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Policy Statement of

the Government

His Excellency Thaksin Shinawatra Prime Minister of Thailand Delivered to the National Assembly on Wednesday, 23 March 2005

Table of Contents

Policy Statement of the Government 1 His Excellency Thaksin Shinawatra Prime Minister of Thailand Delivered to the National Assembly on Wednesday, 23 March 2005

1. Poverty Eradication Policy 4

2. Human Development Policy and Quality of Life 5

3. Economic restructuring policy to create equilibrium 7 and Competitiveness

4. Natural Resources and Environmental Policy 10

5. Foreign Policy and International Economic Policy 11

6. Policy on the Development of the Legal System 13 and Good Governance

7. Policy to Promote Democracy and Civil Society Process 14

8. National Security Policy 15

9. Policy according to Directive Principles of Fundamental 16

State Policies Annex A 17

Annex B 18

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Policy Statement of the Government of His Excellency Thaksin Shinawatra

Prime Minister of Thailand Delivered to the National Assembly

on Wednesday, 23 March 2005

------------------------------ Respected President of the National Assembly, In accordance with the Royal Approval, dated 9 March 2005, appointing myself as the Prime Minister of Thailand, and the Royal Command, dated 11 March 2005, appointing the members of the Cabinet, the Government has formulated its policies according to the democratic principles of the parliamentary system and the constitutional monarchy. This system forms the fundamental basis of the Thai way of life. The said policy also includes the Directive Principles of Fundamental State Policy as stated in Chapter 5 of the Royal Thai Constitution. The Government now presents its policy to the National Assembly as a declaration of its intent, strategy and policy to further strengthen national stability and the sound development of society, the economy and politics for the benefit of the country and the happiness of its people. Mr. President, In continuation of the policy of the previous administration, and in line with the public announcement of the present government during its election campaign that the past 4 years was a period of economic recovery and reconstruction, the upcoming 4 years will be devoted to the emergence of a strong and sustainable Thailand. The Government therefore wishes to report on past developments which are directly related to its future plans.

When the last administration came into power on 26 February 2001, Thailand had suffered economic recession due to its heavy dependence on foreign markets. Particularly the first quarter of 2001, the country’s economic growth rate was only 1.7 per cent, export value dropped by 1.3 per cent, currency value depreciated to 43.2 baht per US dollar, while public debt accounted for 55.9 per cent of the gross national product (GNP). Unemployment reached 1.2 million people and the number of the country’s poorest rose to 8.9 million people. All of these required the Government’s urgent and focused efforts to restore the stability of the country’s economy after the crisis. During its first 4 years, the Government adopted and implemented a “Dual Track Policy” which emphasized the importance of stimulating the economy at the level of the grass-roots and the small-and medium-sized enterprises -- which constitutes the majority of the people. The Government further focused on reducing production costs, increasing income and expanding opportunities, while, at the same time, strengthening the

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competitiveness of the production and service sectors. The Government also paid special attention to restoring economic stability and implementing efficient fiscal policy management. As a result, the Thai economy recorded a higher growth rate of 6.9 per cent and 6.1 per cent in 2003 and 2004 respectively as well as a stabilized exchange rate of around 40 baht per US dollar. Export value soared to 23 per cent in 2004 in consequence of Thailand’s Free Trade Agreements (FTAs) with various countries as well as the development of new potential of the service sectors based on Thai traditional skills and indigenous products. Private investment rose 15.3 per cent in 2004, while public debt dropped to around 47.8 per cent of GNP. Foreign reserves increased to an historical record of 49,800 million US dollars or more than four times of the short-term foreign debt. All these were the results of the wider access of people to capital, the flow of investment capital and the promotion of job and income opportunities for people at the grass-roots level. On the social front, the number of people provided with universal health insurance rose from 78.2 percent in 2000 to 95.4 percent in 2004 due to the 30-baht universal health care scheme introduced by the Government. Employment increased by 3.6 million people within the 4 years whilst the number of poor people decreased to 6 million people as the result of the easier access of capital and knowledge provided by the Government. The average number of years of education was increased from 7.2 in 2000 to 8.1 in 2004 due to the wider educational opportunities and the deregulation of educational loans for students. The number of drug cases dropped from 420.7 per hundred million people in 2000 to 116.5 in 2004 owing to the Government’s campaign against drug dealers and influential persons. Mr. President, I wish to express my gratitude to the Thai people and the members of parliament for entrusting the Government to administer the country for its second term of office, thus, demonstrating their confidence in the socio-economic policies and the efficient people-centered administration of the Government. During the past 4 years, the Government’s policy emphasized problem-solving and opportunities for the majority of the people, which proved to succeed at a number of levels. However, there are still unresolved problems which the Government strongly intends to deal with, particularly poverty. In addition, the Government will develop the quality of life and social services to prepare the country for demographic changes, and to take care of people from cradle to grave. Drugs, influential persons and corruption will also be eradicated from the Thai society. At present, an imbalance between industrial and agricultural sectors still exists in the country’s economic structure. The industrial manufacturing continues to be run by placing orders or according to the pattern developed by the foreign intellectual property owners, which, in turn, makes the country deeply dependent on the imports of raw materials, capital and technological expertise from abroad. Consequently, Thailand gets its returns mainly from wages and raw materials, the minor component in the production chain, which can be defined as “Do much, gain little”

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The agricultural sector, which provides a living for the majority of Thai people, still suffers from the fluctuation of crop prices in the world markets, the risk of natural disasters, the degradation of soil and water resources, and the non-tariff barriers against exported raw materials. At the same time, services sectors, especially tourism, still rely on natural resources without optimizing the value added. Therefore, the Government intends to restructure the country’s economic structure. Otherwise, the economic growth will lead to a cycle of trade deficit and price competition which prevents the country from sustaining that growth.

