gdp declined to the lowest level since the early 1990s. in connection with the structural adjustments, as chart 4 shows, progress has also been made in reducing nonperforming loans. as far as major banks are concerned, they as a whole seem to be hitting the march 2005 target, namely, lowering the share of nonperforming loans in total credits to half of that in march 2002. of course, japan ’ s financial institutions are still facing quite a few problems. in this regard, they should step up their efforts to reduce nonperforming loans and contribute to corporate restructuring. and they should be well prepared for the removal of the blanket deposit insurance, which is scheduled for april 2005. as the structural adjustments have progressed, an opportunity for sustained growth is finally arising. in order to turn this nascent opportunity into full - scale revitalization of the economy, both the private sector and the government should work harder. ii. conduct of monetary policy on the part of the bank of japan, we continue to maintain the monetary conditions which should help deflation come to an end. chart 5 shows that deflation has been easing but the year - on - year change in the consumer price index ( cpi ) has not yet reached positive territory even with the help of upward one - off factors including a rise in rice prices. based on the assessment that the underlying trend of the cpi is still moderately negative, the bank is conducting an extremely accommodative policy with three features. first, the bank is providing unusually ample liquidity to financial markets. the so - called “ quantitative monetary easing ” keeps short - term interest rates at almost zero, thereby ensuring the stability of financial markets, which in turn supports economic activity. second, the bank is conducting its policy with the commitment to continue quantitative easing until deflation ends. the resultant “ policy duration effect, ” by working on expectations about future monetary policy, contributes to further stabilizing financial markets. third, the bank is making efforts to enhance the transmission mechanism of monetary easing. for instance, the bank has already been expanding the types of money market operations. moreover, the bank is eagerly communicating with market participants and other authorities as to how to expand the securitization market. of the three features of the current monetary policy, let me elaborate on the second one : the bank ’ s policy commitment. in this commitment, the bank will maintain quantitative easing until the core cpi registers stably zero percent or an increase year - on -

recorded by enterprises during the year. the overall reduction in foreign investment inflows is also consistent with global developments. in fact, at a global level, foreign direct investment inflows drastically declined to us $ 1, 114. 2 billion in 2009 from us $ 1, 770. 9 billion in 2008 and us $ 2, 100. 0 billion in 2007. nonetheless, new equity investment inflows in zambia surged to us $ 419. 2 million in 2009 from us $ 131. 6 million recorded in 2007. the substantial increase in new equity investments, despite the effects of the global financial and economic crisis, demonstrates how favourable the zambian investment climate is in attracting foreign investment. bis central bankers ’ speeches distinguished guests, it is also encouraging to note that the government ’ s diversification efforts are yielding favourable results. the survey findings show that the concentration of foreign direct investment in the mining sector is reducing as evidenced by the substantial fdi inflows to other sectors such as manufacturing, wholesale and retail trade, and the tourism sector in 2009. evidence from south east asia and the recent global financial and economic crises show that high volatility in foreign private capital if not properly monitored and managed, can induce financial and macro - economic instability. in light of this the results of the foreign private investment and investor perception survey are important and intended to assist the government to effectively monitor and manage these flows. in addition, better information on investor perceptions will assist government in designing policies and programmes that will help enhance zambia ’ s favourable investment climate. further, the results of the survey should prove useful to the private sector and other stakeholders as they highlight some concerns which government should address as well as the overall business profitability and performance prospects of various sectors. the importance of timely and reliable information on capital flows in the design of appropriate policy responses by government and thus enhancing macroeconomic stability can hardly be overemphasised. adequate and consistent information on capital flows will also greatly improve balance of payments statistics for zambia and serve as an early warning system for government on potential financial crises and other external shocks. mr. chairman, zambia has adequate technical capacity to collect, analyse and disseminate data and information on foreign private investment. it has, however, lagged behind in terms of the frequency of these surveys compared with some other countries in the region. for instance, while we are now at the third phase of the survey, uganda, tanzania and malawi are in their eighth, fifth and fourth phases, respectively