About KKQEC

Remark 2

Speech by
His Excellency Thaksin Shinawatra
Prime Minister of Thailand
at the Petroleum Institute Dinner
Sofitel Central Plaza Hotel, Bangkok
12 March 2004
--------------------

Excellency Privy Councillor Kamthon Sindhvananda,
Chairman of the PTIT Foundation,
Excellencies,
Distinguished Guests,
Ladies and Gentlemen,

Thank you, Khunying Thongthip, for that introduction, and thank you all for inviting me. It is a great pleasure for me to address this audience, which is full of outstanding personalities, and whose names resemble the “Who’s Who” of the energy and petrochemical industries. As a matter of fact, I can feel the dynamism and kinetic energy reverberating throughout this room.

First of all, I was delighted to listen to the remarkable contribution of the Distinguished Fellow -- Khun Pisoot, a most visionary man in his time who “gave birth to this industry”. There’s a quality or two that we all can learn from this living legend. Thank you, Khun Pisoot, for the legacy you have left with us.

For nearly two decades, the Petroleum Institute has contributed in many ways to the industry. Particularly in the past year or so, it has provided excellent support to our young Ministry of Energy, especially in regard to the Sriracha Logistics Hub, which was launched a month ago. It has also undertaken a number of important studies, particularly the study on the Petrochemical Master Plan for Thailand’s next phase of development.

Ladies and Gentlemen,
It took me a while to come up with a suitable topic for the evening, since I know relatively little about energy or petrochemicals. When the Institute told me I could talk on “any topic” I desired, that created an even greater dilemma for me. However, it reminded me of the time I spent sitting there, staring at my PC screen. You know, whenever your computer tells you to strike “any key” to continue, I find myself striking the same key every time. And I believe many of you do the same. So, tonight I have decided to address the topic that I feel most passionate about, and which most audiences seem to be interested in – that is, the Thai economy. I will also add a few comments about the energy industry toward the end.

The Thai economy today is a very exciting one to watch – and certainly a very challenging one to manage. Let me cite a few supporting facts and figures.

Thailand currently enjoys one of the highest economic growth rates in the world and is second only to China in Asia. In the most recent figures released by the NESDB, Thailand’s growth rate in 2003 has been revised upwards to 6.7 percent, fuelled by the very strong growth of 7.8 percent in the fourth quarter of last year. Such growth was driven by both stronger investment and domestic consumption. This year, despite the bird flu, I remain confident that we will reach our target of 8 percent growth.

We currently have an all-time high international monetary reserves of around 43 billion US dollars. This is despite paying off our IMF debts two years ahead of schedule. I still recall with some amusement that many so-called economists had warned me not to do so since this might threaten Thailand’s financial stability.

Combined with our commercial bank deposits in overseas accounts, Thailand’s reserves now exceed total debts – both public and private combined. What this means is that Thailand has now become a net lending country. And it is my intention to cut the country’s foreign public debts down to zero before very long.

Meanwhile, our current accounts are rock-solid, with a surplus of around 8 billion US dollars in 2003. Our trade balance has also been in surplus, fuelled by very strong growth in our export volume, which grew by a rate of almost 17 percent last year. All of you in this audience can actually help further strengthen our trade surplus by promoting and using more Thai goods, not merely because it will help the country but because Thai products are among the finest in the world.

In short, all economic indicators are in excellent shape, and I have every confidence that we will be able to sustain and enhance our strong and balanced growth in the years ahead.

Thailand today is not quite a wealthy nation yet, but we feel that we are strong enough to stand on our own two feet. We have not reached the level of prosperity of the industrialised nations of the West but we are not seeking handouts from any country. Rather, we wish to enter into partnership with other countries to reach a mutually beneficial relationship for all.

If you look at the Stock Exchange of Thailand today, you will see a much more vibrant stock market than a couple of years ago, and certainly much healthier than in 1997-1998 when the economic crisis struck. I have said half-jokingly before that if you invest in the Thai stock market and do not make a profit, then you should find some other means of earning a living! Our goal is to make sure that the stock market grows in a robust but cautious manner. I am pleased to note that our total market capitalisation keeps growing by the day, and I am confident that it will catch up with the country’s GDP within the next few years.

