goals, the monetary policy too should play a key role. towards that end, the monetary policy framework adopted by the central bank has been made consistent with the government ’ s macroeconomic framework. accordingly, the 2007 targets in the monetary programme of the central bank have been set, after taking into consideration the potential growth and liquidity needs of the economy to move along the projected growth path while keeping inflationary pressures in check. your excellency, in november 2006, the government of your excellency announced its medium - term macroeconomic framework within a 10 - year development framework. this programme targets an 8 per cent growth for the next six years and 9 - 10 per cent thereafter. these are tough targets. but these are achievable. when striving towards such goals, we must remember that our development focus should always be clear. we must also remember that our external environment may not always and necessarily be ideal. but we would do well to remember that ours has been and is a resilient economy. we have shown that we can grow even in the face of highly adverse circumstances and scenarios. in that context, we would be wise, if we do not develop our economic plans on the overriding assumption of a totally terrorism free environment. of course, if the peace process is successful and a early political solution is found to the on - going conflict, it would be highly desirable. but at the same time, if we consciously develop our plans and frameworks on less than perfect conditions, we could still find ways and means to succeed and deliver the planned results. we owe that to our people, who cannot and should not have to wait until everything falls in to place. therefore, our future strategies should be aimed at moving ahead even in the face of threats of terrorism and other adversities without setting out as a pre - condition, the achievement of a permanent peace or ideal conditions to embark on our development projects and programmes. we are also working today on the basis that all our strategies would be of no avail, if we are not sufficiently committed to achieving those plans. we know we are serious in our efforts. we also have to show we are serious. that is why, at the beginning of 2007, in close consultation with the secretary to the ministry of finance, the monetary board developed a comprehensive monitoring mechanism of key macroeconomic variables in the external, fiscal and monetary sectors. these are based on a financial programming framework to ensure that key macroeconomic targets are met as announced

has been the existence or the absence of the independence of the central bank. many have found fault with exter for making the secretary to the ministry of finance a member of the monetary board. they have argued that this official member with his own self interest in funding the government expenditure programs would use the opportunity to dictate terms to the monetary board, thereby permitting the fiscal policy to override monetary policy. it has been equated by some critics to the case of permitting a child to put his hand into the cookie jar as many times as he wishes. while these criticisms may have some validity, exter ’ s wisdom has been to create an environment for both the government and the central bank to have a peaceful and amicable cohabitation. exter has argued in his report that “... there are, however, many important problems of monetary policy, especially those relating to fiscal policy, on which a central bank should work in close harmony with the government ”. accordingly, a degree of independence has been afforded to the central bank unlike other governmental bodies. this independence extends to the budget of the central bank, job security of the key central bank officials, and power to make monetary policy without consulting the government. the wisdom of exter was that the central bank should as far as possible work in consultation with the government, rather than in isolation. he believed that the true independence of the central bank could be preserved only through that consultative method. in the words of exter, “ the ideal is … one in which there will be continuous and constructive co - operation between the monetary board and the government. the principal instrument for achieving this co - operation should be the permanent secretary to the ministry of finance whose membership on the board will ensure at all times that his minister ’ s views will be made known to the other members of the board ”. however, exter did not expect this arrangement to be effective at all times. hence, he made the proviso that “ it would depend on the men occupying the key positions ” and not on any legal formula. he argued quite correctly that such complex and delicate relationships cannot be established full - blown by a piece of legislation. it must be the result of years of experience and the slow growth of political conventions. the writer has been questioned on this point on many occasions at numerous public fora. the position taken by him agrees fully with that of exter. this position requires the critics to compare central bank ’ s independence with the relationship within