Ladies and Gentlemen,
Whenever I return to Thammasat, I am always glad to see familiar
faces. I wish to thank Ajarn Corinne for inviting me back, which
allows me to reminisce and meet old friends. I am also glad to
see that a lot has changed since my time here -- new buildings,
new faces, and now a new program of study. As an alumnus and former
faculty member, I wish to congratulate the Faculty of Political
Science for taking another important step forward by launching
the English-language masters degree program in international
relations. This initiative is a good example of the ways we Thais
can and should adapt to todays fast-changing world.
Indeed, change is a normal part of life. But it seems that
lately change has been occurring just a little bit too fast for
us to keep up. Today I would like to talk about what kinds of
changes are represented by the crisis facing Thailand and many
of our partners in East Asia, the questions the crisis poses for
Thai foreign policy, and some of the challenges ahead of us.
I think that as time passes, it has become clearer that the
ongoing economic crisis is the severest in Thailands history.
Not even the Great Depression affected the Thai economy so much.
Back then, our integration into the world economy was relatively
superficial. Now we are much more deeply plugged in, with all
the rewards and risks that entails.
In some ways, it isnt all that surprising for a fast-growing
economy to suffer the kind of economic troubles that have battered
Thailand since last July. While it is certainly painful, we are
hardly the first to suffer this kind of fate. Even the United
States, that bastion of capitalism, has lived since the mid-19th
century through several financial crises involving crony capitalism,
investor panic, stock market crashes, and assorted speculative
What is surprising, however, is the speed with which a sneeze
turned into an epidemic. The East Asian downturn began as a local
financial crisis in Thailand, a medium-size economy not traditionally
known to be a regional mover of markets. So by all rights, this
should have been a containable brushfire. Instead, it quickly
escalated into a crisis of regional proportions, bringing down
currencies, stock markets, and even governments. With Japan now
feeling the crunch, we have to be even more vigilant in the days
ahead. But if we make the right moves, if we learn the right lessons,
we can emerge stronger, sadder perhaps, but a little bit wiser.
The crisis is the first clear sign that perhaps we are not
as well prepared for this phenomenon of globalization as we should
be. Although Thailand has gradually opened up our economy to the
outside world, the pace of change in the global economy has been
much more rapid. The exponential advances in digital technology
have allowed capital and information to be moved across the globe
at the speed of light, shortening reaction times and multiplying
outcomes, subjecting domestic economies to rapid ebbs and flows
of capital governments are ill-equipped to deal with.
For emerging markets, this can mean huge infusions of capital
over a relatively short period, as investors vie to get a piece
of the action. But the stampede goes both ways: at the first sign
of trouble, capital can just as quickly rush out. The complex
web of trade and investment ties within the region and with the
rest of the world means that the contagion effect is a reflection
of the darker side of increased interdependence in the new global
What does this mean for Thailand? Since a crisis of this magnitude
has never happened to us before, there are growing calls for a
retrenchment, a withdrawal inward to self-sufficiency. But if
we remember our history, something similar has happened before,
but to someone else. After the Great Stock Market Crash of 1929,
the United States Congress passed the Smoot-Hawley tariff bill,
which levied average import duties of 50 percent. In response,
other countries sought to shield themselves by adopting policies
of protectionism, self-sufficiency, competitive devaluation, export
price reduction, exchange controls and creation of regional economic
blocs. World trade collapsed, unemployment skyrocketed, and nationalism
spun out of control. The Great Depression ended with the outbreak
of World War II.
I am not saying that history will necessarily repeat itself,
for certainly Thailand does not carry the same economic weight
as the United States. But let us not forget its lessons. We have
already seen that in the globalized economy small events can have
disproportionately large effects. In todays world, which
is even more closely interconnected than that of the 1930s, a
beggar-thy-neighbor policy can lead us down a slippery slope that
is just as disastrous.
Our responsibility as a member of the international community
is one reason we cannot afford an inward-looking policy. Yes,
we should practice moderation and not get too caught up in the
web of consumerism, but that is not to say we should renounce
our links to the world.
