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Address by the Prime Minister of the Kingdom of Thailand1, Anand Panyarachun

Author(s):
International Monetary Fund. Secretary's Department
Published Date:
November 1991
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On behalf of the people and the Government of the Kingdom of Thailand, I have the great honor and pleasure to welcome heads of governments, Governors, delegates, and participants to the Forty-Sixth Annual Meetings of the World Bank and the International Monetary Fund. I am delighted that these two prominent institutions have chosen Bangkok to be the venue of this most prestigious gathering of finance ministers and central bank governors, as well as all the leading commercial bankers and financiers of the world. The choice of Bangkok reflects the growing significance of Southeast Asia, the region with the highest economic growth rates in the world during the past few years. I hope that when this meeting is over, you will not only have pleasant memories of your stay but will also be back in the near future to visit our country again.

For centuries, the Kingdom of Thailand has been a Southeast Asian cultural and economic crossroad. Gently absorbing immigrants, the indigenous Thai culture has been enriched by diverse ethnic influences. Bangkok is a blend of old and new. It is an indication that the Thai people have respect for tradition, while at the same time we move with the modern world. During your stay in Thailand, we hope that you will find the time to explore the wonderful mix of tradition and modernity that is characteristic of our nation, and that you will be able to travel outside of Bangkok to see the many faces of Thailand, not only the modern capital city of Bangkok but also the countryside, which is blessed with natural beauty and rich cultural heritage.

Both the World Bank and the International Monetary Fund have duly given credit to Thailand’s economic performance during the 1980s as an example of successful development that combines growth with stability. The macroeconomic adjustment program launched during the early 1980s has successfully restored economic stability, which subsequently provided the foundation for rapid economic growth. Although we are heartened by this, the success is not without qualifications. Not all Thais have fully enjoyed the fruits of success. Many problems still remain to be solved, and many challenges must be overcome. Some problems are indeed a product of the very success of which we are proud. Therefore, our development achievements so far must be considered a qualified success story, and we have to continue to strive hard to bring progress and prosperity to our people.

The Thai experiences, although unique in many senses, contain several lessons that I would like to share with our colleagues from other developing countries, as well as with our friends from the more developed world. To start with, we must take a measured and realistic look at Thailand’s experience, as perhaps an example of both the positive and negative aspects of the development strategy as prescribed by the World Bank and the International Monetary Fund (IMF).

Thailand has made a dramatic transition from an agricultural and resource-based economy into a more dynamic export-led economy—one that combines agriculture, agro-industry, manufacturing, and services. Along this long and arduous path, there were many difficult decisions to make. And I believe that the decision to pursue early corrective policies in response to the difficult conditions of the early 1980s was the one that has contributed the most to Thailand’s recent success. In response to the problems of low and stagnant growth, widening current account and fiscal imbalances, and increasing inefficiencies during the first half of the 1980s, the Royal Thai Government embarked on a comprehensive transition and structural adjustment program to unlock the vast potentials of the free enterprise economy, emphasizing promotion of the private sector’s role. Furthermore, with continued prudent economic management, I can say with great confidence that Thailand has the ability to maintain its growth potential with economic stability, while making a significant contribution to the overall strength of the global economy.

Economic management is a continuous process. There are no resting points in the process of development and economic adjustments. Allow me again to cite Thailand as an example. After having successfully addressed the problems of instability and minimum growth in the early 1980s, Thailand is now faced with a different set of critical issues. These are no less important, but they require a different approach. In the last decade, we successfully tackled macroeconomic issues through fiscal austerity and monetary discipline, and we improved competitiveness and economic efficiency. In the 1990s, we will have to deal with socioeconomic inequalities in income distribution and ecological issues and continuously improve our competitiveness in production and exports in an increasingly difficult international economic environment.

