Other News
March 05, 2009 16:36 PM
Zeti Sees Boost To Regional Integration
KUALA LUMPUR, March 5 (Bernama) -- The current global financial crisis is expected to accelerate the financial and economic integration of Association of South-East Asian Nations (Asean) and greater Asia.
Bank Negara Malaysia governor, Tan Sri Dr Zeti Akhtar Aziz, said this should be viewed positively, not only towards the unwinding of the global imbalances, but also because this has the potential to contribute towards global growth.
"The banking sector in Asean and the greater Asian region will have an important role in facilitating this trend.
"Islamic banking, in particular, which is a form of financial intermediation that is directly linked to trade and investment flows, has significant potential to facilitate this process," she said at the launch of the PT Bank Muamalat Indonesia here Thursday.
Zeti said Islamic finance required all financial transactions to be supported by an underlying economic activity.
"There is now a renewed focus in the global community on generating real economic activity, generating jobs and generating overall financial stability," she said.
She said following the developments that had led to the current global financial crisis, there was a greater recognition for the need to reduce the decoupling of the expansion of financial transactions and the growth of the real economy.
"This is in fact a fundamental requirement in Islamic finance thereby resulting in a close link between financial and real flows," she said.
Zeti said Asean and greater Asia had the potential to further strengthen their domestic economies.
"Indeed, in doing so this would contribute towards reducing further the global imbalances. In addition, being diverse economies, we are able to take advantage of the complementarities that exist in the region," she said.
This is reflected in the increased intra-regional trade and intra-regional investment flows. Intra-regional trade as a ratio of total trade of the region has increased from 30 per cent in 1990 to 40 percent in 2007.
Intra-regional investment flows now account for 12 percent of the region's foreign direct investment. With a total population of 575 million, Asean also has greater potential to increase its economic interface with the larger economies in greater Asia.
-- BERNAMA
We provide
(subscription-based)
news coverage in our Newswire service.
