 Okay. Okay. All right. I need myself. Okay. Good evening, everybody. Hello. I'm just waiting for people to come in. Okay. Good evening again and welcome to SOAS and to the weekly webinar series. As part of our series about intensifying inequality, we are very honored to have with us today Khalid Abu-Smail and Vladimir Haski from Esquah in Beirut. And we are also joined, we are pleased to connect again with Professor Masoud Kashant, who was one of the pillars of our department. And the topic of today is wealth inequality and the cost of poverty, the poverty gap in the MENA region. And we are, Khalid and Vladimir will be presenting very hot new products from their massive machine. They've been working on poverty and inequality for the last few years with very important datasets and new results. And they have updated their results to reflect some of what we know about COVID and its impact. Although, of course, this is an evolving situation. So sadly, things have got worse. So, but we'll see how we can view that with our experts and with our audience. So, the order of the day is that I'm going to talk for a few minutes about her systems in MENA. And then I will give a floor to our keynote speakers to Khalid and Vladimir. Then the meeting, the discussion will be led by Masoud, who's joined us from Boston. And then we'll have a question and answer session towards any end. So, please, if you have questions, it would be nice if you can keep them towards the end. And I hope you enjoy this lecture, particularly given the circumstances. And I think you'll be quite surprised by some of the results and some of the poignancy, which have particular poignancy because of the dramas, which we can feel a lot, especially in Lebanon. So, I wanted to share my screen for five minutes. So, I'm just going to start my slides. And just one second. I'm going to share my screen. Okay. So, one second. Okay. So, a couple of years ago, I was working on health systems as one of the things I noticed about when I was working under Professor Masoud on poverty in MENA. And I took an interest in health systems. And at the same time, I did a paper also, a report for the ILO in the region. And of course, one of the key things about health in the region is, which I found, and I was astounded at that time, is that there was an absence of concern for equity in the literature and the economists that are discussing development and growth. And there was some sort of divide between, you know, what the literature was saying about the state of health and the reality that you observe every day. A difference between, you know, economists like Sen and Claire Bambra and even, you know, the WHO, the local health researchers who are talking, you know, very simple things like that health is about social, is determined by socioeconomic factors, by political structures, et cetera. Claire Bambra had for decades worked on work and what she calls worklessness and how folks have differences in morbidity and mortality according to where you live and according to whether you're region witness, fiscality or not. She also talked about the impact of unemployment on health. So these are very tangible links that are noticeably absent in the reading and definitely in the about five or 10 years ago. And so equity and labor markets are, of course, one of the ways in which health affects poverty and, you know, leads to poverty traps and worsens growth and inclusion. So I'm getting, oh, all right. So anyway, so one I just want to one just to emphasize that the problem with that is that you miss the role of health as an investment and also that you miss the role of health as an investment. And for me now, you really what is really happening is that it's not really functioning. There are so many problems with the systems that are good outcomes, but the systems are not functioning. And the picture across the region is the following. For example, you have very high out of pocket levels. And this has been the case for a long time. That means that an individual, you can imagine the situation in a COVID context. An individual to get help, to get to survive or to stay healthy, they have to spend a lot of money. And this is one of the key links to poverty in the region. And it's going to be accelerated in COVID, of course, just the other thing that is required to stay alive. And in terms of financing systems, of course, this is not true to those who've worked on poverty or social protection in the region. But we have a most countries, you have a lot of cited structures. So the people at the top often have a private and a public scheme to the top hospitals, then slowly and surely the money available for the poor through a number of filters that is really peanuts for denier citizens and the poor. And on top of that, you have more or less, not very developed or very under, you have a lot of the actual capacity of the sectors. So you can have a clinic in Tunisia that's available for the poor, but it would be not open because they're trying to save money. So a situation of probably a lot of deficiencies. And of course, in the GCC, it's a different situation. But what we have there is that migrants are not part of the social protection and you have all the refugees that are permanent and where those are displaced by wars. And okay, one minute. So one of the key messages there is that the systems are produced phenomenal progress. But when you look at them as systems and how they're working now, they're serving equity and access. They are not working and they need revamping. And this is not just me. This is the whole of the specialists and a lot of the politicians as well. But so it's a problem of politics. The problem is as Amartya said, it's a problem of society and politics deciding that some people will suffer and some people will not, by the way, you distribute the resources. And then we're hit by COVID, which Claire Bambra has called the pandemic and others have called the pandemic. And this graph shows you the almost direct relation to the multi dimensional indices that Khalid and his team have been working on. So you can imagine what's going to happen is that all these dimensions will become accelerator of the pandemic. And indeed, so now we have that the false lines of Amina, the efficient system, the vulnerability especially especially in terms of the labor market are very significant and they will complicate any recovery or even the management of the of the current situation. And what we hope for is that basically, I'm talking about that but obviously can talk also in the same way about education that maybe maybe that maybe health will cross over into economics and politics and become central because of the as professor keeps saying, you know, it's, you know, it's about human beings and human resources and human development, after all. And Jessica, one or two thoughts for for the discussion. One thing you notice in the current situation is you do have to have the international dimension in place in your mind when you're looking at solutions and ways out is because of the migrants because of the vaccines because of so many things. But essentially, if you put health as an investment, not as a cost, if you