Economically, the worst is over, says Abhisit

       The Board of Investment, Esso (Thailand)Pcl and Exxon Mobil Ltd yesterday celebrated the sixth anniversary of the establishment of Exxon Mobil's Bangkok Business Support Centre. On this occasion Prime Minister Abhisit Vejjajiva was invited to deliver a speech, the excerpts of which are published here.
       Despite our persisting political problems,Thailand has always remained investor-friendly and ready to welcome our foreign friends.
       The current financial crisis - possibly the worst in 80 years - has sent a chill down the spines of many countries.The hardest hit of all have been the developing and small to medium-sized economies.These economies are suffering even though the cause of the crisis was not one of their own making. And as the world is interdependent and interconnected, the drop in purchasing power and the demand for our goods and services among our major trading partners have inevitably affected us.
       A sharp drop of 20% in the export and tourism sectors in Thailand earlier this year clearly demonstrates this point, as our economy heavily depends on these two important income-earning sectors.
       So, when the government came into office eight months ago, we knew that our priority was to tackle the economic problem right from the start. We also knew that we had to resolve the economic problem as well as our own internal political problems - hence,the "Twin-Challenges."
       In this regard, we made sure that the political problems did not derail us, or distract us, from resolving the economic problems,for the welfare of our people has to come first.
       That is why the government has swiftly introduced the First Stimulus Package which encompasses several short-term assistance and relief measures - including income support for low income people, skill-training programmes, and free basic education. This is primarily to make sure that our poorest,our vulnerable and the least fortunate in our society can weather the economic storm.I must say that while this stimulus package is somewhat unconventional, it makes a lot of sense.
       It is also very practical as it is the quickest way to sustain the livelihood of our people
       and to get the money rolling in our economy again.
       Now that all of the projects in the First Stimulus Package have been completed, I am pleased to say that this unconventional approach has indeed paid off. We can now safely say that the "worst is over". We have seen signs of positive change. For example,we have seen a rebound in consumer confidence. We have seen a different pattern of consumer spending. We also have a huge current account surplus of 1.4 billion US dollars in the first half of this year and a comfortable level of foreign exchange reserves.
       But perhaps a clearer indicator is the improvement in our GDP. From minus 7.1%in the first quarter of this year, the second quarter registered a contraction of 4.9%.But on a quarter-by-quarter basis we have now seen this figure turn positive to 2.3% in the second quarter. We expect the continuation of such improvement and are confident that by the fourth quarter the year-on-year figure will also turn positive.
       So, to tackle the economic aspect of the "Twin-Challenges" that I mentioned earlier,the government has adopted a "TwinApproaches" solution. While we address the short-term economic problems, we are also looking into investing in our long-term socio-economic capability and competitiveness. That is why the government has introduced the Second Stimulus Package, which we call in Thai Patibudkarn Thai Kem Kaeng and in English,"Thailand: Investing from Strength to Strength."
       This 45-billion-US dollar package, to be implemented over the next three years, will be used for investment in the long-overdue infrastructure projects such as roads, rail,communications, logistics, and water management and distribution system.
       Part of this fund will be used to upgrade our healthcare and education facilities and create centres of excellence in medical services. Our service industry, which has tremendous potential to expand, will get a bite at this fund as well, along with the creative economy and tourism industries.
       Last week, Cabinet approved several projects under this stimulus package and they will be put into operation very shortly. All in all, the Second Stimulus Package will be preparing Thailand to enter the post-crisis era as a stronger and healthier economy.
       More importantly, what is important is that it is all about creating "opportunity"for all of us, Thai people and foreigners alike.
       For foreign investors in particular, despite our persisting political problems, Thailand has always remained investor-friendly and has been ready to welcome our foreign friends.
       After my visits to China and Japan, for instance, I can confidently say that the desire to come and invest in Thailand is still alive and well. I have already met with potential investors from these countries and the results were extremely encouraging.
       I know many of you are now wondering if I am going to speak about the political situation - especially after the Cabinet resolved on Tuesday to invoke the Internal Security Act from August 29 to September 1. I would love to say no, as you have heard so much about Thai politics from the news almost on an hourly basis. But I think it is important that our people and our foreign friends truly understand the situation and the rationale behind the measure that we have adopted. Simply put, the Internal Security Act is imposed to pre-empt any violence that may be caused during the rally this weekend - a protective and precautionary measure, if you would like. It is not the same as the Emergency Decree that had been imposed before, because the Emergency Decree was imposed after the violence broke out, in order to contain the situation.And as experience is the best teacher, we have learnt our lesson from the incidents in April, and we cannot allow that to happen again.
       The Internal Security Act will serve as a confidence-boosting measure for all concerned. It will create stability and prevent chaos.
       And, most importantly, measures that will be carried out by the authorities concerned will be strictly in accordance with the law and the Constitution. The Act will only be imposed for a short period of time and only in Dusit district of Bangkok. So, in other areas of Bangkok and the rest of Thailand, business and social activities can proceed as normal.
       I am pleased to hear that the business community has already expressed its support of the move by the government. They do not want any more riots, and the people of Thailand certainly do not want any more of the riots.
       They want Thailand to move on and move ahead towards more peace and prosperity.
       The above remarks were delivered at the "Year of Growth and Opportunities" event at the Mandarin Oriental hotel in Bangkok yesterday.