Apart from the challenges within the country, the Government has to cope with the following dynamics of the world economy and international relations:

(1) The changes in the globalized economy and the trend towards free trade around the world will not only provide Thailand with opportunities to increase the country’s exports, tourism and investment but also increase competition in the world markets. Therefore, we have to be conscious of this tendency and prepare ourselves to deal with the free flow of news and intelligence, technology, labor and peoples, capital, trade and investment and services in order to maximize their advantages.

(2) The imbalance in the world economy and financial speculation may lead to the fluctuation of exchange rates and commodity prices in the world markets.

(3) Rapid technological changes resulting from the accelerating improvement and development of fundamental technologies, including information technology, bio-technology, material technology and nanotechnology.

(4) Social changes as the result of the world demographic trend towards aging societies, urbanization and the awareness and cross-cultural fertilization can be considered as opportunities and challenges to the human resources development process and the future of the country, and finally,

(5) The uncertainties in the world political situation and threats to security include the spread of new diseases, various kinds of narcotics and natural disasters caused by climate change. All require the Government to introduce preventive and corrective measures, both nationally and internationally, to prevent the serious and negative effects on the economy and the way of life of Thai society.

The Government realizes that administering the country in the face of these challenges requires well-designed strategies and planning, efficient and effective bureaucracy, sufficient, fair and up-to-date laws and regulations, accountable and transparent public administration at every level and the participation of all elements of society united to drive the country.

Mr. President, The next four years will be four years that transform Thailand into a secure and sustainable nation in every respect. The Government will provide the opportunities for the future and lay solid foundations for the economy, society and politics by focusing on strengthening the local people, replenishing the fertility of soil and water resources and

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restoring the power of decision to the community. The Government will also emphasize the restructuring of the economy and society to become more balanced, immunizing the economic system and reforming the education system with the aim of developing Thailand as a society with knowledge-based economy according to His Majesty the King’s concept of a Sufficiency Economy. These efforts will lead Thailand to become a country with balanced, prosperous, secure and sustainable structures. Towards this end, the following policies will be pursued:

1. Poverty Eradication Policy Mr. President, The Government will implement policies and measures to eradicate poverty from the country by improving the entire system of the administration, mobilizing not only individuals, but also communities and the whole nation to achieve poverty alleviation and build mechanisms to enable the poor to utilize assets and resources efficiently and in a sustainable manner.

At the grass-roots level, the Government will focus on expanding opportunities, creating income, reducing expenditure, as well as providing access to capital, including money, land ownership and knowledge by accelerating land ownership distribution, expanding the opportunities to gain capital access through Assets Capitalization and promoting cooperative systems and the learning process in new theories of agriculture. In this connection, the Government will proactively solve the poverty problem by founding mobile units known as, “Poverty Eradication Caravan” to cope with the problem, giving advice and services for professional development and providing additional skills training.

At the community level, the Government will strengthen the local community process and enable the poor in local communities to gain advantages from favorable external circumstances. The Government will develop agricultural infrastructure in the community, such as local mills, local organic fertilizer buildings in every district and basic agricultural machinery cooperatives, and create logistic systems for agricultural products and an effective marketing system for the “One Tambon One Product (OTOP)” outputs. Furthermore, the Government will improve the financial system to support grass-root economies, ranging from the well-prepared Village Fund to the Village Bank which offers sustainable access to capital sources. The Government perceives that the strength of the community is one of the most important powers to fight against poverty. Therefore, the Government will allocate the budget according to the population of all villages and communities under the Small Medium Large (SML) Scheme to enable them to solve their own problems.

At the national level, the Government will facilitate all farmers to have sufficient ownership of land in order to increase long-term agricultural productivity to maximize the utilization of land alongside the improvement of soil quality. The Government will increase efficiency of water resource management; allocate water in accordance with the respective areas and the demand of the farmers’ production system;

