Thaksin seeks greater regional cooperation

By Amit Baruah

SINGAPORE, AUG. 23. The Prime Minister of Thailand, Mr. Thaksin Shinawatra, today called on Asian countries to re-think their approaches towards economic development and recovery while seeking greater regional cooperation.

Mr. Thaksin distanced himself from an export-driven economy which relied heavily on foreign direct investment and multi-national corporations.

In a public address entitled ``Rethinking Recovery'', Mr. Thaksin said the East Asia Economic Model (EAEM), which served Thailand and the region well for a couple of decades, could not be sustainable as demonstrated by the 1997 economic crisis.

The Prime Minister, who held talks with Singapore's leaders yesterday, said that this single-track, export-dependent model was ``extremely vulnerable'' to the fluctuations in the global economy.

``For this reason, I am convinced that Thailand needs to pursue a dual track policy that does not abandon the East Asia Economic Model, but which, at the same time, embraces an alternative development strategy.

''While continuing to welcome foreign direct investment to fuel our exports, we will not rely solely on this sector. Our second track refers to the domestic dimension. It requires the strengthening and creation of a qualitative chain for our domestic enterprises in order to build up a new generation of entrepreneurs that can serve as the backbone and stimulus of our economy,`` Mr. Thaksin said.

''The philosophy behind this new development strategy is very simple. We are convinced that Thailand needs to strengthen its economic capabilities in a manner that would provide the real sector, especially that in rural areas, with a considerable degree of immunity to the risks associated with globalisation and increased integration into the global economic system,`` he said.

He said that though it had been four years since the onset of the East Asian economic crisis storm clouds still hung over the region.

Interestingly, the Thai leader referred to the critics' view of globalisation, but did not commit himself to a firm position on the issue.

''Critics of globalisation and liberalisation will argue that it was these twin phenomena that made local and national economies so vulnerable to international volatility inherent in the world economic structure. Many have blamed the current economic woes on the International Monetary Fund (IMF) and its stringent rules and regulations, or on the World Trade Organisation (WTO) and its impact on world trade,`` Mr. Thaksin stated.

''Other analysts have pointed out that the current economic downturn underscores the fundamental drawbacks of the region's economic structures. In part, the failure to implement much- needed structural reforms accentuated the underlying weakness of the economies,`` he said. The Prime Minister said his Government wanted to implement people-centred development policies while balancing greater self-reliance with liberalisation.

''The objective of this people-centred approach is to strengthen domestic demand and production so as to serve as a cushion to immunise the Thai economy against the adverse effects of external volatility and the forces of globalisation,`` he said. According to Mr. Thaksin, the same factors and conditions that brought about the economic crisis in Thailand and prompted a strategic re-think applied to the rest of South-East Asia as well.

''Asian countries today face similar problems in keeping up with the sea changes brought about by globalisation. We continue to face common problems of declining agricultural prices, cyclical demand for goods, and minimal pricing power. Therefore, the time has come for all of us to re-think our respective approaches towards economic development and recovery while seeking greater regional cooperation,`` he said.

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Section  : International
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