to the rescue. of course this has significant imbalances for the new zealand outlook. demand from western countries is gradually improving, but still not very encouraging. the sad us housing story is bad for our wood exports, the uk fiscal retrenchment is hurting our uk tourist numbers and the fragile japanese recovery restrains our food exports. our own internal rebalancing is progressing, but very slowly. substantial fiscal stimulus helped cushion the economy over the past few years. the fiscal deficit will need to be closed and private demand take over public sector support. moreover, it appears that some of the fiscal deficit is structural and unwinding this support will subtract from growth for a number of years, with our housing market remaining weak, consumption impaired, balance sheets fragile and businesses remaining cautious. private demand is still impaired. what is yet to come however at the same time the strong growth in east asia and australia emerging markets has been very beneficial. these markets were much less affected by the financial crisis, have themselves enjoyed strong export prices, and are now being buoyed by growing domestic demand. russia, brazil, energy exporters, south africa and the southern american countries are also in this group. they are developing a much stronger geopolitical voice for the g - 20. the chinese and india stories exemplify this – not by any means a simple picture, but here are two economies with continued strong export demand, government building of infrastructure, and evolving domestic demand. these economies have strong connections to regional growth that will benefit new zealand indirectly over and above our direct trade exposure. other medium term implications look particularly interesting for new zealand. post - war evidence shows that as emerging markets develop significant middle classes, there is a commensurate increase in demand for protein, increasingly animal - based. that has been the pattern across a number of countries with different cultures in different geographies. many of these countries are limited in expanding their own food production, by lack of suitable land, lack of water, increasing climatic volatility, and high oil prices. a recent nomura report 2 argues that real food prices will need to rise significantly. new zealand is not a huge food producer ( not being among the top half dozen producers of any of the world ’ s key food product groups ). however our food exports ( as a % of gdp ) top the world, and we are the best placed in competitive terms in nomura ’ s food vulnerability index. food trade is volatile in

- site analysis of banks ’ performance but also in extensive on - site inspections to assess the soundness of banks now, allow me to share a few notes on the developments of supervision and regulation in mauritius. this year marks the 50th anniversary of the bank of mauritius. the enactment of the banking act 1971 together with attributes in the bank of mauritius act 1966 laid down the basic legal framework governing the operations of banks in the domestic financial system. the subsequent promulgation of the banking act 1988 set the basis for the development of a reputable offshore banking sector in mauritius. in this context, emphasis was laid on the supervisory responsibilities vested upon the bank, providing for mandatory trilateral meetings to be held with banks and their external auditors. after a few sporadic changes over the years, these two acts were completely overhauled and replaced with two pieces of legislations in november 2004, namely the bank of mauritius act 2004 and the banking act 2004. the independence of the bank of mauritius was reinforced, together with an added responsibility of ensuring the stability and soundness of the financial system of mauritius. the banking act 2004 eliminated the separation between domestic and offshore banking activities and provided for a single banking licence to cover both activities. in 2016, the functions of the bank were broadened with the added responsibility of regulating and supervising the locally incorporated, ultimate and immediate financial holding companies of banks and non - bank deposit taking institutions licensed by the bank. alive to the fact that the bank of mauritius act and the banking act still fall short of meeting the international standards for bank resolution and crisis management, the bank sought assistance from the international monetary fund to strengthen the legal frameworks in these areas. in the same vein, the bank opted for a review the bank of mauritius act 2004 and the banking act 2004 in line with international best practices imposed not only by the basel committee of banking supervision ( bcbs ) but also the financial stability board ( fsb ), the international association of deposit insurers ( iadi ), the organisation for economic co - operation and development ( oecd ) and the financial action task force ( fatf ). here, allow me to extend our deepest thanks to mr ravi mohan, who was instrumental in this endeavour and supported us throughout. we also have a couple of bills in the pipeline, notably, the deposit insurance scheme bill and the national payment systems bill, both of which aim at strengthening the stability and soundness of the financial sector. the bank of mauritius has already adopted the macro - pr