Full Speech Of Pm's Surayud

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APEC SUMMIT

Full Speech of PM's Surayud

Full Speech of Prime Minister Surayud Chulanont at the Apec CEO Summit in Hanoi.

Keynote Address

by His Excellency General Surayud Chulanont (Ret.)

Prime Minister of the Kingdom of Thailand

"Reform and foreign direct investment: A view from Thailand" APEC CEO Summit 2006

Hanoi, Vietnam

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Dr. Vu Tien Loc, Chairman of the APEC CEO Summit 2006,

Excellencies, Distinguished Participants,

I am greatly honoured to have this opportunity to address this

distinguished gathering of APEC business leaders. I thank Dr. Vu Tien

Loc, Chairman of the APEC CEO Summit, for his kind invitation.

From my perspective the timing couldn't be better. Recent

political developments in Thailand require clarification in the eyes of the international business community. So, this is an excellent opportunity for me to do so, while at the same time strongly reaffirming the Royal Thai Government's continuing commitment to sustainable economic growth driven overwhelmingly by the private sector, both domestic and foreign.

I intend to address the following topics:

-- The military intervention of September 19 and political developments over the last two months.

-- The timeline for political reform over the next 12 months,

culminating in a free and fair general election by the end of 2007.

-- My Interim Government's major reform agenda, and, finally,

-- My snapshot of the fundamental and dynamic strengths of Thailand's economy and why our reform agenda will make Thailand an even more attractive location for your FDI.

When the military intervened in the supposedly democratic governance of our country on September 19 many foreign observers were puzzled by the Thai people's reaction. Tanks were festooned with flowers, family snapshots taken with tough-looking, but smiling, soldiers.

Public opinion polls reported that the overwhelming majority of Thai people, both urban and rural, supported the intervention.

Given the Thai people's hard won democratic development over the last 30 years, how could they react so peacefully and so positively to the overthrow of the 1997 "People's" Constitution, the most liberal and progressive basic law ever?

To answer this question, one must look at what had been happening to Thailand over the last five years. Democratic checks and balances had been undermined and weakened to the core. Thai society had become polarised as never before. The poor were going deeper into debt. The rule of law was being systematically subverted. Human rights abuses multiplied. Corruption and cronyism were rampant. The country had reached a constitutional impasse that defied traditional democratic solutions.

Therefore, the military intervention of September 19 was a uniquely Thai response to the need for urgent political reform. We have given ourselves a breathing space for genuine democratic reform, a chance to strengthen weakened democratic institutions, restore eroded checks and balances, and ensure that transparency and good governance are given more than lip service.

So far, we have gotten off to a running start. The promises made in the initial days have been kept to the letter. With my appointment as Prime Minister on October 1, the military intervention effectively lasted 10 days. An Interim Constitution has been promulgated. The Government has submitted its policies to the new National Legislative Assembly. A Constitution Drafting Council will soon be established. This new Constitution will be ratified by the people through a national referendum, leading to free and fair elections by the end of 2007.

Over the next 12 months, the Interim Government intends to address four major structural challenges: to advance political reform, restore national unity, redress income inequality and strengthen the rule of law. This, I realise, is quite a tall order.

An elected government is what we are preparing the groundwork for. But elections are but one component of a democracy. An elected government must also be accountable and transparent. Independent checks and balances must be protected. Public participation must go beyond elections.

That is why we are making political reform our top priority. The Interim Constitution has set a timeline of one year for a new Constitution and fresh elections. Before then, the Interim Government will encourage as much public participation as possible. We aim to stimulate a broad, inclusive national debate. Our national communications resources will be used to educate and inform the people. The Government will not impose its views upon the citizens, but will facilitate and encourage informed choice.

Our second, closely related, priority is the restoration of national unity. Domestic social and political divisions have been deepening during the past five years. We need to reject the growing culture of confrontation and seek instead to promote dialogue and reconciliation. Nowhere is this need more keenly felt than in Thailand's deep South.

The Government has already taken initial steps toward reconciliation. I recently apologised to the Thai Muslims in the deep South for previous governments' often harsh repression. Charges against protestors have been dropped. A civilian coordination centre disbanded by the previous government has been reconstituted. During a recent trip to Malaysia I restored, I believe, what have traditionally been warm and friendly relations with our southern neighbour. These are just our first steps. But having worked in the deep South over the last three years in a civil society capacity, and being aware of the multi-dimensional nature of the problems, I believe that an approach based on understanding, compassion and right actions is the only path to justice, peace and harmony, and ultimately a more prosperous deep South.

Our third major challenge is to tackle income inequality. Thailand has been one of the fastest growing economies in the world, yet we still face a wide gap between rich and poor, not only in terms of income but also opportunity. My Government will pursue policies to give the poor greater opportunities for education, health and a better quality of life. We will introduce new policies and continue some initiated under the previous government, provided they prove effective and can be made transparent and sustainable.

