a swf for the future while consuming only a part of it. under this strategy the effects of the dutch disease can be minimized. this fiscal strategy will also make it easier for the management of monetary policy in addressing inflationary concerns. this is in contrast to spending more than it receives or spending all that it gets where the effects of the dutch disease will be exacerbated. some sectors such as building and construction, transportation, manufacturing and services will benefit from the project, especially in the short run during the construction phase. while others will not, particularly the traditional agricultural exports sector as it will be adversely affected by the dutch disease effect ( due to appreciation of kina exchange rate ). let me emphasize that these findings are based on preliminary information and data, and they can be updated once all the information and the data will be provided by the project developers. so the bank of papua new guinea will have to assess the developments and take the necessary steps to ensure that inflation is not getting out of control. the system used to fund projects will assist in containing some of the inflationary pressures. the major developers or engineering, procurement and construction ( epc ) contractors use off - shore finance to fund the project. we expect most of these financing transactions to be undertaken between offshore accounts as allowed for under the 2008 exemption regulation, where they are exempted from seeking approval from bpng for opening of foreign currency accounts offshore. but other sub - contractors will still be required under the central banking ( gold & foreign exchange ) act to submit their requirements to the bank of papua new guinea to determine their eligibility under the 2008 exemption regulation. some of the labor, materials and supplies will be purchased in the domestic markets. to purchase them the developer or contractor has to exchange foreign currency for kina. the result is that the supply of foreign exchange increases which has a revaluation effect on the exchange rate. as a result imported inflation declines. this will mitigate some of the unprecedented very high demand pressures on domestic resources, and inflation. this together with prudent management of the budget and trust accounts can minimize the effect of dutch disease in png. the analysis leads me to the conclusion that the bank of papua new guinea is going to face untested turbulent times. once all the information will become available, we will design the policy framework for ensuring that price stability is maintained. the challenges faced by the government and the bank of papua new guinea are huge. i am sure that we can live

philipp hildebrand : in the focus of the swiss national bank - economic outlook and monetary policy summary of a speech by mr philipp hildebrand, member of the governing board of the swiss national bank, at the wgz - bank, luxemburg, 9 september 2005. the complete speech can be found in german on the swiss national bank ’ s website ( www. snb. ch ). * * * the world economy expands at a robust pace but the growth rates of the important economic blocs diverge considerably. in spite of the accommodative monetary policy in most industrial countries, inflation and inflation expectations remain well contained which may, among other things, be due to the process of globalisation and the credibility of central banks. switzerland, small and extremely open, benefits from a recovering global economy. the conditions for returning to a path of modest expansion look favourable. however, there are certain risks that may affect the global and the swiss economy negatively. most importantly, high oil prices and the devastating effect of the hurricane „ katrina ”, as well as the possibility of increasing long - term interest rates have to be mentioned. a persistently high price of oil could act as a brake to demand dynamics and growth prospects could also be threatened by soaring long - term interest rates, an effect that could be amplified through the housing channel. in the foreign exchange markets, structural and cyclical factors continue to determine the value of the us - dollar. 1 / 1