| Thank
you, Mr. Roosevelt, for your kind introduction.
Ambassador
Jon Huntsman,
Mr.
Williamson,
Distinguished
Guests,
Ladies
and Gentlemen,
First
of all, I would like to thank our hosts -- the U.S.-ASEAN Business Council
(USABC), the U.S.-Thailand Business Council (USTBC) and the Asia Society
-- for sponsoring this event, thus giving me the opportunity to address
the distinguished personalities from the Administration, the Congress,
and the leading members of U.S. business gathered here tonight. I would
also like to acknowledge the distinguished presence of the ASEAN diplomatic
corps, and extend warmest greetings to the leaders of the local Thai community,
who are with us this evening.
I
realize that these past three months have been a sorrowful and trying time
for the United States. My government and the people of Thailand feel great
sympathy and solidarity with the American people for last September’s atrocious
terrorist attacks. We too have a stake in seeing that justice is done.
We share the grief of Americans in New York, here in and around Washington,
D.C., and throughout the country over the loss of thousands of innocent
lives. We ourselves mourn the loss of our compatriots at the World Trade
Center that day.
As
a long-time friend and ally of the United States, Thailand immediately
condemned the terrorist acts in the strongest terms. We also joined the
international community in supporting U.S. actions against international
terrorism, including by issuing declarations at the APEC Leaders’ Meeting
and the ASEAN plus Three Meeting.
Following
the September 11 incident, Thailand has actively cooperated with our friends
and allies in sharing and exchanging intelligence needed to combat terrorism.
Domestically, we are proceeding to amend, as quickly as possible, existing
legislation and regulations in order to accede to all international conventions
against terrorism, four out of twelve of which Thailand is already Party.
Next week, after my meeting with Secretary-General Kofi Annan at the UN
Headquarters, Foreign Minister Surakiart will sign the crucial Convention
for the Suppression of Financing of Terrorism.
As
an expression of Thailand’s humanitarian concern, the Thai Government has
donated 3,000 metric tons of rice as food relief for the Afghan refugees,
and the Thai Red Cross has donated 10,000 blankets. The Government has
also recently commissioned a musical composition entitled, “Requiem, In
Memoriam 9-11” by a distinguished Thai composer to mourn the terrible loss
of lives from the atrocities and as an expression of hope. A performance
titled “Concert for Peace”, to be attended by international personalities,
will be held on 11 January 2002 in Bangkok.
Distinguished
Guests,
Ladies
and Gentlemen,
The
tragedy of September 11 has affected world peace, stability and the way
of life as we know it. Thailand, as a good friend of the United States,
is determined not only to cooperate with the U.S. and the UN to rid the
world of “terrorism of all stripes”. We are also determined that terrorism
shall not achieve its ultimate aim of disrupting the global economy and
destroying our social and economic stability. We are prepared to consult
with the U.S. to find ways and means to creatively block the terrorists’
aim of disrupting and destroying all our productive relationships, whether
trade, tourism or diplomatic relations.
Therefore,
in coming to Washington to visit the President of the United States and
in talking to you today, my delegation and I have one overriding purpose.
We seek to find ways and means to respond creatively to the terrorists’
challenge in disrupting our normal way of life.
Global
trade, in particular, has been especially hard hit by the events of September
11. The global economic slowdown, which started since last year, has been
further exacerbated by the turn of events. Some financial analysts have
forecast that global economic growth may barely exceed one percent this
year and next, which would be the lowest rate in 20 years. Rather than
being depressed by the global situation, however, I believe we have to
rise to the challenge and come up with creative solutions to deal with
the current economic situation.
One
of the most apparent impacts on the global economy has been the drastic
decline in tourism and air travel. This has severely affected all countries,
particularly the travel industry, driving many airlines to the brink of
bankruptcy. This adverse impact on global travel must surely be one of
the aims of terrorist groups, which seek to destroy our freedom to travel
and interact with one another.
To
deal with this serious problem, I believe that a temporary air insurance
regime needs to be considered since the present rates for airline insurance
have become astronomical. No airline today can afford to stay afloat even
at the previous rates, given the great psychological impact of September
11 on air travelers. We must therefore find a means to cushion these effects.