Another reason we cannot afford to be inward-looking is that
such a policy is not sustainable over the long term. Would-be
self-sufficient economies tend to be unable to provide the material
well-being that open economies provide. The examples are everywhere
around us, and even the biggest of aspiring self-sufficient economies
have found it necessary to open up to the world.
Of course it may be argued that we Thais are blessed with a
natural abundance of resources, and hence an inward-looking policy
might just work. But our integration into the world economy is
too deep. Foreign capital and technology are vital to growth and
competitiveness, and to building our own technological base for
development. Natural bounty alone does not guarantee survival.
Indeed, history is littered with the debris of bountiful societies
which failed to adapt to irresistible outside forces.
Thailand has adapted to such forces before. But surviving globalization
is likely to require a somewhat different set of skills from those
used to survive Western colonialism. This time we are not dealing
with governments, but with formidable impersonal forces that heed
no borders and obey only the laws of the market.
We are faced with a stark choice: Either we reform ourselves
to meet international standards, or we can resist and be overwhelmed
in the end, with no control over the pace or direction of change.
By international standards, I mean those standards that we
need to adopt, both in the private and public sectors, if we are
to thrive in the global economy. I do not mean we have to abandon
somtam and grilled chicken in favor of some generic global standard
like McDonalds. We have unique strengths that we must build on.
But at the same time we also have unique weaknesses that must
What we need to do is to reassess the way we do things. Can
anything be improved that will make us more competitive? Are our
processes, practices and institutions as efficient and effective
as they can be? How can we introduce greater transparency and
accountability to powerful institutions such as the bureaucracy
and the banking sector, which have a responsibility to uphold
the public interest?
Such questions should be asked not only of the government and
public servants, but of everyone in the country, because the answers
cannot come from the top as before, but need to come from everyone.
Reform of our economic, social and, yes, political institutions
to meet international standards and expectations is an enormous
task, and it requires the cooperation of all sectors of society.
One of the jobs of the Foreign Ministry during the economic
crisis is to serve as an interface for understanding between Thai
society and the outside world. As I noted earlier, protectionist
sentiment is a natural response in times of financial crisis.
But it is by no means a satisfactory response because it can lead
to the impoverishment of all, others and ourselves. On the domestic
front, therefore, we try to educate the Thai people at all levels
of society about international affairs, and what they mean for
their lives. We believe that when the people recognize how interconnected
the world we live in really is, they will agree that we need to
transform ourselves to meet international standards.
On the international front, the Foreign Ministry tries to convey
to the world what our intentions are and what our approach towards
resolving the crisis is. Because market confidence seems to be
a rare commodity these days, we try to let investors know what
steps we have taken towards reform, what we are doing to transform
our structures and institutions in line with the demands of the
new age. We recognize that the days when confidence was freely
given are over. Now we have to earn every bit of it back. The
crisis is not simply economic in nature. It is a crisis of confidence
in the way we have managed our economy in the past.
We can take some comfort in the fact that we are in a relatively
good position to bounce back. Thailand has always been one of
the more resilient countries in Asia when it comes to adjusting
to powerful outside forces. Our society has enjoyed great diversity
from the beginning. Since ancient times, we have been receptive
to influences and ideas from outside from India, from China,
from the West. With our long-standing tolerance for diversity
and openness, all levels of Thai society are experienced in adapting
to cross-pressures from abroad. We recognized early on that survival
depended not upon closing ourselves off from the rest of the world,
but upon absorbing external influences and making them our own.
Thus, we have never felt the need to assert whether our values
are Asian or universal, as long as they are positive values. Our
policies, be they in trade or other matters, have always been
While our national development has moved steadily towards a
more open, diverse, and pluralistic society, we recognize that
it is the outcome of our unique circumstances and the choices
we made. In Southeast Asia, the kind of openness and freedoms
Thailand enjoys tend to be the exception rather than the rule.
Most of our neighbors are still grappling with the dilemma of
the need for a more open society and the need for domestic order
But we cannot divorce ourselves from the rest of the region.