think of that as a as your priority, then you will find solution. And also, ignoring it will not work, ignoring it simply means that you will not recover, you'll have problems, social, political and medical problems, if you continue to ignore health equity. And I think you can see it around you everywhere. And the last quote is from the Financial Times, it's about vaccines, but you can imagine what's happening within each country about this inequalities and how it will affect future. I hope I haven't kept you too long. And so I give now the floor to Khaled. Thank you so much, Miranda. And it's a pleasure to be here. I think this is my second or third time to give the talk. Sorry. Can you see me? Can you hear me? I just we just had a power cut. So I hope I'm still there. Yes, we can we can see you and hear you. Okay, good. All right. So this is one of the things that you have to get used to when you live in Beirut. So power cuts are a daily activity. In fact, happening every few hours. So let me share my screen. And I think, yeah, let me go to the beginning of the presentation. Take you back. Okay, so again, I very much appreciate your introduction, and especially the notion that you highlighted that equity considerations are vital and not just in health systems, but really in health systems, education systems, and economic systems, and the socioeconomic outcomes that we see are indeed as Professor Sen notes, very much political decisions and social decisions. Some societies have far higher tolerance for inequality, others don't. And there's there's really the value added of this social research that it's the numbers can only tell you so much. But you have to sometimes go beyond these numbers to explain the context, the historical context that leads Nordic countries to have very low in a comparative context, very low appetite for extreme inequalities, as opposed to many other richer countries. So that I think was a very pertinent introduction. Also pleased to reconnect with Masoud, who's a friend worked with a long time, and very much looking forward to it. We have a lot to cover. So I'll go straight to the discussion, which, as you can see, is really focused on poverty and inequality issues. Vladimir, my co author, will be speaking shortly on myself, have been trying to really make sense of the current situation in and particularly issues related to money metric poverty and wealth. But in today's presentation, I want to go a little bit beyond that and cover some of the these contextual issues that I mentioned. And going back to the 2019 report that Esquia and ERF, the Economic Research Forum did with many colleagues from the region and globally. So I'll speak a little bit about that because it talks about inequalities in human development outcomes and opportunities that really set the stage for many of these long term and short term trends, then a little bit about the income poverty and the dynamics and inequality very briefly before we get into the more mundane impact of COVID-19. Then we come to the heart of the issue, which is the wealth inequality, and that's where my colleague Vlad will come in and speak a little bit about the numbers. Also about our proposal, the solidarity wealth tax, and how close with a few concluding remarks, hopefully all of this in a span of around 40 minutes. So human development and the Arab inequality puzzle, what's the story there? Essentially, what one of the main messages that we found in our report, the ERF report, and many other reports that we did in Esquia, UNDP, others is that Arab countries are really, when it comes to their human development levels, if you just take the simple HDI and you look at it in a cross-country setting, up until 2010, most Arab countries actually did pretty well. Most of them are either high or medium level. Some are very high human development. And when you look at the trends from 1970 to 2010, the Global Human Development Report of 2010 actually had five out of the 10 best performers in terms of human development progress from the Arab region. So that's a bright story when it comes to the basic fundamental aspects of human development, like income per capita, educational achievements in many years of schooling, expected years of schooling, and life expectancy. And you can see that in particular in this graph where we are splitting up the Arab countries according to their human development level. And even if you take 1990 as a starting point, it's a nice story. It's a story of continuous progress. And from 1990, life expectancy jumping almost by seven years, mean years of schooling, phenomenal progress here from 3.2 years and average to 6.9 now. The group of LDCs in conflict-affected countries, which is that line in blue, obviously you see a flattening of the trend after 2010, which is of course due to the conflicts. But generally, as I said, it's a positive story. And, and this is perhaps the most important graph from the ERF Esquire Report, is that when you look at the gaps between the rich and poor within countries in basic health and education indicators, these gaps between the richest, the wealthiest, quantile or desiles and between the poorest, they have been closing. So on this graph, you see basically on the horizontal axis, you have the average annual change in the inequalities. And basically, so that's measuring the differences between the richest and the poorest in terms of these indicators, stunting, completion of primary education, skilled attendance of earth, et cetera. And on the vertical axis, you've got the level of achievement itself, so the change in these indicators. So where you want to be, I guess, is if you look at Mauritania and the far left yellow dots on the upper left quadrant, I don't know if you can see my mouse here, this point right here, that's showing you that Mauritania has achieved an average annual reduction in inequality in secondary education of around 10%. And at the same time, it's improved the achievement by almost 8% annual. So that's a success story. And if you look at the distribution of all these colors in the upper left quadrant, it's basically telling you that on average, Arab countries did pretty well in reducing inequalities and also making achievements on these indicators. It's a positive story. Of course, not all of the indicators are not all of the countries. So you still have, you know, Libya on stunting, where you've got a decline in the, I mean, an increase in stunting and an increase in inequality at the same time. But generally, as I said, it is a positive story. Particularly when it comes to secondary education. And I want to highlight that. So if you look at the success story in reducing inequality in outcomes between the rich and poor, it's basically in secondary completion rates. If you're looking at the surveys, the household surveys for the Arab countries in the early 2000s, you would expect to see six times difference between the years of schooling between the rich and poor. That gap has been almost reduced to half. It's also been reduced in primary completion, skilled attendance and birth, infant mortality and stunting, but not by the same level as youth secondary completion, which is fantastic because