record a surplus in the year 2001, though of a smaller amount. although the thai economy will continue to expand, there are a number of important issues to be taken into consideration : the first issue : the us economic slowdown external risks will be increased as the us economy is expected to slow in the coming year. how much should we be concerned about this, given that the usa is a major industrial country and the major export market for asian countries? the degree of thailand ’ s exposure to the us market can be considered moderate, as exports to the us market constitutes about 21 % of thailand ’ s total exports. major export goods include textiles, electrical appliances, electrical parts and integrated circuits. over the years, the structure of thai exports has diversified considerably in terms of both markets and goods, thus reducing over dependence on any particular market or goods. it is expected that this diversified structure and the enhanced price competitiveness will help cushion any adverse effects on thai exports caused by the us economic slowdown. the second issue : restoring public confidence given that exports will slow down, economic recovery will have to rely more on domestic demand which in turn depends on the recovery of purchasing power. however, at present, private sector spending has been affected by the decline of consumer and investor confidence, leading to a situation where those with purchasing power are cautious in their spending. this confidence has to be restored. those who are able to invest have to begin investing. but a good starting point to restore confidence is to have a clear economic policy framework which can be realised only by having people electing good citizens to run the government. if the people are confident in their government and in the policies of that government, then confidence in the economy will be restored speedily. the third issue : fiscal policies for economic growth fiscal policies will play an important role in the process of economic recovery next year. at present, government spending amounts to a fifth of gdp, which is not considered as a high level. but for other countries, people are used to the system which the government plays a major role. government deficit at a level which is conducive to economic recovery should therefore be readily understood and accepted. therefore, fiscal policies must play a more important role in stimulating the economy, but should maintain a balance between economic stimulation and long - term fiscal discipline. the fourth issue : monetary policy on monetary policy implementation, the bank of thailand ’ s view is that the thai economy at present and in the near future continues to need low level of

of operation and signaling to market participants. the proposed amendment of the bank of thailand act clearly states that the overriding objective of the central bank is price stability. to implement this, a monetary policy committee has been set up, the results of whose deliberation are to be disclosed regularly to the public, and an inflation report is to be published quarterly. as for our supervision function, we are moving towards a risk - focused supervision and improved disclosure and accountability system. the formal policy framework is to be set by the financial institution policy committee which similarly has members from outside the bot. may i add that to expedite the promotion of transparency, we have set up these two committees even before the new law has come into effect. thus highly respected and well qualified outside persons now have a say in the deliberations on both monetary policy and financial institution policy. the technological challenge the 1997 crisis set back economic and financial development in thailand by many years. these have to be made up through speedier reforms and a catching up process. in addition financial market participants as well as regulators are facing the global challenge of the new economy and technological revolution. the new technological revolution is pushing for change everywhere in the world, and with no concern for those in need of time to heal the wounds inflicted by crisis. it has become an inevitable development which needs to be embraced with the right attitude, mindset and understanding. the new economy in itself poses challenges, not exclusively to financial service providers, but to regulators, business operators and the financial industry as a whole. the challenge, on this last aspect, is particularly crucial to the government sector ; for they need to make sure that the legal, regulatory and supervisory framework are there to create the right competitive environment and operating conditions. this is to ensure that when their own private operators are ready for the technological challenges of e - banking, internet - broking and the electronic trading platform, then the appropriate legal and regulatory framework is there, rather than becoming an obstacle to development - by which time we may no longer be able to catch up with major global players. in the world of e - commerce and trading, banks have become important intermediaries as the operator of the payments system, to facilitate the payment for the goods and services which are being traded on - line. as regulator of the commercial banking business, the bank of thailand is working in earnest to support the development of the country ’ s payment system, by both the public and private sectors. this is to ensure that