PACIFIC BASIN ECONOMIC COUNCIL
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Supplements & Quick Reference: · Main Page · Overview · Confirmed Speakers · Available Speeches · Photos · Media Information · Sponsorships   Visit the Official Site: www.pbec2002.com Striving for Growth in a Challenging Environment PBEC 35th International General Meeting Kuala Lumpur, Malaysia May 3-7, 2002 Kenneth Dam Deputy Treasurer U.S. Department of the Treasury "Chartering an Effective Economic and Financial Policy: Two Perspectives" Monday, May 6, 2002 Thank you for coming today. Before taking specific questions, let me tell you why I am here in Asia, what I am trying to achieve, and why my trip is of particular importance to President Bush, the United States, and the US Treasury. I am visiting three Asian nations this week - Malaysia, China and South Korea - to launch a new international economic initiative aimed at transforming financial sectors into engines of growth. This represents a new Bush Administration international economic policy initiatives. We believe that well-developed and competitive financial sectors must be the engines of growth in this decade. My intention is to spotlight what I see are early successes in Asian financial markets and draw attention to where increased competition and better, more transparent regulation can clear a path to stronger economic growth. I will initiate a new economic dialogue with my Asian counterparts on ways we can encourage further financial sector openness in Asia. These efforts are essential so that Asian countries can make the best use of their deep pool of domestic savings. Why is this important? It's simple: because it's in the best interests of Asia, the United States and the world economy. Gone are the days when a national airline and heavy investments in manufacturing were badges of economic advancement. The global economy stands at the leading edge of a new millennium in which world-class financial sectors - that are deep, flexible and resilient -- will be the engines of growth. Now, in the 21st century, the fate of all our economies is intertwined. The world economy is no longer a zero-sum game. We have entered a period of economic convergence. When the United grows, Asia grows. And vice-versa. It's that fundamental. The link between financial sector openness and growth is becoming clear. Freer trade in financial services enhances capital market efficiency. It bolsters financial sector stability, stimulates innovation, and provides businesses and consumers with the broadest range of financial products at the lowest cost. In short, freer trade in financial services enhances productivity. When I say trade, I include FDI, after all, the right to have a local presence is normally essential to providing financial services. Openness in financial services also promotes access to new technologies and best practices. This has sped the development of on-line banking, securities trading, insurance services, and financial information services. To achieve this objective, I am using this trip to heighten the visibility of stronger and more advanced trade and investment in financial services. The connection between fully developed financial markets and economic growth is clear. The issue warrants being placed squarely on the global economic agenda. While in Malaysia, China and South Korea, I will be hoping to enlist key Asian policymakers in an international effort to persuade leaders here and elsewhere to embrace greater openness to financial services trade and investment and financial sector liberalization. I hope - through listening and engaging in a constructive dialogue - to deepen and diversify our bilateral economic relations in Asia this week so that we can bring this issue to the forefront of both governments. Thank you.