You have ageing populations in Japan, Europe and United States, which  BIS central bankers’ speeches  1  means that this baby boom generation, the people who were born just after the second world war were now starting to retire are consuming less and saving more and as a consequence you probably don’t have that space for a consumption led economic impetus that developing countries such as ourselves dependent on for the last 30 or 40 years to grow our economies through an export-led strategy. So my first question is; is that export-led strategy relevant any more given these demographic changes that we see in the advanced economies? And secondly given the fact that the advanced economies are in debt – what happened in the great recession was they nationalized private bad debts in their housing sectors, nationalized it, bought it into the government’s balance sheet and as a consequence that the western economies are effectively net borrowers in the system – do they then have all the gear to stimulate consumption and create another repeat cycle of that export-led boom that really lifted countries like China and other big Asian exporting economies out of the low income status that they had enjoyed for several decades. That to me is a very relevant question that we have to ask ourselves at this conference.
That could potentially create some turmoil for international markets including ours and in the process we could see some potential for dislocation which is why Sri Lanka has decided to reach out to multilateral agencies like the IMF and the World Bank to assist us in terms of sheltering or protecting the economy against any adverse developments that may occur in the near future as a consequence of any turmoil in international capital markets if and when US policy makers decide to raise interest rates. That is one hurdle we have to look at. The second hurdle I would say is the lack of a structural change the way international, particularly developed countries of the world, are managing their economic affairs. A lot of the changes that we have seen in the last 5 years has had to do with monetary policy and the aggressive easing of the monetary policy. But on the fiscal side, you haven’t seen any structural changes in countries like the United States and most European countries that took the world into the great recession in 2008 as a consequence of their housing  2  BIS central bankers’ speeches  bubbles. That structural change in terms of improving productivity, reducing the size of social security programs and retooling their economies to become more productive has still not started and until that happens we don’t have a sustainable basis for global growth to grow apace.