as the appropriate instrument for the objective of improving financial inclusion in the country. in the last 10 years or so, there has been a strong interest in the area of financial literacy and there have been initiatives taken in government and private sectors to improve it in many countries, particularly high income countries. currently, the bank is overseeing a world bank led research project to measure financial capability in selected communities in the country. png is one of the 8 countries participating in the project. the project will identify the levels and deficiencies of financial capability in png, out of which authorities such as the bank of png can come up with policy measures to address and improve financial literacy of the people to in turn improve their financial capability. similar research is being done in fiji and solomon islands. this research initiative and the country's participation together with the institute of national affairs ( ina ) as the local consultant fits in well with the initiatives undertaken in the south pacific region, specifically the coombs declaration ( 2008 ) made by the pacific finance, central bank governors and senior officials from the pacific and timor - leste, 2 / 4 bis - central bankers'speeches that proposes a regional umbrella - moneypacific and the related pacific financial inclusion program - that will address the issue of financial inclusion and capability across pacific communities. measures must be taken to encourage and harness the potential that the informal sector has in saving and investment to increase the inclusion of the people and improve their financial literacy and encourage responsible financial practices, and discourage the practice of informal sector lending. increased savings and investments in the informal economy will contribute positively to economic activity and growth of the whole economy. indeed there are evidences and experiences of high income countries having a positive correlation between the level of financial inclusion, literacy and ( capability of people in handling and managing money ) and economic activity and growth, and income. so we have to keep on striving hard to improve financial inclusion and financial literacy in png. in the literature on the subject of financial capability and financial literacy, providing financial education is seen as the key intervention that reduces ignorance and improves outcomes. beside the initiatives mentioned above, the bank is looking at the regulatory environment for mobile phone banking and has carried out a review of the national payments system with a view to reform the current payments system, with enabling legislation, to improve efficiency with respect to timely clearing of transactions, reduction in costs and risks, within png and with the rest of the world. distinguished guests, ladies and gentlemen i have

benny b m popoitai : the national informal economy policy speech by mr benny b m popoitai, acting governor of the bank of papua new guinea, at the launch of the national informal economy policy, port moresby, 24 february 2011. * * * acknowledgement honourable dame carol kidu, minister for community development mr. joseph klapat, secretary, department of community development, and your staff mr. max kep, chairman, informal economy committee, and your members mr. paul barker, director of institute of national affairs, and your staff the consultative, implementation and monitoring council distinguished guests ladies and gentlemen introduction the bank of png as the central bank of the country is pleased to have been invited to participate in this occasion - the launching of the national informal economic policy. the governor, mr. loi bakani, has to attend to an obligatory engagement with one of our international partners so he passes his sincere apology. the acting governor, mr. benny popoitai, has fallen ill and is not able to make it for the launching, and he also passes his sincere apology. i stand in to present this speech on his behalf. what the occasion is for and the role of the central bank the informal economy has the vast majority of the population, who does not have access to many normal services and therefore are hindered from taking part in economic activities. greater participation by the mass of the country's population in the development process is long recognized through the national constitution with : the preamble to the constitution calling for " development to take place primarily through the use of png forms of social and political organization " and for economic development to give special emphasis to " small - scale artisan, service and business activity " ; and also through one of the eight point plan aims adopted upon the attainment of independence calling for " greater and equal participation of the people " and for " equal distribution of wealth ". it is further recognized in the government's 2050 vision launched in 2009, specifically in the wealth creation pillar that states " a concerted effort is required to empower citizens to create wealth from our vast renewable natural resources and through the development of entrepreneurial skills to ensure that the nation's wealth is fairly distributed to the majority of the people. " this occasion - the launching of the informal economy policy formalizes a necessary and a pre - requisite step - of having a policy statement that supports the informal sector development and control act ( 2004 ) and