Muhammad bin Ibrahim: Some perspectives on globalisation and its aftermath Welcoming remarks by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 2017 IMF-BNM Summer Conference "Some Perspectives on Globalisation and its Aftermath", Kuala Lumpur, 25 July 2017. * * * Welcome to the 2017 IMF-BNM Summer Conference. I would like to thank the IMF for partnering with Bank Negara Malaysia to co-host this event for the first time in Southeast Asia. Our exchange of knowledge and experiences will be valuable for us to better understand the dynamic issues brought about by globalisation that is confronting our economies, financial systems and societies. I want to record my appreciation to all of you for being here today. Kofi Annan once said that arguing against globalisation is like arguing against the law of gravity. Globalisation has brought about unprecedented periods of peace, prosperity and progress for the world. We have made significant strides. In the last decade, we have lifted half a billion people out of abject poverty – it previously took us 25 years to do it, from 1980 to 2005. Businesses, investors and workers have benefited from expanded opportunities. Countries have rapidly transformed agricultural labourers into manufacturing workers, spurring growth and productivity. Consequently, economies worldwide have become more interdependent, integrated and intertwined. One of the biggest beneficiaries from globalisation is ASEAN, which celebrates its 50 th anniversary this year.
In line with the spirit of Sasana, our meeting point today for the learned and the wise, I look forward to the exchange of ideas at this Conference. In this regard, I would like to humbly offer some thoughts on three areas where the gains from globalisation can be safely acquired, more equitably dispersed, and impose the least cost to society. Firstly, we must make financial globalisation safer and its benefits distributed more equitably. The Global Financial Crisis, and the Asian Financial Crisis, clearly demonstrated the risks and the damage that could be wrought by financial globalisation. It amplified the costs of policy and regulatory lapses and failures in crisis prevention and management. It is interesting to observe that despite consequences primarily associated with financial globalisation, trade has received the brunt of the blame. Let me illustrate – in the wake of the GFC, between November 2008 to December 2009, 390 trade protectionist measures were announced or implemented by 19 of the G20 members. Ironically, financial globalisation channels were not addressed as quickly. It is surprising how policymakers, particularly in the advanced economies, have yet to arrive at a consensus in recognising the harmful effects of free capital mobility that is disconnected with the real economic activity. This is an issue that many remain divided on until today. While we have instituted policy reforms to better manage our financial systems and institutions, more can be done.