The driving forces behind this were a budget deficit that amounted to 2.6 per cent of GDP in 2005, and a large and growing deficit in household saving. Private household saving turned negative in 2005, which was the first time since the 1930s and corresponded to 0.3 per cent of GDP. The US current account deficit is counterbalanced to 40 per cent by the surplus in Asia, particularly China and Japan. The remainder is accounted for by a number of oilproducing countries and a few small, open economies, including Sweden, Norway and Switzerland. Several different explanations have been put forward for the large US current account deficit. The explanation most often highlighted in the United States is that the deficit reflects stronger productivity growth and higher growth potential in the United States, compared with other parts of the world. Many of the investments made in the 1980s and 1990s, particularly IT investments, had substantial positive effects on productivity, after some time lag. When these investments were supplemented by reorganisation and internal training within the companies, they had an even greater effect on productivity. The labour supply has also benefited from substantial labour immigration. According to the OECD, potential growth, that is, how fast the economy can grow without problems arising in the form of overheating, amounts to 3.4 per cent in the United States, with around 1 percentage point being explained by the labour supply. 10 The corresponding estimate for the euro zone is 1.9 per cent and for Japan it is only 1.3 per cent.
It is therefore the expectation of the Bank of Zambia that this Conference will discuss this trend and its implications, particularly with regard to limited accessibility to technology and technicalknow how of consumers in SADC member countries. Other themes I am sure you will deliberate upon include confidentially of financial information, money laundering and terrorist financing. Effective payment system oversight needs to be promoted so that public confidence in the safety and soundness of the national payment systems is maintained. Understandably, this is a new area and in most member countries work is still exploratory. I therefore urge you all to double your efforts in this regard and deliver on this very important central bank responsibility. Ladies and Gentlemen, another new area is that of mobile phone enabled payment services. This development has a huge potential to help the SADC region leap frog a number of financial sector development challenges particularly those related to improving access and availability of financial services. This is because mobile phone based services, particularly those focused on low-value payments where swift and convenient service is the primary goal could be a practical solution for SADC member countries. The challenge therefore is how well we all respond without damaging this sprouting and potentially cost-effective delivery channel for financial services, which can be damaged with over regulation or lack of mitigation for the risks its poses.