With greater regional integration, we also see significant potential to leverage domestic strategies to create a strong regional footprint in the provision of affordable and commercially viable financial products and services. Beyond domestic borders, Asia’s continued growth and prosperity offers significant opportunities for the provision of financial services and productive investment prospects. An important thrust of the blueprint will therefore be to develop the financial infrastructure to enhance the linkages within the region. This will be facilitated through the continued process of financial integration and increased connectivity within the region, with greater liberalisation of the financial sector, the integration of payment and settlement systems, and greater crossborder cooperation in maintaining regional financial stability. Central to the development strategies for the next decade is the consolidation of Malaysia’s position as a leading international Islamic financial centre. Malaysia already has a strong brand affirmed by the growing importance of our sukuk market and the higher level of foreign participation in our Islamic financial markets. This is reinforced by the diversity of market players and a comprehensive institutional framework for Islamic finance. Two landmark initiatives achieved this year is the establishment of the Islamic Financial Stability Forum (IFSF) and the International Islamic Liquidity Management Corporation (IILM). Moving forward, Islamic finance is expected to further accelerate its pace of global expansion, having a more significant role in facilitating the intermediation of international financial flows. A critical factor that will determine the success of the financial services industry is the talents in the industry.

Third, the extensive financial reforms and development of the domestic financial markets since the Asian financial crisis have significantly strengthened Asia’s financial systems to better manage the more volatile capital flows. In addition, rigorous surveillance is being undertaken. This has allowed several economies to introduce preemptive measures to preserve monetary and financial stability. The near term outlook for emerging Asia going into 2011 remains positive. For Malaysia, despite slower external demand, the overall growth is expected to remain strong, supported by the continued expansion in private domestic demand. Favourable employment conditions, firm commodity prices and an accommodative policy environment will continue to underpin growth in private consumption. Meanwhile, the positive outlook on the domestic-oriented sectors and the recently announced economic transformation programme has improved the  BIS Review 146/2010  1  investment climate. Intra regional trade is also expected to continue to provide support to the growth and development process. Transition to high value-added high income economy Beyond the near term horizon, the Malaysian economy is currently at a significant juncture in its development. The economic future of our country depends on the success in our transition to becoming a high value-added economy. For more than five decades, Malaysia has demonstrated its economic flexibility to adjust to the changing environment and to continuously enter into new areas of competitive advantage.