, agriculture and law and order. however, with revenue forecasted to be lower than expected, this would put pressure on the government to access these funds to maintain recurrent expenditure levels. this concern was raised at the recent png economic update forum series in port moresby. the majority of our people still live in their villages, relying on subsistence farming and fishing and using the cash economy whenever the need arises. they also benefit from their extended family ties through the “ wantok ” ( care for extended family ) system. fortunately, they are least affected by the workings of the government and its agencies, much less by the global financial crisis. our own challenges in the central bank in relation to poverty alleviation involve the issues of financial inclusions and financial literacy. how do we get the vast majority of our people outside our financial system to participate fully within the system and benefit from the economic growth? over the years, we have revitalized the savings and loan society movement, closing down dormant societies, improving on training for their staff and increasing supervision on their activities. we have also licensed two microfinance institutions to complement the activities of the commercial banks and other financial institutions. the savings and loan societies and microfinance companies are aimed at assisting low income earners and entrepreneurs to do businesses, improve their lifestyles and should assist in alleviating poverty. how can we ensure our people are financially literate so that they can make informed financial decisions as well as notice unscrupulous deals when they see one? financial education and literacy programmes by the government sector, private sector and non - government organizations are important. financial literacy programmes lead to financial inclusion which improves the lifestyles or economic conditions of those engaged in it and help reduce poverty. however, to work effectively, both these two activities would have to be undertaken together, that is, microfinance development together with financial literacy. the on - going financial global crisis shows the importance of dealing with these issues, even in the industrialized countries. the current global financial crisis is a concern. some say it is the worse economic crisis since the great depression of the 1930s. if so, it presents a challenge to all of us here today. to those of us involved in the economic management of the country, as well as the technocrats, the politicians, the business community and civil society. we all have a part to play in ensuring that any adverse impact of the crisis is eliminated or minimize, especially on the most vulnerable members of our

l wilson kamit : tackling extreme poverty in papua new guinea address by mr l wilson kamit, cbe, governor of the bank of papua new guinea, to the lowy institute for international policy conference on “ tackling extreme poverty in papua new guinea ”, sydney, 14 may 2009. * * * distinguished guests, ladies and gentlemen may i firstly thank the organizers of this conference, namely the lowy institute for international policy, care australia and the australian national university for the invitation to address this conference on tackling extreme poverty in png. it is not very often that governors of central banks are asked to comment on social issues or microeconomic matters. we tend to look at the macroeconomic level. given the global financial crisis and its adverse effects that are being felt right across the globe, i am pleasantly surprised at the invitation to this conference. recently, i have been asked to address different audiences on this subject at home and abroad. i was asked to comment on the impact of the current global financial crisis on the png economy and its impact on poverty. i have some comments to make on the first part, which is the likely impact of the global financial crisis on png. i must however confess that there are others gathered here today who are better placed to comment on the second part of our discussions on the impact on poverty. i will therefore restrict myself to making some general remarks. ladies and gentlemen, much has been said and written about the causes of the current global financial crisis and its effects around the globe. i will therefore not dwell on them. the maxim that “ no nation is an island ” is never more so true than now, where all countries, developed and developing, if they have not been so far, will be affected in one way or another by this crisis. development through globalisation, international trade and global finance has meant that we, in png, will also be affected by activities and events taking place far away in the major financial centres and industrialized countries. as a small, open economy, png is a price taker for our exports and is vulnerable to the global economic and financial conditions. given this, the question for us, therefore, is in what ways is png likely to be affected by this financial crisis. we are, to an extent, fortunate in png in that our banking system is shielded from the immediate effects of the crisis. our banks and financial institutions are engaged in the traditional financial activities of raising funds from depositors and