While there are agreements on the nature of the development issues confronting us in the 1990s, there is less consensus on how to cope effectively with these issues. A conventional approach of fiscal and monetary disciplines, extensively used in the 1980s, is still considered necessary but not sufficient. Perhaps, it is time for a new vision and strategy, and new programs to deal with the problems of the 1990s.

This meeting marks the beginning of the new development era of the 1990s. There are many challenges and problems that demand bold initiatives and strong will to renew the spirit of cooperation among the developed and developing nations in our continuous battle against poverty. In these tasks, permit me to express a few of my concerns.

First, there will be a continuing strain on resource mobilization to cope with old and new demands, including:

  • • the pressing needs of the least developing countries;

  • • the continuing demand from countries suffering from the debt overhang and made worse by the Gulf crisis;

  • • the widening economic gap between the rich and the poor within each country, within the region, and within the world;

  • • the transformation of the U.S.S.R. and Eastern Europe to market economies; and

  • • finally, new demand for resources to cope with the degradation of the world environment.

All of these entail tremendous resources, which require concerted efforts to mobilize. I trust that in your consideration a dynamic and balanced approach to respond to all these needs will be found.

Second, in the 1980s, when we put our macroeconomic house in order, we were able to gain entrance to the world export markets. In the 1990s, it is likely to be far more difficult to achieve and sustain export success, given the increasing regionalization of the world economy. Although we hope that the emerging regional groupings will support global free trade, they could just as easily lead to a world of managed trade, greatly constraining the export performance of the developing world.

In coping with this changing economic environment, the Bank and the IMF need to develop new initiatives to expand market opportunities for developing countries. In this context, support to enhance economic complementarities among developing countries is necessary. This includes the proposed creation of an ASEAN Free Trade Area within a 15-year time frame, among the six member countries of the Association of Southeast Asian Nations, of which Thailand is privileged to be a member, as well as cooperation among countries in Southeast Asian subregions, including the Lao People’s Democratic Republic, Viet Nam, Cambodia, Myanmar, southern China, and Thailand.

Today we all live in a global community of interdependent nations. Our interests are intertwined. In order to help one another achieve a long and lasting prosperity, I firmly believe that our efforts must be built on the determination, willingness, and spirit for closer cooperation among members of the world community. In this context, the failure to reach an accord in the Uruguay Round is but a clear reminder that the actions taken so far fell short of our stated objectives. Our credibility is at stake, and we need to match our political statements with our actual performance in the negotiation process.

Development to me is not a process only of numbers, facts, figures, and statistics. It has to have a human face. We have to meet the needs and aspirations of people to create a cleaner and gentler world where our children can live, grow, and prosper. A world where the water is clean; the air is sweet; and the vision of beauty endless. There is a tremendous cost in defending our quality of life as equal to, if not greater than, the cost of feeding the poor, housing the homeless, and allowing the least fortunate the opportunity to uplift themselves educationally, socially, economically, and politically. We, in Thailand, will do our best to participate in this quest to attain sustainable development—development that would enrich the quality of life, as well as enhance income for the wider segments of the population. Today, I still find it difficult to understand why it is harder to help the poor, to feed the hungry, and to make the world cleaner than it is to make war. As a small country, we do not dare to teach; we only dare to hope that with lessening political tension, the rich and the poor, the developed and the developing will invest in instruments of peace and prosperity rather than in instruments of war.

I urge all of you to stand firm in the determination to help the poor, the underprivileged, and the downtrodden, and to improve the quality of life and promote prosperity in the world. The rapid degradation of nature and the environment has put our common global heritage in grave peril. Combined efforts and political will are essential to deal effectively with this most crucial challenge of the 1990s. In this spirit, I wish you every success in your deliberations. The world is awaiting new and bold initiatives for the 1990s to alleviate poverty, reduce income disparities, upgrade human resource development, and safeguard the quality of life for mankind. I hope that these Bangkok meetings will be the beginning of the great quest for sustainable and balanced development in the world.

Speaking on behalf of a group of countries.

Delivered at the Opening Joint Session, October 15, 1991.

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