I am pleased to be here today to address the members of the Joint Foreign Chambers of Commerce in Thailand. I thank you for your invitation and kind introduction.

This opportunity to meet with distinguished investors, diplomats and other friends of Thailand is most timely. I am sure all of you are interested in hearing about the priorities of this Government over the coming year. Many of you are doubtless concerned about the future of political reform and economic policy. I thank you for your interest, and look forward to our dialogue today.

It should be clear to you all that since the peaceful military intervention last September, Thailand has entered another period of strategic transition. We are moving through uncharted waters but with a clear destination to be reached within a very limited time.

Every nation faces such watershed moments in its political and socio-economic development and Thailand is no exception. The events of October 1973 and 1991 - 1992 are the most recent in our own modern history. Both times the Kingdom emerged with enhanced democratic credentials, with stronger foundations to deliver a better life for the majority of its citizens.

I am confident that this current transition will also be accomplished successfully, although no one should underestimate the great challenges we face. Deeply entrenched vested interests will struggle to defend their special access to power and money while this Interim Government is committed to eradicating their influence once and for all. No one should underestimate our resolve in this matter either.

To achieve our stated and unshakeable goal of free and fair elections before the end of this year, this Government is addressing four major reform themes:

-- Successful political reform;

-- The restoration of national unity, which will require healing the political divide between Bangkok and the

rural majority and bringing reconciliation and justice to our brothers and sisters in the deep South;

-- Reducing the income gap; and most importantly,

-- Strengthening the rule of law, so that justice is available to all citizens which will require rooting out corruption and reforming the administration of justice and the police.

I will address each of these themes and then discuss some specific economic issues…which may be of passing interest to you. But please keep in mind that each and everyone of this Government's actions is designed to help Thailand become a more transparent, more efficient, more productive, more equitable and more sustainable society, goals which I am sure you share.

Looking first at our goal of successful political reform, I wish to assure you that the tragic events of New Year's Eve will not deter us from pushing forward according to the timeline prescribed in the Interim Constitution. My Government deeply regrets the loss of innocent lives and is pursuing the perpetrators vigorously. At the same time, we are putting in place more effective systems of surveillance to ensure the safety and security of Thais and foreign visitors alike.

Political reform remains our top priority. The Constitution Drafting Assembly (CDA) and its chairman have been selected and work will begin on drafting the new Constitution within days. The Government will seek to promote large scale public participation and inclusive national debate. We will also ensure that the new Constitution provides for the effective functioning of a vibrant system of checks and balances. Although we are not an elected government, we will ensure the swift return to a more democratic government that can fully reflect the aspirations of the people.

Secondly, restoration of national unity means that we will reinvigorate our peaceful approach to promoting reconciliation in the Deep South. This year, we will ensure that the newly-restored Southern Border Provinces Administrative Centre (SBPAC) is given the resources it requires to pursue its coordination work. It will be difficult to eliminate violence altogether, but over the next few months the space for extremism will be reduced. Development activities will be strengthened, including cooperation with neighbouring countries in the Indonesia - Malaysia - Thailand Growth Triangle, so as to expand opportunities for people living in the area.

Thirdly, tackling income inequality and promoting social justice will be further pursued. Improved access to education and health, as well as improvements in the quality of the public services offered, will pave the way for a more knowledgeable and healthy workforce. Addressing these concerns will truly open up Thai society and make it more robust to face future challenges.

Finally, progress in strengthening the rule of law will bring benefits in terms of eradicating corruption in government as well as in business life. Indeed, we are determined that the rule of law will apply in all spheres, with no double standards. The work of administering justice has already been revitalized. I am currently studying the recommendations put forward for reform of the police, who are our front line in the administration of justice. Again, difficult choices are involved, but it is my determination to press forward this reform within the term of this Government.

If 2007 is to be the Year of Great Reforms, this also means putting the economy on a sustainable track. Our economic agenda is clear. Guided by our key operating principles of transparency, justice, efficiency and the economical and sustainable use of resources, we will be moving ahead to pursue further economic progress. Our efforts in 2007 will be geared towards expanding business opportunities and improving productivity to adjust to the world economic slowdown, while expediting prioritized infrastructure development projects and proceeding on legal reform.

On this point, I can categorically say that Thailand will continue to engage with the global economy. Amidst the competition in the global market place, no country can take another course. Even as we build up our internal resilience, Thailand will continue to embrace international trade and investment as key drivers of our economic dynamism.

