words, paradoxes. these paradoxes pose a challenge to us all ; from policy - makers, to businesses, to academics, provoking us to question our understanding of how the world works, and forcing us to rethink the approaches that we need to formulate in response to these forces that are shaping the global economy. i have three paradoxes in mind. the first paradox is this ; while globalisation drives the world to grow closer together, we are simultaneously drifting further apart. by many measures, nations and people are closer than ever in terms of trade, investment, information exchange and physical mobility. despite the weakness in growth and trade activities, global flows of goods, services and finance is still more than one - third of global gdp, 150 % the level in 1990. yet, social disparities, most noticeably inequality in the distribution of income, have worsened considerably. income inequality has risen in many oecd countries since the 1980s1 ; we in asia have not fared well either, with an average gini coefficient that is higher than the rest of the world 2. the distance between the reality that we live in and our idea of an ideal construct of society is thus at once both closer and further than it was in our parents ’ generation. the issues underlying this paradox are complex and different for every nation. in many ways, it is 3 / 8 bis central banker's speeches driven by the very forces of globalisation that have brought our economies closer together, but at the same time undermined the welfare of the middle - class in advanced economies and driven the ‘ haves and have - nots ’ further apart in the emerging economies. the problems confronting us today are different from the past. the implications for policymakers and social thinkers are therefore, immense. these new challenges require more nuanced understanding and approaches, and because of this, our frameworks need to adjust accordingly. for a start, it is important to recognise that new challenges can arise as a by - product of a genuinely positive development. indeed it has been argued that rising income inequality is a direct and unavoidable consequence of the advent of technological revolution and the expanding process of globalisation. thus, in this new economy, one of the pressing challenges may come down to reconciling the benefactors of technology and globalisation with those who are excluded, with the intention of keeping inequality at bay. this brings me to the second paradox. despite all the technological advancements that we have

. this meant maintaining the fund in us dollar short term deposits, in institutions with high credit ratings. you would have seen on yesterday ’ s newspapers that the hsf board is now in place. the bank is currently making arrangements for the longer - term management of the fund. we are working with the world bank to develop the alternative scenarios, as a basis for recommending a strategic asset allocation ( saa ) to the board. after the saa is approved, the next step will be to select external managers. preparation for this latter stage has already begun with identification of a broad group of potential external managers. the process of engaging external managers can be relatively long, largely because of the contract negotiation phase. we are hoping that this could be done in six to nine months. due to the length of time that could elapse between the approval of the saa and the selection and engagement of the external asset managers, the bank will develop an interim investment policy for recommendation to the board of the hsf. work is well advanced in the preparation of the instrument of delegation which is a legal contract that details the duties and responsibilities of the bank as it pertains to the management of the hsf. a public education programme is also being developed to inform and prepare the public for the fund. let me end with a few words about the critical importance of a public education and communication programme, for the success and credibility of the hsf. as i said earlier, it is important that the public understands what is involved in the hsf in order to get buy - in. for example some people need to be convinced of the need to put aside savings for future generations rather than to pursue expenditures to meet current needs. it is important that we counter mis - information and misperceptions by, for example, explaining the rationale behind the transfers to the fund and withdrawals from the fund, when they become necessary. it is important that we explain the procedures behind the selection of external managers so as to underscore transparency and avoid the perception of special deals. we need to manage expectations in line with market realities, since there are going to be questions about whether we are taking too little of too much risk, or the fund is earning enough. a successful long term investment strategy is not incompatible with one or two years of low returns. in such circumstances, open communication could serve to maintain support for the fund and its objectives. let me repeat that this is neither the government ’ s fund nor the