Finally, our fourth major challenge is strengthening the rule of law. When the law is applied unevenly, it opens the way for corruption. Corruption encourages inefficiency. It is also bad for business. If Thailand is to become a more just, equitable and democratic society, we need to become a country ruled by law, not by money or privilege. We also need to ensure that relevant laws are updated to reflect our democratic aspirations and the realities of the globalised economy.

Excellencies,

Distinguished Participants,

Our efforts will be guided by four overarching operating principles: transparency, justice, efficiency and the economical and sustainable use of resources, or "sufficiency economy". These principles will also guide our economic policies.

The first three are self-explanatory, but there has been some misunderstanding over the term "sufficiency economy". Let me reassure you that our sufficiency economy approach is based on common sense principles: moderation, rationality, and self-immunisation from both domestic and external shocks, rather than anything else.

GDP growth continues to be important, of course, but it should not be at the expense of people or the environment. The quality of growth will become an equally important measure of success.

Some have asked whether such an approach is compatible with modern capitalism. If corporate social responsibility, good governance, and better managed risk are compatible with modern capitalism then clearly the sufficiency economy is also.

All of this will take place against a backdrop of continuing strong economic fundamentals. Thailand has always been open to the global economy. Under the Interim Government, it will remain so.

Let me present you with a snapshot of where we stand. It is a picture that reflects our strong fundamentals. Since September 19 up to today, there has been a constant flow of funds into our stock market. The Stock Exchange of Thailand has shown an upward trend for the past six weeks. Foreign Direct Investment is also rising. It is higher year on year from 2005, and the latest figures are more positive than at the beginning of the year. Our exports are also doing well, up over 15% year on year. If anything, it is our strong Baht that we are worried about. All these are signs of strength and confidence in the Thai economy.

As part of ASEAN, we are forging ever closer links not only within the region, but also with economic powerhouses such as India, China and Japan. ASEAN plans to become a free trade area by the year 2010 and an ASEAN Community by 2020 or even earlier. At the ASEAN Summit in Cebu, the Philippines, next month, the region's leaders will discuss how to expedite this process further.

Thailand also prides itself on being ranked one of the world's most attractive investment destinations and one of the easiest countries to do business in. Our thriving auto industry has won us recognition as the Detroit of Southeast Asia. This year we will export some 500,000 vehicles to the world. Our agricultural abundance makes us the only net food exporter in Asia.

We believe in partnership with the international business community. There will therefore be no change in our investment policy. Foreign investment will continue to enjoy full protection. As we pursue the Bogor Goals in accordance with APEC, we will strengthen our communities and societies so that they fully benefit from liberalisation.

Indeed, the structural benefits from anticipated reforms will, I hope, be welcomed by our international partners. The reform of current regulations on trade and enhancement of transparency in government contracts will ensure greater predictability and good governance. Meanwhile, the Government policy statement has clearly outlined a particular emphasis on productivity improvements for Thai enterprises, an aspect that had been neglected for far too long.

All of this means ample opportunities for the foreign investor. We welcome in particular foreign direct investment that will help us meet our development objectives. Let me give you a few examples.

We will continue with the development of large-scale infrastructure projects, the so-called Mega-Projects. To this end, we have recently announced that we anticipate opening bidding on mass transportation routes within March 2007. The main requirements will be that such projects are of tangible benefit to the public, promote growth and development, and are implemented in a transparent manner.

We do recognise that financing can be a challenge. We are therefore keen to work with the private sector to devise innovative means of financing as appropriate.

Another priority area for us is the reform of our education and learning system. We need to effectively prepare future generations for the challenges of globalisation. We can no longer afford to regard our manpower simply as hands to be put to work in farms and factories. We wish to bring out the creative and intellectual potential of every citizen in our society. We would therefore welcome foreign direct investment that will help us build a strong and equitable knowledge-based society. Improvements in Thailand's intellectual infrastructure would, in turn, accelerate knowledge creation and innovation to enhance our long-term potential.

Another area where we wish to see greater public-private partnership is the environment. A sustainable environment is necessary to ensure the quality of life that we wish to see for our citizens. Environmental technologies and management know-how that are suitable to Thailand's conditions would contribute greatly to our sustainable development.

Excellencies,

Distinguished Participants,

The 64 million Thai people are working hard, and challenging ourselves, to move forward onto a more sustainable national development path, more sustainable democratically and economically. We are seeking to build a more just, more compassionate and more egalitarian society.

My Government will rebuild the institutions that are necessary for a strong and stable democracy. Reform means that transparency, accountability, and good governance will be ingrained into all parts of government. This is necessary not only for Thailand's democracy, but for our development to be sustainable.

When you combine Thailand's strong fundamentals with the

structural benefits accruing from the Interim Government's actions, Thailand will offer greater transparency, more efficient governance, greater socioeconomic and political stability and greater sustainability. In other words, for our partners in APEC and around the world it will be a better place to do business in, and to do business with.

Thank you very much for your kind attention.

--The Nation 2006-11-18