in central banking and financial management for its own staff and officials of other central banks in the sadc region. * there is also a more ambitious training programme provided through the macroeconomic and financial management institute ( mefmi ), with its headquarters in harare. the objective of mefmi is to assist governments ( treasuries ) and central banks to develop internal capacity for macroeconomic management ; * the development of the quality of, and capacity for, proper bank regulation and supervision. some harmonisation is encouraged on policies such as bank licensing, minimum prudential financial requirements, and regular auditing of banking institutions. a joint effort is also being made to take the necessary steps against illegal banking activities in the region, such as money laundering and pyramid schemes. * the forum for closer co - operation amongst the central banks of the region has now been firmly established. the work of the committee, apart from consolidating the projects so far undertaken, will now be extended to the level of the private banking sector, and of the development of financial and capital markets in the common interest of the region as a whole. 3. economic challenges for south africa south africa now finds itself in the challenging situation that, in one direction, its financial markets are rapidly being integrated in the global financial system, and in the other direction it is becoming more and more part of the difficult process of supporting and stimulating economic development in the southern african region. at the same time, daunting problems still remain unsolved in the internal economy of the country. the new government has had remarkable success over the past few years in the implementation of disciplined fiscal and monetary policies, and has gained confidence from investors and business people in its determination to apply sound economic policies in general. little progress, however, has been made in solving one of the most urgent problems of the south african economy, and that is to create sufficient jobs for the growing population. total employment in the country is now hardly more than what it was at the beginning of the nineties. south africa ’ s economic policies must, at this stage, maintain good balance between the process of globalisation, the satisfaction of the dire basic needs of the domestic population, and the desire to assist in the economic development of the region. in a holistic approach, these various objectives are not in conflict with each other, but are in many respects supplementary. successful participation in the global financial markets will lead to a larger inflow of foreign investment capital into south africa

mr. stals looks at the future of financial co - operation in southern africa speech by the governor of the south african reserve bank, dr. chris stals, at a conference on southern africa : resources, investment and trade, arranged by forum southern africa limited in london on 10 / 7 / 97. 1. the reintegration of south africa in the world economy good progress has been made over the past four years with the reintegration of south africa in the world economy. the political and social changes introduced in south africa paved the way for the removal of international economic punitive actions that partly isolated the country ’ s economy from the rest of the world during the ten years preceding the fully democratic election of a government of national unity in april 1994. even before the election took place, the rest of the world gave its support to the moves towards democracy by lifting sanctions, boycotts, disinvestment campaigns and trade restrictions. since 1994, the following major changes took place in south africa ’ s international economic relations : ( i ) south africa became a full participating member again in various multinational institutions such as the world bank, the international monetary fund, the united nations and the african development bank. ( ii ) agreements were entered into with the world trade organisation for a substantial revision over a five year period in the protective import tariff structure, and certain discriminatory export subsidies were removed. ( iii ) exchange controls were substantially relaxed to introduce full convertibility for current account transactions, to remove all exchange controls applicable to non - residents and gradually to lift the remaining exchange controls applicable to the outward investment of capital by south african residents. ( iv ) an extensive liberalisation programme of the south african financial markets included major changes in the capital market, e. g. to allow for foreign and corporate ownership of stock broking members of the johannesburg stock exchange, and the opening up of the south african banking sector for foreign competition. there are now 17 foreign banks with branches and subsidiaries in south africa, and about 60 foreign banks with representative offices. ( v ) a number of new bilateral, regional and international economic co - operation agreements were entered into, such as the southern african development community ( sadc ) and the arrangements with the european union for closer economic co - operation. these changes have had a material effect on south africa ’ s international economic relations and are reflected in a very visible way in the south african balance of payments. over the three years 1991 to 1993, the current account of the balance of payments