 Good afternoon, ladies and gentlemen. One of the problems with our profession is that we tend to put things into silos. What I've learned about extractive industries in the 10 years or so I've been thinking about it is that we get the benefits in development terms only if we connect extractive industries with the topics which are being discussed in the other rooms, as we speak, topics of poverty and inequality, topics of industrial policy, and topics of social protection. My experience has told me that when you have a discussion about extractives or mining or oil and gas, you get an audience which narrows down the discussion, and I think that is a pity. Extractives are a little bit like the elephant in the room. We know when we see a great elephant in our living room, it's big and it's going to do some damage, but we know it's important, but we don't quite know why and we don't quite know what to do with it. And I think that a lot of the discussion on extractives is sort of captured by that rather simple-minded analogy. I'm going to start with a few facts, amongst many that we could have. The first fact is that in the past two decades, many developing economies have undoubtedly become much more dependent on extractive resources, meaning oil and gas and mining. Many developing countries at the same time still have huge, unexploited resources of minerals and oil and gas. So if you look at the potential in terms of those resources in the ground or in the deep oceans like the Indian Ocean, that potential is enormous. And the question mark for development economies is what do we do about it? The third fact is that whether, I think this is pretty much undisputed, the rather stronger economic growth performance of many, many developing countries, especially in Africa over the last 10 or 15 years, has undoubtedly been boosted in part by very, very large investments in oil, gas, and minerals. And growth rates have been enhanced as a consequence of that. So those are a few facts amongst many, but what about some questions? What will the future hold? Will the long-term growth of demand for minerals and oil and gas that we've seen in the last 10 to 15 years continue? How will the effect of that on the countries that were interested in low and middle income countries be affected by the end of the super cycle of commodity prices? Are extractives going to be a basis for sustained growth and structural change of the type that Justin Lin was talking about this morning? A sub-question of that is will there be in the newly extractive rich countries of Africa, countries like Tanzania, Mozambique, and Uganda, will there be the assured long-term supply of those resources that will enable them to use these to build the diversified economy that we're all looking for? We're not looking for a long-term future of dependence on primary resources. So will these resources last long enough to enable that transformation to take place? And the big question which is about which one can hold a whole seminar is can the numerous threats to good governance associated with the so-called resource curse be addressed? Especially those threats which emerge in one way or another from the very limited organizational and management capacities of some low-income governments. So that's what I'm gonna try to briefly call. I'm not gonna give answers on all of these questions, but we'll give at least some insights to them. First some evidence on export dependence. This is just for minerals. And if you look at the column here, you'll see comparing, sorry, 2010 compared to 1996, you'll see a very large number of low-income countries there increasing their dependence on minerals in terms of the export share of minerals in terms of total exports. And even Botswana that was already very dependent on minerals in 1996, it's gone from 58.7% to 83% by 2010. As the red at the top says, between 1996 and 2010 the number of countries with mineral exports greater than 25% of total exports increased by from 46 countries to 61. And the similar proposition even more so in oil and gas, you'll find there a large number of Middle East countries but also quite a lot of lowering and middle-income countries including many in Africa where the level of fuel dependence in terms of exports is extremely high, 98.6% for Angola, for example, and 94.6% for Ecuador or Guinea. So these are facts. Many of the low-income countries about which we worry for reasons of poverty, inequality and everything else are whether we like it or not, dependent on minerals and or oil and gas. And they have large reserves. The potential in the ground is very considerable. This graph shows the per capita incomes on the horizontal axis and on the log scale, the per capita value of resource reserves in terms of oil and gas and various minerals. And you can see for the lower-income countries the gap between this line, which is the equal line and per capita income is huge. This is a log-worthy scale. So many countries, low-income countries have tremendous resources relative to the per capita incomes that are currently generated. The question mark then comes again, what, if anything, do we do about that? And if you look at some particular countries, this gap, if you like, between resources and the GDP that's being produced at the current time is huge. If you take the case of Guinea, and I confess these data are a little out of dates, I think they're still broadly valid. It has about a quarter of the world's total reserves of bauxite, and most of that bauxite is high-grade and most of it is unexploited. But it produces, this is reserves and this is production, it produces only at the level of India and China, which have something like one-tenth of the reserves of bauxite enjoyed by Chad. The potential gains in GDP terms to Guinea from exploiting even a small part of those unexploited resources is huge. But the challenges of doing it effectively and so on are also daunting. The growth effects, this is looking at low-income countries only based on a recent World Bank assessment of this issue. If you look at GDP growth for low-income countries as a whole, it's clearly accelerated since 1996. And if you look at the commodity exporting low-income countries, the graph is not terribly clear, but there's a pretty unambiguous sort of evidence that growth has been enhanced in those countries quite significantly. I'd like to use Zambia as one