that's what you need in order to, you know, proceed with structure transformation, industrial policies, demand for more skilled labor force. You want to reduce these inequalities and you want to increase the achievements, especially on secondary education. Gender gaps also. Again, this is like you can see in health and education have been closing over time. So, and especially when it comes to education, some countries like Sudan and Yemen, you still have gaps, but over time for the countries which we had both two surveys in time, you can see that it's also been more or less a success story. Now, despite this progress, this is what, again, the report is highlighting. When you look at the contributions of multi-dimensional poverty, which as many of you might know, is essentially measured in aspects like health and education and living conditions, rather than simply income poverty lines, you still see that education is the main driver of poverty. And this comes out of our 2017 Arab poverty report. So even with all of this progress, when we looked at the multi-dimensional poverty index, which we did with Oxford Poverty and Human Development Initiative in UNICEF, and we decomposed the poverty into its dimensions, it turns out that in many countries, especially in middle income countries, education was still and deprivation education was still the largest driving force behind multi-dimensional poverty. And even when you go into the inequalities between rich and poor as a level, it's still very high in the Arab region when it comes to education, much higher than the inequalities in life expectancy, for example. So even still at the basic level, education inequalities between rich and poor are still extremely high, much higher than the global average, much higher than most other developing regions. More importantly, and I think this is where one of the major messages in the report, our 2019 report has shown, is that the high and increasing levels of inequality and opportunities, as you can see here, were a striking contradiction to the narrative on declining outcome inequality. So when you look at the factors affecting the observed inequality in terms of explaining them in terms of factors beyond the individual or households control like family wealth, like gender, like place of residence, etc., and you try to explain the inequalities using these factors, you'll see that they're quite low for an indicator like stunting, explaining no more than on average 15% or 10 to 15% in a case of stunting and other health indicators. But when it comes to secondary completion rates, when it comes to the one indicator where you pride yourself as a region, that that's your major achievement, there not only accounts for over 60% of that inequality, but it's also increasing over time. And that's what we refer to in our report as the Arab inequality puzzle. The World Bank has come up, of course, with this a lot of, there was a lot of debate, especially after the Arab Spring. And the World Bank had proposed that the real Arab inequality puzzle was the fact that, you know, you had low genies, but people thought that inequality was much higher and it was a problem in the perception domain rather than in the realistic empirical or evidence-based data-driven domain. And the report here is basically saying, no, actually, you do have another kind of inequality puzzle. It's basically that your outcomes are not matching your opportunities. So I would like to basically sum this part by suggesting the following as a stylized fact to derive from this discussion. That most Arab societies, of course, have seen basic improvements in terms of the buildup of social capital. And you've got these youth, they're better educated, and they have more equal outcomes, but they face less equal opportunities, and especially in education. That basically means that, and again, it explains a lot of the frustrations that were felt by the youth and leading up to the uprisings, that whilst they're putting in effort to improve their capabilities at Amartya Sen, the system is not working for them. The mechanisms that allowed their parents and grandparents to have upward social and economic mobility are no longer there and no longer working for them as they would like. Now let's turn to the income poverty story and, with that context, look at what's been going on on that front. So I'm just going to jump straight ahead to this figure, which basically tells you a story of societal evolution in terms of the poor, which I'll accept for the time being the dollar nine day as a rough estimate of that, despite, you know, I've written elsewhere that I have some reservations on the figure, I mean, the measure itself and its ability to capture extreme poverty. But for the time being, and for the sake of time and illustration, let's take it as a simplistic way of measuring extreme poverty. And then moving to the vulnerable group, which is basically measured between one nine and three point five dollars a day, lower middle class three point five to seven, upper middle class seven to 10 and an affluent above 10 dollars a day. Now there is some backing to using these thresholds, which is basically in the work that we did on national poverty lines. But like I said, this is a subject that will require another lecture. The point to note here is that for the period from the 80s up until let's say 2010, you really were witnessing a decline in poverty, vulnerability and expanding middle class. And to some extent, you know, the rise of an affluent base at the top. But since 2011, 2012, with Yemen and Syria, especially going into conflict, Egypt with its demographic weight and facing serious economic challenges, you're beginning to witness in 2015 a reversal of that trend. In fact, the Arab region is the only region in the world that has witnessed an increase in poverty, regardless of how you measure it, whether it's national poverty lines, $1 a day, $2 a day, $3, $5, it doesn't matter. And right now, according to the paper, our projected poverty headcount in 2019 is around 8%. So if we take this curve after the 2015 period, it will also show a diminishing of the middle class and rise in vulnerability and poverty. That's a stylized fact. So basically, even though you've built, again, it substantiates what I've said before, that even though you've built your human capabilities, your economic systems have not been working, and especially after 2010. Also important to consider whenever we're talking about poverty in the Arab region, is that poverty measures are really in the eye of the beholder. If you choose low poverty lines, you've got very nice stories, and the Arab region is consistently lower than the world average. But if you move above $5 a day, the Arab region crosses over the world average. So it becomes poorer than the global average. That's not the case for East Asia or sub-Saharan Africa. Both are consistently either above or below the world average. But the Arab region is the only one that intersects, and that's the case whether you're using 2010 or the latest figures. So basically, a lot of the population is clustered right above the $1.9 a day, between $1.9 and $4 a day. And that means if you have