This gap may be ascribed to structural rigidities that are thought to have hampered European sectoral specialisation and the spread of information technologies, while labour policies designed to help low-skilled workers re-enter the job market reduced the measured growth of European productivity. Bart Van Ark, Professor at the University of Groningen and Director at the Conference Board, will kick off the discussions of the first session. Bart is one of the first academics to have described these developments through studies based on international comparisons of macroeconomic or sectoral data. His research has brought to light the importance, in the European lag, of the lower gains in total factor productivity in ICT-producing sectors, and especially in the services that use these technologies. The European countries’ inadequate specialisation in ICT-producing sectors limits the gains that may be expected from the sharp drop in the cost of computing power. In addition, the difficulties that services using ICT have in making full use of these technologies could be traced to the structural rigidities of European labour and product markets. One of the issues raised by this first change is the impact of these developments on the competitiveness of the mature economies and on capital flows. There are indeed numerous links between competitiveness and productivity. In the short term, relative changes in unit labour costs are a component of cost competitiveness.
That be as it may, like in many other developing countries the financial sector in Zambia still faces a number of challenges. The Financial Sector Assessment Programme (FSAP) Report of 2002 highlighted a number of these including limited access to financial services by the rural and peri-urban population and doubtful sustainability of financial services in Zambia. In light of these findings, and in recognition of the strategic importance of the development of the financial sector in contributing to sustainable economic growth and poverty reduction, the Government of the republic of Zambia developed and launched the Financial Sector Development Plan (FSDP) in 2004. The FSDP is a comprehensive five year strategy to build and strengthen the financial sector infrastructure to enable it to support economic diversification and sustainable growth. In addition, and in furtherance of the objectives of the FSDP, the BoZ Strategic Plan for 2008 – 2011 has made financial inclusion as one of its key strategic objectives. Under the FSDP two important studies, the FinScope™ Surveys of 2005 and 2007, on the demand for and supply of financial services in Zambia have been completed. These studies have augmented the earlier findings of the FSAP with respect to the key developmental challenges for the financial sector in Zambia.