Our strength lies in regional cohesion, as in our efforts on the
Cambodia issue. Instability in our neighboring countries is bound
to affect the region.
There are thus those who urge Thailand to move more quickly
and aggressively in pressing for greater democracy and human rights
in the region. But there are also others, including border business
interests and the bureaucracy, who stand to lose out from such
a course of action. The task of balancing the interests between
the more progressive and entrenched establishment interests is
a delicate one. Foreign policy cannot get ahead of social factors,
but must reflect the existing social structure. If foreign policy
is internally contradictory, the benefits gained would fall short
of their potential. For example, if our policy of promoting human
rights and democracy hurts the interests of our traders along
the border, the policy will encounter domestic political resistance
and be ultimately unsustainable.
We must remember that each country is the product of different
circumstances, opportunities and constraints. Thailand has been
at that stage before, when political repression was the order
of the day. The advances we made towards greater democracy and
human rights were paid for in blood and tears. It is a process
that each country must work out for itself, in its own way, in
its own time.
The regions economic crisis has thrown such contradictions
into stark relief. It is generally accepted that the answer to
the regions economic ills lies in reforming structures and
institutions so that they are more in line with market forces.
The dilemma some countries face is how to reform the economy without
also granting more political freedoms. For example, as I noted
earlier, information is one of the three crucial factors in the
new globalized economy. During Asias boom, the restriction
of information did not seem to pose undue difficulty for the countries
concerned. Now that the credibility of the regions institutions
has been cast into doubt by the crisis, however, freedom of information
is likely to assume much more importance for prospective investors.
We therefore believe that the region, if it is to maintain
its dynamism, has no choice but to move in the direction of greater
openness. The economic crisis is exerting greater pressure on
East Asian countries to reform, but just when reform is needed
most, it is also the hardest to carry out. Institutions have become
entrenched, and powerful vested interests are naturally against
any but the most superficial reforms. The danger lies in the fact
that while reform is by and large a domestic process, delays or
setbacks in one country can affect the recovery of the region
as a whole, especially if that country has extensive trade and
investment ties with others in the region.
So what the economic crisis has done is that it has made openness
no longer a choice countries can embrace or reject as they see
fit. Openness has become necessary not only for Thailand but for
the region as a whole if we are to survive this crisis together.
The rapid spread of the economic crisis throughout the region
tells us that perhaps a change in our thinking is in order. Perhaps
it is time that ASEANs cherished principle of non-intervention
is modified to allow ASEAN to play a constructive role in preventing
or resolving domestic issues with regional implications. This
is, of course, a sensitive subject, as states tend to be instinctively
reluctant to yield to others on what it sees as sovereign matters.
But when a matter of domestic concern poses a threat to regional
stability, a dose of peer pressure or friendly advice at the right
time can be helpful.
Non-interference does not mean turning our backs on our neighboring
countries or turning a blind eye to the plight of their people.
Lending a helping hand in times of need even on domestic matters
should not be interpreted as interference in internal affairs.
Non-interference does not mean that we cannot espouse the values
of our society, though of course we should not seek to impose
them upon others. If there is a general consensus among the ASEAN
members on the kinds of situations that warrant constructive intervention
and the modalities of such intervention, the process should become
easier. The trick lies in how we can achieve the right balance
between the often conflicting demands and imperatives of this
crucial juncture in history.
I confess I have no ready answers. I believe we are entering some extremely challenging times for Thailand and the conduct of foreign policy. The times call for both domestic reform and new thinking in our foreign policy. The capacity of states to respond effectively to situations will be sorely tested. International relations will be conducted not only between states, but at all levels. Technologies such as the Internet will transform the face of international relations as we know it by opening up the policy process to public participation. The future is therefore not only in the hands of an elite few, but of everyone.
Thailand cannot meet the challenge alone; the region as a whole
must rise to the occasion. The past has proved that we are no
stranger to adversity. With clear, critical thinking, with vision,
and with that most indispensable of ingredients, luck, I believe
that together we can overcome these challenges.