a small shock to expenditure or income, you're going to have a very large poverty response. And that's exactly what happened with COVID-19. And this is the data that we are now turning into the economic side. This is the data that we used in order to project our poverty impacts. So basically, we took the projections from DESA. And I have to say this is April 2020 data, which now may give you very different results if we were to use like the latest IMF forecast. The situation, especially in 2021, would be rather different. So on average, the region as projected scenario in 2020 is a decline in GDP of 5.7 on a per capita basis. And in 2021, it's expected to have a rebound, mild rebound of 1.2, as opposed to a reference scenario and no COVID scenario of around 1.5 per capita and 1.7 per capita growth in 2020 and 2021. Now, basically, punching these figures and using basically the information that we have about the distribution of income and about how income will respond its elasticity to the how poverty, sorry, would respond to changes in income and to changes in income distribution. And you get a picture that looks like this. You get a picture that basically tells you that the region and in here, I have to say that this is based on national poverty lines, which is different than the international PPP poverty lines purchasing power parity poverty lines that I introduced earlier. So if I was to take the measures used by the Arab countries themselves and use them as a yardstick for poverty and apply the shocks that are basically coming out of the GDP growth figure, the region in 2019 had 29% poverty and it was expected to go down to 27%, almost 27.7%. Instead, it's now 32.1%, which basically in head count terms means that you have an additional 16 million people in poverty as a result of COVID-19. And that was our headline caption, which we produced last year in our assessment. Does this make sense? Yeah, I think so. I think it's actually quite a conservative estimate given that, for example, the other information that we've been having, such as the fact that nearly one third of the employed population in the region is vulnerable to layoffs or major wage reductions because of the fact that employment in the past two decades has been focused in informal and low paying sectors. So when you look at the loss in working hours and you translate it and you look at the impact on employment and vulnerable employment, these figures make sense. But also, very importantly, not all countries were equally affected. And this picture that I just said, once you refine it, once you update it, because it's been changing almost on a monthly basis. So when you look at what's happened in a country like Lebanon using May data from the statistical office in Lebanon, you get a story that is dramatically different. So in Lebanon, for example, you've got an extreme poverty rate that was almost 8% and Lebanon was priding in having relatively lower poverty rates than the rest of the region. That's almost tripled to 23%. And an upper poverty line of around 27%, now reaching around 55%, which is basically in your blue and orange bars here put together. And that also made for our headline news caption of Lebanon reaching 55% poverty rate in a span of six months because of your financial crisis, because of your political instability, because of these multiple overlapping crises put together with the COVID recession and you get a huge impact. So that's basically our income poverty story. How am I doing on time? Okay, I think I'll hand it over to Vlad in a couple of minutes. But before I do so, of course, poverty is not just an income phenomena. It's not a money metric phenomenon. There's also the multidimensional poverty index, which I said I mentioned is very important. That's not easy to predict. That's not easy to simulate. And when you're talking about predicting or projecting multidimensional poverty, which is made up of indicators like stunting, household conditions like health, education, it becomes a completely different ball game. We tried to do it for Syria, for example, from 2006 to 2017. And we estimated that, for example, using our Arab MPI, Multidimensional Poverty Index, probably the rate poverty headcount rate jumped from around 38% to maybe 50 or so percent. But it's not easy to do. What we've been doing in Esquia is that we've been developing a multidimensional poverty assist tool with a simulation function that will maybe help us to do so in the future. But right now I have to say that, and maybe I'd like to hear Masoud's reflections on this, it's a completely different challenge when you're trying to estimate multidimensional poverty. That's why we don't really, or I don't really know for sure what happened post-COVID-19. The UNICEF has been suggesting that multidimensional poverty has increased over the last few years in many countries. But I'm more skeptical. I just don't know. I don't think we have the information, the data that will allow us to substantiate this or even the tools, the analytical forecasting, now casting tools that will allow us to make that conclusion. One last thing, if you look at this figure, what is it saying? It's saying that when you apply a multidimensional poverty index, regionally defined, you've got almost 40% of the Arab population that are classified as poor. When you look at the vulnerability to poverty, it's around 20%, and at that you get a picture of two-thirds of the population that is poor. A very different story than when you use the $1 a day, $1.9 a day, or even when you use the global MPI of Oxford University at UNDP. Again, poverty, whether it's multidimensional or whether its income really is in the eyes of the beholder. Inequality story. Before I hand it over to Vlad, in the region, it's basically two narratives. One, which you get here, which is based on household income expenditure surveys, that tells you that the region, on average, is lower in terms of income inequality than the rest of the world, and it's been declining. That's what led the World Bank to produce the Arab inequality puzzle paper, which is essentially saying that this is the reality of inequality in the region. What you have in the streets, the uprisings, that's because of some perception of inequality that's much higher, but it's just a perception. Actually, I would argue that it's a lot more going on than it being just a perception. The evidence is when you look at the growth rates of the economies and the growth rates of the household expenditures and incomes, you'll see that the economies have actually been growing much faster. The national accounts are suggesting economies and private consumption has been growing much faster than what's being recorded in household incomes. That leads us to suggest that, and especially in middle income countries, that there's a lot of growth that hasn't been captured by households, but not all households. Basically, the gist of it is that many households that are at the top and that are not able to be captured by these household surveys properly, and Vlad is more of an expert on this, have been accruing more of the benefits of the growth process. In reality, when you try to correct for that, as