Let me remind you of some key facts and figures that support the picture of strong fundamentals in the Thai economy. Despite the successive shocks of drought, flood, high oil prices and political uncertainty, our exports continue to show a strong performance with an increase of around 16.9 percent year on year. Long term investors continue to show substantial interest in Thailand, with the Board of Investment approving approximately 3 billion US dollars in foreign direct investment during the last 3 months. This is compared to the figure of 11 billion US dollars during the first 9 months of last year. New investments have been announced in the past weeks, including by Ford and Panasonic. And although this year Thailand and other Asian economies may be constrained by the world economic slowdown, we are confident that a growth rate of 4 - 5 percent can be maintained. Despite upward pressures on the baht, our exchange rate regime and expansionary fiscal policy are designed to ensure this growth.

Globalization and regional cooperation will continue to provide Thailand with many opportunities. The recent East Asia Summit in Cebu which I attended laid out bright prospects for the future of East Asian countries. This Government will do its utmost to grasp these opportunities. It will doubtless mean change. However, what we are doing is to ensure that Thailand can manage this change successfully.

Promoting the "Sufficiency Economy Philosophy" of His Majesty the King as a fundamental principle of development policy means that we will focus on stable growth, sound macro-economic discipline and the equitable sharing of economic benefits as we compete in the globalized world. Growth with quality means greater concerns for good governance and management of risk. But such concerns do not impact on the market mechanism, nor do they influence the openness of the Thai economy. In fact, the "Sufficiency Economy Philosophy" is a Thai model for sustainability, the importance of which is only now becoming recognized around the world. As an early adopter of a sustainable approach to development, Thailand should, I believe, be praised, for it is a path down which every country or company will have to travel sooner rather than later.

Close scrutiny of the Government's record shows that we promote openness. We remain committed to the free market, to the liberalization of trade in goods and services. Thailand has thrived, and will continue to thrive, on foreign trade and investment. We very much look forward to pursuing FTAs in the ASEAN framework which will benefit the regional economy as a whole. At the same time, to ensure transparency we have subjected our bilateral FTA negotiations to scrutiny in terms of the key principles of transparency, justice, efficiency and cost-effectiveness. As such the Japan-Thailand Economic Partnership has been debated by the Cabinet, undergone a public hearing and will be submitted to the National Legislative Assembly for consultation. Above all, this process will ensure that, for once, our people are able to manage the changes that are to come.

We are actively stimulating economic activity through continuing the implementation of carefully selected mega projects. While ensuring continuity, we have also subjected mega projects to the same means testing. Those that are beneficial to the general public will be expedited.

Accordingly, the expansion of the mass rapid transit system in Bangkok will be realized, involving 5 additional lines covering 118 kilometres. The Ministry of Transport, together with other agencies concerned, is currently conducting feasibility studies and detailed design for further submission to the Cabinet. We expect procurement for these projects to commence soon and to be completed within the tenure of this Government.

Other high priority infrastructure projects involve improvement of the logistics network, which will reduce transportation costs, and an integrated water resource management system to address floods and droughts. Over the coming months, we will be ensuring the facilitation of budget disbursements so as to promote maximum feed-through effects for the entire economy.

Infrastructure is also a major focus for our economic cooperation with neighbouring countries. The expansion of communication routes with neighbouring countries, such as the Second Friendship Bridge across the Mekong, will bring increased opportunities from leveraging Thailand's geographical and logistical advantages. By promoting common prosperity with our neighbours, we are also actively enhancing our own potential.

New opportunities are being fostered in several sectors. In the energy field, these result from pro-active approaches in addressing the energy crisis. For instance, the Petroleum Act will be revised to attract more investments in the exploration and extraction of petroleum fuel. Invitations for investment in new Independent Power Producers (IPP) will be announced around March, calling for some 400 billion baht in fresh investment in power generation. Meanwhile, cooperation is being sought on bio-fuels.

In the automobile sector, the Board of Investment has announced new incentives for the manufacturing of low-cost, fuel efficient automobiles. The so-called ECO Car will benefit from Thailand's strong production base in the automobile sector, and by responding to market demand will complement our existing specialization in the field of pick-up trucks.

In addition, the Government believes that market opportunities will expand when competition is fair. Thus we are leveling the playing field in previously distorted industries such as the telecommunications sector, ensuring the proper operation of independent regulators. Retail and wholesale trade are being examined to ensure balance. Competition law is also being strengthened through the setting of clear criteria.

