where the riksbank would want to be able to do so on some future occasion, eg with a view to avoiding the risk of recession and falling prices. the riksbank hardly has better prerequisites than investors in the market to determine whether a so - called speculative bubble is developing. if a speculative bubble is involved, it will sooner or later burst. however, it is then the riksbank ’ s duty to counteract a fall in inflation by an energetic interest rate policy at the same time as it limits the damage of the fall in demand that could ensue. bank of japan ’ s april report of recent economic and financial developments1 bank of japan, communication, 12 april 2000. * * * the bank ’ s view2 the improvement in japan ’ s economy is becoming distinct. recovery has started in some areas of private demand, as seen in a gradual upturn in business fixed investment. with regard to exogenous demand, net exports ( real exports minus real imports ) continue to follow an upward trend due to an upturn in overseas economies, and public investment has started to pick up reflecting the progress in the implementation of the supplementary budget for fiscal 1999. as regards domestic private demand, housing investment is decreasing moderately, and recovery in private consumption continues to be weak through lack of notable improvements in employment and income conditions. meanwhile, business fixed investment is starting to pick up albeit moderately. reflecting such developments in final demand, industrial production is increasing, and corporate profits and sentiment continue to improve. firms as a whole still strongly feel that they have excess capacity and employees, and that they should reduce their debts to restore financial soundness. nevertheless, the number of firms that take positive action, such as increasing the amount of fixed investment, is increasing gradually, especially in high - growth sectors. regarding employment conditions, although the decrease in the number of employees and in wages is slowing, efforts by firms to reduce personnel expenses have prolonged the severity of households ’ income conditions. as for the outlook, public investment is likely to increase for some time. this, along with the favorable financial environment created partly by the bank ’ s monetary easing, is expected to continue underpinning the economy. moreover, net exports are likely to follow an upward trend reflecting the recovery of overseas economies, and it is also highly probable that business fixed investment will increase gradually with an improvement in corporate profits and sentiment. however, housing investment is expected to continue declining moderately, and there seems to be no

for your considerations. first, public service commissioners must break the rules when setting the remunerations packages for skilled and talented professionals or employees that the public service must employ to deliver the services needed by the community. the public service commissioners and their respective governments must remunerate those with needed talent and skills equal to the market remuneration package others are prepared to pay for the same skills. in other words, the pay structure for talent and skills identified as essential for effective delivery of government services and policy goals must be different from the general public servant pay structure. ( may be a good “ break the rule ” option is to apply george orwell ’ s famous line in his book animal farm … “ all animals are equal but some animals are more equal than others. ” so that we can restate it as “ all public servants are equal, but some public servants are more equal than others ”. ). whilst all this sounds possible, i must warn that it is not an easy option to take in an environment where there are strong unions representing the interests of their members and where affordability is not easy to come by. but social service delivery to the public suffers if those specialized skills are not available because the country cannot afford to pay for them. the second consideration is for the public service commissioners to be more creative in creating an employment environment that would attract skilled and talented people to want to work for the public service. i call these the non monetary factors, although funds must be spent to make them happen. public service commissioners must provide clean and attractive office environment for the officers to work in. this includes the provisions of proper equipments that can enhance productivity. shorten the length of time it takes to hire successful candidates : skilled and talented people cannot wait for months to receive their letter of acceptances. they will find employment somewhere else if we are slow to process their engagement. ensure that your newly recruited workers do not have to wait for months before they are put on the payroll and paid for their services. it is demeaning for a professional with family members waiting months for his pay to be processed. talented and skilled workers just cannot tolerate inefficiency that our bureaucratic procedures unfortunately require to be adhered to. public service commissioners and their supporting technical teams must continuously scan the market to ensure that the remuneration of those with talents that are required is within the market price for the skills and talents. this means actively involved in communicating with the professional bodies that represent the interests of