under good discipline, with the right policy mix and stance. here, the keyword is the coordination of monetary and fiscal policies. the bank of thailand ’ s role in promoting sustainable growth is to conduct responsible monetary policy to ensure price stability. but sound fiscal policies are also needed to complement the effectiveness of our policy. it is critical that public debt does not become a problem and threaten to drag the recovery process. fiscal responsibility and discipline are thus keys, and i am extremely glad to see that the government has taken the first step towards fiscal sustainability by consolidating its budget this fiscal year. underlying all these frameworks, however, efforts must also be made to ensure that domestic saving mobilization is adequate to finance our economic development in a sustainable fashion. as the thai economy regains full strength, our current account is likely to be in deficit again and we need to ascertain that the savings - investment gap is kept at an appropriate level. ladies and gentlemen, in closing, allow me to reconfirm that thailand has certainly come a long way since the crisis. to make it last, we do need a bit of luck on the global economic development while ensuring that we get all the fundamentals right. some of these reform measures are tough and social support is needed to ensure that we continue to move in the right direction. if we manage to get all of these real, financial, governance, and macroeconomic frameworks in place, i do believe that thailand would be well on a sustainable road to development. with these in mind, allow me to wish this conference every success in its endeavor. as a thammasat economics alumnus, it is an honor and a great pleasure to be ‘ home ’ addressing the distinguished guests and participants of this prominent conference. thank you.

into the context of rapidly evolving global and regional economies. let me start with the real sector. for a brief period in the early 1990s, it seemed that everything was going well. everywhere one turned, businesses were booming. demand seemed to always outpace supply. and on top of all that, thailand was just named asia ’ s fifth economic tiger. little did everyone know, however, that the spectacular economic performance masked certain structural weaknesses in some part of the real sector. as it now becomes all too clear, parts of thailand ’ s real sector prior to the crisis were characterized by low productivity and high leverage. with the benefits of hindsight, thailand ’ s past rapid growth could be attributed primarily to quantity, that is, the mobilization of capital, labor, and natural resources, rather than quality. during decades of spectacular growth, total factor productivity or tfp rose only modestly. overtime, thailand ’ s inability to further move up the quality ladder, after it graduated from a low - labor - cost production - base status, gradually led to the erosion of our export competitiveness. in relation to the attitude towards risk, thailand ’ s use of leverage, being among the highest in asia, put the country in a vulnerable position to potential adverse shocks. when the crisis hit in 1997, many companies thus found themselves in desperate straits to service their debt, eventually leading up to a major collapse of the real economy. while these weaknesses have been and are being addressed since the crisis, these measures take time to become fully effective. in the meantime, these shortcomings have been accentuated by the recent change in global competitive landscape brought about by china ’ s wto accession. thailand, like many other countries, will need to reposition itself quickly to meet this new global challenge. stepping beyond the realm of the real sector, another expensive lesson learnt during the crisis is that the world financial markets have become extremely slippery. as today ’ s financial world becomes increasingly interconnected, disturbances in one market can quickly spread to others with devastating results. these merciless and indiscriminating financial storms therefore need to be guarded against around the clock, with an early warning system developed to help protect all those involved. looking back over the past ten years, the thai financial sector has changed considerably. the financial liberalization trend prodded along by the bank of thailand not only expanded the size and the scope of the sector, but also made it become more open. the government ’ s ultimate purpose of the