inflation is detrimental to our economy because of the following reasons : i. makes planning difficult for economic agents ; bis central bankers ’ speeches ii. companies and consumers are unable to draw up effective investment and expenditure plans ; iii. government is also unable to make good projections of revenue collections and thus unable to effectively plan its current and capital expenditures ; iv. relative prices are distorted leading to inefficient allocation of resources ; v. high cost of investment as interest rates skyrocket ; vi. savings propensity is low as savers are discouraged by negative real interest rates ; vii. in an inflationary economy, interest rates are high and borrowing for investment is inhibited, which leads to : limited access by productive ( private ) sectors to investment funds ; low investment, output and employment ; and lesser impact on the social sectors. ladies and gentlemen, as you share thoughts in this workshop, allow me to underscore the importance, we at the bank of zambia attach to capacity building programmes for all employees in the financial sector. i am reliably informed that during the workshop you will cover a number of important topics including the following : i. analysing the framework for collective bargaining and exploring new trends in collective bargaining ; ii. enhancing negotiation skills and knowledge base of union officials ; and iii. developing a pool of professional union negotiators in zufiaw. i am fully aware that some of the topics that you will be discussing during this forum may not be entirely new to you, but i firmly believe that they may be necessary for purposes of reinforcing what you already know. i therefore, urge you all to take keen interest in all the deliberations if you are to realise the full benefit of the workshop. mr president, no company can sustainably grow if it does not provide mechanisms by which employees can influence their working lives. labour is more than a commodity. unlike non - living factors of production, such as, machinery and raw materials, the work of human beings raises questions about the impact of work and work relations. as you review your collective agreement frameworks, i wish to remind you that there are a lot of common interests and important interdependencies between employers and employees despite the apparent conflicting interests. for instance firms need workers and workers need jobs. ladies and gentlemen, there can be no true bargaining without prudent and effective leadership on either side of the table. this kind of leadership is required for us to achieve our collective objectives.

across is that deflation will be overcome and the price stability target of 2 percent will definitely be achieved. and this will happen at the earliest possible time. the bank considers it desirable to achieve a situation in which both prices and wages rise in a balanced manner. however, this does not mean that the bank will adjust its policies aimed at achieving moderate inflation simply in response to the pace of increase in wages. from both a theoretical and an empirical perspective, prices generally move in parallel with wages ( chart 9 ). if the bank were to move slowly toward achieving the price stability target, wage adjustments would also be slow. at the end of the day, this issue comes down to a chicken and egg situation. in order to overcome deflation – in other words, break the deadlock – somebody has to show an unwavering resolve and change the situation. this means that, when it comes to price developments being at stake, the bank must be the first - mover. the bank has been pursuing qqe based on the stance that it will do whatever it can to achieve the price stability target. as a result, conditions in financial markets – as exemplified by stock prices and foreign exchange rates – as well as corporate profitability and labor market conditions – particularly the unemployment rate – have improved significantly, so that the underlying trend in inflation has changed markedly. looking at the cpi for october 2015, the year - on - year rate of change in the cpi for all items less fresh food and energy was 2. 0 percentage points higher and that for all items less food and energy was 1. 5 percentage points higher than in march 2013, that is, immediately before the introduction of qqe. as evidenced by these figures, the bank has the capability as well as the strong will to achieve price stability at 2 percent inflation at the earliest possible time. the bank of japan ’ s price stability target of 2 percent provides a benchmark which firms can refer to when adjusting wages and individual prices. once 2 percent inflation prevails, firms that continue to base their investment, hiring, and price - setting decisions on a deflationary mindset will be at a disadvantage and fall behind their competitors. in our view, the environment for wage increases – such as a tight labor market and high corporate profits – is certainly already well established. however, it is of course up to firms ’ management and labor whether to raise wages in line with the 2 percent inflation benchmark in anticipation of price increases of 2 percent