Marzunisham Omar: Statistical science for a better tomorrow Welcoming remarks by Mr Marzunisham Omar, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the International Statistical Institute Regional Statistics Conference 2014 “Statistical Science for a Better Tomorrow”, Kuala Lumpur, 17 November 2014. *  *  *  Good morning, distinguished guests, ladies and gentlemen. I am pleased to welcome you to this inaugural ISI Regional Statistics Conference 2014 on “Statistical Science for a Better Tomorrow”. Bank Negara Malaysia is most honoured to jointly host this event, together with the International Statistical Institute and its South East Asia Regional Network, the Department of Statistics Malaysia, and the Malaysia Institute of Statistics. Today, we have more than 500 statistical researchers, practitioners, policymakers and users of statistics from around 40 countries. With such diversity of participants, I believe the conference provides an excellent platform for the participants to share insights on the application of statistical science for knowledge discovery, innovation and policy. The importance of statistics cannot be overstated. The formulation of decisions – by individuals, businesses and especially policymakers – is as good as the statistics collected and the capacity to interpret the data. While the need for accurate and reliable statistics is common across all fields of study, two other requirements for the compilation and analysis of economic and finance-related statistics can be considered to be rather unique. The first is timeliness, given the rapid pace in which economic and financial developments can change.

For example, while policymakers were aware that trade activity had deteriorated during the height of the global financial crisis around October to November 2008, it was not until January 2009 that the extent in which global economic activity had fallen off the cliff was realised. Indeed, as financial conditions are often vulnerable to sudden shifts in sentiments and herd behaviour, the window of opportunity to take decisive policy action is often very small – potentially, just a matter of hours during periods of crisis. This is where availability of statistics on a timely manner does make a difference. The second is the continuous re-evaluation of underlying relationships. Beyond errors in reporting and limitations in aggregation, statistical estimates of economic variables are also subject to movements in relationships amongst variables across time (the so called “structural breaks”). As a consequence, in the words of former Governor Duvvuri Subbarao of the Reserve Bank of India, “the chance of being fooled by randomness is much higher in the assessment of economic events”. Why is this so? It is because, in the field of economics and finance, outcomes are shaped by human behaviour – which, contrary to fundamental assumptions, is not always rational. In addition, economic systems are reflexive, in the sense that beliefs about what will happen often influence what does happen. Going forward, as the global landscape and expectations of economic agents adjust to, as yet, an unknown new normal, the demands on the timeliness and quality of data and analysis will only increase further.