In this regard, I would like to propose that official financial institutions
from the U.S., Japan and Europe should consider joining hands to provide
temporary relief in insurance rates for all kinds of international flights.
This would be of immense benefit to the travel and airline industries of
all countries, including the U.S.
Another
area that has been severely affected by September 11 has been global trade.
In the case of Thai-U.S. trade, for example, large financial losses have
been inflicted by the delays resulting from heightened security. Due to
the stringent security requirements that have been put in place, air freight
from Thailand to the U.S. now face delays of at least two days. This is
because they have to undergo security checks, both in Thailand and the
United States. Moreover, security clearances for sea freight, which formerly
took only an hour, now require 10 days to complete. These delays have caused
companies to lose millions of dollars.
As
a way of dealing with this problem, I would like to propose that Thailand
and the U.S. consider cooperating in setting up some kind of concept of
an “agreed secure warehouse” through a mutual recognition arrangement by
which Thai exports could undergo only a single security check prior to
shipment. The goods that have been cleared according to U.S. requirements
could then be securely locked up, thus preventing the need to face a second
security check upon arrival in the U.S. Such a measure would be of great
value to our private sectors, and allow our normal trading activities to
proceed as before.
Distinguished
Guests,
Ladies
and Gentlemen,
This
morning, I had a fruitful discussion with President Bush on cooperation
between Thailand and the United States in all areas. I also witnessed the
signing of a new Economic Cooperation Framework, which sets the guidelines
and directions for future Thai-U.S. economic cooperation in various fields
of mutual interests. This includes trade, investment, transportation, science
and technology, agriculture, and so forth. The agreement represents the
most significant vehicle launching our relations into the new century.
You will also be pleased to know that Thailand has already signed a treaty
to avoid double taxation with the U.S., and we have exchanged Diplomatic
Notes this afternoon, ensuring its full entry into force without interruption.
Based
on this new framework of cooperation between Thailand and the U.S., I am
confident that both our countries can build a strategic partnership for
mutual growth and prosperity in the 21st century. In these turbulent times,
I am convinced that we need one another now more than ever before.
Looking
around the room, I am glad to see many familiar names in the audience here
today, and I am pleasantly aware that you already have operations in Thailand.
I thank you for your strong confidence in Thailand throughout the years
— before, during and after the Asian Economic Crisis. Many of you have
shown renewed confidence in Thailand by new investments, with a view to
further expansion. I am confident you have made the right decision.
The
main reason for my optimism is the fact that Thailand’s economic reforms,
implemented since the economic crisis and after my government came to office,
will soon begin to bear fruit. These economic recovery efforts have placed
us in a stronger economic and financial position than some might have expected.
The Thai Government has succeeded in stabilizing Thailand’s macroeconomic
situation, while effectively implementing various measures to revive the
economy.
Allow
me to cite a few cases in point.
-
Thailand
enjoyed continued recovery in 1999 and 2000, with GDP growth rates of 4.2
percent and 4.3 percent respectively. Given the global situation, growth
this year is lower, but continues to be positive.
-
My
government has established a credible and effective framework for monetary
policy, reducing inflation to a level of 2.2 percent.
-
The
foreign exchange rate for the Thai baht has been stabilized, and our net
international reserves have increased to over 33 billion U.S. dollars.
-
Our
private sector non-performing loans (NPLs) now stand at 12 percent of total
loans, and are decreasing.
-
In
establishing the Thai Asset Management Corporation (TAMC), we are bringing
about corporate financial and management restructuring as well as an early
return to normal credit and banking activities.
-
Thai
sovereign and commercial bank credit ratings have been stable. Thai commercial
banks have recovered significantly since the 1997 financial crisis.
-
Thailand
now has an efficient Foreclosure Law.
-
Thailand
is also streamlining financial transaction procedures, business registration
procedures, taxation, and export/import custom procedures, to make them
more investor-friendly and transparent.
-
The
private sector is moving towards good corporate governance.
