improvement has been made in the cheque processing infrastructure, cheque remains an expensive payment instrument to process at about rm3 per cheque. the total cost is even higher when we take into account the cost incurred by the payer and payee in delivering and depositing cheques. it is estimated that cheque processing cost malaysia about rm768 million5 per year. this amount is huge and a sheer wastage. correcting distortion between paper - based and electronic payments despite the cost incurred in processing cheques, cheques have not been priced directly to reflect its costs except for the stamp duty of 15 sen per cheque. on the contrary, electronic payment services such as the interbank giro ( ibg ) are priced above cost at about rm2 per transaction. such price distortion does not incentivize the adoption of the more efficient electronic payments on a mass scale. in advanced countries such as australia, norway and sweden, electronic payment services are priced lower than cheques consistent with their respective cost of production. the correct price signals that reflect the real cost of cheques and electronic payments had facilitated a broad shift from the use of cheques to the use of electronic payments. we need to correct this price distortion between cheques and electronic payment services, bank negara malaysia has announced a new pricing strategy for payment services in march this year where the price of ibg and cheques are aligned closer to their cost of production. with effect from 2 may 2013, the transaction fee for ibg conducted via internet and mobile banking was reduced to 10 sen from rm2 previously. in addition, a cheque processing fee of 50 sen per cheque leaf will be imposed 11 months later on 1 april 2014. norway, sweden, denmark, finland. rm636 million ( banks ) + rm19 million ( myclear ) + rm113 million ( businesses ). rm113 million for businesses was computed based on the ecb study that businesses incur a cost amounting to 0. 012 % of gdp. bis central bankers ’ speeches the 11 - month grace period before the implementation of the cheque processing fee is intended to afford both the public and the businesses ample time to familiarize with, adjust and migrate to using electronic payments such as the ibg for their payment transactions. improving accessibility, security and convenience of electronic payments based on a recent survey conducted on businesses, we have identified 4 key hindrances to the adoption of electronic payments, namely : • concern of

inia naiyaga : engineers ’ role in economic growth and financial stability speech by mr inia naiyaga, deputy governor of the reserve bank of fiji, at the fiji institute of engineers ’ ( fie ) workshop, suva, 2 june 2011. * * * welcome the president, mr pratarp singh and members of the fiji institute of engineers ; distinguished speakers ; distinguished guests ; ladies and gentlemen ; introduction my presentation this morning is “ engineers ’ role in economic growth and financial stability ”. let me begin with the outline of my presentation. firstly, i will look at the recent developments in the international and domestic economy followed by the contribution of the building and construction industry to the fiji economy. i will also elaborate on the economic costs arising from natural disasters and the importance of the national building code to fiji and the way forward. global economy developments in the world economy remain promising. although the world gdp growth forecast was unchanged in april, conditions remain significantly varied across major regions of the world. while the recovery in the us economy is showing signs of slowing, growth in most of asia remains strong. however, the outturn in asia is still below the rapid pace experienced in the earlier recovery, with the exception of japan where earthquake - related damage is having a significant effect on economic activity. at the same time, growth in other emerging markets and transition economies has been encouraging. however, uncertainties linger on the horizon. global risks prevail in terms of rising unemployment and inflation, and even though global food prices were unchanged in april this year – they are still higher by 36 percent when compared with the same period last year. furthermore, global imbalances are anticipated to widen further if overheating in asia worsens. domestic economy domestically, the performance of the economy last year was supported by the improved global economic recovery. in 2010, fiji ’ s economy is estimated to have grown marginally by 0. 6 percent driven by the positive performance of the manufacturing, hotels and restaurants, mining, financial intermediation and services, and real estate sectors. this year, aggregate growth is expected to be 2. 7 percent. growth is predicted to be broad based in 2011 with the only decline ( marginal ) expected in the construction sector. most sectors of the economy ( like tourism and mining ) are expected to maintain their 2010 momentum into this year. additionally, the sugar sector is forecast to increase production this year given the reforms currently undertaken within the industry. bis central bankers ’ speeches looking forward