It is almost impossible for someone today to have a once-in-a-lifetime chance to see the gold ingots of the national reserves. But it was possible for those living during the post-World War II era.

At that time, the Bank of Thailand (BOT) asked for its gold bullion from the Bank of Japan (BOJ), the Japanese central bank, and placed the treasure under the care of the US Federal Reserve in New York.

During World War II, Thai Prime Minister Field Marshal Plaek Pibulsongkram had decided to bring the country onto the Axis side, leading to strict obligations Thailand could not avoid.

One obligation involved international gold reserves. Japan, an Asian Axis country, required Thailand to deposit gold to back up circulated notes at the BOJ instead of the US Federal Reserve.

But when the Axis lost to the Allies, the ingots were taken from Japan to the US.

In modern times Thais have had many chances to see gold ingots, particularly when Pra Mahabua gathered donated gold and cash in baht and dollars to turn over to the BOT. The monk wanted the central bank to keep them to strengthen the country's international reserves.

In 1997 the country lost almost all of its reserves to Western currency speculators. The reserves were only US$27 billion (Bt1 trillion at today's rates) and the swap obligation was $18 billion.

As a result, the BOT asked other Asian central banks and international organisations for financial aid. The BOJ and the Import Export Bank of Japan rushed to lend a hand.

The International Monetary Fund (IMF), led by the United States, hesitated but at last joined in the assistance after it realised how severe the "tom yam kung" crisis was.

The $17.2 billion of the IMF programme gradually strengthened the confidence of foreign and Thai investors, and the reserves eventually increased.

The economy was derailed temporarily, partly because of the austere monetary policy prescribed by the IMF, but then came back on track with the steady growth of the economy, low inflation, a current-account surplus, high international reserves, low foreign debt and so on.

Now Thailand marks the ninth anniversary of the 1997 economic crisis with an economic slowdown, high inflation and baht fluctuation, along with a political vacuum and dampened confidence of consumers and the business sector.

Economists of different schools have different opinions on macroeconomic management. Some want to boost economic growth while others prefer stability.

Worsening economic sentiment is causing grave concern that the economy is in a mild stagflation phase. Some are afraid that the Bank of Thailand's policy-rate hikes will cripple economic growth without squelching inflation - the cost-push version.

Interest groups have different attitudes on politics and cannot find the best solutions for the country's benefit, causing a slowdown in public investment and lowered business confidence.

Meanwhile, China is playing a dominant role in the world economy along with the recovery of the Japanese economy, which will benefit Thailand's exports. On the other hand, the US economy is threatened with inflationary pressure and twin deficits.

Market turnaround has caused fluctuations in capital movement around the world, resulting in volatile currencies, including the baht. Short-term capital movement remains a threat to the currency.

Demoralised the world may be, but the $57 billion of Thailand's international reserves have been laid down proudly and seem indolently disinclined to go off on their travels again.

Anoma Srisukkasem

The Nation