In
the government sector, we are also taking many steps to improve the management
and accountability of the government bureaucracy, including measures to
“unlock” the value of our state assets through an aggressive multiyear
privatization program. This unlocking of value is best represented by the
recent privatization of the Petroleum Authority of Thailand, the country’s
integrated petroleum company. The success of this move has revitalized
interest in the Stock Exchange of Thailand and helped to bring foreign
investors back to Thailand. Many other privatizations of state enterprises
will be coming on stream.
Ladies
and Gentlemen,
I
believe that maintaining macroeconomic stability in itself is not sufficient.
Particularly in view of the sharp economic slowdown since September 11,
it is essential for us to boost market confidence and demand. Some form
of macroeconomic stimulus through government spending is therefore unavoidable.
However, this has to be done appropriately to supplement our reform efforts
as well as to stimulate domestic demand at the grassroots level. This lies
at the heart of my government’s dual-track development model.
Basically,
this policy seeks to pursue twin goals of strengthening the domestic economy
while opening the market to foreign trade and investment. Concurrently,
the Government will also undertake measures to eradicate poverty. Allow
me to elaborate on these dual goals, which are complementary and reinforce
each other.
In
the current economic situation, I am convinced that Thailand, like other
countries, needs domestic stimulation to help restore growth and consumer
confidence. That is why my government is firming up the competitiveness
of our real sector and stimulating domestic demand through our state banks
and village funds.
A
vibrant, creative and lively community of domestic industries and SMEs
acts as a valuable support for investments from the U.S and other countries.
At the same time, it also creates new jobs and entrepreneurs, thus expanding
the buying power of the 62 million Thai citizens right at the grassroots.
Towards this end, the Thai Government has implemented numerous measures
to reduce the burden on the poor. One case in point is the one million
baht development fund for each village to use as seed capital and loans
for local entrepreneurs.
As
a former businessman myself, I realize that time is money, and that time
lost cannot be regained. For this reason, Thailand has been investing in
infrastructure so that the transportation of raw materials and manufactured
goods will be smooth and efficient, and production need never be put on
hold by disruptions in the supply of utilities. To ensure a strong and
healthy workforce, the Thai Government has also implemented a new 30-baht
universal health care scheme. The program caps each visit to the hospital
at a price of only 30 baht, or around 75 cents.
Distinguished
Guests,
Ladies
and Gentlemen,
Together
with our domestic policies, Thailand needs an open, stable and peaceful
Southeast Asia to prosper. Therefore, we are committed to the regional
integration of Southeast Asia in the ASEAN framework.
To
be sure, ASEAN has faced its fair share of criticism in the aftermath of
the East Asian financial crisis. Yet, one should never lose sight of the
fact that, with a combined population of almost 500 million, ASEAN constitutes
a huge market for both member and non-member countries. As ASEAN is now
progressing under the ASEAN Free Trade Area, under which 90 percent of
tariffs will be eliminated, firms and businesses in ASEAN are expected
to enjoy expanding economies of scale, thus improving on their economic
competitiveness in general.
In
addition to greater integration within Southeast Asia, Thailand is convinced
of the need to forge closer cooperation within Asia as a whole. This is
why we have advocated the idea of an “Asia Cooperation Dialogue” (ACD),
an informal forum for Asian leaders to exchange views on issues of common
interest, including trade, investment, tourism, and financial cooperation.
Thailand hopes to host the first Asian Foreign Ministers’ Meeting next
year. A core group is being set up to prepare for this Meeting. Such a
forum would help strengthen the economies of Asia, and enable Asia to be
a stronger economic partner of the U.S. in the future.
Ladies
and Gentlemen,
In
talking about Asian economies, one of the most widely discussed topics
is China’s recent entry into the World Trade Organization (WTO). For our
part, Thailand welcomes China’s admission into the WTO. We consider this
as further making the WTO a universal trading body where more than 95 percent
of world trade will be governed by the same rules.
Like
every other challenging moment, there is always an opportunity. Thailand
sees this moment as one such opportunity since it further reinforces the
principle of comparative advantage. With China’s accession to the WTO,
Thailand’s strategic location in the region has actually enabled us to
see more investments coming from overseas as well as from Mainland China
itself.
