1 June 2020
Ladies and gentlemen,
Good morning, good afternoon and welcome to the 5th ECAPI EGFIP forum virtually co-hosted by Central Bank of Armenia (CBA).
Allow me to express my gratitude to CBA Governor Arthur Javadyan and Deputy Governor Vakhtang Abrahamyan for their leadership in driving forward regional financial inclusion in these extraordinary times. I would also like to take the opportunity to congratulate and welcome to the AFI network the new CBA governor, Martin Galystyan, who will start his assignment on 15 June. CBA has been a true champion of financial inclusion over the past decade.
Let me start by thanking everyone for their support and time to attend this webinar, regardless of the circumstances on how and where we work. In March 2020, AFI established a business continuity plan that has since been applied as a response to the consequences of the global spread of the corona virus and cancelled all physical AFI events. The plan leveraged on telecommunication technology as an alternative mode of delivering services, such as this meeting, as part of support to our members.
Recently, the AFI Board of Directors also made the decision to postpone the 2020 AFI Global Policy Forum (GPF) to 2021, in consultation with co-host Central Bank of Jordan and based on internal assessments by the AFI Management Unit. Despite rescheduling of the AFI GPF, the AFI Annual General Meeting will proceed as planned on 9 September 2020, with members convening virtually to facilitate decision-making by the AFI Membership Council on key strategic matters.
It is exciting and gratifying to see over 30 participants across all the seven countries of ECAPI attend this virtual meeting. This participation is a manifestation of AFI’s relevance as a member-driven network.
COVID-19 indeed has been rapidly spreading all over the world. What started as an alarming health crisis has already turned into a dramatic economic crisis. The economic downturn caused by the pandemic has reached emerging and developing economies and analysts and observers of this situation assume that the negative impact of this crisis will be even more severe for them than for the developed world. This will be a real emergency situation for us and now more than ever, we have the responsibility to show solidarity to each other.
Responsibility also means to assess the current situation with caution and to avoid jumping to conclusions too quickly. Some commentators of this crisis have been quick to define what we see as “new normal”. We think that too little is known to justify speaking about the “new normal” at this stage, as too little is known about the virus itself. For now, we will have to live with insecurities, but now we also have an opportunity to draw the right conclusions from this crisis and aim for a “better normal”, compared not only to what we see at present but also to what we have been used to. In this regard, I am grateful to refer to a quote from Governor Benjamin Diokno from the Central Bank of the Philippines who stated recently that we should “prepare for a ‘new economy’, not a ‘new normal’, which is an oxymoron”. I looked up the term “oxymoron”, which stands for a figure of speech in which two opposite ideas are joined to create an effect. With this in mind, we believe that we at AFI are well advised to strive for the better normal that will be for the benefit of everyone.
Having said that, financial inclusion is an impactful policy choice that responds to the economic crisis of this magnitude. As we could see in the aftermath of the financial crisis in 2007/2008, financial inclusion is among the few practical solutions that can have a substantive impact in re-establishing economic resilience of vulnerable groups and catalyzing economic recovery. As we also have learned over the past 12 years, with every crisis there is also an opportunity:
First, in these extraordinary times, we see how current movement restrictions have also offered opportunities for digital finance as it allows for crisis responses to be fast, accurate and immediately available.
Second, this crisis also offers opportunities to incorporate Inclusive Green Finance considerations into the recovery perspective that ushers the dawn of the “new economy” – one that is green, resilient and socially inclusive.
Third, we see the opportunity to strengthen the gender lens when developing emergency and recovery responses to the COVID-19 global health pandemic. In this sense, we believe that post COVID-19 financial inclusion can unlock and further drive women’s economic participation and enable transformative opportunities while leaving no one behind.
Our immediate answer in practical terms is also the launch of the AFI COVID-19 Policy Response. This response intends to quickly and flexibly support the short- and medium- term policy response initiatives of our members. The approach we have adopted will allow for a combination of quick, needs-based, highly practical and high-impact interventions that enable rapid response policies and regulations to be implemented in highly impacted countries. We look forward to working with Eastern Europe and Central Asia (EECA) countries and providing complimentary support to the responses undertaken by the central bank and supervisory authorities to mitigate challenges related to the crisis.
The journey for ECAPI has been very interesting. EECA members met for the first time in October 2015 in Skopje, Northern Macedonia, for the first EECA Regional Forum on Financial Inclusion Policy, followed by a meeting in Minks, Belarus in 2016. During the 2017 AFI GPF in Egypt, members reaffirmed the need to strengthen regional collaboration, followed by the first technical meeting on establishing the EECA regional initiative in May 2018, hosted by the National Bank of Tajikistan. In June 2018, EECA leaders met to discuss the priorities of the regional initiative and we officially launched ECAPI in Sochi in September that same year.
The journey has been incredible and today it’s great to see over 30 technical experts from the region with an objective and the mission to take the agenda to the next level, primarily focusing on four key areas, which are even more relevant in today’s context of the crisis: consumer protection, financial literacy/education, digital financial services and inclusive FinTech.
ECAPI has seen significant momentum since the time it has been launched in 2018. The Expert Group on Financial Inclusion Policy (EGFIP) members delivered four knowledge products in 2019 across topics, including digital financial services, market conduct regulation and supervision, and financial education and impact measurement, which will be officially launched and shared during this virtual forum.
As a part of the Phase III strategy, AFI has been working with developed market regulators to form knowledge partnerships under the Developed-Developing Market Dialogue (DDD) and I am pleased to share that the European Central Bank, Bank of Finland and Commission de Surveillance du Secteur Financier from Luxembourg (CSSF) will be actively sharing their perspectives as a part of this forum. I would also like to mention that we will bring diverse stakeholders perspectives to the forum, with private partners such as Visa, also sharing their views on digital financial literacy. I would like to thank our knowledge partners and private partners on their participation and for bringing a more multi-faceted dimension to our dialogue in this regional initiative.
Finally, I would like to make one special announcement. After preliminary examination on the strategic rationale, needs and opportunities, as well as cost-benefit considerations for establishing an office in Europe, the Board of Directors agreed to the establishment of AFI’s Representative Office in Luxembourg. One of the objectives of the office will be to foster more effective and tailored services to the current and prospective members of AFI in the EECA region, in line with AFI’s regionalization and decentralization strategy. We hope that similar to AFI’s regional offices in Africa and Latin America and the Caribbean, we would be able to provide tailored services to member countries in the EECA region and build momentum for the implementation of ECAPI.
Over the course of next three days, we will deliberate various important topics that are even more relevant in the times of the current crisis. On this note, I wish to thank you all once again for your participation and will leave you to take forward your deliberations and wish you a fruitful discussion.