Keynote Address by Mr Loi M Bakani, CMG Governor, Bank of Papua New Guinea to the 38th Meeting of the SEACEN Directors of Research and Training Meeting and High-Level Seminars

BANK OF PAPUA NEW GUINEA

Keynote Address

by

Mr Loi M Bakani, CMG

Governor, Bank of Papua New Guinea

To the 38th MEETING OF THE SEACEN DIRECTORS OF RESEARCH AND TRAINING MEETING AND HIGH-LEVEL SEMINARS

Alotau, Papua New Guinea, 17-20 August 2016

Dr. Hans Grenberg, Executive Director of SEACEN and your team from the SEACEN centre, Mr. Peter Webb, Director of Research and Curriculum and your team from the Icliff Leadership and Governance Centre, Mr. Bejoy Das Gupta, Chief Economist for Asia Pacific at the Institute for international Finance, Directors of Research and Training from members SEACEN economies and invited central bank representatives, distinguished guest, ladies and gentlemen.

Let me first of all extend a warm welcome to all of our visiting guests to beautiful Alotau in the lovely province of Milne Bay. We have decided to take the SEACEN DORT meeting away from the hustle and bustle of a modern big city like Port Moresby where we previously hosted the SEACEN Board of Governors meeting in 2014 and the SEACEN EXCO last year. This time, we want to give the opportunity to many of you to see another part of Papua New Guinea – the quiet, provincial and rural setting of which the majority of our people live in, surrounded by beautiful natural scenery and experience the warm hospitality of the local population. I am sure over the next few days you will get to see and experience what I am talking about.

The vision of SEACEN is to be a regional training hub for central banks in the Asia/Pacific region. Its mission is to build capacity in central banking and foster networking and collaboration between members. The DORT Meeting is the start of the process where all of you as Directors of Research and Training decide on what our staff should receive training in during the coming year. The proposals go before the Deputy Governors at the EXCO Meeting for consideration before approval by the Governors at the Board of Directors Meeting. I therefore cannot stress enough the importance of the DORT meeting. Your deliberations are the initial basis from which we shape the capacity of our staff, in fact, our Central banks in the SEACEN family.

The type of training courses and research programmes will determine how we as central bankers in SEACEN deal with the challenges of effectively managing monetary policy, ensuring financial system soundness, having secured payment systems, and good governance structures in an ever-changing world of globalisation, rapid modernisation within our economies and fast evolving technological changes. I do not have to mention that we also live in one of the fastest, if not the fastest, growing regions of the world. The role and functions of central banks have evolved over time to encompass new thinking in academia, trends in global financial markets and macroeconomic developments, and the demands of a more literate and educated population.

I am therefore pleased to note from your programme that the sessions cover a good mix of policy discussions on recent issues in monetary policies and in supervisory and regulatory policies, global trends and relevance to Asian banking sector leaders and eco-system awareness. These are all important given the unconventional monetary policies adopted by major central banks around the world in recent times and the challenges of effective monetary policy management. There are also emerging issues of concerns for supervisory policy in light of recent financial crises. These are issues we also face here in Papua New Guinea. For instance, we are reviewing the effectiveness of our monetary policy signalling rate in transmitting to market rates, managing monetary policy in an environment of high economic growth with manageable inflation and our drive on financial inclusion and financial literacy to reach the large un-banked population in our country.

In recent times, governance has come to the fore in the way central banks operate, relating to the areas of credibility, integrity, transparency, accountability and independence. Our role as central bankers depend not only on how we can manage macroeconomic and monetary policy, as well as financial stability and supervision policy effectively, but also importantly on whether we have credibility in our leadership skills and governance attributes. I am therefore glad that your break-out seminar sessions for the research and training seminars adequately covers these areas.

I am confident the resource persons engaged will cover important agendas to stir your thoughts and enrich your experience this week, but let me reiterate that as leaders in your fields of expertise in research and training etc, there is a demand for each of you to go beyond just being technical experts in your field, and to appreciate the necessity of bearing the responsibilities of leading people. The demand to set standards,influence your followers and to create a positive life-long learning culture can be daunting but it is the right path to take. It is achievable as we come together in such forums to exchange ideas and learn from each other. We have a task to see things from different perspective, embrace change and allow it to permeate the norm and our comfort zones. We can no longer operate in isolation and which I want to agree that the eco-system paradigm and perspectives should be embraced to trigger transformation in how we lead and manage. The Central Bank and its mandate functions are a function of a spectrum of variables that make up an entire environment we operate in. We are interconnected and hence our effectiveness depends on each player’s reactions and contributions in the network or chain. We must address risks and issues from a systems thinking perspective. So when there is a change introduced in our governance standards, macro prudential policies or as result of information communication technology intrusions in the way we do business, the entire eco-system and the stakeholders become our focus.

Bank of PNG has seen number of changes in our past strategic plan. We continue to see more in our new strategic plan 2016-2020. We have drawn invaluable lessons from these experiences. One of them is to be able to have competent program managers and leaders who understand the learning process that’s taking place in the mind in any introduced change program. Building on from the “known” (referring to existing knowledge) and leading people to the “unknown” (new knowledge) is wise strategy and fundamental to enhancing the learning process of followers in terms of making quick wins. Change initiatives may not realise their objectives if we apply one-size-fits-all approach where something (it could be framework, policy or a system) completely new has been introduced to replace the old practice without much thought given to make necessary tailoring and appropriate connectivity with the people and current process. This is to ensure a smooth transition occurs. Another lesson learnt is that the leader-manager plays significant role of influencing and creating the right kind of environment conducive for followers (staff under you) to be creative and to perform without fear. With the foregoing, I am sure a rewarding experience will be achieved during the combined and the split sessions.

To conclude, Papua New Guinea is aptly known as the “land of the unexpected” – the land of a thousand tribes with over eight hundred distinct languages. While our people still hold fast to our heritage and ancient culture, we have embraced modernisation and are a rapidly developing economy. During your stay you I am sure you will appreciate what I am saying. I therefore hope you can enjoy your time here in Alotau, experiencing the culture of the Milne Bay province and visiting some of the tourist attractions here.

Once again, welcome to Papua New Guinea. I hope your stay in Alotau will be an enjoyable and fruitful one.

 

Thank you.