Many
of you may be considering investing or adding to your investments in China,
now that China has entered the WTO. While making that decision, I hope
you will also have a close look at Thailand. Talk to your colleagues who
have made investments in my country and they will tell you that Thailand
is a place of the future.
In
this connection, I am delighted to note that Ford Motor Co. announced this
month a relocation of its Ranger one-ton pick-up truck production to Thailand.
This will make Thailand the light truck production base for over 100 countries.
I take the decision by Ford Motor Co. as a vote of confidence in Thailand.
In
my talks with various American CEOs, I learnt that many of you are considering
moving your regional headquarters to Bangkok. I believe that would be a
very smart move because we are currently working on a more attractive incentive
package to encourage you to set up your headquarters in Thailand. All of
you are invited to look at the potential and promising benefits of this
package.
As
a first step, just before my departure for the United States, the Thai
Cabinet approved a package of wide-ranging tax breaks for foreign companies
establishing their regional operating headquarters in our country. Such
headquarters will be entitled to a 10 percent corporate tax rate, a large
decrease from the previous rate of 30 percent. At the same time, expatriates
working in the regional headquarters will be able to enjoy a flat rate
of 15 percent personal income tax. In addition, the Board of Investment
will also make available the services of its “one-stop service centre”
to assist such companies in obtaining work permits, visas, and so forth.
Another
law that we plan to amend is the much-discussed Telecom Act, which had
placed a maximum limit of 25 percent for foreign ownership of Thai telecom
companies. The Government is determined to raise the ceiling to 49 percent
and will submit this amendment to the legislative process.
Distinguished
Guests,
As
you are aware, Thailand is strategically located with great potential as
the hub of business activities reaching out to China, ASEAN, and the rest
of East Asia.
We
are promoting closer economic linkages with our neighbours by opening up
borders and establishing a common production base in the region. Thailand
is strengthening her position to serve as a regional hub for economic activities.
In the recent past, Thailand has been active in galvanizing and coordinating
our strategies with our neighbours, near and far, to ensure realization
of the infrastructure required for multimodal transportation networks,
in particular, the East-West Corridor, stretching from Thailand through
Laos to Viet Nam and the deep sea port of Danang on the South China Sea.
To
complete this network to the Indian Sub-continent, Thailand has initiated
trilateral cooperation between India, Myanmar, and Thailand on road and
infrastructure linkages, which has been agreed upon by the three respective
Foreign Ministers. Myanmar will host a trilateral ministerial meeting early
next year. On the “north-south” axis, priority is given to road and railway
interconnections between Yunnan Province of southern China, through the
Mekong countries and Thailand, down to the Malay Peninsula. The first connection
extending from Yunnan Province through Myanmar to the northern part of
Thailand will be completed next year. These infrastructural linkages will
open up more business opportunities in trade, investment, finance, and
tourism, with Thailand serving as the regional hub.
In
terms of linkages to East Asia, I dare say that of all the countries in
the region, Thailand enjoys the best relationship with both China and Japan.
This is based on long-standing historical, cultural and commercial ties
dating back centuries. This triangular relationship forms the basis of
trust and confidence in which future development can be easily explored.
To
reinforce the above, both the United States and Thailand agreed in the
Framework for Economic Cooperation that Thailand should serve as a regional
hub. Only this morning, President Bush announced that the U.S. Trade and
Development Agency (TDA) will open a regional office in Thailand in January
2002. This announcement clearly reflects U.S. recognition of Thailand as
a hub in the region.
In
the area of regional financial cooperation, for example, we will be concluding
a bilateral swap arrangement (BSA) with China and the Republic of Korea.
We have already made such an arrangement with Japan. This will help further
enhance financial stability in the region, and is an important step towards
greater regional financial cooperation in the future. In the area of trade,
ASEAN and China have just announced plans to establish an ASEAN-China Free
Trade Area within 10 years. We agreed to commence a feasibility study immediately
next year to be followed by negotiations the year after. On the part of
Thailand, we are ready to move fast, getting a head start with China. For
the first time, we are both working on “strategic cooperation”. This strategic
partnership focuses on the launching of new areas of economic and social
cooperation.
