Welcoming Remarks by Datuk Ahmad Hizzad Baharuddin on Labuan IBFC 25th Anniversary Half Day Conference
LABUAN IBFC 25TH ANNIVERSARY CONFERENCE
Welcome Remarks
By
Datuk Ahmad Hizzad Baharuddin
Director-General, Labuan FSA
30th October 2015
Dorsett Grand Labuan
Bismillahirrahmanirrahim
Assalamualaikum Warahmatullahii Wabarakatuh and very good morning.
Chairmen of Associations,
Esteemed speakers,
Distinguished guests,
Members of the media,
Ladies and Gentlemen.
- It is my honour and great pleasure to welcome you to this conference to commemorate a very momentous occasion, the Labuan International Business and Financial Centre’s 25th Anniversary. Labuan FSA is pleased to host this conference to mark the opening of the silver jubilee celebration of Labuan IBFC.
- Enthusiasm for this conference is clearly reflected with the presence of so many industry players here this morning. This signifies the importance of this conference in bringing together of minds to deliberate on key issues surrounding global economic and financial development. On behalf of Labuan FSA, I would like to thank you for your presence here today.
- With us this morning are two international speakers, Mr. Norman Loayza from the World Bank and Mr. John Harris from Jersey Financial Services Commission, who have travelled a great distance to be with us for this event. Let us extend a very warm welcome to our two distinguished speakers and thank you for joining us in our silver jubilee celebration.
Ladies and Gentlemen,
- The world economy and international financial system is in phase of intense globalisation resulting in a more connected and interdependent world. Economies are becoming more connected with each other within and across regions, including the emerging economies within ASEAN. Today, we are standing at the brink of very exciting times for ASEAN as the date draws closer to the realisation of the ASEAN Economic Community. Since 2007, the financial integration in ASEAN has significantly enhanced the efficiency and effectiveness of intermediation and allocation of resources to enable the surplus savings of the region to be channeled to productive investments in the region. This rapid progress of economic integration has enabled the region to further harness the benefits arising from the diversity and complementarities that exist amongst the ASEAN member economies. Improved accessibility to financing supported the growth of intra-ASEAN trades and investment activities over these recent 15 years. The intra-regional trade now accounts for almost a quarter of the region’s total trade while intra-regional investment activity has quadrupled to 17% of total investment since 2000. A more cohesive region also facilitates greater collaborative efforts on safeguarding financial stability.
- While globalisation opens up new opportunities for businesses and trade, it also creates a strong potential for the growth of financial centres to facilitate financial linkages leading towards a more efficient allocation of resources across borders and enhance prospects for the world economy. For a decade, cities and countries in the Asia Pacific region have been making various efforts to become vibrant financial centres (IFCs) and some in Asia, have made substantial progress towards becoming global IFCs. With markets’ increasing interdependencies and challenges intertwined, the progressive globalization will contribute to increasingly complex and contagion risks that can lead to instability, where adverse consequences can outweigh the benefits. These underscore the importance of collective efforts to develop an effective yet flexible regulatory system in each jurisdiction, with appropriate mechanisms for greater cross-border cooperation at the regional as well as at the global level.
- Of recent decade, international financial centres experienced tremendous pressure as they were being put under heightened scrutiny by multilateral agencies and major global economies, which compelled them to tighten their regulations to conform to international standards. In particular, we see challenging expectations for IFCs to subscribe to higher level of disclosure and transparency and information accessibility to facilitate effective cross border monitoring.
- It is therefore challenging to balance between the pressing needs for international conformity against their investors’ expectations for a great degree of free and liberal market environment. It is therefore important for regulatory authorities in IFCs to formulate policies which sufficiently address emerging risks without compromising the growth track of the industry players within. In this respect, it is also important to look beyond the horizon in a changing business environment that is fundamentally different from the present day, to identify the potential future developments and challenges so that IFCs can be adaptive rather than reactive. Only then IFCs can prosper further its economic capacities, as well as its resilience.
Ladies and Gentlemen,
- In light of the inevitable transformation of the global financial environment and the requirements to meeting the increasingly stringent international standards while balancing business policy, how do international financial centres evolve and adapt to this transition and remain relevant in the new economy? In view of these imperatives, this is timely at this juncture for the Labuan IBFC to reflect on its 25 years journey and what lies ahead for us in the next 25 years. I am sure the conference today and our distinguished speakers can shed a better understanding on the current global trends, challenges and opportunities for us to be aware of and be more prepared in moving forward.
- Thank you and I look forward for an interesting intellectual discourse in this conference.
