I dwell at some length on this issue because the state of public finances is currently the only significant impediment to Malta’s membership of the euro area. While it is encouraging to know that we have been able to reduce the fiscal deficit/GDP ratio from 11% in 1998 to its current level of around 6%, getting to the Maastricht reference value of 3% by 2006, as the Government plans to do, will require unrelenting efforts and a greater emphasis on expenditure-cutting. This is not only because taxation levels are already relatively high for an economic downturn, but also because of the tradeoffs involved in pursuing further fiscal consolidation. Indeed, the Government’s resolve to trim the deficit will be a key determinant of the degree of exchange rate stability that it will be possible to achieve during ERM II. This, in turn, will depend on how much economic operators, taxpayers and recipients of social benefits and other transfer payments are prepared to give up today in exchange for sustainable public finances tomorrow. In the final analysis, therefore, the success of the euro strategy will hinge on consensus being reached on the implementation of the necessary reforms. In this context, discussions are underway in the Malta Council for Economic and Social Development with a view to reforming the pension and health systems, currently two major sources of pressure on public finances. If the social partners do indeed take ownership of the reforms, the credibility of the country’s overall economic strategy will be considerably enhanced.

Key entry points for financial inclusion These could be through: (a)  Direct loans or banking facilities to the targeted vulnerable communities or groups;  (b)  Facilitation of economic activity in a particular geographical area of operations or location;  (c)  Development of local or national infrastructure to enable a particular type of business activity, which could then be practiced or performed by a group or groups which can include women; and  (d)  Providing an enabling environment and/or enhancements for such economic activity to take place. The enabling environment includes laws, regulations, taxation, skills development, duty waivers, subsidies, etc. In this context, tax concessions and duty waivers given to make enterprises be “financially inclusive” are often forgotten. In fact, due to lack of awareness, enhancement of access to finance or financial inclusion that has already taken place in various sectors, and the enabling environment that has been created, are taken for granted with no value attached to them. Women’s contribution to economic development Let me now deal with the importance of women’s contribution to the economic development in Sri Lanka and assess whether financial inclusion of, and access to finance by women are on par with the contribution they make. Women in Sri Lanka have been engaged in economic activities over centuries of history primarily through employment. Due to low productivity and inadequate incomes in the agricultural sector, women in small farm families have moved from unpaid family labour to other occupations, in particular, to garment factories and employment abroad.