Our sights should be raised instead to achieve an order whereby those who are worst off benefit more than others, so that gaps in the world are narrowed. Today I shall begin with some reflections about the concepts of democracy and market. I am prompted to do so in that those who arranged this seminar first asked me to speak about “a democratic world economic order”. Then I shall concentrate on some of the issues of a mainly economic nature that have featured in the debate in recent years on globalisation. In doing so I will be drawing on some of my personal experience of economic cooperation. Then I shall sum up and draw some conclusions. Democracy and markets In my opinion there is no contradiction between democracy and markets. It is rather the case that they are two complementary components of a viable social system. A market economy is the form for organising economic activities that in almost every situation has proved superior to other alternatives, such as a centrally planned economy. Democracy is seen today as the self-evident form for political decision-making. One of the points about a market economy is that it allows for decentralised decisions about economic matters — agents can conclude agreements that are mutually beneficial. Political intervention is normally warranted only when a third party stands to lose. However, such situations are relatively common, for instance in environmental questions.
In this regard, the emergence of Islamic finance into the mainstream of the financial system is an opportunity for the Nusantara financial intermediaries, in particular, for Malaysia and Indonesia and other neighbouring countries, to open new frontiers and in so doing strengthen further the economic and financial linkages. The building of a Nusantara financial platform would not only facilitate and mobilise the pool of investable funds from the respective economies but also allow for the more efficient allocation of the funds into the productive investments in other parts of the region. This would not only contribute towards lowering the cost of funds but it would also allow for greater diversifications of risks. More recently there has been growing interest in cross border participation in investment activities in our respective economies. Malaysia's capital inflows into Indonesia has increased by three-fold totalling USD2.2 billion in 2006 compared to the previous year. It is estimated that Indonesia requires  BIS Review 73/2007  1  approximately an annual investment of USD22 billion for the next several years for the development of its infrastructure, with a large part of the funding to be provided by the private sector. In the same way, the Ninth Malaysia Plan for the period of 2006 to 2010 has a financing requirement of RM107.6 billion. The development of our regional financial intermediaries and markets will facilitate the mobilisation of resources towards financing these potential activities and thus contribute to sustaining development in the Nusantara economies.