areas of economic potential and fulfilling infrastructure needs is a difficult but not insurmountable task. we may refer to the story of our country ’ s development for inspiration. within six decades, our economy moved from being a commodity - dependent nation to one that is successfully transformed. we subsequently elevated ourselves to where we are today, an economy that is open, diversified and competitive. this is only possible because of continuous investments in infrastructure over many decades. rationalising tax incentives to be in line with international practices on the global regulatory front, as we had witnessed, the unfolding of the global financial crisis revealed the significant vulnerability of international financial markets to market dislocations. calls for greater regulatory harmonisation and the adoption of international best practices have gathered speed, blurring the distinction between onshore and offshore regulatory requirements. offshore financial centres which remain mired in the old model and thinking are set to become part of a sunset industry. there have also been significant advancements with respect to international taxation practices. authorities are now more proactive in seeking to mitigate the distortionary effects of harmful tax competition on the allocation of resources and its negative implications on national tax bases. malaysia, until early this year, has been an observer of the oecd ’ s inclusive framework on base erosion profit shifting ( beps ). since january 2017, we have agreed to become a participating member in the inclusive framework. this will allow malaysia to participate in the beps related work on equal footing with other oecd and g20 countries. we will also be able to provide direct inputs to shape the content of the beps related standards. in addition to that, work has commenced on reviewing respective jurisdictions ’ preferential tax regimes against the standards outlined, to combat harmful tax practices. the standar4, which forms one of the four beps minimum standards, will require authorities to step up on transparency and substance rules for geographically - mobile activities, such as financial services. it seeks, for one, to prohibit the shifting away of income into preferential tax regimes where businesses have little or no economic activity. such international developments will directly influence ibfc ’ s business model going forward. the world that we live in, since the creation of offshore labuan in the 1990s, has drastically changed. what was relevant then is no more relevant now. we have no choice but to change with it. it is an opportune time for us to review of the current tax framework for labuan. the purpose of this review

in euro area countries had remained broadly stable since the late 1990s, at a level similar to the 14 us metropolitan statistical areas. 14 during the crisis we saw a temporary increase in inflation dispersion in the euro area but this has been reversed over the past 12 months. ( chart 1. ) the picture is similar for the dispersion of gdp growth. before the crisis the dispersion of growth rates was around 2 %, in both the euro area and the united states. dispersion rose somewhat during the crisis in both currency areas but remained broadly in line with pre - crisis patterns overall. 15 ( chart 2. ) going one step further, investigation of the sources of this growth dispersion in the us and euro area economies reveals parallels even in the root causes of dispersion in economic performance and productivity. on the one hand, both currency areas comprise regions that experienced a significant boom and bust cycle over the past decade. on the other hand, both also contain regions that are facing significant structural challenges of a more long - term nature. in the united states, for example, nevada, arizona, florida and california experienced increases in house prices that outpaced the national average by a wide margin. the steep house price increases accompanied above average growth in these states. this could probably be explained, at least in part, by the impulse that these states received from the housing - related sectors such as construction, which saw its share in terms of value added increase at the national level during the years of the housing boom. in the crisis, the sharp keynote address by jean - claude trichet, president of the ecb at the “ ecb and its watchers xiii ” conference, frankfurt am main, 10 june 2011. the use of all us states in the computation of gdp dispersion, in contrast to only 14 us metropolitan statistical areas ( msas ) in the computation of inflation dispersion, is to be explained by data availability. the most recent entries to the euro area have been excluded to avoid breaks in the time series. the 2010 data for us regions are estimates published by the bureau of economic analysis on 7 june 2011. bis central bankers ’ speeches fall in house prices in florida and the south - western us states turned boom into bust. these states experienced the harshest recession among the us states. 16 similarly, in the euro area some countries experienced asymmetric boom - and - bust cycles. several euro area countries had higher than average growth in the pre -