On
the west, Thailand is expanding economic ties with India. Just last month,
Prime Minister Vajpayee and I agreed to set up a Joint Working Group to
undertake a feasibility study on a Free Trade Area Agreement. Our strategy
is for these cooperative endeavours to complement and reinforce regional
integration and the dynamism of this region as an economic partner, offering
foreign investors further opportunities to expand into ASEAN as well as
the Chinese and Indian markets.
Ladies
and Gentlemen,
Despite
the gloomy economic situation at present, I see a very bright future for
trade and investment between Thailand and the United States. After all,
the average Thai has bought into the American dream and wants a good life,
with the freedom to choose and the power to make his or her life better.
I am pleased to note that in the year 2000, imports to Thailand from the
U.S. grew by over 31 percent, totaling almost 6.6 billion U.S. dollars,
and the market is still growing. For instance, Thailand has nearly 300
KFCs and 100 Pizza Huts, making us one of the company’s 10 largest markets
outside the U.S.
U.S.
direct investment in Thailand also increased three-fold for the first half
of 2001, totaling 991 million U.S. dollars. This makes Thailand the second
largest recipient of U.S. investment among the ASEAN countries. It is no
coincidence that there are presently as many as 600 members of the American
Chamber of Commerce in Thailand.
The
U.S. business community is highly valued in our country. American companies
play a large and important role in Thailand, providing jobs and good prospects
for tens of thousands of Thais, working with us as we seek to make Thailand
the center of an open, prosperous and democratic Southeast Asia.
Right
now, foreign investors from Europe are also taking advantage of Thailand’s
strategic position as a regional hub. Like their American counterparts,
many European companies have become household names and part of everyday life.
This should come as no surprise. Thai investment policy remains among the
most liberal in the world. The reforms that have been undertaken since
the economic crisis in 1997 have paved the way for the efficient functioning
of the market in Thailand.
In
view of the above, I hardly need to point out to you that Thailand is the
best place in the region for your investments. By investing in Thailand,
you are increasing your market share, lowering your costs, as well as producing
jobs and opportunities for the 62 million people in Thailand, the 500 million
people in Southeast Asia and, in the near future, the 1.3 billion people
in China, as well as another 1 billion in India.
I
might also add that your investments are well protected in Thailand. My
government has been doing everything we can to create a level playing field
to safeguard your investments. The Thai Government’s investment strategy
is designed to assure you of your promotional privileges. As Prime Minister,
I personally guarantee that all incentives that existing and future foreign
investors enjoy now will be honored for as long as I head this government.
There will be no policy shifts. I do not mean only this term, but also
in the next term of my government as well.
Distinguished
Guests,
Before
concluding my remarks, I would like to say a few words about the uniqueness
and importance of the Thai-U.S. relationship.
In
pondering about the history of our bilateral relationship, I am reminded
of the symbol of the Eagle and the Elephant. A sword, with an eagle and
an elephant gold handle, was presented to the King of Thailand by the U.S.
President in 1833. That was 168 years ago. This image exemplifies the long-term
nature and stability of our relationship. Throughout the colonial era,
the global wars of the Twentieth Century, and the conflicts within Asia,
Thailand and the United States have remained close friends and allies.
That will not change in the dawn of the Twenty-first Century.
I
would also like to underscore the fact that the United States has made
significant contributions to the development of our nation in countless
ways. Many members of the Thai Cabinet, myself included, have benefited
from an American education. Thailand’s infrastructure and private sector
development owe a great deal to U.S. involvement and contributions. We
admire and have benefited immensely from America’s entrepreneurial spirit,
commitment to open and competitive markets, and promotion of international
best practice standards.
In
return, Thailand hopes to be worthy of our place as a partner of the United
States, and strives to make a difference in the evolving world order. We
are fortunate to have been blessed with a cohesive, peace-loving society.
As one of the founders of ASEAN, we have been at the forefront of multilateral
cooperation endeavors, which we view as a core to extending stability throughout
the region. We plan to continue this leadership role in maintaining the
stability and prosperity of the region, and seek to do so with the cooperation
and partnership of the United States.
Thank
you very much for your kind attention.
Message
from The Honorable George W. Bush, President of the United States of America
on this occasion. |
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