macroeconomy, creating a cycle of resource led booms and slumps. the export of natural resources and the spending of the revenues thus generated in the domestic economy can also cause real exchange rate appreciation, which damages the competitiveness of the non resource traded goods sectors of the economy, such as agriculture and manufacturing ; this is a phenomenon called “ dutch disease ”. avoiding the pitfalls of natural resource dependency – the so called “ resource curse ” – is only possible with sound economic policies and good economic governance, a subject i will return to shortly. the eac is now implementing the second stage of its regional economic integration project ; the common market which will allow for trade in services within the eac, including the right of establishment of firms in the service sectors, and the free movement of capital and labour. the eac customs union has already yielded major benefits for uganda. uganda ’ s exports to our eac partner states have risen from only $ 68 million in 2001 / 02 to $ 676 million in 2011 / 12. intra - eac exports now comprise 25 percent of uganda ’ s total exports, compared to 14 percent 10 years ago. regional economic integration can help to accelerate uganda ’ s transition to an efficiency driven economy in several ways. first, it will expand the size of the market for domestic firms, allowing them to realise economies of scale and become more efficient. in terms of value, the combined gdp of the eac partner states is the equivalent of nearly $ 90 billion, which is four times the size of the ugandan economy alone. secondly, it will strengthen competitive pressures in the national market, by exposing domestic firms to greater competition from firms from other eac partner states. competition provides the best incentive for firms to increase their productivity. thirdly, regional integration will provide a stepping stone for industries which are not yet competitive globally to begin exporting, and thus stimulate the improvements in productivity which will eventually enable them to compete on global markets. this is likely to be especially important for the domestic food sector, which could produce substantial surpluses for export. in turn, the opportunity to sell on regional export markets will give farmers in uganda incentives to focus on production for the market and to produce higher value bis central bankers ’ speeches products. finally, cooperation at the regional level is necessary to develop the infrastructure to support growth in the region ’ s economies ; for example road and rail links from landlocked countries to the coast. this will be particularly important for the development of the

the federal council ’ s concerns. a feeling of disquiet about the existing financial system is not enough reason for a radical overhaul. it is also difficult to predict what impact such an experiment would have on switzerland as a business location. moreover, the snb ’ s independence would be undermined if we had to distribute new money directly to the state or to private households. the snb would become a political football and the fulfilment of our mandate would be hampered. conclusion let me conclude : the discontinuation of the minimum exchange rate did not plunge switzerland into recession as many had feared. the economy actually grew slightly in 2015, despite appreciation of the swiss franc and a hesitant recovery in the international economy. the main reason for this growth is that swiss companies and employees actively exploited optimisation potential and showed great flexibility. the snb ’ s expansionary monetary policy contributed to the depreciation of the swiss franc over the course of the year and thus also supported the economy. inflation is currently negative, due to the appreciation of the swiss franc following the discontinuation of the minimum exchange rate and to the reduction in commodity prices. we expect it to return to positive territory in 2017. we will keep our options open should other measures be necessary to fulfil our mandate. but, as always with monetary policy decisions, we need to carefully weigh up the pros and cons to serve the interests of the country as a whole. in the wake of the financial crisis and the use of unconventional measures, central banks have become the focus of intense public interest. various reform proposals are being discussed and we welcome these public debates. new ideas need to be seriously considered and evaluated. the intentions behind the sovereign wealth fund and sovereign money projects are commendable. but, on closer examination, the drawbacks outweigh the benefits in both cases. finally, on behalf too of my colleagues in the governing board, fritz zurbrugg and andrea maechler, i would like to take this opportunity to thank our employees for their hard work and dedication. we would also like to thank our shareholders for their solidarity with the snb and for their loyal support. last but not least, a thank you also to our young guests from the kantonsschule olten and the centro professionale commerciale lugano for showing an interest in monetary policy and the snb. thank you all for your attention. bis central bankers ’ speeches