takes in more than 40 per cent of taiwan's electronics exports. so, a us rebound would likely benefit them more than us. therefore, while we are hopeful that the us economic trend is more upbeat, we harbor a healthy dose of reservation insofar as the immediate gains brought on by the us recovery are concerned. another risk to growth is in the effectiveness of policy stimulus to meet the growth challenge. in the past few years, various fiscal stimulus packages have been the principal motor driving the economy. later this year, however, the necessary consolidation will take place to ensure fiscal sustainability, and sound economic management will demand a right mix of policies. having achieved external stability and price stability, there is room for monetary policy to be more accommodative to growth. on this point, i wish to emphasize that even though our focus today is on economic recovery, the bank of thailand's monetary policy objective remains that of maintaining price stability. it is my belief that an important pre - condition for growth on a sustained basis is a stable macroeconomic environment. however, i doubt that macroeconomic policy alone will be sufficient for long - term economic growth. we, therefore, need to look beyond macroeconomic policy. to meet the growth challenge, thailand needs a steady and sincere effort at the micro - level to put our economy back on a more robust growth path. the reforms must aim for good corporate governance, faster debt restructuring, and the efficient and effective banking sector. without these actions, the potency of the fiscal and monetary policies will be limited, and whatever gains in output we make will be ephemeral. the bottom line, ladies and gentlemen, is that thailand will stand ready to reap the full advantage of an upcoming global recovery only if the real sector becomes competitive and the financial sector functions smoothly. the bank of thailand can contribute to the growth process by conducting a responsible monetary policy to ensure price stability, and by prodding the economy along the path of institutional reforms that have been initiated. with a sound policy framework and institutional reforms in place, a more efficient economic structure will have been built and the entrepreneurial energy of the private sector can be unleashed to ensure greater economic well being. this brings me to the last point i wish to make tonight, that is the need to speed up the structural reforms. i am convinced that the necessary transition toward more robust and durable growth lies in breaking out of the current constraints imposed on the economy post - 1997, the most pressing of which is

we know it is a product of the great depression, and that economic disaster was the result of a combination of events unlikely to recur. in addition, the moral - hazard costs of the safety net are significant. nonetheless, the safety net, by providing ongoing access to real resources, has become capitalized into a broad spectrum of asset values. it is now an embedded part of our social and economic framework, for good or ill. viewed in its most favorable light, the safety net does guard against those once - in - a - century or so breakdowns in market forces, however induced. the long absence of a fire, or of an economic and financial conflagration, does not suggest that we should cancel the fire insurance policy or the safety net. but, i do think that as a society we ought to explore what we can do at the margin to retain the economic benefits and lower the economic costs of the safety net. we ought to be careful that we do not, through safety net expansion, increase the marginal costs more than the marginal benefits. a look back to the pre - safety - net era might be helpful as part of that exploration. i have in the past suggested that to lessen the moral hazard of the safety net and to improve supervision and regulation, public policy should attempt to simulate, in so far as possible, what markets alone might do, or at least to create market - type incentives. to do so would, of course, move us closer to the period of pre - safety - net incentives while avoiding, one hopes, the distortions of that regime. for example, solvent banks must remain assured that they will be able to liquefy their sound assets at times of liquidity distress, but ideally, we would otherwise like banks to be managed as if there were no safety net. that is, if we retain the safety net, we ought to price and otherwise manage it so that the banking system is as close as possible to the one the market alone would provide. clearly one of those steps would be better pricing of safety - net access. the federal deposit insurance corporation has proposed some useful initiatives to move in that direction. the usual suggested premiums for deposit insurance are, of course, far from those that would fully eliminate the subsidy that insurance provides to depository institutions and their borrowers and depositors, especially at times of financial crisis. indeed, to eliminate the subsidy in deposit insurance, the fdic insurance premium would have to be set high enough