We have already seen quite a bit of economic restructuring in the US and Europe – particularly in manufacturing industry – in response to the development of lowcost competition based in China and other Asian economies. We should expect this process of structural change to continue as the leading Asian economies continue their development in the decades ahead. The key for economies like the UK, other European economies and the United States to prosper and succeed in this new world economic order is to have the right supply-side policies which help businesses to remain competitive and adapt to changing market conditions. To support high living standards, western economies will need to stay ahead of the game by upgrading their levels of education of skills and maintaining a business climate which is conducive to enterprise and innovation. Flexible labour markets are also a key ingredient in ensuring that a high level of employment can be sustained against the background of structural change and increasing global competition. 3  See Asian Development Bank (2011). Note that the ADB analysis covers a much wider group of economies than Charts 2 and 3, which boosts the share of world population to over 50%. Llewellyn and Santovetti (2010) also provide a similar analysis of future economic prospects in Asia. BIS central bankers’ speeches  5  Pressure on energy and commodity markets There are two other wider challenges raised by the changes we have seen in the global economy in recent decades.
Data and news that transcends boundaries in real time are important for not only investors and financial institutions but also for researchers and scholars in Islamic finance. It will contribute towards enhancing competitiveness, product innovation and strengthen the international financial inter-linkages. As we enter this new decade, the challenge for the world is to sustain the economic recovery. While there continues to be many problems still to be addressed in the developed world, most emerging economies have continued to do well. In Malaysia, our economy recorded a strong growth of 7.2% in 2010 driven by strong domestic demand and our stronger economic and financial linkages with other emerging economies. An important part of this recovery is the strong recovery in private investment as capacity utilisation increases and as the dynamic nature of our economy presents new investment opportunities in new growth areas. For the Islamic finance industry, the year 2011 is set to be an exciting period. The global sukuk issuance in the year 2010 surpassed that of the previous year by more than 20 per cent. Against this positive growth, renewed confidence of investors and issuers is evident. In 2011, the sukuk issuance is projected to surpass the level recorded in 2007 when it sustained the highest level of issuances. The year 2010 also saw Malaysia’s evolution as a multi-currency sukuk origination platform with four foreign currency sukuk issuances amounting to about USD3 billlion.