##ary effects of strong inflows of short - term capital. indonesia has increased the holding period for its short - term debt, while thailand has imposed a withholding tax on interest and capital gains earned by foreign investors on thai bonds. singapore has also implemented a series of macroprudential measures to curb speculative activity and to ensure a stable and sustainable property market. 19. most asean - 5 economies, including singapore, have also scaled back the expansionary fiscal policies introduced during the crisis. 20. in short, asean policymakers have been proactive in addressing inflationary pressures but will need to remain vigilant because the risks are not over yet. inflation is expected to peak this year and moderate going into 2012. the asean economies ’ hard - won macroeconomic stability will give them the resilience to ride a challenging external environment. integration : towards a single market 21. even as they build up their resilience, the asean countries have been working steadily towards greater economic integration. asean has committed to building by 2015 the asean economic community ( “ aec ” ), a single market and production base. this will allow goods, services, investments and capital to flow more seamlessly across the asean region. more importantly, it will give asean an economic heft and relevance that corresponds to that of china and india. 22. the different levels of development within asean has been often cited as a reason why integration will not work in asean. on the contrary, the different sources of comparative advantage and therefore factor prices across asean, offers a powerful incentive to develop an efficient pan - asean production network. indeed, this has already happened in manufacturing, especially electronics. it needs to happen across a broader set of economic activities. the economic case for asean integration is strong. it is a matter of political will to make it happen. 23. progress in integration has been strongest in merchandise trade. the asean - 6 countries have eliminated tariffs on 99. 7 percent of goods. cambodia, laos, myanmar and vietnam have committed to reduce tariffs on 98. 6 percent of goods to zero to five percent. 24. but as all cross - border businesses know very well, enhancing trade links is not just about reducing tariffs. it is equally, if not more, about reducing non - tariff barriers and streamlining regulations. in may last year, the asean trade in goods agreement ( “ atiga ” ) came in to effect. the atiga not only entrenches tariff reductions, it also lowers the cost of

soundness, therefore, the absolutely crucial thing is to avoid a housing boom and bust cycle. to ensure this, policy initiatives are naturally required from the micro angle targeting the supply and demand of housing and the tax regime. an even more important task, however, is to carry out macro economic policies that keep the overall economy on a stable course. what is more, given that financial innovation can amplify financial unrest, central banks and financial supervisory authorities should redouble their efforts to construct effective systems for monitoring and supervision of financial derivatives. closing remarks ladies and gentlemen, i expect this seminar will be a forum for a policy debate, involving in - depth and constructive discussions about household debt issues. in closing i should once more like to voice my deep thanks to all of you taking part. although you have a crowded and hectic schedule, i hope you will be able to spare some time to gain a taste for korean culture and the beauty of spring here. thank you.