sweden also had one foot in the “ new economy ”. however, the economic upturn here in sweden started later than that in the usa, and from a situation with a higher level of financial saving in the private sector. the imbalances in saving and foreign trade that distinguished - and still distinguish - the usa thus had no counterpart in sweden. despite the strong growth, however, inflationary pressure was unusually weak, even in sweden. the usual explanatory variables - resource utilisation, import prices and inflation expectations - were not always enough to explain or forecast the low inflation rate that was established periodically – which was also something that affected many forecasters and analysts around the world during this period. when the economic upturn began, there were still plenty of free resources, which had a dampening effect on inflation. at the same time, inflation expectations had stabilised around our inflation target of 2 per cent and wage agreements were moderate. however, apart from this we had to seek explanations for the low inflationary pressure in increased competition on internationalised and deregulated markets supported by developments in information technology. we appeared able to live with a lower growth rate than before, without this endangering price stability. the low inflationary pressure meant that the riksbank could be content with cautiously slowing down the economy during 2000, despite the high growth rate. the steering interest rate was raised only twice from the end of 1999 up to november last year. before that the rate had been reduced from almost 9 per cent in autumn 1996 to as low as 2. 90 in march 1999. the swedish repo rate was low in comparison with the corresponding steering interest rates in, for instance, the usa and the euro area. at the end of last year, however, resource utilisation in the swedish economy was beginning to be strained and inflation was estimated to rise to the extent that it would exceed the target level two years ’ ahead. the riksbank therefore raised the repo rate by a quarter of a percentage point to 4. 25 per cent. the assessment of the risk spectrum indicated at the same time that a weaker economy in the usa could dampen growth in sweden. as we now know, this is what happened. developments during the spring during the first half of the year, the economic climate continued to weaken both in sweden and other countries, but the signals regarding the strength of the downturn were mixed. the weakening in the economic climate was concentrated to the manufacturing industry, while

sukhdave singh : the rise of the south at a crossroad – a view from east asia and latin america opening address by dr sukhdave singh, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the world bank knowledge and research hub conference “ the rise of the south at a crossroad : a view from east asia and latin america ”, sasana kijang, kuala lumpur, 16 may 2016. * * * i am pleased to welcome you to today ’ s conference on “ the rise of the south at a crossroad : a view from east asia and latin america ” organised by the world bank knowledge and research hub in kuala lumpur. for those of you who have not been here before, i would also like to welcome you to sasana kijang. i congratulate the world bank knowledge and research hub for organising this conference on economic integration. economic integration within the current global context it is indeed an opportune time for us to look at economic and financial integration and what it can offer to emerging economies in asia and latin america. it is an opportune time because the world seems to have been unable to bounce back towards a healthy growth path after the financial crisis in the developed world. it is an opportune time because policymakers have not been successful in generating strong sustainable growth. the traditional tools for nursing the economy back to health don ’ t seem to be working as well – possibly because of overuse or misuse. a pedantic approach to monetary policy in much of the developed world has led to near zero and negative interest rates in many of these economies. yet growth has remained stubbornly weak. such policies also risk merely creating the transfer of growth across time rather than promoting sustainable growth over time. it is perhaps time to start asking whether the best way to recover from the blow - out of one debt bubble is to create the conditions for another. central bankers and financial markets seem to be caught in a cycle of brinkmanship and central banks are caught in a trap of their own making. the outcome has been almost a decade of worsening financial repression, the progressive build - up of risks in the global financial markets, accompanied by weak investment and weak growth. it is clear that the lessons of the financial crisis have not been fully learnt in these economies – not by the financial markets and not by the policymakers. similarly, fiscal policy is supposed to be a tool that should be useful