shown strong commitment to supporting the progress of global economic integration. nevertheless, we should also put the issue of benefits and challenges of financial and economic globalization into a proper perspective. i would like to do this by examining the experience of thailand during the past two decades. over the past twenty years, it is an undeniable fact that globalization has brought substantial gains to thailand. the evidence is all around us. international trade and investment have boomed. thai exports expanded by over 11 percent per year during the same period. our large and vibrant export sector sends goods all over the world. and, in turn, thai consumers enjoy goods from all corners of the globe. on the investment side, healthy joint ventures and foreign investment abound. interaction at the person - to - person level has also grown, underlying the fundamental importance of the sharing of knowledge and skills between nations. and last, but by no means least, this luncheon and our presence here today reflect the progress of globalization. i am glad to say it is a progress that we have made together. ladies and gentlemen, it is also undeniable that thailand has shown a strong commitment to global economic integration. thailand ’ s economy and openness have grown together hand - in - hand. but openness brings forth not only benefits ; it also invites challenges. as such, we must embrace globalization with our eyes open for potential risks and pitfalls. although globalization has brought considerable gains over the last decades, the path traveled has not always been smooth. in fact, it has been strewn with risks, some predictable and some not. nearly ten years ago, thailand was in the midst of a financial crisis that had been caused by a number of factors. the most telling one was the premature liberalization of the financial sector. that round of financial liberalization encouraged significant capital inflows and massive over - investment, creating financial vulnerabilities which eventually led to abrupt reversal of flows in the period that followed. i am sure many of you can recall the event vividly. and further back in time, nearly twenty years ago, thailand was embroiled in a global oil crisis that thrust the world economy into a period of recession and high inflation. during both episodes, the prognosis for globalization seemed grim. nevertheless, thailand emerged from these crises with a renewed commitment to global economic integration and internal reform. the situation today is nowhere near as grim. but the economic lessons of the past remain relevant. openness comes with challenges. and as the

so that minority shareholders are better represented on the board. audit committees are now a requirement and many banks now have nomination and compensation committees to reduce the power of the major shareholders. most also have risk management committee or, at least, asset and liability management committee. to further increase transparency, commercial banks now have to announce at the end of each month their npl level, penalties and fines imposed by the authorities, as well as the amount of their related lending. by year - end, we will launch the director's handbook for the financial community and further encouraging increased transparency of appointment and compensations. of course, we cannot change others without changing ourselves at the bank of thailand. our reorganization strategy focuses on four aspects, namely organizational structure and work process, human resource management, decision - making process, and database and information technology. our hierarchical structure has now been reduced from a total of seven layers to four. authorities and responsibilities are being further delegated toward a lower level to the operating officers in charge. this helps reduce the previously lengthy approval process and increase our flexibility. new departments have been established to better cope with the rapidly changing economy and the rising information need of the organization. these include the data management group, the information and public relation group, the planning group who conducts a bank - wide risk assessment as well as a new department of risk management and information technology examination, who monitor risk profile and risk management at the financial institutions. in addition, our business processes are now more client - oriented with a new website, new voice - mail, and new central point of contacts being offered as services to our stakeholders. both the netherlands and thailand are small open economies in the world market. to survive the tide of globalization, we both need a well thought out strategies. we have to choose our battleground and cooperate with friends around the world. to do this, local strength has to be further strengthened while lessons and technologies must be learnt from others. here, international co - operations through jointed ventures, through foreign direct investment, or through international trade will play major roles in our successes. on this front, thailand has done remarkably well, registering a substantial increase in net inflow of foreign direct investment in the four years following the crisis despite the overall net capital outflow due to debt repayment within the banking sector. foreign direct investment ( to the non - bank sector ) increased from an average around 1. 4 billion us dollars during 1992 - 1996 to 3. 4 billion us dollars during 1997 - 2000