kuwait finance house's initiative, in this regard, as the first islamic bank worldwide to possess an economics & investment banking research arm based in malaysia, is a major advancement on this front. the establishment of the research unit will facilitate information sharing amongst the islamic financial institutions and other key stakeholders. the setting up of the research unit provides vital information which can be shared. the promotion of information sharing and exchange of knowledge will encourage better understanding and spur global collaboration among the financial players. through in - depth market knowledge of the financial services industry, it will without doubt spur greater innovation in islamic financial services, leading to cutting - edge products and services. equally important, it is also expected to enhance linkages between the middle east and asian regions, acting as a conduit to promote greater economic integration and encourage deeper intermediation of islamic markets. this further underscores the economic integration of both the middle east and asian regions and further enhances linkages in the new silk road, a manifestation of the thriving global islamic finance market. ladies and gentlemen, on this occasion of the official launch of kuwait finance house research, it is with pleasure that i congratulate kuwait finance house for its forward - looking outlook and commitment to contribute to the success of islamic finance by allocating resources in having a dedicated research entity to drive its islamic banking business forward. it is my hope that kuwait finance house will continue to play a major role in the initiatives to further develop islamic banking both here and in asia. i wish kuwait finance house research every success in its endeavours. in the name of allah, most gracious, most merciful, it now gives me great pleasure in officiating the launch of kuwait finance house research. thank you.

% of gdp. domestic - oriented industries in the manufacturing sector now accounts for more than one - quarter of total output. domestic content in the services sector is now higher, at about 80 %. the construction sector, which has high local content and multiplier effects, also performed better during the year. the pro - growth policies to stimulate domestic activities benefited in particular the services sector which sustained a growth of 4. 9 % in 2001. the expansion was broad - based, with strong increases recorded for intermediate services, particularly finance and insurance as well as communication sub - sectors. strong expansion was also recorded in the final services group, particularly government services and utilities sub - sectors. while the overall growth had moderated during the year, the overall balance of payments turned around to a surplus position of rm3. 7 billion in 2001. while the current account surplus narrowed in 2001, the surplus remained large at rm27. 4 billion or equivalent to 8. 9 % of gnp. this reflected a moderate decline in the trade account and an improvement in the income and services accounts. as at end - 2001, bnm's international reserves was higher at us $ 30. 8 billion. subsequently, reserves have increased further to us $ 32. 6 billion as at 14 march 2002, sufficient to cover 5. 5 months of retained imports and cover 5. 3 times the short - term external debt. while the external debt increased during the year, the outstanding amount has remained low at 55. 4 % of gnp. the debt profile also remained sound with short - term debt accounting for only 13. 7 % of total debt. in 2001, malaysia's macroeconomic fundamentals continued to strengthen. inflation moderated to 1. 4 % ; international reserves continued its increasing trend, driven by sustained inflows of trade surplus and long - term capital flows ; the overall fiscal position of the federal government improved ; domestic savings remained high and the financial system strengthened significantly. these stronger fundamentals have increased the economy's resilience in the face of a more difficult external environment. the pegged exchange rate regime continued to be well supported by the fundamentals and facilitate international trade and investments during the year. the stability in the exchange rate also allowed for the effective implementation of pro - growth policies and the accelerated pace of banking and corporate restructuring. the malaysian banking sector strengthened further and remained resilient to perform its intermediation function efficiently and effectively throughout 2001. the capital position of the banking system improved with