Speaking about GDP, I have pointed out in the past that Australia’s GDP is about three times Thailand’s figure despite comparable exports with Thailand’s. How is such a large gap possible? My answer is that we have to pay special attention to other growth factors – in our case, the strengthening of the domestic economy.

In the past, Thailand relied on a “single track model” of economic development, with a focus on exports, cheap labour, and foreign direct investment (FDI) from multinational companies. This was the model pursued by most of the East Asian economic tigers. Today, such a model has somewhat outlived its usefulness, and we can no longer afford to focus single-mindedly on those factors alone. In many respects, such a model has created imbalanced growth and is not sustainable in the modern globalised world.

Today, my administration has taken steps to rectify the situation. As the second track of our dual-pronged economic strategy, we are focusing on strengthening the domestic economy and creating greater opportunities at the grass-roots level. We are using state banks as a mechanism for micro credit financing to promote new entrepreneurs and SMEs. The promotion of the One Tambon, One Product (OTOP) and Village Fund Schemes as well as the People’s Bank are but a few concrete examples of our actions.

It is unfortunate that in our past economic development efforts, we placed undue emphasis on Bangkok. This deprived provincial areas of both capital and talent, causing excessive migration of people to the city. This has got to be reversed. We must return our human and financial capital to the provincial areas by creating greater opportunities upcountry. If our efforts are successful -- and I have every reason to believe that they will be --then we will surely achieve my ultimate goal of eradicating poverty from the country by the year 2009.

Most of you here are engaged in some aspect of international trade. As you know, I have been pushing hard for Thailand to conclude Free Trade Agreements (FTA) with our major trading partners. The first concrete achievement happened last year with the conclusion of FTA arrangements with both China and India, the world’s two most populous countries. By signing with these two Asian giants alone, we will have access to a combined market of over 2.3 billion people. This will ensure a huge export market for Thai products and services, including the goods of multinational corporations manufactured in Thailand.

One would think that the enormous benefits of these FTA arrangements would be apparent to all. However, I still have my fair share of critics who claim that Thailand stands to lose by agreeing to the FTAs. I prefer to think of it this way. Thailand has a population of 63 million people, whereas our trading partners represent a market in the billions. There is only a limited amount of goods and agricultural produce that our people can consume, but, in return, there is a gigantic market that they can produce for. If we are properly prepared for the changes that lie ahead, how can we lose? The key is to be efficient and flexible – and not to be afraid of changes. We must plan ahead for change, instead of sitting on our heels and being forced to change.

Incidentally, when the Prime Minister of Sweden called on me a few months ago, I asked him about the secrets to Sweden’s remarkable economic success. Do you know what he told me? He said, first, free trade agreements, and second, educational reform – coincidentally, these are two key areas of focus of this administration. That is why I am confident that FTAs will bring a similar breakthrough success to Thailand. My government will work in close partnership with the private sector to guide and help mitigate your concerns. Let us move ahead together – for success is within our reach.

Distinguished Guests,
Ladies and Gentlemen,

Let me now share with you some of my thoughts on energy. As I said at the outset, I know relatively little about energy and petrochemicals. That is why I have assigned Minister Prommin and other energy experts to handle these matters. I hope the Minister is still enjoying his job. Of course, his gray hair has been there long ago, even before becoming Minister of Energy. And I suspect that he may have gained a few more gray hairs following the EGAT demonstrations!

In any case, I do have a few thoughts to share with you tonight.

First of all, you need no reminding that your industry is regarded as a critical development tool. For historical reasons, energy matters used to be managed by a number of agencies under various ministries. Now that I have placed the agencies under the same umbrella, namely the Ministry of Energy, the public and I have high expectations for greater synergy and efficiency from you all as a whole.

