to the benefits received. this contributes to increased investment and augments the productive base, thereby facilitating the financing of social security expenditure commitments. apart from specific reforms in the social security system itself, an improvement in the fiscal position would have an overall positive macroeconomic effect, compensating in part for the addition in aggregate demand brought about by ageing. the lower absorption of resources by the state could also lead to a higher average level of productivity and to an improvement in the country ’ s balance of payments. productive capacity would also be enhanced if the state creates fiscal and other incentives for individuals to provide for their own needs after retirement, leading to an increase in the household saving rate and, consequently, also to a faster accumulation of capital. fiscal consolidation will, however, only solve part of the problems created by population ageing. the negative supply shock caused by this phenomenon must also be countered by a positive shock. supply - side reforms aimed at increasing the availability and the efficient use of economic resources are, therefore, essential. the efficiency of markets can be improved by implementing a vigorous competition policy and reducing public sector involvement in the economy. productive capacity would also be improved through such policies as market liberalisation, greater investment in infrastructure and education, and a market - driven industrial policy. structural rigidities in the labour market must be eliminated in order to decrease their disincentive effects in terms of the labour supply and the work ethic. a labour market policy intended to increase skills, and consequently the employability of individuals, is also desirable. conclusion this “ grey cloud ” on the horizon, therefore, appears to have a silver lining in the form of appropriate policy responses that would effectively enhance the welfare of populations. moreover, as the secretary - general of the united nations, kofi annan, has said : “ trees grow stronger over the years, rivers wider. likewise, with age, human beings gain immeasurable depth and breadth of experience and wisdom. that is why older persons should be not only respected and revered ; they should be utilized as the rich resource to society that they are. ” the wealth of skills and experience that older people bring to the workplace, to public life and to the family are generally not recognized. technological advances and new ways of organizing society can be put to good use to increase the participation of older people in work and to make appropriate socio - economic changes.

productivity and stability for sustainable growth address by dr mario vella governor, central bank of malta delivered during the ifs annual dinner 18 november 2016 dear president and members of the committee of institute of financial services ( ifs ) malta, personally and on behalf of the board of directors of the central bank of malta and of its senior management, i thank you for the opportunity to address this distinguished audience. dear minister. ladies and gentlemen. this annual event brings together key stakeholders in this country ’ s economic development and growth, and in the development of the social, educational and cultural conditions without which economic development and growth are not possible. it is now an established tradition that the governor of the central bank seizes the opportunity of the annual dinner of ifs malta to make a number of factually grounded remarks about some matters in the remit of the central bank. the traditional presence of the minister of finance at this event is of vital importance because it provides the stakeholders present with a more dynamic view of the whole, in the light of the statutorily distinct roles of the ministry of finance and the central bank. before sharing some thoughts with you, i would like to commend ifs for its ongoing commitment to responding to the changing needs of the marketplace and its pursuit of excellence in the provision of financial services education. it is encouraging to hear that the institute has had a successful year and that you are working on new initiatives to promote even higher professional standards. this is most welcome, as education and professional development are fundamental to the sustainability of our financial sector and its continued success. your strategic partnerships with the university of malta and overseas professional bodies such as the european banking & financial services training association ( ebtn ), the london institute of banking and finance, and the global association of risk professionals page 1 of 8 ( garp ) - whose representatives are with us tonight - reflects the institute ’ s excellent reputation. that a committee member of ifs - malta has been elected to the highest decision making body of a european association for a third consecutive term confirms the institute ’ s integrity and professionalism. the central bank has always worked closely with ifs and will continue to support its activities. this year, we also cooperated with the ifs during the european money week to promote financial literacy to underprivileged youths and participated in the successful ifs malta annual seminar on pension reform. i look forward to even more cooperation in the future. mr president, well done and thank you for taking a