zeti akhtar aziz : growth and development of the world economy welcoming remarks by dr zeti akhtar aziz, governor of the central bank of malaysia ( bank negara malaysia ), at the official opening of the world bank group knowledge and research hub in malaysia, sasana kijang, kuala lumpur, 28 march 2016. * * * it is my great honour to welcome the distinguished senior leadership of the world bank group, dr axel van trotsenburg, vice president of development finance ; and dr kaushik basu, chief economist and senior vice president, to the master lecture on'shared prosperity'by dr kaushik basu. the lecture is held in conjunction with the official opening of the world bank group knowledge and research hub in sasana kijang later this afternoon. as we meet today, the global economy is confronted with an immensely challenging environment. a slower than anticipated growth in several major economies, the sharp decline in commodity and energy prices, the significant shifts in global liquidity, and the heightened geopolitical tensions are having far reaching and widespread implications. going forward, the challenge for both the advanced and emerging economies is to lift growth trajectories and search for sustainable growth factors that can rebuild economic fundamentals, address structural vulnerabilities and forge new sources of growth. key is the " sustainability " and strengthening of the growth and development of the world economy. an important aspect in this process is that economic growth and development, no matter how stellar, will begin to fade when inequality sets in and when income disparities widen. experience has also shown that financial crisis and economic recession entrenches the cycle of poverty. during a financial crisis, the poor lose their income by several times more compared with the average household. we saw this happen during the recent global financial crisis, and we also saw how many that were displaced suffered " hysteresis " thus deeply affecting their income prospects. we also risk facing a severe setback in our fight against poverty. in the more recent years, the international community has accorded greater attention to addressing this agenda and to achieving more balanced and inclusive growth. malaysia, while achieving growth and progress since the 1960s has always given attention for it to be a shared prosperity. given the role of the financial system in facilitating this, bank negara malaysia has always given priority to the financial inclusion agenda to not only bring the underserved segments of society into the financial mainstream but to promote a more effective participation

have on the poorer economies. similarly, the disproportionate effect these developments are having on the poorer segments within a particular economy. this crisis thus brings to the forefront a number of issues concerning financial inclusion. firstly, while the crisis demands action with great urgency, the policy response to restore the functioning of the financial system and to get growth in the economy again, there also needs to be a continued commitment to the financial inclusion objective. this becomes all the more vital given the more adverse implications of the crisis on the poor segments in the economy. secondly, while the policies and regulation of financial inclusion are essential to ensure the soundness and sustainability of an inclusive financial system, of equal importance are the policies, instruments and framework to deal with distress in an inclusive financial system. this is to ensure that the strategies for resolution will provide a total solution that addresses the entire spectrum of the financial system, from that which is large and highly connected with systemic implications to that which is small and highly vulnerable. this includes measures relating to relief and support and the mechanisms for resolution to ensure the sustainability of an inclusive financial system even during unstable financial and economic conditions. in recognising the importance of financial inclusion, the united nations established the united nations advisory group on financial inclusion in 2006. the group advises the united nations and member states on issues relating to the advancement of the financial inclusion agenda on a global scale. since its establishment, many successes have been achieved. these include increasing the public awareness on the importance of financial inclusion, assisting governments in the design of regulatory systems that facilitate the creation of financial services for the poor, encouraging the of use of holistic measures to gauge the progress of financial inclusion, collecting and disseminating best practices, collaborating with the private sector to leverage on the talent and technology to further advance financial inclusion and to promote research that will galvanise new initiatives. in malaysia, financial inclusion is a high priority in our national agenda. since the establishment of the central bank, there has been a conscious policy to have an extensive commercial banking branch network across the country, to ensure the outreach, in particular, to cover the non - urban areas. malaysia now has 10. 2 branches for every 100, 000 individuals as opposed to the global median of 8. 4 branches for every 100, 000 individuals. in malaysia, more than 80 % of the population also have some form of savings account. this has also contributed to the financialisation of savings in the country. deposits as a percentage of