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In Thailand, where utilisation by many industries has now reached full capacity, investments are particularly needed to expand that capacity to cope with an increasing demand from exports, as well as a recent surge in domestic demand generated by unprecedented increases in the prices of five major crops that has occurred at the same time.

While the price of oil has come down and stabilised at its current level, the political conflicts in the country have also somewhat calmed down. Some points of contention are no longer an issue, and it is becoming quite clear that the ongoing protests are purely based on political agendas. The protests never question or pose any threat to private investment. From what appears in the business news, private investors, both foreign and domestic, have gradually started many new projects, such as eco-car projects, GM's diesel production centre, the expansion of petrochemical plants, the 3G telecommunications network and the expansion of retail and food outlets. Even the housing and condominium projects, which had stopped for some time, are now returning to life on some feasible sites.

I would like to propose that the government make use of this time - with the oil price stabilised and the political conflict starting to calm down - to boost private investors' confidence by speeding up the government projects which people are waiting for such as the mass-transit rail system. They could also speed up the various approvals that are needed for petrochemical, chemical and energy projects in the Map Ta Phut area, which have passed pollution-control standards, and get on with the meeting of the committee for investment on the Southern Seaboard established two months ago. If these actions were taken, they would involve related private investments, and investor confidence would increase.

The increase in the prices of five major crops this time round will remain in line with the high price of oil.

The price of rubber naturally increases along with the oil price, as the synthetic rubber produced from oil is a direct substitute of natural rubber. Molasses from sugarcane and tapioca are used for producing alcohol, which in turn is used to produce ethanol, while palm oil is used for producing biodiesel. As a consequence, the price of sugar-cane, tapioca and palm oil have increased substantially and will stay at the current level.

The increase in the price of rice is due to two factors: the natural catastrophe that has caused production to decrease in some net supplying countries, and the relation with the price of other crops such as maize, which have been used to produce alternative energy to a large extent in the US. The price of rice, which should come down after the next harvest, will not go down to the last year's level due to the relation to the price of maize. Furthermore, the land for growing rice may also be reduced due to farmers choosing to grow other crops that are used as raw materials for alternative energy.

It is a golden opportunity for Thailand that the income of upcountry farmers, who comprise the majority of the Thai population, stands a good chance of increasing at a faster rate than those in the industrial and service sectors in big cities. This would not only narrow the income gap but also increase the role of domestic consumption as a contributing factor to economic growth in addition to exports. If we can depend on both exports and domestic consumption to mobilise our growth, the economy will become more resilient. Any time the economies of our trading partners slow down and they import less from us (which is likely in the near future), we will still be able to rely on the growth of domestic consumption to steer our economy.

The big question for this administration is how we can best ensure that the prices of these major crops remain at their current high level, or how can we promote the use of these crops as raw materials for alternative energy in order to keep the price high or even higher with even greater demand for the raw materials.

As for rice, other producing countries are not expected to experience the same natural challenges they did last season, so the price of rice after the new harvest should be somewhat lower. The question is how we can make sure that the market price does not drop below a proper level, so that the price of rice stays reasonably high in the future.

Management to ensure that the prices of these major crops remains high is very important, as this will improve the lives of people in the farming sector, who have been left behind for quite some time. The current situation allows us to do this effectively. It is a golden opportunity for us to promote the income of people upcountry and to strengthen domestic consumption as a more effective factor in mobilising growth of the economy in parallel with export. In this case, theoretical economists would say there is no need to manage the situation, as the increased demand for these crops will naturally result in their prices increasing. However, in the real world the buyers, who are of better financial standing, do have more bargaining power than the farmers and tend to push the price down. Therefore the stock-financing scheme at a suitable price, if done properly and transparently without a hidden agenda, lessens the disadvantage of the sellers.

Never in the history of this country have the prices of so many crops grown here stood so strong a chance of going up at the same time. I hope the government does not miss this golden opportunity to ensure a higher income for farmers upcountry. As a consequence, domestic consumption could become a more important engine for growth along with exports, which would make the Thai economy more resilient.

Until Next Monday.