This model is supportive of Asia’s new growth model of a regional production hub and increasing intraregional trade. Moreover, it is a key development strategy for ASEAN to ride with rising Asia as part of an even bigger economic hub of ASEAN+3 and ASEAN+6. The +3 include China, Japan, and Korea, with the+6 expanding to cover India, Australia, and New Zealand. In addition to trade liberalization in goods, liberalization in services will also spur competition. This in turn would lead to lower prices and increased quality of services, as well as better transfer of know-how from outside and within the region, in areas such as business  BIS central bankers’ speeches  1  organization and management, and risk management capacity through foreign participation in financial services, for example. But, since services liberalization can involve short term adjustment costs, its progress has been subject to domestic regulations as a country’s institutional and regulatory environment needs to be strengthened before and during liberalization in order to reap eventual benefits. A single market and production base for ASEAN cannot be complete without the free flow of skilled labor. It is also complementary to other freedoms, such as freedom of capital flows (particularly FDI) and services, and together they have important implications for productivity growth and investment. Indeed, it is logical to expect that ASEAN integrated business organizations would be more effectively run by regional than local managers.
Malaysia 's own experience in managing the financial crisis in our part of the world over 1997-1998 was that a decisive and comprehensive response at an early stage of the crisis not only produced an early recovery but it also reduced the cost of the crisis on the financial system and the economy. The crisis was a defining moment for Bank Negara Malaysia . The Bank's efforts to sustain stability did not end when the Asian financial crisis abated, and when economic recovery was firmly in place. The key lesson was that foundations for resilience are built during the good times. Once stability was restored, the Bank therefore embarked on a comprehensive restructuring and reform of the financial sector. This included the aggressive development of the domestic financial markets and the strengthening of the regulatory and supervisory oversight. This has been reinforced by a higher level of regional cooperation and collaboration. Therefore, it is not what we are currently doing to cope with this international financial crisis but the efforts that have been undertaken over several years that have ensured the resilience of our financial system during these most challenging of times. Over the course of these recent months, we have witnessed the introduction of massive fiscal stimulus packages, sweeping proposals for regulatory reforms and various unorthodox policy measures being introduced to stabilise and restore market confidence in the financial system. Whilst these measures were necessary and have contributed towards some stabilisation in global financial markets, more importantly is the long-term sustainability of this trend.