It is therefore imperative that the risks arising from financial openness be better managed. Similar to legitimate concerns on trade openness, emerging economies also have legitimate concerns on the negative effects of financial globalisation. More needs to be done to have, to quote IMF’s Christine Lagarde, “safer capital flows”. Allow me to put forward two areas for deliberation. First is on financial safety nets. In this regard, I welcome efforts to strengthen regional and global financial safety nets. To this end, ASEAN+3 2/4  BIS central bankers' speeches  countries achieved a significant milestone under the Chiang Mai Initiative Multilateralisation when the fund size was doubled to USD240 billion in 2014. Moving forward, an important consideration is to bring the various bilateral swap arrangements and regional financial safety nets together with the IMF’s safety net into a coherent framework that will enhance their complementarities and thus, effectiveness in supporting emerging economies in dealing with short term capital flow volatility. Second is with respect to domestic policy space for emerging economies in dealing with capital flows. Clearly, capital flow volatility poses considerable challenges to emerging economies’ policymakers in safeguarding financial and macroeconomic stability. While the global community continues to debate and explore possible solutions to manage spillovers and spillbacks of policies in advanced economies, for emerging economies, there is a need not just to preserve existing tools available to us, but to constantly refresh our policy toolkit to deal with the multifaceted risks confronting our economies and to be flexible in implementing them. Pragmatism is key.

This morning, in my brief remarks, I will touch on globalisation from three perspectives, namely trade, financial and human capital. Trade Globalisation A key manifestation of globalisation is the exponential increase in international trade. Exports as a share of global output have tripled since the 1950s, while foreign direct investments have increased seven-fold. This phenomenal development has been facilitated by economic integration, technological advancements and the proliferation of trade agreements. The benefits of globalisation of trade and investment have been experienced across the board – economic growth and productivity have accelerated; businesses have greater access to resources and markets; workers have broader job opportunities; and consumers have a greater array of goods and services to choose from. Collectively, these gains have translated into the unprecedented improvement in income across the world. This is certainly true for Malaysia. We are no stranger to international trade, ever since the rise of Malacca as an important global port more than 600 years ago. Despite accounting for only 0.2% of the world’s land mass, Malaysia is currently the 25th largest trading nation in the world and a key player in the global value chain. Our financial system is highly integrated with the international markets. Malaysia’s economic and financial integration with the rest of the world has undoubtedly contributed significantly to our economic progress in the last few decades. And yet, there is increasingly growing pushback against globalisation, especially in the advanced economies.