BIG SHOES TO FILL

Malaysia 2017 | FINANCE | FOCUS: LEGACY OF TAN SRI ZETI AZIZ

The departure of Dr. Zeti Akhtar Aziz from Negara's top position kept many uneasy for a period of time. While a satisfactory successor has been chosen, Aziz leaves behind a legacy of one of the world's most renowned central bank leaders.

Bank Negara's longtime governor, Tan Sri Dato' Sri Dr. Zeti Akhtar Aziz, stepped down in April 2016, after nearly 16 years in the position. Throughout her tenure in the position, the 69-year-old had been lauded international as being one of the world's best central bank heads. Her legacy will be remembered as one that fought for strict independence for the institution. In her final days in office she said that her successor should not be a politician, nor should politicians occupy any seats on the board, as a way to ensure the bank keeps its priority the national economy, and not the political agenda of any party.

Under Zeti's tenure the central bank racked up achievement after achievement. In 2001, the bank launched the 10-year Financial Sector Masterplan, which laid the framework in guiding the country's economy to its next stage of development by defining the direction and financial makeup of the economy. The next year, the country issued its first sovereign sukuk, and at 2011 it was the highest sukuk issuer in the world, granting 69% of international issuances. In 2005, Malaysia created a deposit insurance system, increasing confidence in the banking system and providing a massive boost of trust from and protection for consumers.

By 2009, Aziz was receiving wide-ranging acclaim for her governing of the Malaysian central bank—Global Finance magazine named her among the world's best central bank chiefs. Accolades continued to her retirement in early 2016, with Aziz raking in such awards as the Development Bank's Islamic Banking and Finance award in 2012, a lifetime achievement award based on her work in Islamic finance from the ruler of Dubai in 2015, and another lifetime achievement award from the Central Banking awards in January 2016. During her time as Negara's chief, the country also saw the establishment of the Asian Institute of Finance, new guidelines to reduce the high percentage of household debt, the opening of a representative office in Beijing, and the inauguration of the Asian School of Business, the first central bank business school.

There was speculation for some time on who would replace Aziz, during which time the only thing that was certain was that not only would the next governor of Negara have massive shoes to fill, he or she would be taking the reins at a very significant point in the domestic and global economy. Aziz's successor, Muhammad bin Ibrahim joined the central bank in 1984, and became a Deputy Governor in 2010. Also sitting on the bank's Financial Stability Committee and its Monetary Policy Committee, Ibrahim has previously held multiple positions in governmental bodies and companies; he is both a member of the Board of Directors of PETRONAS, since 2010, as well as the Malaysian Retirement Trust Fund, since 2012.

Though Ibrahim assumes his role nearly a decade after the global financial crisis, he is taking up his job in a financial landscape that has been immensely transformed. Many of the reforms put in place after the meltdown are still playing out today, and as the new head of the central bank, Ibrahim will have to continue to carefully navigate the financial road ahead. However, this is also a time of expanding economic horizons, for both Malaysia and the rest of the world.

“Across various sectors, disruptive technologies are rapidly expanding the horizon of economic opportunities while challenging existing business models," Ibrahim told TBY. “In the case of banking for instance, we have already seen greater competition from new entrants amid the emergence of fintech." Despite the developments, both internal and external, which have had effects on the Malaysian economy, the country has been able to manage steady growth of between 4 and 6%, growth that is set to remain safe with Negara under the reins of Ibrahim.