Last August, at the Ministry of Energy’s first workshop on Energy Strategy for Competitiveness, everyone agreed that energy use in the transportation sector needed immediate attention because our transportation sector consumes nearly 40 percent of our energy – followed by industries and households. Plans have been formulated to tackle this matter, as you may already have read.

At that workshop, I also said the world is rapidly becoming a molecular economy, brought about by the emerging prominence of nanotechnology, biotechnology and materials science. Soon, a tiny solar cell with incredible power storage capacity will be made available – and this could revolutionise the power industry. Since Thailand is a sunny, agricultural country, I believe we should pay closer attention to innovations such as solar cells and biofuels. Vast opportunities lie ahead for those who are smart enough to think ahead.

I am pleased to see that some of the strategies spelled out at that workshop have already taken shape. Tax regulations have been amended to promote the marketing activities of petroleum products. Customs Free Zones have been set up. Earlier this year, we inaugurated Thailand’s first Petroleum and Petrochemical Logistical Centre at Sriracha. That was a bold step forward for us. As a result, Thailand will become another logistical centre for active petroleum and petrochemical marketing transactions. Owing to these new possibilities, Thailand’s refineries have already become more active.

We are taking a closer look at the implications of a strategic energy land bridge in the South to economically enhance the security of Southeast Asia’s energy supply and take advantage of our strategic location and proximity to the hinterland, namely countries such as China and our neighbours.

Also, we have discussed the issue of regional power and natural gas transmission cooperation. In this respect, Laos and Myanmar are notable examples of neighbouring countries who have benefited directly from energy transactions with Thailand. Our purchase of electricity from Laos and gas from Myanmar has meant a lot to their economies, and is a mutually beneficial situation for both sides.

In short, it has been a busy period for the Ministry of Energy, which has a lot on its plate!

Over the past two decades, Thailand has made considerable headway in discovering natural gas, crude oil, and condensate. While our own crude oil output will soon reach 100,000 barrels a day, it accounts for only a tiny portion of our overall consumption – and we will certainly continue to need oil imports for the foreseeable future. That is why I have stressed again and again that we must do more to save on oil consumption.

For Thailand, it is perhaps natural gas rather than oil that proves to be much more interesting and challenging for added value. Being an indigenous fuel, natural gas provides great value for both direct financial benefit and economic multipliers.

Financial benefit consists of revenue through taxes and royalties to the state. Economic multipliers include jobs and the value created by the exploration and production, LPG, power, petrochemical, and plastic industries. The plastic industry itself includes various items like automotive parts and electronics. All these items are derived from natural gas. To help us cut down on oil consumption, Thailand is using more and more NGV vehicles, and gas will increasingly be used with the completion of the Bangkok Gas Ring and distribution lines to industrial estates.

On the supply side, gas will be in use for decades to come. Through technological advances, more and more gas fields are being developed in the Gulf of Thailand, including what used to be “non-economic” or marginal gas fields. New fields, for instance, Arthit and fields in the Joint Development Area (JDA) with Malaysia, will start production as early as 2006, not to mention future gas from Cambodia and Vietnam.

A new nucleus of gas development is taking shape, with PTT Exploration & Production’s Bongkot Field serving as the second Gulf of Thailand “gas hub”. The first hub, of course, is the well-known Erawan Field. Like the first one, this hub would collect gas from “southern” fields, like Bongkot, Arthit, and the JDA fields, for further transport to shore. This second hub would add to the security of gas production while diversifying the risk of having just one nucleus of gas production in the Gulf. Natural gas will thus remain Thailand’s fuel of choice for several years to come. Our challenge is therefore to optimise its value chain for the benefit of the Kingdom and the people of Thailand.

Excellencies,
Distinguished Guests,
Ladies and Gentlemen,

I do hope that my talk tonight has stimulated some thoughts among you, and that all of you will continue to find innovative ways to contribute to the development of the Thai economy and a better life for the Thai people. One particular question that I would like to leave with you is how to make Thailand increasingly competitive and well prepared to deal with the challenges of the twenty-first century. I am confident that if we all work diligently in tandem with one another, there is no limit to what we can achieve together.

