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

are busy debating whether these early signs point to a tangible recovery, the recent strong boom in the stock market seemed to have overwhelmed that debate. on this point, let me say that we need to distinguish between the recent asset price performance and the economic fundamentals. it is true that the performance of the listed set firms has improved. the improvement was led in part by better - than - expected profitability of listed companies. corporate profits in general were also on the rise in 2001, compared to 2000. with this improvement, we are now more able to segregate the winners that is, the strong performers - - from those lagging behind. this presents a stark contrast to the previous pictures in which almost all sectors were judged to have performed poorly. another factor that contributed to the strong performance in the stock market is that the thai market had a relatively low p / e ratio compared to other markets, regional and extra - regional, and the positive price correction might have been at large. but, whether the inflows that have been driving the market up will stay for long will depend on the underlying fundamentals. this is to say that in order to attract long - term investors that they need, thai companies must persevere with business restructuring and continue to reform their operations. but more importantly at the macro level, the economic recovery process must continue firmly, and be supported by the right policy mix and by further progress on the unfinished reforms. i would like to turn your attention now to what we see as the risks in the process of recovery. the speed and robustness of the recovery will depend in large part on the turnaround of the global economy. on this front, the bank of thailand remains cautious in our optimism. our guarded optimism is based on two reasons. first, the us economy, which absorbs roughly 20 per cent of our exports, is likely to rebound later in the year while japan, where 15 per cent of our exports go, seems more likely to remain in the mire for the rest of the year. therefore, the global economy as a whole may not be expanding much. second, a us recovery, particularly if led by electronics, may not benefit thailand as much as it will benefit other regional economies. this is owing to the diversified nature of thailand's exports. for example, electronics count for only 26 per cent of our total exports while they count for 36 and 60 per cent of taiwan's and singapore's exports, respectively. furthermore, the us