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establish the Special Purpose Vehicles (SPV) to manage production, processing, marketing and capital resources to reduce risk for farmers; and establish a system to manage each individual agricultural product to stabilize the price of agricultural products, which will yield a fair return to farmers. The Government will also extend social welfare benefits to illegal laborers and laborers in the agricultural sector. 2. Human Development Policy and Quality of Life Mr. President, The Aim of the Development Policy is to make people happy which consists of good health, caring families, harmonious environment, and a peaceful and sharing society. The Government believes in the importance of developing human resources and a quality society as well as strengthening the social capital of Thailand, which will serve as the foundation for a sustainable economy. The Government will establish a life-long, knowledge-based society by developing knowledge and morality from birth by creating a suitable environment, caring families and educational institutions which will look after the youth by providing up-to-date knowledge and good values based on Thai culture. The Government will establish a mobile caravan to offer advice to parents on child development and guidance according to their individual capabilities. The Government will promote cooperation among monks, regional institutions, boy scouts, girl scouts, schools and family institutions as well as media to actively engage in the above role as well as providing places for studying religion around the country. The Government will accelerate educational reforms and teaching methodologies to keep up with the economic and social changes as well as encouraging the life-long learning process while keeping in mind the value of the local identity. The Government will systematically encourage a life-long love for reading to support a knowledge-based society, skill development, learning technology and provide the opportunity for those who wish to complete compulsory education to grade 12. The Government will establish an Income Contingency Loan (ICL) to extend educational opportunities from vocational college to university level. The Government will offer an opportunity to the applicants to pay by installments when they start earning salaries. It is an urgent matter to create an appropriate environment that supports the learning process within and outside the system to turn Thai society into a knowledge-based society. The Government will foster cooperation with other parties to establish knowledge institutions around the country, for example, a modern libraries network, museums, design centers, recreation centers etc. The Government will establish an Internet network among schools. The Government will offer tax benefits to companies in the private sector who participate in the above projects. The Government will support those who have special knowledge in science and technology by increasing the numbers of science schools, encouraging research institutions to participate in producing master’s degree or doctoral degree

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students as well as encouraging people’s awareness of the importance of knowledge in science and technology. The Government will support well-known schools which have the ability to raise their own capital to establish school networks and encourage those schools to look after schools in other areas which wish to raise their teaching quality as well as establishing a vice free zone by introducing laws and measures to eradicate drugs, gambling and sexual misdoings from the youth. Cultural Policy: Over the next four years, young people will be encouraged to learn, love the country, care for other people in the right way, and understand the value of art. New artists can be created by (1) establishing a permanent art exhibition area for young artists to participate as well as meet other artists, (2) providing scholarships to those who have potential in art, (3) promoting art contests at local, national and international level, and (4) cooperating with educational bodies to provide cultural learning locations to encourage the creative study of art. Health Development: The Government will improve the quality of the 30 baht medical care system as well as reforming health management by adjusting public health services to prevent diseases. The Government will introduce tax measures to encourage people to decrease or give up consuming harmful products and use tax income to promote health and social activities. The Government will raise the standard and quality of public health to allow people to enjoy the services on an equal basis as well as establishing a medical research center to study new diseases. The Government will promote sports as a means to create opportunities for the youth to develop their athletic skills to create excellence and a sense of national pride. Furthermore, the Government intends to instill in the youth the love for sports and how to use their spare time rewardingly in order to divert them away from drugs and other temptations. People at all levels will be encouraged to have the opportunity to exercise through sports in order for them to keep healthy and fit. In terms of social security, the Government will encourage the people to obtain a sense of security through ownership of property, both for those with low incomes who desire to own affordable property through governmental projects, and for those with middle incomes who would like to purchase property by paying in installments through a system of long-term loans with appropriate interest rates and with consumer protection measures. Apart from enabling ownership of property, the Government will develop community environments to make them pleasant to live in, such as communal health gardens. The Government will seriously continue to clamp down on influential persons and eradicate drugs from Thai society, by adhering to the principle: “Addicts are patients who are in need of treatment while traffickers are those who must be punished under the judicial process”. The said principle will be implemented through a combination of community participation and law enforcement measures, and by cutting off all channels for acquisition of illegal wealth by those influential persons, namely drug trafficking, illegal logging, human trafficking and control of gambling.

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The Government will ensure the sense of equality and human dignity in women and children, through the eradication of all manners of human trafficking, of discrimination, and of the violation of the rights of women and children, as well as through the promotion of knowledge and careers for women so that they are self-dependent. In providing aid and assistance to the elderly, the Government upholds the belief that the elderly are valuable resources for the national economic and social system. Furthermore, the Government supports the well-being and maintenance of good physical and mental health for the elderly through the creation of sufficient financial guarantees and savings during their working career so as to benefit them in their old age. The Government also will encourage appropriate health lifestyles for the elderly, support strong families able to take quality care of family members, exempt those aged over 65 from income tax, and promote the use of the experience of the elderly in the country’s development through the system of brain bank. The Government will create happiness for Bangkokians through the policy of keeping Bangkok strong and appealing, by speedily enhancing the quality of life and a good environment with schools close to home, safety in people’s lives and properties, and traveling convenience. The Government will reform the bus transportation system and develop the mass railway transit system to cover the whole of Bangkok and its outskirts in order to reduce fuel consumption and pollution. 3. Economic restructuring policy to create equilibrium and Competitiveness Mr. President, The future challenge that remains is to maintain a substantial growth of the Thai economy in order to facilitate employment and income creation. More important, however, is the restructuring of economic growth to ensure its quality and sustainable expansion, thorough economic and wealth distribution, and immunization from global transformations in the globalization age. Therefore, in the next four years, there is an urgent need to strengthen Thailand’s economic foundation. The Government will restructure the entire economic system with the aim of increasing product value based upon knowledge and Thainess, by combining a natural resource base, and Thai culture and local ingenuity with new entrepreneurs, good management, commercial innovation, establishment of acceptance of Thai brands, and restructuring of the market system in order to match production and services with global consumer demand to ensure Thailand’s future sustainable expansion. In restructuring the agricultural sector, the Government will support the value increase of agricultural products by encouraging research and development of technological innovations and biotechnology alongside local ingenuity and promoting community enterprises in adding product value. Importance will be given to food security, transformation of agricultural products into alternative energy such as palm oil, sugar cane and cassava. Agricultural products that have high marketing potential and opportunities for adding value are, for example, rubber, livestock, coastal aquaculture breeding. The Government aims to promote agricultural products processing in line with