Thank you very much.

----------------------------




Remark 2

Speech by His Excellency Thaksin Shinawatra Prime Minister of Thailand at the Petroleum Institute Dinner Sofitel Central Plaza Hotel, Bangkok 12 March 2004 -------------------- Excellency Privy Councillor Kamthon Sindhvananda, Chairman of the PTIT Foundation, Excellencies, Distinguished Guests, Ladies and Gentlemen, Thank you, Khunying Thongthip, for that introduction, and thank you all for inviting me. It is a great pleasure for me to address this audience, which is full of outstanding personalities, and whose names resemble the “Who’s Who” of the energy and petrochemical industries. As a matter of fact, I can feel the dynamism and kinetic energy reverberating throughout this room. First of all, I was delighted to listen to the remarkable contribution of the Distinguished Fellow -- Khun Pisoot, a most visionary man in his time who “gave birth to this industry”. There’s a quality or two that we all can learn from this living legend. Thank you, Khun Pisoot, for the legacy you have left with us. For nearly two decades, the Petroleum Institute has contributed in many ways to the industry. Particularly in the past year or so, it has provided excellent support to our young Ministry of Energy, especially in regard to the Sriracha Logistics Hub, which was launched a month ago. It has also undertaken a number of important studies, particularly the study on the Petrochemical Master Plan for Thailand’s next phase of development. Ladies and Gentlemen, It took me a while to come up with a suitable topic for the evening, since I know relatively little about energy or petrochemicals. When the Institute told me I could talk on “any topic” I desired, that created an even greater dilemma for me. However, it reminded me of the time I spent sitting there, staring at my PC screen. You know, whenever your computer tells you to strike “any key” to continue, I find myself striking the same key every time. And I believe many of you do the same. So, tonight I have decided to address the topic that I feel most passionate about, and which most audiences seem to be interested in – that is, the Thai economy. I will also add a few comments about the energy industry toward the end. The Thai economy today is a very exciting one to watch – and certainly a very challenging one to manage. Let me cite a few supporting facts and figures. Thailand currently enjoys one of the highest economic growth rates in the world and is second only to China in Asia. In the most recent figures released by the NESDB, Thailand’s growth rate in 2003 has been revised upwards to 6.7 percent, fuelled by the very strong growth of 7.8 percent in the fourth quarter of last year. Such growth was driven by both stronger investment and domestic consumption. This year, despite the bird flu, I remain confident that we will reach our target of 8 percent growth. We currently have an all-time high international monetary reserves of around 43 billion US dollars. This is despite paying off our IMF debts two years ahead of schedule. I still recall with some amusement that many so-called economists had warned me not to do so since this might threaten Thailand’s financial stability. Combined with our commercial bank deposits in overseas accounts, Thailand’s reserves now exceed total debts – both public and private combined. What this means is that Thailand has now become a net lending country. And it is my intention to cut the country’s foreign public debts down to zero before very long. Meanwhile, our current accounts are rock-solid, with a surplus of around 8 billion US dollars in 2003. Our trade balance has also been in surplus, fuelled by very strong growth in our export volume, which grew by a rate of almost 17 percent last year. All of you in this audience can actually help further strengthen our trade surplus by promoting and using more Thai goods, not merely because it will help the country but because Thai products are among the finest in the world. In short, all economic indicators are in excellent shape, and I have every confidence that we will be able to sustain and enhance our strong and balanced growth in the years ahead. Thailand today is not quite a wealthy nation yet, but we feel that we are strong enough to stand on our own two feet. We have not reached the level of prosperity of the industrialised nations of the West but we are not seeking handouts from any country. Rather, we wish to enter into partnership with other countries to reach a mutually beneficial relationship for all. If you look at the Stock Exchange of Thailand today, you will see a much more vibrant stock market than a couple of years ago, and certainly much healthier than in 1997-1998 when the economic crisis struck. I have said half-jokingly before that if you invest in the Thai stock market and do not make a profit, then you should find some other means of earning a living! Our goal is to make sure that the stock market grows in a robust but cautious manner. I am pleased to note that our total market capitalisation keeps growing by the day, and