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However, at present, its biggest concern is the financial meltdown.

The Icelandic government yesterday took control of its biggest bank, Kaupthing, to try and shore up the banking system. Now three of the country's largest banks - after Landsbanki and Glitnir were taken over earlier this week - have come under the government's control.

What Iceland is facing is a classic financial crisis, which threatens bankruptcy at a national level. Banks are falling and the currency is plummeting. Once its reserves run out, guess whom it will have to turn to for a bail-out? The International Monetary Fund, of course.

It's the exact script and storyline that was playing in Thailand more than 10 years ago.

Iceland went through a global credit boom. It aspired to become a big player in international banking. Its banks expanded dramatically overseas. Investors took large positions in its high-yielding currency and foreign money poured into local projects. But 15 months ago, the bubble went bust.

Now Iceland is left picking up the pieces amid the wider global financial crisis.

Luckily, Thailand is in a better position to cope with the global crisis. In fact, Thailand along with Australia and China are the only three nations in Asia that are in a rather strong position to deal with the meltdown.

However, this does not mean it is time to be complacent, especially not with the stock market falling like dead autumn leaves.

Remember that Thailand is being buffeted by a perfect storm. Domestically, it is facing a deep-seated political crisis, with anti-government protesters intensifying their rally to oust the Somchai Wongsawat government. Things have already turned violent, leaving little room for a truce between protesters and the government at the moment.

Outside the country, a global credit crunch is hurting all big economies, reaching far and wide from the US to Europe, and Asia is starting to feel the pinch.

The spectre of the collapse of the global financial markets is what many people are afraid of.

Alongside the concerted interest-rate cuts of 50 basis points each by the Federal Reserve, the European Central Bank and other central banks in Europe and Canada, China has also announced a reduction in its benchmark one-year lending/deposit rate by 27 basis points effective today.

It is also lowering its reserve requirement ratio by 50 basis points from October 15.

The Chinese government's moves come in a bid to stimulate domestic demand on the back of deteriorating global economic conditions.

The Hong Kong Monetary Authority has also announced a modification in the base-rate formula to make borrowing through the discount window less costly amid the tightening of global liquidity.

The move is also aimed at providing some stability by minimising drastic spikes in interbank rates, and lowering the pressure on banks to lift lending rates.

Taiwan's central bank (CBC) surprisingly cut the rediscount rate by 25 basis points yesterday to 3.25 per cent.

The Bank of Thailand has kept its policy rate unchanged at 3.75 per cent because it is still concerned about inflation.

But in order to go forward, it will have to bring down the rates to stimulate growth.

In fact, the rate in Thailand might go down a further 0.75 percentage points to 3.0 per cent in the first quarter of next year.

Some research houses, such as the Fiscal Policy Research Institute and DBS Global Research, have already revised downward the Thai GDP growth for next year to 4 per cent.

As a middle-income country, Thailand cannot be comfortable with an economic growth that is below 5 per cent. This year's growth is likely to stay at 5 per cent, which means there is absolutely no room for complacency at all.

We are in the middle of a crisis. Yet few seem to care.