example because we've done recent work on this. This graphic here read across from the right-hand side as the share of investment in total GDP. In the 70s and early 80s, Zambia was not untypical among African countries, it had an investment ratio of about 10% of GDP. Since the reforms in mining, which took place at the end of the 1990s, that investment ratio has accelerated. It's now more than double what it was before. And what's caused that has been caused very heavily by foreign direct investment. That foreign direct investment, you can't see this graphic very clearly, the green part is heavily linked to minerals and the investment in the new copper mines in both in the copper belt and in new areas of mining development in Zambia. The consequence has been on the right-hand side that the production of copper has increased hugely since 2000 when the reforms took place. It's more than doubled, but also from the yellow bars, you can see that a large part of that has been associated with the super-cycle of prices. The fact that the copper price has gone up or did go up until two years ago to unprecedentedly high levels. So, good news, Zambia benefited greatly from this. Bad news, or bad question mark, can it continue? Well, for the future, let's look forward now. There's little doubt that the adjustments in terms of economising on certain metals, notwithstanding, and the adjustments associated with climate change, notwithstanding, we will continue to be dependent intrinsically on metals for a whole host of reasons. I've limited, I've listed a few there. And even as we move to reduce dependence on fossil fuels, which undoubtedly we will because of the climate change agenda, metals will remain critical. For example, we have huge amounts of cement and rare earths as inputs into production of wind turbines. We use a tremendous amount of uranium steel copper and other metallic components in nuclear energy. And in other forms of renewable energy, we are using, we will be using metals as an intrinsic input. So even if we have a massive move towards the elimination, if you like, of dependence on fossil fuels for energy, metals will still be there as a critical input. And if you look at the work done by the McKinsey Global Institute just one and a half years ago in the paper called Reverse the Curse, looking at various types of materials, they saw no reason projecting up to 2030 to see any sort of falling away in demand, slowing down past possibly, but primary energy growth, steel growth, and of course the growth in the demand for food and water. And that they suggested would lead to a tremendous investment need in the future, which they measured in terms of billions of dollars per annum. This is for oil and gas. This is for minerals. And they did a couple of scenarios. They did a scenario based on their expectation of demand expansion without climate change adjustments. And then they did it again with climate change adjustments. And the important thing is to compare even the second scenario, climate change, to what happened before. And even with that adjustment, they reckon the demand for minerals for oil and gas rather would grow faster than it did in the period 1995 to 2012. Significantly. Similarly with minerals. We've got a growth of demand for minerals. So we have this juxtaposition. People looking at this are saying there will be an ongoing demand for minerals and oil and gas. We have low income developing countries with huge reserves of these things. What do we do about it? I'm jumping ahead a little bit now because one question mark about that is the prices. This is an example of the copper price. We know that we've now hit the end of what has been called the super cycle from about 2011 onwards. And prices have gone down dramatically. But notice that even though they've gone down to 2014, they are still quite a lot higher than they have been historically. And some commentators have been to say, well, perhaps we've reached the maximum point of pessimism in prices. There was a natural adjustment like the pig cycle. A lot of supply is being taken out of the market. Two or three years from now, prices may be possibly starting to edge up again. I'm not forecasting that. That's a possibility. But it's also a question mark about what these countries can expect in the future. The big question is this. Will these revenues or will the availability of the resources in the new African producers be large enough and last long enough to sustain transformation? And this, I think, is a sort of representation in a way of a point just in Lin was making this morning. We could think of the dependence on renewables or oil and gas as being a period when dependence increases for a while. It's called the depletion stage. Then the settling down period, during which time other aspects of the economy are being developed, using the catalyst of natural resources. And then a period of decline when the countries continue to grow, but the dependence on the natural resource or oil and gas and renewables is declining. This is argued quite well in a recent paper by Paul Stevens and others written under the Chattin House umbrella. And I thoroughly recommend you to look at that as a sort of more detailed discussion of what I'm saying. We've done some work recently with the Gates Foundation, the African Development Bank, on looking at the six new oil and gas and mineral countries in Africa, Tanzania, Uganda, Mozambique, Sierra Leone, and so on. We've looked at the scale of likely revenues over the next 30 or 40 years against revenues. This is what we get, say, for Tanzania, the Donaldus year. So you'll perhaps be able to relate to this. But you take the average of the first 10 years with a central price assumption. It gives about $20 per capita. If you look at that in terms of government revenue, it gives about just under 2% of government revenue compared with the existing situation. If you allow for a high price or a lower price, you get different numbers. That's the same graphic for a longer period of time, up to 2014. And you see that what we get from this is a sort of line that says that we're going to get, on reasonable expectations from the new LNG and now the gas development in Tanzania, we're going to get something like 1.5% of government revenue enhancement from this. Click up to 4% if prices recovered dramatically, but it couldn't go down to less than 1% if we