Muhammad bin Ibrahim: Some thoughts on the new economy Speech by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Malaysian Institute of Economic Research’s (MIER) 30th Anniversary Dinner, Kuala Lumpur, 26 September 2016. * * * Distinguished Guests, Ladies and Gentlemen, I am honoured to speak here at the Malaysian Institute of Economic Research’s (MIER) 30th Anniversary Dinner. I would like to commend MIER on the institute’s continuous efforts in expanding economic knowledge, and the commitment to research over the past 30 years. Today, we meet at a time where the global economy is becoming increasingly dynamic and challenging, underpinned by complex global interlinkages and shifting trends. The challenges posed to policymakers are immense. The rapidly evolving world also necessitates swift, yet pragmatic policies in order for us to remain ahead of the competition. Against this backdrop, a deep understanding of the core issues is absolutely critical in supporting evidence-based policy responses; not only to manage risks but also to better leverage on opportunities. Tonight, I will be sharing some thoughts about this “new world economy” that we are in, and along the way, share some policy insights and research ideas for the many economists and policy thinkers in this room. Global macroeconomic environment is becoming increasingly challenging The periods of strong global growth have become something of a distant memory to us. Global growth for the past 5 years has averaged 3.5%, well below the pre-crisis average of 5.1%.
All these 5/8  BIS Central Banker's Speeches  proceedings are also meticulously minuted, with the intention that the Bank will one day release the minutes for transparency purposes, and for the benefit of the research community. Even after the formal institutionalisation of our conduct of monetary policy, continuous efforts were made in the years after to further strengthen our policy decision-making framework in face of the ever-challenging policy environment. For instance, the establishment of the Joint Policy Committee in 2010, which combines members from both the MPC and the Financial Stability Committee, was done in recognition of the need to have effective coordination of monetary and financial stability policies given their increasing interdependence. The year 2015 also marked another significant milestone for the Bank. We appointed for the first time two external members to our MPC, a progress that reflected the ongoing maturity and inclusiveness of the MPC as a decision-making committee. The inclusion of the external members has brought about additional diversity of views, and their relevant experiences have further enhanced the collective expertise of the MPC. It is important for us to outline the philosophy that underpins our policymaking. The first is pragmatism – the need to do the right thing without necessarily being dogmatic and rigid in approaches. Our monetary policy framework is not on inflation targeting, but one with primacy placed on the price stability mandate while giving due regards to developments in the economy. This was amply illustrated in the way that we managed the challenges in 2007 and 2008.