of oil and petroleum products. attainment of a single digit inflation has been government ’ s goal for a long time. it is, therefore, pleasing to note that, in april 2006, annual inflation declined to 9. 4 %, the lowest rate in the last 30 years. this inflation outturn has been largely due to the conduct of appropriately tight monetary policy aided by prudent fiscal policy and the continued relative stability of the kwacha. with the anticipated bumper harvest of maize coming on the market as the marketing season opens this month, maize prices are expected to fall and assist in keeping food inflation in check and overall inflation at a single digit level. the challenge will be to anchor inflation at these single digit levels throughout this year and beyond. in order to do this, continued implementation of appropriate monetary and fiscal policies as well as maintaining relative stability of the exchange rate would be vital plus increased production of goods and services. ladies and gentlemen, recently, the exchange rate market has been characterized by a general appreciation of the kwacha against major foreign currencies. this has been mainly due to increased supply of foreign exchange on the market relative to demand. the key factors underlying the increased foreign exchange supply include : ii. increased copper output and exports as well as record high prices. copper exports volume has in recent year registered sustained growth, increasing from 353, 000 metric tons in 2003 to 423, 000 metric tons in 2005. the price of copper rose to us $ 4572. 0 per tonne in december 2005 from us $ 3134. 79 per tonne in december 2004. by may 19, 2006, the price of copper had increased to us $ 8016. 29 per tonne, iii. increased non - traditional export earnings, from us $ 410 million in 2003 to us $ 476. 7 million in 2005, iv. improved economic confidence following the attainment of the enhanced hipc initiative completion point in april 2005, which resulted in reduced external debt service obligations, and ; v. increased foreign direct and portfolio investment, reflecting increased market confidence in the economy stemming from the greatly improved prospects for the copper sector, the cancellation of the bulk of zambia ’ s external debt, and the continued commitment to prudent fiscal and monetary policies. mr chairman, all these factors have accounted for the current strengthening of the kwacha. this has led to an outcry from some of our exporters of nontraditional commodities that they are losing external competitiveness and

is the importance of features such as sound macroeconomic policies, a strong commitment to free trade, a lightly - regulated competitive business environment and a well - educated and flexible labour force. however, some reasons are not ones that can be copied – for example, the benefits of being an english - speaking nation with close ties to the us business community through the irish - american diaspora. it is difficult to overstate the importance of education. indeed, many commentators see the decision to make second level education free in 1969 as key, since it produced a pool of well - educated workers by the mid - 1980s. this, however, needs to go hand - in - hand with openness to foreign investment – without this, educated workers will simply move to firms abroad rather than the firms moving to them. an active industrial policy can also help, as firms tend to cluster in industrial groups so as to achieve economies of scale in supplies etc. for example, ireland actively targeted major it firms in the 1980s and early 1990s, which has seen a cluster of such it firms just outside dublin. once some major firms set up operations, it was much easier to attract smaller firms in the same industry. this emphasis on openness to foreign investment allows me to pick up on the issue of national sovereignty that dr. eiein - sain mentioned. ireland adopted predominantly protectionist and inwardlooking policies in the first 35 years of the state ’ s existence. notwithstanding the small domestic market, the emphasis of development policy was on promoting domestic industry behind high tariff barriers. not surprisingly, these policies were not successful in delivering sustained economic growth and higher living standards. employment failed to increase and emigration rose to very high levels. the legacy of protectionist policies was a small and inefficient indigenous sector, which primarily served the domestic market. the failure of protectionism and over - reliance on agriculture were recognised in the late 1950s and, over the course of the following two decades, the economy was opened up to trade and investment. in particular, the focus shifted to attracting high - productivity export - oriented foreign industries, a policy which has been remarkably successful in generating economic growth and prosperity over the past 40 years. there have also been significant spin - offs in terms of servicing and supplying foreign firms, which has contributed to the development of the domestic services sector. our success in generating employment, however, has been a more recent development and reflects the fruits of the increased emphasis on education, a reduction in the labour market disin