Piketty has done, and you try to look at other sources of data like the tax data, and you try to correct for the inequality story, the region becomes a region that has the highest wealth inequality, as opposed to a region that has moderate or low inequality. This is basically coming out of the world inequality database and the world inequality report that shows the region has 64. The top desal of income has 64 percent of income, as opposed to maybe half of that if we're relying on the household income expenditure surveys. Let me stop here and hand it over to Vlad to give, I guess, the more important and issue that we're here to talk about today, which is our wealth inequality and cost of poverty reduction story that will lead up to our proposal. Vlad, over to you, and let me know when you want me to shift the slide. Okay, thank you, Khalid. Thank you. Good evening, everyone. So let me continue this presentation with Khalid, and I hope that Khalid will interject anytime he sees anything worth mentioning. So this second part of the presentation links very closely to what Khalid has been saying. I think on this slide we list some observations from the region that motivated this work, and so basically the facts that we started with were that in this region the concentration of wealth is notoriously high, and at the same time a lot of people are stuck with low incomes or informal jobs, and so we started this analysis by thinking, well, it's a way to address some regional problems by linking together the top wealth, the concentration of wealth that is stuck in one small group of a population, and address the problem that a large share of the population face at the bottom, that they are income poor, and we need to find some funding to elevate, to raise them out of poverty. So these are two facts of, on one hand, high concentration of wealth, and on the other hand, the low opportunities for growth, low opportunities for upward mobility in a substantial part of populations' lives motivated this work. And so a thesis that we were exploring here is who should be responsible for raising the the poor and the vulnerable out of poverty, and are there arguments why the private sector and the civil society should contribute, particularly when the state doesn't have the resources or amid all the economic problems and COVID. So the bottom bullet point here on this slide summarizes that we, in this analysis, we tried to do several things. One, estimate the mass of wealth held by a very small group of people, compare it or juxtapose it with the prevalence and the depth of poverty experienced by a large share of the population, and then explore the fiscal instruments, how to solve the problem of poverty without killing the goose and finding reasons how this kind of solution would be sustainable and agreeable to all sectors of the society. Okay, next slide, please. Okay, so one fact that we were starting with was that a small number of individuals, we found 37 or 40 individuals who were billionaires in the region, and the sum of their wealth amounted to something like 110, 120 billion dollars, which turns out to be the national gross domestic product of some least developed countries in the region. In this graph for year 2017, we saw that the GDP for Sudan is of the same magnitude as the wealth of 40 individuals across the entire region. Next slide, please. Now, the challenge that we faced was that data are not available very much, they are not comparable very well across countries. There are, Khalid mentions, kind of speculative results that are available, and so we focused on using reliable data for multiple sources. We used the wealth information from Forbes and from Credit Suisse to get several competing estimates and to see whether they are aligned with each other. For incomes and poverty levels, we used World Bank's Povkal net, and some estimates and projections from UNDP, and we took a lot of care making sure that we work with the same currencies, deflate them to the same base year, and so we believe that the results that we produced and that I will present in a few slides make sense, and we're not comparing apples and oranges that these numbers are realistic. Next slide. Just a quick comment here that the income growth projections were from UNDESA, not from UNDP, but that's just a minor addition. Over to you. And so we started tabulating information on wealth and incomes in the region. First, we started with the Forbes billionaires list, and we found that this particular list had problems. It was, as you are probably aware, the estimates of billionaire's wealth are not very accurate. These lists miss some population, the lists are not updated regularly, and so for Forbes, we just got some kind of ballpark figures to check how significant is this concentration of a handful of individuals of wealth, and what share of the poor population in the region we could be comparing these individuals to. So as of 2019, we found 37 individuals on the Forbes list, their joint wealth. I don't see the bottom of the slide, but it should be 107 billion or so. 110 billion. 110, okay, I don't see the bottom. And now the next challenge was, well, we don't know anything about the wealth of the rest of the population, and so we will have to do some kind of imputation based on national reliable statistics. So in the next three columns, we show some statistics from Credit Suisse. Credit Suisse produces an annual report of the stock of wealth in each country worldwide. I think the estimates are of high quality, even if we might still think that they are rather conservative, and so for each country, Credit Suisse reports the real wealth per adult in each country, the number of adults in the country, the Gini coefficient, and these are based on these very simple statistics on wealth in each country. We took the liberty to estimate a full distribution of wealth from the poorest people to the richest people in each country. There is recent literature saying that this is not such a wild exercise that the distribution of incomes and wealth has a lot of regularities, and so we used the very regular and standard and conservative estimates of what the full distribution of wealth in each country should look like, and based on that, we were able to estimate the mass of wealth, not just among the billionaires, but also among the top 1% of individuals, top 10% of individuals, as well as bottom 46% of individuals, and this turns out to be interesting because after this exercise we found that the wealth of the 37 billionaires in the region amounted to the total wealth of bottom half of the region's population. Now I'm not sure if I said it. That's correct, so if you can see the bottom row is basically the billionaire real wealth was around 108 billion and the bottom 46% of adults had or bottom half had around 110 billion, so they are of almost equivalent order of magnitude. And on the right hand side of this table we just show some summary statistics or some results that we got for each country. So on this slide we show a regional analysis where we, you know, looking jointly at the 37 regional billionaires, we find that their wealth is equivalent to the wealth of the bottom 46% of