electricity and roads, or the rule of law. in the western world, job security has diminished, not just for blue - collar workers. these days, services in ict and other high - tech sectors are offshored to low - income countries. but the number of offshored jobs is still very modest compared to the total number of jobs lost and created. in the netherlands, roughly 9. 000 jobs are offshored each year, whereas the annual number of job destruction and creation is above 800. 000. 4 since the ict revolution is skill - biased, it favours highover low - skilled labour. fortunately, higher income inequality between high - and low - skilled workers does not necessarily imply that low - skilled workers are worse off. the imf has shown that recent trends have increased the size of the pie. cheaper inputs have lifted output and overall labour compensation by about 6 % in real terms in advanced economies over the last 25 years. 5 and all consumers benefit from lower prices. to keep labour market effects in check, employability is a key policy issue. flexible employees can adapt to new circumstances that technology brings about. governments can offer a helping hand by improving education, and by providing a social security system that encourages people to move from one job to another. in some countries, social security schemes may be so generous that they deter efforts to seek new employment. but the slogan “ the lower, the better ” goes much too far. in latin america, for instance, social security schemes alleviate income inequality. if the benefits of economic growth are widely shared, support for economic reform can be expected to be broader than otherwise. monetary policy the challenge for monetary policy is to adapt to the new environment. fortunately, central banks have much more room for manoeuvre now than they had when arthur burns was appointed as fed chairman by president richard nixon back in 1970 with the words : [ quote ] “ i respect his independence ; however, i hope that independently he will conclude that my views are the ones that should be followed ” [ unquote ]. also downward pressure on inflation by cheap imports from low - income countries has made central bankers ’ life in the western world a bit easier than in the past. prices for clothes and big ticket items such as cars and personal computers have declined. computers became a lot cheaper if one takes into account quality improvements. the overall downward pressure on inflation has allowed for lower monetary policy interest rates, at least in the short term. in the longer term, the real

function entirely without problems. at times, there has also been considerable criticism of the players on the international financial arena. although this may sometimes be warranted, unfortunately it all too often stems from the opinion that financial operations are a bad thing. i have therefore tried to describe today the tasks carried out by the financial system in society. these not only make our daily life easier, but also provide a crucial contribution to economic development. it is therefore important that our solutions to the problems we see in the financial system do not destroy these welfare - creating mechanisms, but instead contribute to reinforcing them. for the same reason, it is important that countries pursue a good domestic economic policy. sound government finances and sustainable price stability, combined with structural reforms that increase the flexibility of the economy, will reduce fluctuations in exchange rates and capital flows and thus increase the financial markets'capacity to contribute to the development of the economy. thank you.