I am confident that it will catch up with the country’s GDP within the next few years. Speaking about GDP, I have pointed out in the past that Australia’s GDP is about three times Thailand’s figure despite comparable exports with Thailand’s. How is such a large gap possible? My answer is that we have to pay special attention to other growth factors – in our case, the strengthening of the domestic economy. In the past, Thailand relied on a “single track model” of economic development, with a focus on exports, cheap labour, and foreign direct investment (FDI) from multinational companies. This was the model pursued by most of the East Asian economic tigers. Today, such a model has somewhat outlived its usefulness, and we can no longer afford to focus single-mindedly on those factors alone. In many respects, such a model has created imbalanced growth and is not sustainable in the modern globalised world. Today, my administration has taken steps to rectify the situation. As the second track of our dual-pronged economic strategy, we are focusing on strengthening the domestic economy and creating greater opportunities at the grass-roots level. We are using state banks as a mechanism for micro credit financing to promote new entrepreneurs and SMEs. The promotion of the One Tambon, One Product (OTOP) and Village Fund Schemes as well as the People’s Bank are but a few concrete examples of our actions. It is unfortunate that in our past economic development efforts, we placed undue emphasis on Bangkok. This deprived provincial areas of both capital and talent, causing excessive migration of people to the city. This has got to be reversed. We must return our human and financial capital to the provincial areas by creating greater opportunities upcountry. If our efforts are successful -- and I have every reason to believe that they will be --then we will surely achieve my ultimate goal of eradicating poverty from the country by the year 2009. Most of you here are engaged in some aspect of international trade. As you know, I have been pushing hard for Thailand to conclude Free Trade Agreements (FTA) with our major trading partners. The first concrete achievement happened last year with the conclusion of FTA arrangements with both China and India, the world’s two most populous countries. By signing with these two Asian giants alone, we will have access to a combined market of over 2.3 billion people. This will ensure a huge export market for Thai products and services, including the goods of multinational corporations manufactured in Thailand. One would think that the enormous benefits of these FTA arrangements would be apparent to all. However, I still have my fair share of critics who claim that Thailand stands to lose by agreeing to the FTAs. I prefer to think of it this way. Thailand has a population of 63 million people, whereas our trading partners represent a market in the billions. There is only a limited amount of goods and agricultural produce that our people can consume, but, in return, there is a gigantic market that they can produce for. If we are properly prepared for the changes that lie ahead, how can we lose? The key is to be efficient and flexible – and not to be afraid of changes. We must plan ahead for change, instead of sitting on our heels and being forced to change. Incidentally, when the Prime Minister of Sweden called on me a few months ago, I asked him about the secrets to Sweden’s remarkable economic success. Do you know what he told me? He said, first, free trade agreements, and second, educational reform – coincidentally, these are two key areas of focus of this administration. That is why I am confident that FTAs will bring a similar breakthrough success to Thailand. My government will work in close partnership with the private sector to guide and help mitigate your concerns. Let us move ahead together – for success is within our reach. Distinguished Guests, Ladies and Gentlemen, Let me now share with you some of my thoughts on energy. As I said at the outset, I know relatively little about energy and petrochemicals. That is why I have assigned Minister Prommin and other energy experts to handle these matters. I hope the Minister is still enjoying his job. Of course, his gray hair has been there long ago, even before becoming Minister of Energy. And I suspect that he may have gained a few more gray hairs following the EGAT demonstrations! In any case, I do have a few thoughts to share with you tonight. First of all, you need no reminding that your industry is regarded as a critical development tool. For historical reasons, energy matters used to be managed by a number of agencies under various ministries. Now that I have placed the agencies under the same umbrella, namely the Ministry of Energy, the public and I have high expectations for greater synergy and efficiency from you all as a whole. Last August, at the Ministry of Energy’s first workshop on Energy Strategy for Competitiveness, everyone agreed that energy use in the transportation sector needed immediate attention because our transportation