Today I am truly delighted to welcome the Governor of Bank Negara Malaysia as our guest of honour. We all know Tan Sri Zeti to be one of the most respected and admired persons in this country. We are very fortunate that she has accepted our invitation to be our guest speaker today.
The performance of our economy is a favourite topic of conversation these days which is a good thing so long as we do not go overboard speculating. Growth has now returned to a decent level, and punters are back in the share market. Last week, in unveiling the 2004 Budget, the Prime Minister forecast the economy would grow even faster next year, at 5.5%-6%, up from 4.5% this year.
He also delivered a bundle of goodies that should reduce the cost of doing business, improve the way we do business and enhance the competitive edge of Malaysian businesses.
The goal obviously is to make Malaysia a resilient trading nation. The way to do that is to build up Malaysian-owned companies that export Malaysian-made goods using mainly Malaysian raw materials.
I am almost certain that Tan Sri Zeti will make reference to the budget when she talks to us about Challenges And Opportunities In An Increasingly Competitive Asia.
We have done well in the competition stakes among Asian countries.
The 2003 World Competitiveness Yearbook has raised Malaysia to Number 4 in the rankings among economies with populations larger than 20 million people. Only the US, Australia and Canada are ahead of us. Last year, we were in 6th position. In 2001, we were No. 10.
In the World Investment Report of the United Nations Conference on Trade and Development, Malaysia is listed among the top 10 economies for foreign direct investment or FDI in 2002. Malaysia attracted 3.2 billion US dollars in FDI last year, up from only 550 million US dollars in 2001.
However, when we speak of competitiveness in Asia, China is on everyone′s lips. Like a giant magnet, it is pulling in FDIs from all corners of the world. Its industries are beginning to flood the region and beyond with good quality products that are priced very competitively.
Clearly, China presents a huge challenge to the other developing economies in Asia.
On the other hand, China also offers tremendous opportunities both as a market for our products and as a source of investment. In 2001, China was Malaysia′s 6th largest export market and 5th largest source of imports. China was also the 3rd largest source of FDIs in Malaysia after US and Japan.
Opportunities elsewhere are also beckoning.
Malaysian construction companies have been prominent in a number of Asian countries. The opening up of markets in other ASEAN countries under the AFTA rules will offer more of both opportunities and challenges.
All these developments mark the transition to a more liberalised and globalised economy. To support the process will require an efficient, competitive and resilient financial system that can ensure both stability and flexibility.
We are, therefore, privileged to have Tan Sri Zeti here today to give us her perspective on how Malaysia may best perform in an increasingly competitive region.
We know Tan Sri Zeti as a respected career central banker. We celebrated her appointment as the first woman Governor of Bank Negara Malaysia. We keep our ears open to her every comment. Her words, although always softly spoken, are loudly heard in company boardrooms and the financial markets.
However, few people outside the banking sector are actually aware of the pivotal role she played in helping to steer Malaysia successfully out of the Asian financial crisis of 1997-98.
Outwardly, Tan Sri Zeti looks mild, almost fragile, but don′t be deceived by that façade. For sure, she must possess nerves of steel and the stamina of a marathon runner, besides brilliant intellect. Those were the qualities needed when she sat in front of her computer screen virtually around the clock during the financial crisis, watching the ringgit being bashed down by ruthless currency speculators. She was in constant touch with the market, gathering information to construct a picture of the speculative attacks and devising ways to counter-attack, which eventually led to the implementation of selective exchange controls.
Tan Sri Zeti was the proverbial right person at the right time in the right place.
In Tan Sri Zeti, the government has a monetary and economic expert. When she studied for her PhD at University of Pennsylvania, she had carried out pioneering work on capital flows and their implications on monetary policy. Later, in Bank Negara Malaysia, she was responsible for economics, reserves management, foreign and money market operations, and exchange control.
Please join me in welcoming to the rostrum one of the most powerful women in the developing world.
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