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food safety standards, by developing systems to control the quality and standard of both exported and imported agricultural products consistent with global standards. Furthermore, the Government will promote and support sustainable agriculture along the lines of the new theory and organic farming in order to preserve and restore natural resources and environment. As for the industrial sector, which is a highly competitive production sector, the Government intends to transform those entrepreneurs who are still hired producers, receiving only a small profit from the business, into knowledgeable entrepreneurs who are able to use technology to its utmost benefit so as to produce high quality goods which cater to market demands. The aim is to develop an industrial sector that can effectively compete in the world market. The Government will promote the use of domestic raw materials and adding value to goods by focusing on high potential industries and newly emerging industries and by improving the efficiency of weaker industries. The Government will also encourage the development of industrial networks as well as of value added products on a knowledge basis by promoting knowledge management process at all levels, ranging from local enterprises, small and medium enterprises and large enterprises. At the same time, the Government will develop a supporting system to increase the capability to compete in the following areas:

(1) Develop research systems for science, technology and innovation for production and trade. Promote Thai intellectual property by cooperating with the private sector in research, development and innovation. Encourage Thais to register for copyrights and patents domestically and internationally as well as to be able to apply such intellectual property for commercial purposes;

(2) Develop human resources for the industrial sector to generate creative ideas, entrepreneurial instinct, ability to learn, and skills in developing new sectors in science and technology that are consistent with the needs of the business sector in order to be prepared for changes in economic infrastructure in the future. The Government will organize training for the workforce that is in line with the needs of the labor market by focusing on developing a workforce of international standard, ready to compete in the world market for upmarket consumers, with the objective that the entire workforce must be trained continuously on a regular basis. The Government will raise awareness and understanding among employees regarding the benefits of human resources development by using tax incentives;

(3) Stimulate the development of an enterprise network to increase value added and networking in food, fashion, automobile, electronics, software and tourism industries as well as support other enterprise networks e.g. energy, health, biology, services, creation and design;

(4) Build a strong economy and upgrade the production and services sectors in the provinces by expanding science and technology infrastructure e.g. science park, technology incubator; and

(5) Encourage clean technology production. Encourage alternative energy in manufacturing, including rehabilitate environment affected by the industrial activity.

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With regard to the service sector and tourism, the Government will focus on adding value rather than increasing quantity. As such it will cooperate with the private sector, local entities and communities in safeguarding natural resources and environment related to tourism from deterioration, organize a certification system for hotels and service providers, increase the capabilities of organizations related to tourism, and develop human resources in tourism to meet international standards. In this regard, the Government will speed up revitalization of tourist destinations that have experienced degradation or which have been affected by natural disasters, such as the Andaman coastline, and develop cultural tourism by linking with neighboring countries as well as developing environmental tourism and health tourism. The Government will expand the service sector to generate new sources of income in areas such as health, education, international meetings and seminars, air transport, film production, software development, wholesale/retail, and regional business hub. Regarding small and medium sized enterprises, the Government will create opportunities for entrepreneurs to be able to access financial resources, product development and innovation, and local and international marketing, so as to build competitiveness through various mechanisms that have already been initiated i.e., village fund and bank, assets capitalization, and development of standards and quality of OTOP products. The Government will create opportunity to develop SMEs by supporting knowledge in sales, marketing, and accounting system, providing knowledge in improving product quality and production, including assistance in registering intellectual property of local populations and communities, as well as setting up of Thai exhibition centers in large cities abroad to create markets and promote Thailand. The Government will change the management system of goods transportation to be efficient, high quality, and timely, able to support the expansion of the economy and link production to markets at all levels. This will reduce costs at all stages of distribution within a multi-modal transportation network, whether by car, ship, train or pipeline. Importance will be given to linkages to Laem Chabang Deep Sea Port and Suwannabhumi International Airport as windows to the world market. The Government will expand networks and services for information and communication technology to be fully up to date and covering all areas of the country, at a fair cost and in sufficient quantity to support economic expansion. It will also utilize such technology to add knowledge for society, public administration and electronic commerce. In the current situation in which oil prices in the world market are still high and volatile, the Government will implement energy policy which is central to the production system, transportation and livelihood of the people so as to be able to use energy efficiently, reduce energy imports and develop alternative energy such that we can be more self-reliant, including through developing the best utilization of natural gas, creating energy security in the region and increasing value in the country by developing

