In so doing, it exports capital abroad and runs a current account surplus, so that it can smooth its consumption in the future when the labor force shrinks. Similarly, a young emerging economy chooses to save less than it invests, attracting foreign investors, and running a current account deficit. It does this to increase its current consumption and its future output. Prescribing maximum levels for current account surpluses and deficits completely ignores the fact that countries operate within different structural environments. If we do not allow countries to smooth their consumption over time, why do we allow individuals to smooth their consumption by letting them take out loans or invest in foreign companies? Certainly, it is a difficult question. What is considered to be a sustainable current account deficit or surplus? One thing is sure – forcing countries to adhere to an arbitrarily chosen range and ignoring their structural factors, the measurement biases, and their savings characteristics is not an appropriate strategy in an international economic order which is still based on the principle of free markets and free trade. 10  11  See www.bloomberg.com/news/2010-10-22/geithner-push-for-g-20-trade-gap-targets-opposed-before-g-20talks-start.html. Between 1980 and 2012, the current account balances of the G20 countries were outside of the –4/+4 range 23.4% of the time, while for OECD countries the range was exceeded 34.9% of the time. 12  For more information regarding accounting bias in the Swiss current account, see IMF (2011, 2012): Switzerland Article IV report.

Muhammad bin Ibrahim: Major milestone for financial integration in ASEAN Remarks by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Luncheon, hosted by Bank Mandiri, Kuala Lumpur, 6 July 2017. * * * I am pleased to be here today to deliver the remarks for the lunch gathering hosted by Bank Mandiri. I am confident that Bank Mandiri will be the first Qualified ASEAN Bank in Malaysia, a major milestone for financial integration in ASEAN. Indonesia and Malaysia – neighbours and friends Let me start with the close relationship between both of our countries. Our relationship extends beyond our geographical proximity but is bound by our similarities in language, culture and of course – food. These natural forces have allowed us to forge and strengthen a strong history of cross-border trade and investments. Businesses from both countries have also strongly committed to invest and contribute to each other’s socio-economic development. Malaysian companies have made significant investments in Indonesia, amounting to USD12.1 billion at end 1Q-2017. These investments span the financial services, telecommunication and agriculture sectors. In fact, the collaboration between Malaysian and Indonesian corporates gave birth to Malindo Airways Sdn Bhd in 2012. It speaks volume of the partnership and close cooperation between our two countries. Indeed this venture will further open up ASEAN skies and expanded the close ties between the people of Indonesia and Malaysia. Over the last few years, Indonesian firms have also started to increase their presence in Malaysia.