Zeti Akhtar Aziz: Growth and development in the Asian region Dinner address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the ICLIF Alumni Association Dinner, Kuala Lumpur, 17 February 2006. *  *  *  It is my pleasure to be here this evening at this Inaugural Annual Dinner of the ICLIF Alumni Association. This occasion provides an excellent opportunity to promote greater engagement and networking among the industry leadership. This is particularly important for our region where the financial sector has experienced a pronounced transformation in the financial landscape. There will be new dimensions and new requirements for leaders and leadership capability in this new and highly challenging environment. It calls for being able to meet the new demands of the new economy, being able to perform in a more competitive environment, being able to reap the benefits of the new technologies and finally being able to operate in an environment of heightened uncertainty. Despite these increased challenges, the world economy has entered 2006 on a stronger note. The latest indicators suggest that the global economic outlook remains favourable, with sustained growth across the major economies. While the US and China are expected to continue to experience strong growth, it is expected that the recoveries in Japan and Europe would provide additional support to global demand. This provides a positive external environment for Asia. In the Asian region, domestic demand has proved resilient with most countries experiencing a strengthening of domestic demand.
It is important to recognise the important role that Asia can have in contributing to rebalancing global growth and in so doing contribute towards global adjustment of the imbalances. In terms of economic growth, the region has consistently recorded performance that is, one-and-a-half times higher than the global average. On demographics, Asia is home to more than half of the world's population, with a young and growing workforce, and expanding middle-class in a number of countries. Robust domestic consumption and rising investment have therefore become important sources of growth. This has been supported by the rising income and increased productivity and the expansion of intra-regional trade. The increasing importance of intra-regional trade, which accounts for more than 50% of Asia's total trade, makes the region the next most integrated region after the European Union in trade. This has positioned Asia as the largest and fast-growing market in the world. In addition, the Asian region has also embarked on measures to spur its economic openness by forging free trade agreements, which would contribute to increasing the capacity of the region and the potential of the region, in addition to improving prospects for contributing towards the rebalancing of global growth and the global adjustment process. Combined with the region's traditionally high degree of economic openness with a total trade averaging 95% of GDP in the region, it reflects Asia's potential to be a self-sustaining and mutually reinforcing the region's growth.