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the petrochemical industry, downstream industries and bio-energy industry, and encouraging the use of ethanol and bio-diesel from agricultural products to replace petrol. To ensure efficient investment and provision of infrastructure services, the Government will increase the potential of state enterprises by improving management and introducing privatization, and forming clusters to monitor these companies to operate in accordance to the country’s strategy, including strengthening monitoring mechanisms related to infrastructure services. The Government will monitor the management and development of state enterprises, bearing in mind the best interests of consumers as the customers. In order to efficiently alleviate poverty, develop quality human resources and society, strengthen the economic system and develop infrastructure, significant investment is necessary. In this regard, the Government will consider appropriate sources of capital, strictly adhering to the principle of having stable expansion of the economy and strict financial discipline. It will accordingly draw up a budget that is consistent with the economic climate, manage inflation to be at appropriate level, maintain foreign capital reserves and current account at sufficient level, as well as maintain the country’s status as a net lender.

In terms of financial market policy, the Government will create transparency and strength as well as provide the business sector and people in all parts of the country with opportunities and channels for greater access to sufficient financial capital. In term of capital market policy, the Government will develop both capital and debt instruments as long-term capital for the business sector. The Government will also promote private savings to enhance security in the lives of the people and as a source of funds to reduce dependency on foreign capital in expanding investment. As for international finance, the Government will continuously push for financial cooperation in the region by developing Asian Bond markets as an important mechanism for capital mobilization for the common interest of Thailand and the region as a whole. 4. Natural Resources and Environmental Policy Mr. President,

Natural resources and the environment are important elements in the country’s development, requiring a balanced approach in utilization, conservation and replacement in order to safeguard these national assets for the next generation. The Government will, therefore, promote and accelerate the rehabilitation of soil and water conditions and solve the problem of environmental degradation and pollution so as to restore a sound environment to the Thai people.

The Government will set standards for managing public and private resources by encouraging participation of the private sector and local community in order to attain a balanced approach in utilization, tenure and conservation of resources base, land, forest, water and coastal resources. The Government will use the Geo-information system, amend laws and regulations, and expand participation among relevant sectors of

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society for the greatest benefits and sustainable development of the country and quality of life.

The Government will take both upstream and downstream measures for

environmental preservation. These include supporting local communities to build dams and dykes in accordance with His Majesty’s Project, assuring fair access and sustainable use of bio-diversity, and investing in the systematic development of water resources in accordance with the physical characteristics of each river basin, from the development of watersheds and water sources to the distribution of benefits in an efficient and comprehensive manner. The Government will rehabilitate soil, stop illegal burning of plantation and surface degradation, reduce the use of biochemicals in agriculture, and pursue His Majesty’s Project to plant vetiver to protect soil surface from erosion. The Government will also implement preventive and early warning measures against natural disasters, e.g. floods, droughts, earthquakes, changes to the ozone layer and take necessary measures to mitigate impacts on and hardship to the people.

Regarding pollution, the Government will expedite measures to control

pollution arising from production and consumption i.e. gas, waste, polluted water, noise and smell. The Government will expedite construction of a system for the treatment of waste water from societal use and agricultural and industrial activity, implement an environment-friendly waste disposal system and enhance waste disposal capacity of local administrative authorities.

The Government will promote the private sector’s role in research and

development for energy conservation, environmental management, recycling of raw materials and clean technology. In order to reduce pollution and the social burden of pollution, the principle of the polluter pays the costs will be used. In addition, the Government will not allow Thailand to become an end receiver of waste which has to bear the costs of industrial waste and pollution.

5. Foreign Policy and International Economic Policy Mr. President, In today’s changing world, Thailand cannot avoid being linked with the world economy and society. The Government must therefore conduct foreign and international economic policies that will protect Thailand’s national interests. In the meantime, partners must be sought and international cooperation must be built, at both the level of neighboring countries and the region, to develop together and prevent problems that may affect Thailand. The Government shall conduct a proactive foreign policy based on the principle of equal treatment, and aims to promote and expand friendship and cooperation with foreign countries, in political, security, economic, social and cultural aspects, with foreign affairs a key instrument in enhancing the Government’s economic and social development policies.

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With regard to the strengthening of foreign relations in various dimensions, the Government shall continue to build and strengthen the good understanding and cooperation with neighboring countries, and further expand cooperation at the levels of government, the private sector and the public, in particular, the economic cooperation with neighboring countries under the Ayeyawady - Chao Phraya - Mekong Economic Cooperation Strategy (ACMECS) and other sub-regional frameworks in the areas of trade, investment, agriculture, industry, linkage of land-sea-air transportation networks, tourism and human resource development. The Government shall cooperate with ASEAN member countries to expedite the realization of the ASEAN Community and promote the Asia Cooperation Dialogue (ACD) as a forum for enhancing confidence and relations among the countries of Asia, as well as an important foundation towards the establishment of an Asian Community.

