Encik Abdul Rasheed Ghaffour: ASEAN - advancing its potential, hurdles and the way forward Closing remarks by Mr Encik Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Conference, Kuala Lumpur, 4 August 2017. * * * Thank you for having me here today to deliver the closing remarks for the ASEAN@50 Conference. I am also honoured that you have chosen Sasana Kijang to be your meeting point for this Conference. I’m sure that all of you have greatly benefited from the two thought-provoking panel discussions earlier, that drilled down the measures required for ASEAN to achieve its economic promise. ASEAN proudly welcomes its golden jubilee next week. This momentous occasion not only celebrates our achievements thus far, but also marks the gravity of the work ahead of us. We will continue to galvanise all sectors of society – public, private and civil – to ensure ASEAN’s achievements are not just reflected on paper, but more importantly, can be seen, felt and heard. ASEAN stands out as a dynamic region – with diverse strengths that continues to benefit its growing population of 625 million people. In 2015, ASEAN contributed to more than 7 percent of world exports. Our strong trade performance has contributed to increased employment by about 70 million over the past 17 years – enabling better livelihoods of households. Millions have been lifted out of poverty with the significant rise of ASEAN’s GDP per capita, from USD1,054 in 1996 to USD4,000 in 2016.

(b) Role of Financial Integration 1/3  BIS central bankers' speeches  The private sector’s role in enhancing shared prosperity in ASEAN must be facilitated by an enabling environment for efficient cross-border business transactions. This has been achieved through greater financial integration in ASEAN including deeper banking integration; smoother capital mobility; and efficient payment and settlement systems. ASEAN central banks have made significant strides towards this end, but by no means will we coast on by. We will continue to champion financial integration that benefits all. An Asian Development Bank study in 2013 has shown that banking integration mobilises savings towards more productive investment, thereby increasing productivity and accelerating growth. This study also showed that smoother capital mobility will facilitate more competitive and productive cross-border lending and borrowing, while promoting financial sector and capital market development. Lastly, an efficient cross-border payment and settlement systems promotes cost-effective transactions by reducing the cost of doing business. Hurdles faced by ASEAN Like it or not, the path to achieving the strategic objectives of the ASEAN Economic Community (AEC) 2025 will be filled with hurdles. The pace of convergence within ASEAN would be shaped by members’ different levels of development. It is harder for countries with resource constraints to shoulder the high costs involved in undertaking structural and institutional changes, which are required for effective integration. In overcoming such hurdles, I stand proud in acknowledging that ASEAN adopts a gradual and phased-in approach that ensures a win-win situation for all.