rundheersing bheenick : fostering africa ’ s growth in the new reality – from vision to action address by mr rundheersing bheenick, governor of the bank of mauritius, at the opening plenary of the swift africa regional conference, balaclava, 30 may 2011. * * * it is a pleasure to be here this morning and to address you at the opening plenary of the swift africa regional conference. let me add my own words of welcome to the foreign delegates, especially those visiting our country for the first time. i have no doubt that you will be joining the ranks of satisfied repeat visitors as you discover for yourself how right one of our earliest publicists was when he claimed boldly that heaven was copied after mauritius. the name of the publicist? a certain mark twain. he may have been exaggerating – but just a wee bit! i thank swift for giving me the opportunity to share with you some thoughts on the theme of “ fostering africa ’ s growth in the new reality – from vision to action ”. i shall focus on the need to strengthen financial market infrastructure ( fmi ) in our region. fmis play a key role in promoting financial stability and economic growth. when financial markets get the jitters, the world economy grinds to a halt, as we have just painfully re - learnt. it is difficult to think of a more appropriate topic for a gathering such as this at a time when we have all become acutely aware of the importance of strong financial markets for economic prosperity. it is true that much progress has been made in strengthening fmi in africa ; it is equally true that much remains to be done as african financial systems are still lagging behind and are weakly integrated with the global financial system. as policymakers in advanced economies direct their efforts towards global reforms for a more robust global financial system, it may be a suitable time for some fmi initiatives in the african region. first, let me briefly recapitulate the scope of swift ’ s activities and operations in the global fmi, just to give the uninitiated some idea of its systemic importance and explain why regulators take such a close interest in swift. a few metrics will suffice to give you an indication of the criticality of swift to the operation, safety and soundness of the global financial system. since it was set up in the mid - 1970 ’ s, swift has rapidly become an indispensable element of

a disturbance in one market segment or one country is likely to be transmitted far more rapidly throughout the world economy than was evident in previous eras. in earlier generations information moved slowly, constrained by the primitive state of communications. financial crises in the early nineteenth century, for example, particularly those associated with the napoleonic wars, were often related to military and other events in faraway places. an investor ’ s speculative position could be wiped out by a military setback, and he might not even know about it for days or even weeks, which, from the perspective of central banking today, might be considered bliss. as the nineteenth century unfolded, communications speeded up. by the turn of the century events moved more rapidly, but their speed was at most a crawl by the standard of today ’ s financial markets. the environment now facing the world ’ s central banks - - and, of course, private participants in financial markets as well - - is characterized by instant communication. this morning i should like to take a few minutes to trace the roots of this extraordinary expansion of global finance, endeavor to assess its benefits and risks, and suggest some avenues that can usefully be explored in order to contain some of its potentially adverse consequences. a global financial system, of course, is not an end in itself. it is the institutional structure that has been developed over the centuries to facilitate the production of goods and services. accordingly, we can better understand the evolution of today ’ s burgeoning global financial markets by parsing the extraordinary changes that have emerged, in the past century or more, in what we conventionally call the real side of economies : the production of goods and services. the same technological forces currently driving finance were first evident in the production process and have had a profound effect on what we produce, how we produce it, and how it is financed. technological change or, more generally, ideas have significantly altered the nature of output so that it has become increasingly conceptual and less physical. a much smaller proportion of the measured real gross domestic product constitutes physical bulk today than in past generations. the increasing substitution of concepts for physical effort in the creation of economic value also has affected how we produce that economic output ; computer - assisted design systems, machine tools, and inventory control systems provide examples. offices are now routinely outfitted with high - speed information - processing technology. because the accretion of knowledge is, with rare exceptions, irreversible, this trend almost surely will continue into the twenty - first century