years ago the technical version of the 20 - 20 vision document, into the 3rd millennium, 1 referred to the past decades, as a story of unmitigated success. then we put in a note of caution : “ but peel away the layers of this remarkable success and there are immense challenges ahead to be overcome if growth is to be achieved and sustained … ” how right we were to sound the early warning! sustainable development is not easy ; it really is post - graduate philosophy, politics and economics, especially for a small island developing state. i have been a lifelong socialist with a strong affinity to the gini - coefficient. a long way back socialists thought that making a profit was a vice : whereas the real vice, in the pursuit of sustainable development, is making a loss, especially a loss of capital and of natural resources. in 1989 the world bank referred to mauritius as a “ miracle of development ” : the worry now is that the genie has retired back into the bottle, and in the meantime we seem to have forgotten the trick of rubbing. ministry of economic planning and development ( 2000 ) into the 3rd millennium, government of mauritius. i am encouraged therefore to see that youth is on our side. for i observe that the number of mauritian students registered in tertiary education has increased from the year 2005 to 2006 by 15 %. with a gross enrolment rate of nearly 20 %. to keep pace with our competitors the target for the enrolment rate is to exceed 30 %. that is the benchmark already achieved by our competitor countries. the overall increase in students in the finance sector in the year was 14 %, which broadly matched the general increase of 15 % in total tertiary students. but in banking the increase in registered students in the year was 32 %, double the general trend. i hope they all have their sights on our jobs. we must ensure the banking doors are open wide to the best of them. we together as a sector must eagerly respond to their commitment. we must see more and more careers open to merit. high performance must bring financial rewards and accelerated advancement. we need to cherish the vigour and ideas of each new generation. we must no longer overwhelm the vitality of youth with stifling traditional procedure - based management. a key to our very sustained survival in the next four decades is working with the lighter feet of youth. rapid response is not only relevant to survival from marine tsunamis. i have to say i am

to assume that a total net inflow of capital in excess of the projected current account deficit will add some amount to the official foreign exchange reserves during the course of this year. if these assumptions prove to be correct, the exchange rate of the rand, measured against the basket, should be more stable this year than the experience of last year. such a balance of payments situation will also reduce pressure on monetary policy and will contribute to easier domestic financial conditions. 3. monetary policy and the domestic financial situation in a more stable macroeconomic situation with better equilibrium in the balance of payments, monetary policy can be aimed more directly at influencing developments in the more important domestic financial aggregates. in a statement issued last friday, the reserve bank indicated that the rate of increase in the m3 money supply should not exceed 10 per cent in 1997. this will provide for real growth in the economy at a rate of between 2 and 3 per cent, and inflation at a level well below 10 per cent. the reserve bank is concerned about the rising trend in inflation that gained substantial momentum during the course of 1996. the average rate of inflation for last year was 7. 4 per cent, being the lowest rate of inflation south africa had since 1972. the annual figure disguises the fact however, that inflation reached a lower turning point of 5. 5 per cent in april 1996, and has since then risen to a level of 9. 4 per cent in december 1996 and also in january 1997. in the fourth quarter of last year, the quarter - to - quarter seasonally adjusted annualised rate of inflation was as high as 12. 7 per cent. the escalation in inflation was caused mainly by the depreciation of the rand, by sharp rises in food prices, by rising interest rates and also by a rise in the unit labour costs per unit of production. in this situation, however, it is imperative that the rate of increase in the money supply will be constrained, which requires a meaningful slow - down in the rate of increase in bank credit extension. last year, the m3 money supply rose by 13. 6 per cent, and total bank credit extended to the private sector by 16. 1 per cent. if we want to make sure that the current trends in inflation will not be perpetuated, we must make sure that increases in the money supply will not automatically accommodate rising prices, or even further stimulate the inflationary pressures that are emerging from other sources. the most recent developments in the financial situation therefore do not