The Government shall further develop and expand cooperation on an equal basis and in strategic partnership with countries and key groupings of countries based on mutual benefit, and shall promote greater recognition of and confidence in Thailand on the part of foreign countries.

In the area of multilateral cooperation, the Government shall abide by its obligations under the United Nations Charter, international law, cooperation frameworks to which Thailand belongs, and Thailand’s international commitments. The Government shall step up Thailand’s role in the United Nations, international organizations, regional organizations and international networks to promote and support peace; security; democratization; international development cooperation in economic, social, technical and human security aspects; humanitarian assistance, in particular post-conflict rehabilitation; counter-terrorism cooperation, and the development of Thailand into a center for international conferences and activities. The Government shall encourage Thai nationals to play key roles in the United Nations and other international organizations, and Thailand to play a leading role in the setting of important international rules and regulations and in the reform of the United Nations, as well as in addressing globally-recognized transnational issues, in particular narcotics, HIV/AIDS, epidemics, disasters, natural resources, the environment, poverty eradication and sustainable development. In the area of international economic relations, the Government shall continue to pursue a proactive international economic policy, in conjunction with domestic economic policy, particularly economic restructuring, so that international cooperation may be used to develop and enhance the potential of people at every level in preparation for the economic restructuring as well as develop Thailand’s potential to play a leading role in regional economic development. The Government shall continue to negotiate free trade agreements with various countries for the greatest good of the country, to increase the competitiveness of Thai entrepreneurs and to pursue proactive marketing policies in both existing and new markets, so that Thai goods and services are widely known and recognized by foreign consumers.

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The Government shall encourage Thai representatives to play constructive leading roles in international trade and economic negotiations, particularly under the multilateral framework, to enhance the bargaining power and safeguard the overall interests of the country, as well as expand economic cooperation with various countries to promote access to natural resources, raw materials, science and technology, and new knowledge from abroad to increase the country’s economic competitiveness in international trade fora. So that the conduct of foreign policy is truly responsive to the needs of the Thai public, the Government shall continue to pursue diplomacy for the people, by encouraging the participation of people from all walks of life in foreign affairs, supporting the role of Thai communities abroad in protecting and promoting the national interest; to protect the rights and interests of the country, the Thai private sector, workers, and communities abroad; and to further improve the system for integrated administration of Thai government offices overseas. 6. Policy on the Development of the Legal System and Good Governance Mr. President,

For the country to have a strong economic foundation and a peaceful

society, it is essential to have a strong legal foundation, judiciary process, and good governance, especially transparency and freedom from corruption at all levels and in all circles, in both the public and private sectors. The Government shall modernize the entire legal system so that it is relevant to the changes in the world, by abolishing laws, rules, regulations and injunctions that are unconstitutional and that infringe upon the rights and freedoms of the people; laws that are unenforced, unnecessarily burden the public, and create difficulties, delay, and redundancy in the work of government agencies, and are inimical to national development, in particular, the development of economic laws in response to economic restructuring, to emphasize expanding opportunities for the poor and underprivileged, and boost the nation's competitiveness to meet the demands of globalization.

The Government shall improve the system for the dispensation of justice in an equitable and just manner, so that the public may enjoy thorough and prompt access to and use of the justice process. Moreover, the Government will improve the management of legal studies, develop the competency of legal staff in the public sector, and encourage public awareness of the law in everyday life, rights, freedoms and civic duties, so that basic rights and freedoms may be protected. The Government shall continue to develop the civil service by restructuring the bureaucracy and introducing the use of information technology for more efficient planning and decision-making, which would render roles and missions more concise, efficient, and responsive to the situation, whether in area supervision or the carrying out of ordinary and special duties and assignments, open to change, and responsive to the needs of the people, using a people-centered approach.

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The Government shall continue to promote greater efficiency in the integrated administration system, whether at the provincial or other levels. The Government shall emphasize public sector personnel administration that is virtuous and efficient, improve human resources management and arrange a fair remuneration system. In addition, public services shall be improved proactively, through direct-to-individual service through one-stop service centers and comprehensive e-government services, capacity building for government agencies and units, development of a new public administration system that is highly flexible and nimble, emphasis on knowledge management and development of government agencies and units into learning organizations.

The Government shall continuously prevent and suppress corruption in the civil service to bring about a transparent and clean civil service, by putting in place an auditing and performance evaluation system based on virtue, ethics, and cost-effectiveness; developing a monitoring process; investigating and punishing wrongdoers severely; disclosing information; improving the public procurement system; ensuring transparency and efficiency in public expenditures; encouraging serious public participation in campaigning on this matter; and instilling social conscientiousness and values so that people will oppose corruption and malfeasance by state officials.

The Government shall promote good corporate governance, in particular through transparent auditing systems, and encourage the private sector to be responsible to clients, customers, and all stakeholders, as well as to society and the environment; strengthen society through consumer protection to ensure fairness; and prevent monopolization and collusion, whether direct and indirect.

Over the next four years, the Government shall promote ethics and morals as guidelines for living and conducting business by all, by seeking cooperation from the Sangha and the ecclesiastical bodies of all religions.