regional population and we do a little bit of kind of comparison how who are the people at the top, who are the people at the bottom, and we don't find the same people at the top and at the bottom. The billionaires come from some countries while the bottom 46% of the regional population come from generally completely different countries. For example, we find that 97% of adults in Sudan are classified among the bottom 46% of the regional population, so 97% of Sudanese people are poor and we don't have any billionaires in the region coming from Sudan. And then we played with other economic groups, so we started thinking, well, if we want to compare wealth of some rich individuals and, you know, and compare it to the wealth of the poorest individuals, why don't we also look at the top decile group. So on the right hand side of the table we see some the national composition of the richest 10% of the regional population. And here we can see that I think 23, maybe 23 billion, 24 billion, yes. I see 64% of 64% of Qatar's population in the region's top decile, while again looking at Sudan, our estimates show that no adult in Sudan is in the region's top 10%. Let's move to the next slide. One second, please. We're getting close to six o'clock your time, the London time. I think we will try to wrap up in seven minutes. Is that okay with you, Rondo? Five? Five, okay. Vlad, you're gonna have to run my friend. Okay. Sorry. Okay, I've already presented these stylized facts, move on. This is just illustrating the technical work we did by, you know, estimating a continuous, smooth wealth distribution in across the whole region. And on this slide, I just show the three major parts of the region, the wealth distribution across all GCC countries, again, the wealth distribution across all middle income Arab countries, and the wealth distribution among all the least developed countries and conflict countries. And what is interesting here is that the three shapes are completely different from each other. You know, looking at the bottom 46% of the region's population, we see that that's really something like 80% or the vast majority of those individuals come from the least developed countries and conflict countries, while there are not that many people from GCC and middle income countries. And above the 46% line, again, there are very few LDC citizens, but high number of GCC and middle income country citizens. This slide shows the Lawrence curve for the entire region. And again, and there are three colors here, blue stands for GCC, citizens, green stands for middle income country citizens, and red dots are for these developed country and conflict country citizens. And we can see that these three groups of countries don't overlap at all. So if we have distributions across countries, they are not overlapping, but GCC countries are up here. And LDC countries are in their entirety below the distribution for GCC. Next slide, please. I think this is the maybe the central figure from our work, getting to the idea of the cost of poverty reduction and what kind of tax would be needed or redistribution would be needed from the wealthiest people to supplement the incomes of the income poor. And so quickly, here, this table is different from what I showed before, because here the analysis is done at the national level. We carefully look how much wealth concentration we have in each country. So how much wealth in that one country could be redistributed to fund poverty reduction within the same country. The top half shows middle income countries. The bottom half shows the least developed and conflict countries. And we see that, so across all makes the top diesel wealth in 2019 was $1.4 trillion, doing a little bit of projection to 2020 in the middle of the COVID crisis. Our conservative and basic estimate is that there is $1.3 trillion worth of wealth in the top diesel group. And how does that compare to the poverty gap? What's a poverty gap? That's the amount of money needed to lift people who are under national poverty line to the poverty line to get them essentially out of poverty. And we find that those numbers are in fact very low in the middle income countries. In 2019, this was $12.95 billion. And 2020, again, a conservative estimate of the poverty gap, we have $15.6 billion. So at the right side of the table, simple counterfactual question, well, if we took the wealth of the richest 10% of people, and if we impose a very simple assessment such as 1%, would it be enough to eradicate poverty or close the poverty gap in those countries? And that's what we find. That as of 2019, across these middle income countries, the tax that would close the poverty gap was 0.9% on average across the countries. In the middle of the COVID crisis in 2020, we found that the necessary tax rate would be 1.2%, which we find that's a very reasonable and a sustainable level of taxation. And based on these numbers, we argued that a solidarity redistribution from the wealth rich toward the income poor is sustainable. And we listed out reasons why the entire civil society and private sector should agree with this form of transfer. The last sentence I will say here is that this redistribution would not be successful in the least developed countries, where I don't see the numbers at the bottom of the slide. But it will let me explain it then very quickly. Basically, it will take 35% wealth tax or 35% to 40% wealth tax annually in order to close the poverty gap. Basically, what Vlad is basically trying to say is that the cost of closing the poverty gap, regardless of the scenarios, is within reach. It's basically achievable. It just requires a political will. And of course, that's something that goes back to our first proposition that does the society as a whole have the political will in order to do something about reducing inequalities. It's not just a technical issue. It's very much a political issue. But the bigger question is, if you just give me three minutes, I'll close. The bigger question is, can the Arab countries afford not to take these bold steps? Can they afford to continue on with the same development model that they've had over the past three or four decades? Well, not from an economic standpoint, not with the deaths rising at this rate that they've been rising over the past decade. So almost all of the non oil rich middle-income countries are now reaching a very precarious debt to GDP ratio. And clearly something has to give. That situation cannot go on forever. And especially not with the rents, the oil rents per capita projected to decline in oil rich and oil poor countries. So these are the rents per capita. This is something that I did for the ERF blog post. It's just a basic simple calculation of the resource rents that come out of oil exports and natural gas exports and the like per person. And as you can see, because of so many factors, including not the least the demographics, the rising population of the GCC and other oil rich countries, you have a declining resource base per capita. That basically means that you don't have the fiscal space that will allow you to continue on with your previous policy. Something has to change. And so the conclusion that we have is