have a continued decline in the prices involved. Now, if you put that into context, I'm going to jump to the next slide, with, for example, the requirements of Tanzania or the other countries that we studied in terms of their financing gaps for education and health, this is the picture you get. This is the revenue expectation. And this is what you need in the blue bars to deal with reasonable calculation of the education financing gap. What you need to build is a reasonable education system. On the red ones, what you need to build the health system to a reasonable standard. And you can see that even if you spent all of these revenues in Tanzania on health and education, you would not, sorry, Tanzania, keep saying Tanzania. This is Tanzania. You would not deal fully with these gaps. This is before we start to talk about using government revenues to transform the economy in some of the ways that were being talked about this morning in the earlier sessions. I'll finish with my conclusions. What can we done? We done. And I'm trying to make this as positive as I can. I think Justin Lin is quite right. If we're going to use this opportunity, if that's what it is, to diversify the economy, we've got to see diversification over time. We've got to see structural change over time. We do not want to see low income countries continuing in the next 30, 40 years to be the same dependence, have the same dependence on oil and gas and minerals as perhaps they will have in the next 10 years. And that in terms of revenues means that the base of the revenues has to be shifted as well. Because the trouble with the extractive revenues, they are point revenues. They come from a very limited number of corporations and they go in a certain direction and they are controlled by a limited number of people. Diversification means a broadening of that. But this takes a lot of time. There are lots of good reasons why diversification has not happened in Tanzania in the years in which I've been familiar with it or in other similar countries. So what's the remedy? Well, this is the last slide. I think it argues first of all for a more, this is the point Paul Stevens and colleagues argue for, a more go slowly approach to resource depletion. You may have those resources in the ground, they're still going to be there. So if there could be some mechanism whereby they could be depleted more slowly, giving time for governments to build capacities which are currently lacking to manage these, to develop the coordination mechanisms, to develop the supply chains that can feed onto them, then we might get a better outcome. Unfortunately, that is an approach which might conflict dramatically with the maximization net present value which would preoccupy shareholders and commercial organizations. So it's not easy to do. But I think this is the key point now and it doesn't link up, I think, with Justin Lin's points. But first of all, an awareness that the benefits of oil and gas and mining are not just in the revenues. The huge mistake, 90% of the discussion around this is are the revenues going to be big enough? If you look at the spend of mining companies in particular, you find that only about 15% of their spend is the taxes paid to government. The much bigger spend, two or three times as much, is spent in one way or another in the local economy. And to the extent that that spending can be captured in development of small-scale industries or supply industries, then we get a much bigger outcome effect, a transformation effect than we get just by worrying about how the government will spend its mining revenues. Second point, I think, is much greater awareness that these mining industries create huge multipliers. We've done recent work on Zambia where we've looked at the multiplier effects, both of the spending through the supply chain but then the on-spending of the workers in the mines but also in the supply chain itself. And those multipliers can be four to five times. So in particular areas like the copper belt, you get a tremendous amount of spending power coming naturally, if you like, from this process. What you need then is an industrial supply base that can respond to that. Very often you find it's not there. And this argues, I think, for the facilitating role of government that Justin Nimm was arguing for this morning, where we're getting government policies that recognize this have helped to small industries so that they can actually respond to this in a positive and effective way. Third point, mining companies, one-in-gas companies invest huge amounts in infrastructure, railways, ports, road systems for their own commercial purposes but often in regions of underdevelopment where there to be a sort of synergy between government objectives for infrastructure development and the companies, you could get a much bigger bang for any given buck. Ports is a very classic example. Southern Tanzania, Donald Winner, that's better than I do. There's gonna be a lot of port development. That port development can be used, not purely for mining and oil and gas and NNG exports, but with some synergy and some additional investment, perhaps for donors, you can get other advantages from that type of development. And governments do not really see this in these terms. They tend to put the mining investments in a category and government investment in another. Don't join them together. And exactly the same is true of the large social investments. Mining companies or oil and gas companies do increasingly the responsible ones spend huge amounts of money on health, education and various types of social purposes for their own corporate social responsibility objectives. These need to be connected. They're similar spending by governments. So we get a bigger benefit in terms of sustainable educational improvements, sustainable health improvements in the regions where mining operates. Not just enclave hospitals which are state of the art, but only serve a very limited number of people. So the conclusion is, I'm sorry, it's right at the bottom there. Extractive industries, extractive led development for the future will be difficult to achieve, but it's a huge potential and worthwhile improvements in economic and social performance would seem to me to be possible in almost every country where I've looked at these problems in any depth. Thank you very much. Sorry to go on a bit too long. Have a good day.