"Next Generation Asia"

By

Keynote Address by His Excellency Thaksin Shinawatra
Prime Minister of Thailand
at the 2001 Fortune Global Forum
Hong Kong, 9 May 2001

Excellencies,
Distinguished Colleagues and Guests,
Friends of Thailand and Asia,

It is an honor and a pleasure to have this opportunity to meet with many friends in the business and financial community, government leaders and members of academia, who are the key players, true supporters and valuable partners in promoting the continued growth and prosperity of the Asia-Pacific Region.

 

This is truly a gathering of the Asian Insider Forum.

 

Allow me to briefly express my deep appreciation to the people and government of the Hong Kong Special Administrative Region as well as the organizers of the Fortune Global Forum for the excellent arrangements and cordial hospitality in hosting this timely gathering.

 

The history of Asia is rich in tradition, with many notable and great achievements in overcoming seemingly impossible odds and challenges.

 

Asia is a complex and multifaceted region but joined together in the all important quest--a singular purpose--in seeking the attainment of greater prosperity, rapid and sustainable socio-economic growth, as well as improving the quality and standard of living of its people in peace and harmony with the rest of the world.

 

Asia has always responded positively to challenges, dangers, success, crises, and the immutability of change with equanimity. Our theme, the Next Generation Asia, is timely--a new chapter waiting to unfold.

 

The uninitiated and misinformed may have been troubled by the recent Asian crisis, but to experts with an insider box seat--those present here--the future of Asia holds many promises with few surprises.

 

The story will definitely be an exciting and a successful one.

 

The progress of recovery in all Asian economies in the past four years has been steady, rising like a phoenix from an unprecedented economic and financial crisis of grave severity. This is a clear demonstration of Asia’s resiliency, innate strength, great fortitude and determination.

 

Governments, businessmen, and the Asian people were determined to rebuild their seemingly shattered dreams, and are assuredly bringing Asia back to a more viable, sustained and dynamic growth path once again.

 

In comparison, while the outlook of a global slowdown looms large, its impact, while not helpful, would relatively be but a slight turbulence and not a major impediment to full economic recovery in the near term.

 

The Asia-Pacific Region will continue to be a key and dynamic player on the world economic stage, and the crucible for change and progress in the coming economic era.

 

Distinguished Colleagues,

 

Asia and the Pacific is home to over three billion people.

 

Our economies together represent one third of the global economy, and together we own more than half of the world’s monetary reserve assets.

 

Our region has produced a wide variety of world class goods and services from time immemorial.

 

We are a growing market for capital goods, technology, consumer products, semi-finished goods, and raw materials needed to promote and sustain rapid economic and social development growth. Our market continues to expand with improvements in income levels and development growth.

 

Our region has great diversity in resources, manpower, skills, homegrown technical know-how, open trading and investment systems, flexible lifestyles and enormous potential.

 

On the other hand, Asia must accelerate, sustain and enhance equitable socio-economic growth to alleviate poverty and raise the quality and standards of living of its population to an appropriate and acceptable level.

 

The pace of change and new realities demand new pragmatic and realistic policies and action programmes to ensure that Asia will once again become a key and constructive player on the world trade and financial arena.

 

The process requires a reexamination of new realities, establishing new priorities and improved channels of collaboration and cooperation among Asians to optimize our own potential, and safeguarding our national interests.

 

In the past, Asian countries individually tended to trade outside the region for imports and exports, which served to enrich the western world, figuratively and literally.

 

Asian goods and natural products--spices, timber, minerals, handicrafts, cotton, and silks--reflect the quality of Asian skills, our unique know-how, and the richness of our culture and abundant natural resources.

 

In turn, we instead shifted to importing western technology and industries and followed in their footsteps, but always one or several rungs below in the value chain.

 

We have now come full circle.

 

In the new economic century, to deepen and widen economic development, Asia must reexamine and reposition our development strategy to cooperate and collaborate with each other more closely in trade and development to produce and create new products of world class quality, utilizing a combination of world class technology with the innate skills and know-how of our forefathers.

 

Asian countries must network and collaborate with each other to enrich the world once more. To do so, we must join hands in identifying, designing, processing, and resource mapping to produce goods of high value, with world class quality, among ourselves, first and foremost.

 

However, we must not hesitate to co-opt and optimize appropriate modern technology as well as advanced marketing and delivery systems to bring the new product to the world stage. We must learn to turn the information superhighway into a new shimmering Silk Road. The future of trade is not only about production and marketing, but also about “predicting demand and satisfying demand at the right moment”.

 

Responding appropriately to new challenges and new lifestyles will be crucial in creating a new paradigm of national development based on globalization and localization.