7. Policy to Promote Democracy and Civil Society Process Mr. President, Democracy and civil society, wherein the people can participate in national and local development, are important mechanisms in ensuring that economic and social development are truly in line with the people’s needs. The Government is determined to promote and develop democracy, with an emphasis on popular participation and the protection of people’s rights and freedoms. That the Government received the people’s trust so overwhelmingly in the last election has given rise to a new dimension in the Thai political system: a strong government. However, the Government fully recognizes that in a democratic society, there must be checks on the administration of public affairs, through a strong civil society. Therefore, the Government will listen to the people’s opinions through appropriate and diverse formats on important issues, in line with Article 59 of the Constitution, and work with all to promote and elevate human rights to international standards, including through setting

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up a center to search for missing persons and a system for identifying unidentified corpses, for greater justice in Thai society. The Government shall promote and support the work of independent organizations in accordance with the Constitution, promote the role of community leaders or local philosophers, decentralize power to local authorities so that localities may become more self-reliant and make decisions on local affairs, and promote constructive private development organizations and civil society, in which people can participate in policymaking, political decision making, economic, social and political development planning, and monitoring the exercise of state power at every level. 8. National Security Policy Mr. President, The Government shall honor and protect the authority of His Majesty the King from any violation. The Government shall develop the national defence system in line with standard national defence approaches, by building awareness and introducing public participation in national defense, improving the preparedness and modernity of the Thai armed forces for greater efficiency and readiness to protect the country’s national sovereignty and interests, and supporting peace-keeping activities in various regions under the auspices of the United Nations. At the same time, the Government will promote the role of the armed forces in national development, and introduce order in the border areas to prepare for situations and problems under both normal and special circumstances. To solve the problem of illegal immigrants and workers, the Government will aim to check and prevent new entries, set regulations on foreign workers, and strictly suppress illegal immigration, especially movements that have the backing of influential persons, to minimize the size of the problem and its long-term impact on security, together with managing the status and rights of persons with no clear legal status, and appropriately contributing to national development, striking a balance between protection of fundamental rights and protection of national security. The Government will solve the problem in the southern border provinces by mobilizing resources and improving administration and management according to the principles of understanding, reaching-out, development, and strict law enforcement to achieve peace and safety of life and property in the area at the earliest. The Government is also determined to improve the quality of life and well-being of the people in the area in a sustainable manner by emphasizing the participation of every sector, building national and communal reconciliation, dispensing fairness and justice, strictly eliminating dark influences and corruption by government officials, together with poverty eradication, education development, and economic and social development in line with the special characteristics of the area, way of life, and culture of the people, including cooperating with other countries, especially neighboring countries, in developing, preventing, and solving the problem of transnational crime and disruption of peace in the border areas.

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The security situation is a new environment that is important to the country’s economic and social development. The Government will reform intelligence work to be more efficient, including an information system with in-depth economic, social, and security information that can truly be used to prevent and tackle problems, including creating preparedness for crises that are large-scale disasters, both natural and man-made, by giving priority to the establishment of a national center for emergency warning and crisis management, to respond promptly to crises for rapid post-crisis relief and rehabilitation. 9. Policy according to Directive Principles of Fundamental State Policies Mr. President, During the past four years, the Government has seriously implemented the directive principles of fundamental state policies in line with the Constitution, and reported the progress, problems, and obstacles to the National Assembly every year. Over the next four years, the Government remains determined to earnestly implement the directive principles of fundamental policies by combining the above-mentioned government policy with the substance of each article of Section 5, on the directive principles of fundamental state policies according to the Constitution of the Kingdom of Thailand. The Government will report the progress, problems, and obstacles to the National Assembly every year to receive opinions from the members of the parliament, which would be used to improve the work of the Government. Mr. President, The Cabinet’s policy formulation on the administration of state affairs, just described, rests on a factual basis pertaining to the country and continuity with past events, including an analysis of the new economic, social, political and administrative environment, and the changing world situation. After this policy statement, the Government will expedite concrete implementation by drafting a national action plan, comprising a legislative plan, national administrative plan, and action plan for each government agency, to serve as guidelines for future work. The Government wishes to reassure the National Assembly, as the body charged with overseeing state administration, that the Government will administer the country with loyalty, honesty, and determination for the country to achieve the same level of prosperity as civilized nations, for equality in a more balanced society, and for pride in being Thai, truly with the interests and happiness of the Thai people at heart. Thank you.

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Annex A Draft legislation that the cabinet deems essential to the administration of public affairs, in accordance with section 173 of the Constitution of the Kingdom of Thailand:

1. Draft Act on Administration of State Affairs 2. Draft Act Amending the Act on Reform of Ministries, Agencies, and Departments 3. Draft Act on Civil Service Regulations 4. Draft Act on Reorganization of Ministry of Defense Affairs 5. Draft Act on Consumer Protection

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Annex B

Index roster of the policies on the administration of public affairs of the cabinet, in comparison with Directive Principles of Fundamental State Policies in Section 5 of the

Constitution of the Kingdom of Thailand

Constitution of the Kingdom of Thailand Cabinet’s Policy Page Section 71 The State shall protect and uphold the institution of kingship and the independence and integrity of the territories.

