emmanuel tumusiime - mutebile : enhancing an enabling environment for the diaspora to invest beyond remittances in uganda ’ s social - economic transformation speech by mr emmanuel tumusiime - mutebile, governor of the bank of uganda, at the biennial ambassadors ’ conference, kampala, 7 january 2014. * * * your excellencies the ambassadors ladies and gentlemen i would like to thank the ministry of foreign affairs for inviting me to give this talk on enhancing an enabling environment for the diaspora to invest beyond remittances in the quest for uganda ’ s social - economic transformation. allow me to first highlight a couple of key economic facts on uganda. uganda has made considerable progress in the past quarter century on many fronts, including raising people ’ s average incomes and diversifying sources of growth from agriculture. for example, between 1988 and 2012 uganda ’ s economic growth averaged 7 percent ; industry value added as a percentage of gdp increased from 10. 2 percent to 25. 4 percent ; the share of value added in agriculture as a percentage of gdp decreased from 56. 7 percent to 23. 4 percent ; value added in services as a percentage of gdp rose from 33. 1 percent to 51. 2 percent. other socioeconomic indicators include literacy rate ( percentage of people ages 15 and above ) rose from 56 percent in 1991 to 73. 2 percent in 2010 ; percentage of population in the urban areas increased from 9. 9 percent in 1988 to 16 percent in 2012 ; life expectancy at birth rose from 48 years in 1988 to 58 years in 2011. uganda ’ s economic growth was almost twice the sub - saharan africa ( ssa ) average of 3. 6 percent between 1988 and 2012. moreover, uganda achieved high growth with low inflation. with exception of 2011 / 12, inflation averaged about 7. 4 percent between 1993 and 2013, below the ssa average of 7. 8 percent between 1993 and 2012. therefore, uganda ’ s socio - economic indicators, characterise uganda as a country that has undergone tremendous change over last quarter century. more importantly, the process has resulted in the dramatic fall in poverty and improved the living conditions of the ugandan people. this trend is reflected in the reduction of head count poverty ; from poverty headcount ratio at national poverty line of 56 percent in 1992 to 24. 5 percent in 2009, and from 68. 7 percent of the population living on less than $ 1. 25 a day at 2005 international prices in 1989 to 38 percent

that should be taken into account when developing macroprudential frameworks for ccps. first, we should not try to apply blindly to ccps the macroprudential tools we have developed for the banking sector. unlike banks, whose social function is to transform risk and maturity, ccps are not in the business of taking risk directly but of pooling risk. see adrian, t., and shin, h. s., “ liquidity and financial contagion ”, financial stability review, banque de france, february 2008. see cœure, b., “ the known unknowns of central clearing, ” speech at the meeting on the global economy and financial system hosted by the university of chicago booth school of business initiative on global markets, coral gables, 29 march 2014. see committee on payments and settlement systems and technical committee of the international organization of securities commissions, “ principles for financial market infrastructures ”, april 2012, http : / / www. bis. org / cpmi / publ / d101a. pdf. bis central bankers ’ speeches therefore, we do not want to regulate them primarily as risk takers. instead, our aim is to control the way they propagate risk, including in particular the way they allocate losses in case of a participant ’ s default. second, while the microprudential and macroprudential approaches have different perspectives, they may in practice rely on some of the same tools to reach their objectives. a macroprudential approach to ccps should also involve elements of sound microprudential risk management, as both can be tightly interlinked. bearing this in mind, allow me to lay out five elements of the macroprudential approach to ccps which are being developed and implemented at cpmi - iosco level. first, we are currently working towards establishing a set of criteria to identify ccps that are systemically relevant in more than one jurisdiction. this is an important issue given that the pfmi require ccps with cross - border relevance or with a more complex risk profile to apply more stringent risk mitigation standards – in particular a “ cover 2 ” requirement for calibrating their stress testing and for sizing their financial resources. providing authorities with a consistent framework for assessing systemic relevance is the starting point of any macroprudential approach. second, we want to ensure that the financial buffers built up by ccps in good times are highly robust