that tapping into wealth is no longer a fanciful option. It really very much has to be on the table. And I also see that even the IMF lately has been discussing these options and many other circles and traditional orthodox economic policy advocates have been more open to this. My conclusion is that it's not just economic policy that will need to change. If the Arab countries are going to do something, they need to change the role of the state. They need to think and reimagine of different public services. And what Rhonda's introduction has been arguing and what I think many of the slides that we have shown have argued that you have witnessed a significant change in the way public service delivery has been taking place in a way that you've been emphasizing quantitative rather than qualitative gains. And take the example of the efficiency of government. If you just take the World Bank government efficiency indicator and you correlate that with the simple indicator. One minute. That's it. The share of public sector employees. It would seem to me that Arab countries need to improve both on the efficiency and maybe even think of working to improve the capacities of public sector employees. You can't have better health education systems without working on both the capacity and the efficiency of public service delivery. That's my last slide. And thank you very much. But you're the one who told us we can speak as much as we want. So you bear some of the blame. Over to you. Thank you. Thank you. Stop sharing. Okay, it's not. Oh, dear. Hello. Masoud. Okay. Can you hear me? Sorry. Just one second. I just want to apologize because I didn't introduce you properly. And I probably wanted to ask about the timing that we have. So just to say that Professor Masoud is now an emeritus professor. He's joining us from Boston and he's a founding member of the Iranian Economic Association and also at the economic research forum for Iran for the Arab region and Iran and Turkey. And also both Vladimir and Khaled are leading researchers at SQA, especially with this current reports on health inequalities. Khaled has long been working also even with Masoud about poverty and about research about multidimensional poverty. So participating in flagship reports, similarly with Vladimir. He's been working on Asia but has joined SQA to spearhead this work on inequality in particular. And before that, he's also public works at universities in Seoul and published in the World Bank economic review, et cetera, the review of income inequality. And I'm teaching at TOWAS. So it's 10 past now. So Sarah, how much time can we have? I think we have to give Masoud at least 10 minutes. Well, I think. And then we can start the discussion in 10, 15 minutes. Is that all right, Masoud? Well, let's see. I can cut some of my just fine. Let's go. Thank you. Thank you for giving you this opportunity to discuss this presentation by Khaled and Vladimir. Can I show the screen, yeah? Oh, yeah. Is my screen shared? Yeah, but you can maximize. Yeah. Is it okay? Can you see Randa? Yes, yes. Okay. Well, that's better. I'll try to move quickly. And also I caught some of the technical bits. Maybe we can discuss later with Khaled and Vladimir directly. You know, I broadly agree with most of their analysis and prognosis, but as a discussion, I'll try to look a bit in more detail into some of their findings and see if we can throw up some additions to, you know, future research agenda that Khaled mentioned. Well, in the literature, there seems to be some debate on the nature and trends of income distribution and poverty. And this is shown in the diametrically opposing narratives in Khaled's presentation. I think we do not have two stories. I mean, if you look at the two sides that Khaled mentioned, we do not have two stories, but one story looked at from different angles. That is from individual country perspective and regional perspective. The story one showed here and discussed by Khaled shows individual country income distribution and regional trends viewed from an individual country perspective. Story two told with the help of Piketty's diagram looks at income distribution from a regional perspective as if the whole region is one country. It's not just the addition of the top 1%. The story told by Piketty's picture is really the overall regional picture and is not the same story as the previous slide. Middle East happens to be a region where some of the richest countries with small population exist side by side with some of the poorest countries in the world with high population levels. The regional picture is of course of interest in relation to the political economy of region as a whole, et cetera, but really doesn't help us if you want to understand what is happening in poverty and income inequality within the countries. Another anomaly that mentioned by in the two stories of Khaled, this discrepancy between national accounts and survey based average levels is also visible in per capita consumption levels and it is not just the phenomenon related to the Middle East or Arab countries. It is a phenomenon which is really common to all countries which have survey and national accounts based data and there has been literature how to sort this out, but the work of Khaled and Vladimir goes on still to make projections of poverty based on national accounts growth rates which is really problematic. In an earlier work I had suggested calibrating survey means before making such projections. Ravalion has suggested using national poverty lines for such calibration, but anyway this now having said this we can move to two important contributions of the work which is the estimate of the resources needed to lift everybody out of poverty and also the measurements of distribution of wealth so briefly and then the suggestions of the tax, wealth tax. Well, the estimation of poverty gap is of course an important contribution and is a lot of work involved in that and they give the cost of closing the gap for the countries in the region, but also they are... I think you're frozen. Hello? Can you hear me? Yes, you're fine. I think he's having some connection issue. Okay, so they are correct in using national poverty lines rather than World Bank international poverty lines. The difference in the average consumption of the poor and poverty line is the amount needed to raise the average for above the power line. If you multiply this by the number of the poor it gives us the estimate of the cost of raising the consumption of all of the poor above the power line and this is the measure they have provided for 2019 and 2020. In passing it would be worth noting that if we multiply this difference by the total population it gives us the cost of the universal basic income. The difference between these two is that the first one is the cost of a targeted poverty eradication program and the second one is universal. Universal basic income has become popular particularly in the context of the COVID crisis and therefore it may be interesting to provide estimates of that too. For countries such as Yemen and Sudan where the majority of the populations live below the power line, the difference between the two may not be very