prasarn trairatvorakul : growth, sustainability and inclusiveness – thailand ’ s key success factors dinner talk by dr prasarn trairatvorakul, governor of the bank of thailand, at the japanese chamber of commerce ( jcc ), bangkok, 23 march 2011. * * * ladies and gentlemen, let me begin by extending my deepest condolence to the japanese business community in thailand on the immense losses caused by the unprecedented earthquake and tsunami in japan. despite the tragic incidents, i am confident that the strength and determination of japanese people, together with supports from all around the world, will enable japan to recover swiftly. for today, i would like to thank the japanese chamber of commerce for inviting me to share with the distinguished audience my assessment of the thai economy. i also look forward to hearing your views and concerns regarding the economic prospects. needless to say that japan and thailand have a long history of close economic relationship, with japan being the top foreign investor in thailand. as such, thailand has become a production hub for several japanese industries, including vehicles, electronics and electrical appliances. i therefore hope that our discussion today will help align understanding and further strengthen the partnership between our two economies. for my presentation this evening, i would like to offer my assessment of the economy based on what i see as the three most important attributes that determine the economic progress for thailand – the “ key success factors ”, if you will. first is that growth must be sustainable. we don ’ t want three years of boom followed by three years of bust. second, the country ’ s potential growth rate should be high enough to continuously raise the people ’ s general standard of living. and, third, growth should maximize inclusiveness. by this i refer to maximizing the exposure of everyone to economic development, both in terms of participation in the development process and in the sharing of its benefits. this would lessen the problem of inequality, and foster social harmony. that said, i wish to underscore that, even though growth is the most visible factor, growth alone is not sufficient but sustainability and inclusiveness are also crucial to ensure long - term economic success. looking at economic strengths and weaknesses in the context of these three success factors should provide for a better understanding of the role of central bank and policymakers in advancing the economic development agenda for thailand. indeed, these success factors entail three corresponding fundamental responsibilities for policymakers. the first responsibility is to ensure continued macroeconomic stability

ajith nivard cabraal : practical, not conventional, wisdom has driven sri lanka ’ s rebuilding and reconciliation article by mr ajith nivard cabraal, governor of the central bank of sri lanka, 3 april 2014. * * * about five years ago, sri lanka faced three daunting economic challenges. to deal with those challenges, the sri lankan authorities implemented certain pragmatic strategies that challenged conventional wisdom. at the time of defeating terrorism in may 2009, a massive investment was required to restore normalcy in the terror - torn northern province. conventional wisdom suggested that the rebuilding, rehabilitation and restoration should be carried out at a moderate pace, without burdening the economy unduly, and without placing government expenditure under stress. however, even at the risk of experiencing a spike in the fiscal deficit in the years 2009 and 2010, sri lanka executed a rapid action plan to de - mine land, re - settle idps, and upgrade infrastructure in the war - affected areas. that investment brought quick relief to the hundreds of thousands of people who had suffered during the 30 year war. the cost? a staggering us $ 3. 2 billion over 4 years, or nearly 6 % of gdp! the direct benefit? rapid clearance of over a million landmines from the northern province : speedy resettlement of nearly 300, 000 idps ; early restoration of the infrastructure : considerable progress in agriculture, fisheries and sme activity : significant increase in industrial production and domestic tourism : major transformation in the financial sector ; and creation of new entrepreneurs and job opportunities ; the overall outcome? a peaceful country without a single terrorist incident ; significant country - wide economic growth ; and sharp reduction in poverty levels. these incredible outcomes vividly reflected the extraordinary benefits that had been reaped via practical wisdom! around 2008, the country was trapped in a “ vicious cycle ” that had hampered growth since independence : high fiscal deficits leading to high inflation ; high inflation leading to high interest rates ; high interest rates leading to low investor confidence ; low investor confidence leading to sluggish investment ; sluggish investment leading to lower growth than potential ; lower growth and high fiscal deficits leading to unfavorable debt dynamics which in turn, impacted fiscal deficits adversely. this vicious cycle was deep rooted, and many sri lanka ’ s economists who subscribed to conventional wisdom used to lament that this cycle was the country ’ s “ karma ” ( fate ), and that it would be impossible to break