sector consumes nearly 40 percent of our energy – followed by industries and households. Plans have been formulated to tackle this matter, as you may already have read. At that workshop, I also said the world is rapidly becoming a molecular economy, brought about by the emerging prominence of nanotechnology, biotechnology and materials science. Soon, a tiny solar cell with incredible power storage capacity will be made available – and this could revolutionise the power industry. Since Thailand is a sunny, agricultural country, I believe we should pay closer attention to innovations such as solar cells and biofuels. Vast opportunities lie ahead for those who are smart enough to think ahead. I am pleased to see that some of the strategies spelled out at that workshop have already taken shape. Tax regulations have been amended to promote the marketing activities of petroleum products. Customs Free Zones have been set up. Earlier this year, we inaugurated Thailand’s first Petroleum and Petrochemical Logistical Centre at Sriracha. That was a bold step forward for us. As a result, Thailand will become another logistical centre for active petroleum and petrochemical marketing transactions. Owing to these new possibilities, Thailand’s refineries have already become more active. We are taking a closer look at the implications of a strategic energy land bridge in the South to economically enhance the security of Southeast Asia’s energy supply and take advantage of our strategic location and proximity to the hinterland, namely countries such as China and our neighbours. Also, we have discussed the issue of regional power and natural gas transmission cooperation. In this respect, Laos and Myanmar are notable examples of neighbouring countries who have benefited directly from energy transactions with Thailand. Our purchase of electricity from Laos and gas from Myanmar has meant a lot to their economies, and is a mutually beneficial situation for both sides. In short, it has been a busy period for the Ministry of Energy, which has a lot on its plate! Over the past two decades, Thailand has made considerable headway in discovering natural gas, crude oil, and condensate. While our own crude oil output will soon reach 100,000 barrels a day, it accounts for only a tiny portion of our overall consumption – and we will certainly continue to need oil imports for the foreseeable future. That is why I have stressed again and again that we must do more to save on oil consumption. For Thailand, it is perhaps natural gas rather than oil that proves to be much more interesting and challenging for added value. Being an indigenous fuel, natural gas provides great value for both direct financial benefit and economic multipliers. Financial benefit consists of revenue through taxes and royalties to the state. Economic multipliers include jobs and the value created by the exploration and production, LPG, power, petrochemical, and plastic industries. The plastic industry itself includes various items like automotive parts and electronics. All these items are derived from natural gas. To help us cut down on oil consumption, Thailand is using more and more NGV vehicles, and gas will increasingly be used with the completion of the Bangkok Gas Ring and distribution lines to industrial estates. On the supply side, gas will be in use for decades to come. Through technological advances, more and more gas fields are being developed in the Gulf of Thailand, including what used to be “non-economic” or marginal gas fields. New fields, for instance, Arthit and fields in the Joint Development Area (JDA) with Malaysia, will start production as early as 2006, not to mention future gas from Cambodia and Vietnam. A new nucleus of gas development is taking shape, with PTT Exploration & Production’s Bongkot Field serving as the second Gulf of Thailand “gas hub”. The first hub, of course, is the well-known Erawan Field. Like the first one, this hub would collect gas from “southern” fields, like Bongkot, Arthit, and the JDA fields, for further transport to shore. This second hub would add to the security of gas production while diversifying the risk of having just one nucleus of gas production in the Gulf. Natural gas will thus remain Thailand’s fuel of choice for several years to come. Our challenge is therefore to optimise its value chain for the benefit of the Kingdom and the people of Thailand. Excellencies, Distinguished Guests, Ladies and Gentlemen, I do hope that my talk tonight has stimulated some thoughts among you, and that all of you will continue to find innovative ways to contribute to the development of the Thai economy and a better life for the Thai people. One particular question that I would like to leave with you is how to make Thailand increasingly competitive and well prepared to deal with the challenges of the twenty-first century. I am confident that if we all work diligently in tandem with one another, there is no limit to what we can achieve together. Thank you very much. ----------------------------
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