open to debate, especially with junior staff. the fond memories he has left behind among colleagues show that, in the long run, it is this attitude that defines a leader's legacy. i would like to thank the organizers for putting together today's impressive programme. i would also like to thank the keynote speakers, the panellists, the moderator, and all of you for participating in this gathering of friends. professor maurice obstfeld and professor helene rey will talk about two issues that central banks have to deal with on a regular basis : the elusive neutral interest rate and monetary policy spillovers. andrew bailey, governor of the bank of england, agustin carstens, general manager of the bank for international settlements, and vitor constancio, former vice president of the ecb, know a lot about'hard times'and financial crises. professor beatrice weder di mauro has the challenging task of moderating their discussion. i look forward to hearing them all. at the risk of sounding provoking, i would like to conclude by re - quoting kierkegaard :'life can only be understood backwards, but it must be lived forwards.'my wish for ignazio today is that he will not only continue to look forward, but also to reflect on his experiences, and share his reflections with us and the cohorts of young economists – and potential central bankers – who will follow us. thank you. 3 / 3 bis - central bankers'speeches

##rated recently and this has spilled over and amongst others, impacted negatively on world trade volumes. domestic economy south africa continues to suffer from the aftermath of the tragic events that occurred recently. economic activity has slowed down sharply, particularly in the mining sector. the recent downgrade of the country ’ s sovereign credit rating, as well as increased uncertainty, may impact negatively on both fdi as well as investment by the household sector. bis central bankers ’ speeches the export performance of domestic companies continues to deteriorate. latest estimates by the sarb show that the country ’ s global exports have declined over the past 50 years. some of the factors contributing to this trend in recent times are : ( i ) the decline in the contribution of gold mining sector to growth and the decline in the role of gold globally ; ( ii ) binding constraints related to infrastructure bottlenecks ; ( iii ) skills shortages and mismatch ; ( iv ) the dominance of low - cost production bases which are export oriented in many emerging market economies ; and ( v ) sluggish growth in sa ’ s key trading partners. economic activity on the production side has changed noticeably when compared to the 1980s. the agriculture and mining ( primary ) sectors have shrunk since then and contribute less than 5 per cent to gdp. although the manufacturing sector has shrunk as well, it contributes roughly around 15 per cent. significant growth has emanated from the tertiary sector, with finance, insurance, real estate and the business services sector contributing around 21 per cent. government services have also aided economic activity in line with the countercyclical spending. on the expenditure side, growth has been largely driven by final demand – in particular consumption expenditure by households. consumption expenditure by general government, which has been driven by countercyclical fiscal policy, in particular on - going spending on the expanded public works programme, which is aimed at labour intensive infrastructure projects. however, under - spending by national, provincial and local governments continued to subtract from growth in capital formation, in particular social infrastructure. at some level, albeit at non - spectacular growth rates, all of these factors have helped with dealing with the cyclical aspect of unemployment, although since the beginning of the most recent recession, the unemployment rate has risen and hovers above 25 per cent. in the period 2004 to 2007, the average annual growth rate was well above 4 per cent and unemployment reached a record low level of 21 per cent. this is an indication that sustained elevated