At the end of the day, I firmly believe Thai consumers and all foreign investors in the Kingdom will benefit. Through all these measures, the Royal Thai Government is improving governance and investing in the physical and intellectual infrastructure of the country. By focusing on stimulating the real economy, we are establishing a firmer basis for economic growth.

The same concerns for transparency and predictability guide the proposed revision of the Foreign Business Act (FBA). Let me stress that the proposals will not affect existing foreign companies in manufacturing industries, export businesses, BOI-promoted industries or those businesses not listed under the Act. We merely seek to put an end to the previous precarious position many investors had been put into as a result of the investigation into complaints about Foreign Business Act violations. This determined, above all, the timing of the revision.

We know businesses welcome predictability. We know businesses like to see fairness and transparency, without selectivity. The measure is aimed to achieve these objectives by creating a level playing field. The amended Act is expected to strengthen our oversight capacity, address previous loopholes, while avoiding the creation of unnecessary obstacles to FDI. Indeed, where impediments are found, we will be looking to see how we can inject additional elements of liberalization into the measure, just as increasing flexibility is being shown over the question of capital reserve requirements.

I thank the JFCCT for making its views on this matter known at an early stage, including as reflected in the letter to me from Mr. van Haren. Let me assure you that the Government takes into serious account the JFCCT's concerns. We are serious about dialogue and ensuring transparency in all that we do. This is why I, together with the Government economic team, am here today at your kind invitation. And this week, Ministers and officials concerned will be making additional clarifications. The Cabinet decision 2 weeks ago was a decision on the principle, and the final text will still have to undergo various processes before it is approved by the National Legislative Assembly.

I wish to reiterate that the proposed revision should not be construed as an act of "deliberalizing" the Thai economy. It represents legal and technical adjustments rather than any change in overall economic direction. Thailand and Thai companies will continue to welcome foreign partners and external participation. Indeed, the undertaking is already given that the list of restricted activities attached to the Foreign Business Act will be reviewed on an annual basis. As I have repeatedly stressed, the Royal Thai Government will uphold its international obligations. What we do will therefore be WTO-compliant and will be consistent with our international undertakings.

I would urge that all stakeholders take time before coming to any firm conclusion about proposed adjustments. You can be assured that we are looking at the long term. We will not, by design or by default, kill the goose that lays the golden egg.

In the meantime, we are continuing to lay down the crucial foundation for Thailand's long term competitiveness. The national vision will need strong building blocks for our economic resilience and efficiency and productivity. We are moving ahead on these long term improvements, including through preparation of the National Productivity Improvement Plan and the National Intellectual Infrastructure Plan. In order to achieve quality growth, we need to constantly develop the quality of our human capital, physical capital and technology, particularly where SMEs are concerned. We also need better ways to combine them to produce goods and services, and develop new ones. This will require a better innovation system to nurture new ideas.

I hope that our foreign partners will join us in this great collective enterprise for us to prosper together. Indeed, we urge you to put forward recommendations for improving efficiency, transparency and productivity, not only in your businesses, but also in government. Join us in the fight to promote corporate and government responsibility. In so doing you will be renewing your commitment to the Kingdom of Thailand as we celebrate the auspicious occasion of His Majesty the King's 80th Anniversary.

With regard to this auspicious event, I wish to take this opportunity to invite all foreign businesses operating in Thailand to join the Kingdom's celebrations by launching your own "sufficiency economy" or sustainability projects under the theme of "From His Majesty's wisdom, sufficiency for our children".

You can launch such projects within your own organizations or in connection with the communities in which you operate. The sustainable use of resources means seeking greater efficiency in every area in which you operate which in the long term is, I believe, good for the bottom line.

The Year of Great Reforms that I have outlined represents our progress toward a more sustainable development path, both in political and economic terms. In view of the many challenges along the way, it will require cooperation on the part of all Thais. It also will require the active cooperation of all our friends. You can be assured that Thailand does not take the contributions of the foreign business community for granted. We need the trust and confidence of our partners for these actions to succeed.

It is my fervent hope that our good friends in this room will continue to support our efforts to build successful political reform and establish the socio-economic preconditions for quality growth. Through our actions in 2007 I fully expect that Thailand will become a better place in which to invest and do business. It will indeed become more transparent, more efficient, more productive, more equitable and more sustainable - all long-term goals to which every nation should aspire.

Thank you very much for your kind attention.