zeti akhtar aziz : raising the bar for the next phase of growth and development – sustaining transformative momentum welcoming address by dr zeti akhtar aziz, governor of the central bank of malaysia, at the 10th ifsb ( islamic financial services board ) summit 2013 “ the future of the islamic financial services industry – resilience, stability and inclusive growth ”, sasana kijang, kuala lumpur, 16 may 2013. * * * it is a great pleasure to welcome you to this 10th ifsb summit, on the “ the future of the islamic financial services industry : resilience, stability and inclusive growth ”. bank negara malaysia is most honored to host this year ’ s summit, which is held in conjunction with the 10th anniversary of the islamic financial services board ( ifsb ). it was here in kuala lumpur 10 years ago that we witnessed the momentous occasion of the ifsb inauguration, that was the culmination of international collaboration among the founding member countries with the support of several key international and multilateral institutions. its landmark establishment in 2002 as the international prudential standard setting body for the islamic finance marked a major milestone in the effort to strengthen the international infrastructure for the islamic financial system, steering the path for its successful integration as a viable component of the global financial system. a decade on, the work of the ifsb in ensuring a cohesive cross - border regulatory framework and the international best practices that are attuned to the intrinsic characteristics and peculiarities of islamic financial intermediation, have served to underpin the development of a sound and stable islamic financial system, ushering in a phase of rapid growth and greater internationalization of the industry. indeed, 10 years since the founding of the ifsb have been a period of significance, during which the islamic financial services industry has grown impressively with its landscape dramatically evolved. this growth acceleration has been accompanied by the widening of its geographical reach transcending its traditional borders in muslim majority countries to the more established financial centres. in addition, islamic finance has evolved as a comprehensive system of intermediation servicing all segments of society, including governments, businesses and households regardless of scale of businesses and income levels. in this decade, islamic finance has also evolved from being domestic - centric to become increasingly internationalized, intermediating funds across borders and becoming a new vehicle that bridges economies and fostering closer financial linkages, particularly among emerging and developing markets. as a form of financial intermediation that

let me quickly reflect on the state of play of these long - term determinants of growth. concerning labor, the region has been facing constant shrinking of working - age population - 0. 5 % on average, per year in the last nine years, mostly due to unfavorable demographics and emigration. if we take into account estimates that 1 / 3 of the emigration is high - skilled labor, then obviously, this is not only an issue of quantity, but quality as well. in this context, global competitiveness report points to a large human capital gap of the region with an index rank of 62. 2, compared to 16. 7 for eu15. the health crisis emphasized even more the long - standing and burning issues that need to be tackled such as increasing participation rates ( that currently hover around 54 % ), rising life expectancy, skill mismatches, and in particular digital skills and " jobs skills of tomorrow ", although given the structural nature of the problem it will continue to weigh on the medium - term growth dynamics. concerning capital stock, data reveals that the capital stock in the region constitutes only one third ( 35 % ) of the capital stock in the countries of the european union. this calls for raising investment ratio and closing investment gaps. these gaps are particularly wide in infrastructure, looking at the average rank of 70. 5 for the region compared to 16. 7 for eu152. however, there is also a great scope for improvements in ict infrastructure, as a cornerstone of the new economy, in order to accelerate digital transformation of the economies. as for productivity, it remains low, about 1 / 3 of the eu average. in the last five years before pandemics, the average gdp growth of the region was 3 %, with tfp 2 / 3 bis - central bankers'speeches contribution of merely 0. 3 p. p. to increase productivity, the region must tackle structural and institutional obstacles that inhibit efficient allocation of resources. the evidence suggests that institutional reforms in emerging economies are associated with about 1 p. p. a year higher total factor productivity growth compared to " normal " years3. so far, fdis in the tradable sectors are one of the traditional venues that increase productivity that implies not only tapping additional external sources for growth financing, amidst low domestic savings, but also transfer of know - how and technologies. however, pandemics led to significant deceleration of fdis and trade flows, flagging up many vuln