 

To overcome old nemesis and to meet the challenges of the new century, Asia must embrace change and adapt to new economic realities and revolutionary development in a new market place brought about by the process of globalization and the third industrial revolution, the information and communications technology age. Asia must quickly and actively participate in protecting and making use of its vast bio-resources, and expand its cooperation and research capabilities to keep abreast of ongoing and innovative advances as well as the convergence in IT and bio-technology.

 

Convergence of technology will be the new frontier of knowledge and the new venue of wealth creation of the new century.

 

In this process of repositioning itself, Asia needs to reassess, improve, and realign its development strategies and objectives.

 

Asia is currently facing the following challenges:

 

The challenge of the “ Knowledge-based Economy”.

 

The challenge of global competition.

 

The challenges of innovation and convergence of new technologies.

 

The challenge of speedy and appropriate "capacity building" to bridge the digital divide.

 

The challenge of poverty alleviation.

 

The Asian share in the value chain of producing the goods of the world will come under increasing demand pressure for ever lower prices for Asian products, pitting our farmers and unskilled labor against each other in an unending and ruinous price war. We are offering cheap labor for industrial goods and cheap farm products for the world.

 

The repetitious vicious cycle of crisis and devaluation brought about by selling our human labor and skill in this old value chain cheaply must be reexamined.

 

Some of us in Asia will be able to sustain ourselves through the crisis by borrowing against future earnings. But without changes, we will be facing the repetition of pain.

 

Asia can no longer afford to apply simple short-term solutions that merely fix what went wrong, and refinance old debts temporarily without improving the production matrix. We can no longer ensure competitiveness through fiscal and monetary austerity, export price reductions, and continuous devaluations.

 

Asia will have to compete with the rest of the world on “Quality”.

 

We must “think globally but act locally”.

 

We must converge the best of our past with the best of the future, in order not just to survive the future challenges, but also to enrich our people and the world.

 

We must also promote, enhance, and deepen our traditional know-how, and encourage our people to think and create innovatively as in the past.

 

We must recast the traditional mold of entrepreneurship to take advantage of new phenomena to bridge the digital divide urgently and effectively without delay.

 

If history is to be our guide, the West sought and benefited much from Asia’s fabled riches and its wide variety of offerings.

 

The tales of Marco Polo, the silk route and the spice trade were the stuff of legends, the dreams of explorers, and the commercial backbone of the East India and China trade. Asian products of high quality were the world standards and, as such, enriched global lifestyles, both qualitatively and quantitatively.

 

Asia must once again seek to rekindle that bounty.

 

We must identify and produce new riches to match the new demand requirements. We can enrich the world once more with a broader range of goods and services for a new discerning consumer class. We must rediscover how to shift our considerable talents to move up the value chain to produce higher quality goods with higher returns based on the synergy of globalization.

 

Asian capabilities, aesthetic skills, unique local know-how, knowledge and dedication, when combined with world-class modern design, cutting edge technology, appropriate cost-effective industrial engineering, modern packaging, advanced marketing and internet capabilities will be the key to the new silk road and new spicy life styles.

 

Yet at the same time, Asia must address and solve the problem of poverty of the majority of its population as well as reduce the socio-economic gaps between the poor and the well-to do and, especially, between the rural and the urban sectors while restructuring itself to the new economy.

 

To do so effectively, we will need to be pragmatic and eclectic in designing our responses to the new paradigm.

 

A process of transition and transformation is required to bridge the modern with the traditional, the national with the global.

 

The Western world will have new opportunities and new investment potential in Asia’s rediscovery of its roots. The advanced western delivery system and modern financial services will play a major part in this process.

 

Building new partnership, new avenues and new business opportunities for a new era.

 

The new Asian development paradigm is not exclusive for Asians only but must, and should, be open to, and in partnership with, all our Western friends and partners.

 

The times will demand greater cooperation, both bilateral and regional, and less competition for greater mutual benefits.

 

Asia must shift its primary emphasis from simply trading outside the region in competition with each other to one of networking and trading intra-Asia among each other, and collaborating to compete in other world markets.

 

If we fully cooperate and collaborate with each other in expanding intra-Asian trade, as our European and American friends do among themselves, Asia will have taken the very first serious step in the right direction, thus bridging the great economic and trade divide.

 

For me, I see this time as the opening of a new era of the Asian phoenix flanked by all our crouching tigers and no longer invisible dragons.

 

Distinguished Colleagues,
Ladies and Gentlemen,

 

Permit me now to briefly outline and clarify the new policies and objectives of the Royal Thai Government and our proposed medium-term economic and social programme of putting Thailand back in business once again.

 

The most important task of my administration is, first and foremost, to revive confidence and belief in the ability of the government to restore and reinvigorate the Thai economy back to a path of dynamic yet stable and sustained growth.

 

Concurrently, we must immediately address the fundamental problems of the poor.

