In addition, Malaysia’s economic flexibility has allowed us to shift resources from industries in which we no longer have comparative advantage to new areas of growth. It is these factors that will continue to underpin the positive growth outlook of the Malaysian economy into the near to medium term. Key Imperatives to prepare for the new global landscape The changing global landscape presents significant new challenges for both the developed and emerging economies. Important is to be well-positioned to manage the new risks and to build the necessary capability and capacity to have the agility and flexibility to adjust to the rapidly changing conditions. As the emerging economies aspire towards achieving higher levels of income and living standards, a different path from that which led the way for the advanced economies will now need to be considered. The current global financial crisis and the Asian financial crisis have provided us with many important lessons that should form the underpinnings for our business models and our policies for growth and development. A key priority of policy should be to balance the need of ensuring sustained stability while having in place the necessary foundations to secure long-term development. Avoiding and preventing the build-up of excesses is a critical imperative. The recent crisis has forcefully shown that markets cannot be exclusively relied on to rein in excesses. Market discipline needs to be complemented by policy interventions to effectively manage the build-up of imbalances in the financial sector and in the economy.

Productivity is thus not only a function of physical technology, but of talent development, including leadership development, given the increasing dynamic and complex environment. In the area of regional collaboration and cooperation, the Asian region is well ahead in the areas of surveillance arrangements, financial safety nets and crisis management. These frameworks and arrangements were established in the period of relative stability since the Asian financial crisis. The establishment of regional arrangements and platforms, including the building of regional financial infrastructures and markets, is not only aimed at facilitating the efficient intermediation of financial resources in the region, but also at safeguarding financial stability in the region. This trend paves the way for coordinated policy actions to manage and mitigate the risks and vulnerabilities to the region. Given our diversities, there is also tremendous opportunity for the private sector, in particular in ASEAN, to integrate further in the areas of trade, investment and finance, and to leverage on the respective comparative advantage that exists in the region. Conclusion While we could best prepare for the future using all the knowledge that we currently have, the transition towards the new landscape will continue to be paved with uncertainty and new challenges. Further, there will be increasing complexity in the functioning of the global economy and the international financial system. In this environment, perhaps the best compass for policy-makers and businesses is one that is centred on principles; in particular, on ethics and integrity. Recent experiences in the advanced economies have put this into question.