##ible capital projects than would have been the case before the fall in global oil prices. it is likely, therefore, that the pace of capital investment in oil production and the associated infrastructure will be slower than had been anticipated before the global oil price fall. the uncertainty about the future path of oil prices will also have implications for private investment decisions in the non oil sectors of the economy. oil revenues expand the national income of a country. an increase in national income raises demand for consumption and investment goods. the demand for traded consumption and investment goods can be met through higher imports, but the demand for non traded goods, such as most services and housing, can only be met from domestic production. hence to enable the economy to maintain internal balance, between supply and demand, the structure of production within the economy must shift in favour of industries which produce non traded goods. the larger is the increase in national income derived from oil revenues, the greater the shift in the structure of production from the traded goods sectors to the non traded goods sectors. to bring about this shift in the structure of the economy, there must be capital investment in the non traded sectors, together with a reduction of investment, or even disinvestment, in the traded goods sectors. this shift in the production structure of the economy is facilitated by an appreciation of the real exchange rate, entailing a rise in the prices of non traded goods relative to those of traded goods, thereby making non traded goods production more profitable and traded goods production less so. private investors have incentives to invest in the non traded goods sectors because they expect demand for non traded goods to increase in the future when the country begins to spend its oil revenue. the global price of oil has important consequences for national income. in essence the bulk of the national income derived from oil takes the form of public revenues, because the oil companies themselves are foreign. production sharing agreements in the oil industry are structured so that most of the risk of price volatility is borne by public revenues. a fall in global oil prices translates directly into a fall in public revenue and hence a fall in national income. consequently, the uncertainty about the level of future global oil prices also translates into uncertainty about the amount of national income that will be derived from oil and hence the magnitude of any future rise in demand for non traded goods in the ugandan economy. with future demand being more uncertain, private investors have incentives to delay irreversible investments in these sectors. this will not be offset by any

barry whiteside : fiji ’ s banking and licensing framework, its economy and outlook address by mr barry whiteside, governor of the reserve bank of fiji, at the soft launch of bred bank ( fiji ) limited, suva, 3 november 2012. * * * the deputy chairman of bred bank ( fiji ) limited, mr darryl constantin board directors chief executive officer, mr satish deb management and staff of bred bank ( fiji ) limited distinguished guests ladies and gentlemen introductory comments good morning, bonjour and bula vinaka to you all. i wish to thank satish for the kind invitation to officiate at this “ soft ” launch of bred bank ( fiji ) limited. this is indeed another milestone in the history of our financial system. today marks the entry of a new bank and, perhaps more significantly, not since bank of hawaii entered our financial system in 1993 have we had a bank start from “ scratch ” and be challenged to build its operations from the ground up. before i turn to some background information about bred bank i would like to make some general comments about banking and our licensing framework. banking & licensing entry into our banking system is quite deregulated. however, i must say that while anyone can apply to establish a bank in fiji, they must meet our fairly comprehensive licensing requirements, which play an integral role in ensuring we are dealing with reputable, tried and proven players. historically, we have had banks withdraw from the country for various reasons. some contend that this indicates that the country is sufficiently banked. the reserve bank of fiji, however, does not presently have a policy on limiting the number of players in the industry. we do like to ensure that those institutions that do come in are strong and have the appropriate backing to take them forward. may i add that the decision to commence full banking operations in a new jurisdiction is not a spur of the moment thing and is certainly not taken lightly. banking is a relatively difficult and complex business to establish. set up and operating costs are extremely high. just look around you and take a guess at how much has been spent on this fit - out. a new institution trying to position itself in an already competitive market must be prepared to do more to secure a share of that market. there are strenuous compliance requirements set by the regulators that must first be met before the business can even think of taking in the first deposit, or giving out the first loan. these compliance measures have been further strengthened since the global financial