 

Eradication of poverty is a major socio-economic policy objective--the fundamental cornerstone in restoring and constructing a stable social platform to ensure social cohesion and political stability, which will enable economic recovery and growth.

 

A strong stable social platform is imperative in generating investor confidence and a prerequisite for a conducive and desirable investment climate.

 

That is why the thrust of our policy objectives are geared to revive and resuscitate the farmers and the village economy to generate domestic demand impetus at the grass roots.

 

Given the limited availability of resources and less than friendly world economic outlook, we have to prioritize urgent action programmes to effectively resolve the plight of the majority of our poor at the outset.

 

At the same time, we have taken equally urgent actions to address the equally important issue of financial rehabilitation as well as corporate and industrial restructuring on a broad front.

 

We will ensure equitable and fair treatment to debtors and creditors in a transparent and expeditious manner.

 

The Thai economy is now emerging from the Asian financial crisis in a weakened but fair shape, although we have not as yet effectively communicated the results of our hard work to global investors.

 

Similarly, we have not been able to explain our policies and objectives clearly to the international community in detail.

 

We will be rectifying that in the coming days.

 

Although the outlook for economic growth is less buoyant because of the impact of a projected worldwide economic slowdown, our economic policies and programmes are specifically designed to strengthen and jump start domestic demand at the grassroots, reinvigorate the real sector, continue corporate restructuring, accelerate the early reduction and consolidation of NPLs by establishing the Thai Asset Management Corporation, and maintain a strong external current account position, and continued foreign exchange reserve adequacy.

 

Structural and legal reforms as well as financial rehabilitation will continue.

 

Thailand’s outlook continues to be stable, and once our programmes are in place, market assessment should be bullish in the near term.

 

Thailand’s recovery will be reinvigorated by new policies to stimulate and maintain sustainable economic growth in the near term between 3.5 to 5% of GDP.

 

Domestic demand stimulation through the village fund, debt restructuring for small-scale farmers, SME promotion and micro credit programmes have been initiated on a fiscally sound and prudent basis.

 

These measures will reduce poverty, promote rural development, and create new types of entrepreneurs and new products for new markets.

 

These socio-economic measures are crucial social and economic foundations in creating a stable social platform. They are the basis of sound, equitable development growth, an investor-friendly environment, and an assurance of long-term investment values.

 

Social stability and cohesion as well as political harmony are crucial ingredients in maintaining an investor-friendly platform.

 

Restoring financial sector health is making steady progress through NPL consolidation at the Thai Asset Management Corporation, which will be professionally managed with low moral hazard danger and based on maximization of recovery values.

 

Similarly, we will strengthen our support of corporate restructuring and legal procedures by providing full financial and administrative support to the judiciary process. Fair and equitable treatment will be the rule. And the government will strictly maintain a neutral stance between debtors and creditors.

 

Allow me to state clearly and unequivocally that Thailand, and in particular my administration, is firmly committed to maintaining an open free enterprise economy.

 

Our welcome to investors, both old and new, continues. We shall honor all our international commitments. There is no backtracking and we have no desire to change our proven and time-tested stance. Any reports to the contrary are mischievous and absolutely untrue.

 

We are, however, at a critical juncture in a multi-year reform process.

 

This reform process is geared to creating and increasing sustainable wealth based on new products, new industries, new ideas, but relying primarily on the principle of self sufficiency where appropriate.

 

This move to greater value added in the value chain will be based on building upon our unique local strength and know-how combined with cutting edge capital IT and bio-technology and modern marketing systems. This new development paradigm requires a change in the mindset of Thai people, Thai businessmen and Thai officials. Our foreign friends need to readjust their mindsets as well.

 

The Thai government must create an environment and mechanism to encourage a new class of entrepreneurs, create new opportunities and provide a new framework for our people to think whole and far, take and manage risks, and pursue their potential for a more prosperous and equitable society.

 

We are striving to fulfil our potential. We are cooperating to forge a sound, prosperous and dynamic Thailand. We are building a civil, moral and just society. We are building a free and democratic nation, at peace with itself, its neighbors, its region, and the world.

 

Excellencies,
Distinguished Colleagues,
Ladies and Gentlemen,

 

The next generation Asia, to be successful, must be anchored in the tapestry of traditional Asian strengths and heritage. It must also be modern, open to innovation and changes. It must be wise and flexible in designing new approaches to leverage and build from our combined strengths, common heritage, physical, geographical and intellectual endowments. The economy of speed will be of paramount importance in responding to rapidly changing world demands. We must create a strong economic and social platform, bridging the past with the present for a secure future in the next generation.

 

I wish to invite all who believe to join with me in this wonderful quest to build a new Asia and a new Thailand.

 

Thank you.

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