8. National Security

Policy

24

Section 72 The state shall arrange for the maintenance of the armed forces for the protection and upholding of its independence, security of the State, institution of kingship, national interests and the democratic regime of government with the King as Head of State, and for national development.

8. National Security

Policy

24-25

Section 73 The state shall patronize and protect Buddhism and other religions, promote good understanding and harmony among followers of all religions as well as encourage the application of religious principles to create virtue and develop the quality of life.

2. Human Development

Policy and Quality of Life

6. Policy on the Development of the Legal System and Good Governance

8

22

Section 74 The State shall promote friendly relations with other countries and adopt the principle of non-discrimination.

5. Foreign Policy

and International Economic Policy

8. National Security Policy

18-20

24

Section 75 The State shall ensure the compliance with the law, protect the rights and liberties of a person, provide efficient administration of justice and serve justice to the people expediently and equally and organize an efficient system of public administration and other State affairs to meet people’s demand. The state shall allocate adequate budgets for the independent administration of the Election Commission, the Ombudsmen, the National Human Rights Commission, the Constitutional Court, the Courts of justice, the Administrative Courts, the national Counter Corruption Commission and the State Audit Commission, readiness.

6. Policy on the

Development of the Legal System and Good Governance

7. Policy to Promote Democracy and Civil Society Process

21-22

23

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Constitution of the Kingdom of Thailand Cabinet’s Policy Page Section 76 The State shall promote and encourage public participation in laying down policies, making decisions on political issues, preparing economic, social and political development plans and inspecting the exercise of State power at all levels.

5. Foreign Policy and

International Economic Policy



20

21-22

23 Section 77 The state shall prepare a political development plan, moral and ethical standard of holders of political positions, Government officials, officials and other employees of the State in order to prevent corruption and create efficiency of the performance of duties.

6. Policy on the


22

Section 78 The State shall decentralize powers to localities for the purpose of gaining independence and self-determination of local affairs, developing local economics, public utilities and facilities system and information infrastructure in the locality thoroughly and equally throughout the country as well as develop into a large-sized local government organization, a province ready for such purpose, having regard to the will of people in that province.

6. Policy on the



21-22

23

Section 79 The state shall promote and encourage public participation in the preservation, maintenance and balanced exploitation of natural resources and biological diversity and in the promotion, maintenance and protection of the quality of the environment in accordance with the sustainable development principle as well as the control and elimination of pollution affecting public health, sanitary conditions, welfare and quality of life.

3. Economic

Restructuring Policy to create equilibrium and competitiveness

4. Natural Resources and Environment Policy

13

16-17

Section 80 The State shall protect and develop children and the youth, promote equality between women and men, and create, reinforce and develop family integrity and the strength of communities. The State will provide aid to the elderly, the indigent, the disabled or handicapped and the underprivileged for their good quality of life and ability to depend on themselves.



7-11

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Constitution of the Kingdom of Thailand Cabinet’s Policy Page Section 81 The State shall provide and promote the private sector to provide education to achieve knowledge alongside morality, provide law relating to national education, improve education in harmony with economic and social change, create and strengthen knowledge and instill right awareness with regard to politics and a democratic regime of government with the King as Head of State, support research in various sciences, accelerate the development of science and technology for national development, develop the teaching profession, and promote local knowledge and national arts and culture.



3. Economic Restructuring Policy to create equilibrium and competitiveness


7-11

12

23

Section 82 The State shall thoroughly provide and promote standard and efficient public health service.



9

Section 83 The State shall implement fair distribution of incomes.

1. Poverty Eradication

Policy 3. Economic

Restructuring Policy to create equilibrium and competitiveness

6-7

11-14

Section 84 The State shall organize an appropriate system for the holding and use of land, provide sufficient water resources for farmers and protect the interests of farmers in the production and marketing of agricultural products to achieve maximum benefits, and promote the assembling of farmers with a view to laying down agricultural plans and protecting their mutual interests.


Policy 4. Natural Resources

and Environment Policy

6-7

16

Section 85 The State shall promote, encourage and protect the co-operatives system.


Policy

6

Section 86 The State shall promote people of working age to obtain employment, protect labor, especially child and women labor, and provide for the system of labor relations, social security and fair wages.


Policy 2. Human Development



4. Natural Resources and Environment Policy

7 8

13

20

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Constitution of the Kingdom of Thailand Cabinet’s Policy Page Section 87 The State shall encourage a free economic system through market force, ensure and supervise fair competition, protect consumers, and prevent direct and indirect monopolies, repeal and refrain from enacting laws and regulations controlling businesses which do not correspond with the economic necessity, and shall not engage in an enterprise in competition with the private sector unless it is necessary for the purpose of maintaining the security of the State, preserving the common interest, or providing public utilities.





10

11-16

22

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Policy of the Government of H.E. Prime Minister Thaksin Shinawatra Delivered to the National Assembly on Wednesday, 23 March 2005

Documents

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