their liabilities in order to make sure that they have adequate liquidity that may be used in case of unforeseen events. the first central banks in its relatively modern form were therefore established to provide the function of being the sole issuer of currencies and the single keeper of reserves as defined by law, notably the bank of england in 1694 and epitomised in a tome in 1873, lombard street by bagehot, editor at the time of the economist, where the concept of the banking department and the note issuing department was so clearly explained. this gave credibility and value to paper currency and it was also a very much more efficient system in that the single reserves at the central bank could be used by the many commercial banks who there