Zeti Akhtar Aziz: Growth and development of the world economy
Welcoming remarks by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank
Negara Malaysia), at the official opening of the World Bank Group Knowledge and Research
Hub in Malaysia, Sasana Kijang, Kuala Lumpur, 28 March 2016.
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It is my great honour to welcome the distinguished Senior leadership of the World Bank Group,
Dr Axel van Trotsenburg, Vice President of Development Finance; and Dr Kaushik Basu, Chief
Economist and Senior Vice President, to the Master Lecture on 'Shared Prosperity' by Dr
Kaushik Basu. The Lecture is held in conjunction with the Official Opening of the World Bank
Group Knowledge and Research Hub in Sasana Kijang later this afternoon.
As we meet today, the global economy is confronted with an immensely challenging
environment. A slower than anticipated growth in several major economies, the sharp decline
in commodity and energy prices, the significant shifts in global liquidity, and the heightened
geopolitical tensions are having far reaching and widespread implications. Going forward, the
challenge for both the advanced and emerging economies is to lift growth trajectories and
search for sustainable growth factors that can rebuild economic fundamentals, address
structural vulnerabilities and forge new sources of growth.
Key is the "sustainability" and strengthening of the growth and development of the world
economy. An important aspect in this process is that economic growth and development, no
matter how stellar, will begin to fade when inequality sets in and when income disparities
widen. Experience has also shown that financial crisis and economic recession entrenches the
cycle of poverty. During a financial crisis, the poor lose their income by several times more
compared with the average household. We saw this happen during the recent Global Financial
Crisis, and we also saw how many that were displaced suffered "hysteresis" thus deeply
affecting their income prospects. We also risk facing a severe setback in our fight against
poverty. In the more recent years, the international community has accorded greater attention
to addressing this agenda and to achieving more balanced and inclusive growth.
Malaysia, while achieving growth and progress since the 1960s has always given attention for
it to be a shared prosperity. Given the role of the financial system in facilitating this, Bank
Negara Malaysia has always given priority to the financial inclusion agenda to not only bring
the underserved segments of society into the financial mainstream but to promote a more
effective participation in the financial system which will in turn strengthen the potential for
enhancing economic well-being.
Before I conclude my remarks, allow me to congratulate the World Bank Group on its many
achievements realised in the Asian Region. Bank Negara Malaysia is pleased to partner the
World Bank Group in its initiatives in the region. By the response received, this initiative will
inspire the many talents within the Malaysian research community to be more engaged to think
and delve into greater research on Malaysian economic and development issues that have
great importance to the country and the region that is expected to persist in our prevailing and
future environment.
With the official opening of the World Bank Group Knowledge and Research Hub, I believe the
Hub is well-positioned to become a regional centre of excellence that promotes learning
opportunities, thought leadership and innovation. Being located in Sasana Kijang, which in
Sanskrit means a meeting place, it is hoped that the Hub would benefit from synergies with the
institutional cluster of intellectual excellence that are also located right here in Sasana Kijang,
including the Alliance for Financial Inclusion, the SEACEN Centre, and the Islamic Financial
Services Board. On behalf of Bank Negara Malaysia, allow me to express our great optimism
of this partnership in bringing knowledge, expertise and best practices to realise greater
regional and international collaboration. Today, the winner of the Young Malaysian Researcher
Prize 2016 will be announced.
With this, let me conclude my remarks and invite Dr Axel Van Trotsenburg, to deliver his
remarks. I also look forward to the address on 'Shared Prosperity' by Dr Kaushik Basu.