zeti akhtar aziz : big shift – traversing the complexities of a new world luncheon address by dr zeti akhtar aziz, governor of the central bank of malaysia, at the khazanah megatrends forum 2012 : “ big shift – traversing the complexities of a new world ”, kuala lumpur, 2 october 2012. * * * the global economy has now entered into a period of slower economic growth despite the significant and wide ranging pro - growth policies that have been implemented across the world. why then has the world not been able to achieve a sustained long - lasting recovery? what has been holding back this prospect? in addition, the rapid and significant changes in the global environment have also brought with them new demands and new challenges. our understanding of the factors that are containing the global growth prospects and the consequence of the new environment will better position us to face the fundamentally new landscape and to manage its consequent challenges. let me first thank khazanah for the invitation to speak at this khazanah megatrends forum. the topic on the big shift that is being experienced in the world today is indeed highly relevant. while the international and national attention is currently focused on the immediate challenges of the global environment, equally important, however, is to recognise the long - term changes that will reshape our future. the first part of my remarks today will focus on the immediate challenges of the global economy, taking into account the fundamental factors that are likely to affect the growth outlook. the second part of my remarks will touch on the key imperatives to best prepare us for the new global landscape, so as to be better positioned to succeed and survive in this new environment. policy - makers in the world economy have continued to be confronted with policy challenges since the onset of the global financial crisis. while the policy responses have focused on addressing the origins of the crisis – on the extensive build - up of excesses, the over - leverage and over - indebtedness of the private and public sectors, the breakdown in the functioning of financial markets, the loss of competitiveness, and the loss in confidence in the financial system and the economy, the concern now is on achieving a sustained economic recovery that is accompanied by job creation. half a decade into the crisis, and this has yet to be achieved. in the recent months, the global economy has again experienced a broad - based moderation in growth from an already modest pace. this has stemmed

put under an imf programme as we were in a position to meet and repay all our foreign obligations. we have since emerged from this turbulence much strengthened and on a solid and steady growth path. indeed, this is one debt that the country will not be able to repay. malaysia will always be indebted to you, yang amat berhormat, for your leadership and your vision. ladies and gentlemen, the financial sector in our region has now reached a new stage of development. over the years, the role of the financial system has evolved, facilitating the various stages of development and growth. increasingly, the financial services industry is also becoming a source of growth, especially as several countries in the region are moving towards a knowledge - based and services - led economy. in the process, the dynamic changes taking place are also being driven by technological advances and an increasingly competitive environment. as financial restructuring and reforms progress to a more advanced stage, financial institutions are also moving on to make the necessary adjustments to become more productive, innovative, and strategically more focused. efforts are now focused not only on the creation of a sound and resilient financial sector but towards institutional development and capacity building of the financial sector to elevate it to a higher level of performance, efficiency and excellence. this represents an important phase in the development of the financial sector as highlighted in our 10 - year financial sector master plan that was released almost three years ago. it represents an important development prior to moving towards a more deregulated and liberalised environment. in this context, we are envisaging forward - looking financial institutions that will be able to face the challenges of financial liberalisation and globalisation as we progress into our next stage of development. in this context, leaders need to be visionary to see future trends focused on organisational vision, to stay competitive and be able to adapt rapidly to changes. in addition leaders need to take into account the corporate social responsibility so that the profit mindset is balanced against the objective of longterm sustainability. when we talk about enhancing leadership capability we are talking about leaders who are continuous learners, who are on the cutting edge of excellence, leaders who have strong convictions and beliefs, and yet having humility and recognising the need to reinvent themselves and inspire their organization to adapt to the new challenges and changes. this is vital if the financial services sector is to forge ahead and remain at the forefront of new innovations, an element that is critical to securing long - term