Let us now see what it is like today: Growth is over 7%, and average growth from 2006 to 2012 has been 6.7%; Growth appears to be on course to reach around the 8% level from next year; Foreign reserves exceed $ 6.3 billion and around 4.4 months of imports; The country enjoys peaceful and stable conditions; Foreign investment inflows are strong and foreign Investment via international sovereign bonds and Government paper amounts to about $ billion; Unemployment is around 3.6%; Poverty is down to about the 6% mark; Inflation has been at single digit levels over the past 4 ½ years; GDP is at about $ billion; Per capita income is around $ 3,000; The economy is being diversified under a 5Hub + Tourism strategy to avoid the middle income trap; The Fiscal deficit has been limited to 6.4% in 2012, and on a reducing trend; The Debt to GDP level is below 80% and falling; The level of infrastructure has improved tremendously; The Doing Business global rank is at the 81st, and is poised to jump about 10 places this year; Regional development has made tangible progress and the Western Province share of GDP has dropped to around 43%; Regular foreign investment is flowing into banks and the stock market; Private remittances have reached nearly 10% of GDP, or about $ 6 billion in actual inflows; The banking system has been stable and even in the midst of very difficult global circumstances, the country enjoys favourable reviews from many influential international quarters.
At present, there are no research findings on the costs associated with capital controls or how much those costs rise each year, as this is a complex estimation task that may not even be feasible until several years from now. On the other hand, it can be argued that the costs were small to begin with because of the situation represented by a worldwide financial crisis. Furthermore, in implementing the capital controls, the Central Bank has attempted to reduce these costs as much as possible by granting exemptions. A bill of legislation relaxing certain restrictions affecting firms and individuals is expected in the near future. But none of this changes the need to make every effort to abolish the capital controls. I mentioned long-term costs. In addition to this, the controls were imposed as an emergency measure and constitute a deviation from our contractual obligations under the EEA Agreement. That deviation has been approved by our counterparties, but we are still obliged to make our best effort towards lifting the controls without jeopardising financial and economic stability. Does this mean we must revert all the way to the regime we had before the crisis? I think that, as regards corporate and household capital movements, the answer is broadly yes. On the other hand, it will be necessary to limit financial companies’ exchange rate risk more than was done before the crisis, including the maturity mismatches in their balance sheets and overall size of foreign-denominated balance sheets.