shifted from the jse to the bond exchange of south africa. this led to a substantial rise in the turnover in the secondary bond market from r2 trillion in 1995 to nearly r12 trillion in 2003. improvements to the jse included the electronic clearing and rolling contractual settlement, the dematerialisation of equity scrip and the implementation of an electronic trading system. the value of shares traded on the jse increased from r62 billion in 1994 to r752 billion in 2003. seventhly, the normalisation of relations with the rest of the world made it unnecessary to follow restrictive fiscal and monetary policies to maintain a surplus on the current account of south africa ’ s balance of payments and created a leeway for the promotion of economic growth. in the past ten years a deficit was therefore recorded on the current account, but this deficit as a ratio of gross domestic product remained low and averaged only 1 per cent per year. over the same period there was a net financial inflow recorded from the rest of the world amounting to nearly r204 billion, compared with the net financial outflow of about r45 billion from 1985 to 1993. as a result, the level of foreign investment in south africa amounted to r736 billion at the end of 2002. this is a very significant post - apartheid dividend for country. south africa ’ s real economic growth doubled from an average annual rate of 1½ per cent during the 1980s to about 3 per cent between 1994 and 2003. in addition, the average growth in real gross national income per capita, an indicator of living standards, improved from a negative figure of 1, 1 per cent per annum during the 1980s to a positive figure of 0, 8 per cent between 1994 and 2003. moreover, between 2000 and 2003 the average growth in real gross national income per capita amounted to about 1, 5 per cent. the big challenge is to further increase the growth performance of the domestic economy. the foundation has been laid over the past ten years to make this achievable. to make life better for all our people. so we can indeed claim, without fear of contradiction that the post - 1994 period has seen some remarkable improvements in the macroeconomic and financial position of our country. a good foundation has been laid. greater efforts have now to be directed at micro - economic reforms and job creation as the president has directed. my own personal journey has been a momentous one. in 1980, as a twenty one - year - old kid,

the demand side - aiming to keep the growth in aggregate demand more or less continuously in line with the underlying, sustainable growth in the supply - side capacity of the economy. i probably need not remind an industrial audience what happens if we get it wrong and let demand run ahead of supply. the inevitable result is accelerating inflation, with all the damage that can cause - by distorting the outcome of investment decisions and obscuring the relative price signals that direct resource allocation. in the end we know that demand has to be brought back under control. the choice typically is not whether or not to tighten policy but whether to tighten sooner or later ; and there is a strong presumption that by tightening sooner - before excess demand really takes hold - we will need to tighten less - to moderate the pace of growth of demand rather than bring it to a shuddering halt or even send it in reverse. too often in the past the mistake has been to tighten policy too little and too late, contributing to an exaggerated, boom and bust, economic cycle and thereby encouraging an unduly short - term approach to both financial and physical investment. so in trying to maintain effective price stability, in trying consistently to achieve the government ’ s inflation target, of 2½ % for underlying retail price inflation, what we are really trying to do is to achieve economic stability in the much wider sense of ensuring that aggregate demand grows in line with our productive potential. if we are successful in that, then the financial and business communities will become more confident of making longer - term decisions, and in that way we can contribute indirectly to improving the underlying supply - side of the economy. this objective is now very widely understood and accepted. but it is, of course, much more easily said than done. since the recession of the early 1990s we have in fact been reasonably successful in maintaining this broader economic stability in this country. inflation has been brought down to, and maintained at, the lowest rate we have seen in a generation ; but, even more important, we have also seen relatively steady growth over this period and a sustained and very welcome fall in unemployment. but it has to be recognised that the going is now becoming more difficult, for two main reasons. the first is that we began the present period of expansion in 1992 with a good deal of slack, or spare capacity, in the economy - following the recession - and that slack has now been more or less reabsorbed. in the past year, in particular, the pace