large. Okay, so the paper provides, I mean the report provides the cost of poverty eradication for all the 14 countries and also compares it with the rest of the topic side. Now moving on to the wealth distribution work. They provide wealth distribution for 14 countries but also across the whole region which is really this is a massive work and very timely. They use estimates of average wealth and genie coefficient of wealth distribution from the Credit Suisse data bank to estimate distribution of wealth in each country. This data is also supplemented by the data from Forbes 700 billionaires list. Reading their report on this work, I was not clear how the same genie coefficient is applied to upper and lower ends of the distribution, the log normal and Pareto distributions to estimate the distribution function and also if the billionaires data is used in fitting the upper tail. These issues need better discussion in the paper and warrants a separate technical paper explaining their procedures in more detail. Another issue related to the reliability of the Credit Suisse data on both the level and distribution of wealth in the countries in the region. The wealth levels are estimated by shortcut methods for all the escort countries in the Credit Suisse data bank and they are considered as poor or very poor approximations by the Credit Suisse. Distribution of wealth is then estimated based on distribution of income and using extrapolations from distribution of wealth and income from countries where such data are available. This may be permissible in a large data set where consistency of data work is important but where it comes to individual countries studies where the absolute value of wealth is of interest it may need more investigation. Another area of possible future work for escort. I'm sure the authors of this study are familiar with many of these criticism and I think they are correct in believing that their estimates of concentration of wealth in the top side is likely to be very conservative but these estimates can be improved. Of course you know it doesn't mean that the middle region has higher concentration that other parts of the world like Latin America or United States etc. Okay the question of wealth tax. So they finally move to this very neat table about the wealth tax as they juxtapose the two estimates of the cost of poverty eradication and the wealth of top detail nicely presented in the following table for the two groups of countries. A wealth tax of around 1% on the assets of the middle income countries is sufficient to close the poverty gap but for the least developed countries this does not look feasible and foreign assistance is definitely required. Wealth tax in the context of COVID has been discussed in many countries including the UK and various Latin American countries as a means of covering the cost of the cost imposed on governments by COVID and not necessarily as a poverty eradication program. So a few comments on the results. I think COVID would have much more profound effect on the regional economies and societies than can be captured by poverty gap projections. The real story of COVID is about inequality. It has a devastating effect on the informal workers and other blue-collar working classes that have to be physically present at the workplace. It has hit remittance flows that is important for the low-income families and tourism which devastating effects. I'm sure you know Khaled and Vladimir are very aware of this. So some of the immediate questions of interest are related to how are the affected workers catered for by the existing healthcare system as Randall aptly mentioned and the social safeness. What measures have governments taken both preventive measures and compensatory measures to deal with the situation. Esquire website has plenty of interesting analysis of the likely impact of COVID on different population groups but very little on what has been done in different countries. This I think is essential information and requires a requirement before governments can aim for wealth taxes. The issues of legitimacy are addressed in the paper by Khaled and Vladimir and they are related to these type of questions. Getting back to the tension between regional and national perspectives the small wealth tax in top income countries in the region the oil exporting countries would be able to finance poverty irrigation programs or even universal basic income programs in the poorer countries but it would be difficult to tax private citizens in one country to subsidize another country. Of course if the money can come from the existing government budgets without the need to raise taxes this can be feasible. If you look at the sovereign wealth fund in oil rich economies in the region you see that they have close to three trillion worth of assets. Any wealth fund manager worthy of the name should be able to get a return of five to ten percent a year on these funds and with recent stock market trends in countries where these funds are mainly invested indicates much higher returns on our likely that brings at least between 150 to 300 billion dollars income a year from the sovereign wealth funds then a 10 to 20 percent tax on this income not the wealth not the assets but the income of sovereign wealth funds would be sufficient to finance poverty education programs in low income and middle income countries in the region. This however should be managed by an independent body not subject to political manipulations by the donors. A couple of final notes just really we should focus more on the covid it's short-term and long-term effects and it's particularly impact on inequalities within countries across the country's impact on the budgets as Khaled mentioned is going to be important impact on this the distribution of conflicts that it may create. We need to know how the governments are coping with covid how well do the healthcare and social protection systems cope with the pandemic and what caps there are then we have to also look at the long-term implication inequality implications of covid particularly it's impact in terms of educational attainments and opportunities. It has additional implications for education budgets we have to be forward-looking and foresee these developments if we are really concerned about inequality trends and finally I mentioned this to Khaled before the meeting you know with the covid the kind of data sets and surveys that we have had been relying on so far up to 2019 it will no longer be available they are not available for 2020 not likely to be available for 2021 maybe future years and at best we would have telephone call based surveys so what would be implications for the research in escort how can escort deal with this problem and what new initiatives are necessary one suggestion is for example use of administrative data encouraging governments to make use to make this data available. Administrative data is very valuable but not used in in the region and therefore I mean these are the type of things one can do but it's important to really address the question of data as we go along because we cannot just keep on projecting into the future by using the past trend thank you very much. Thank you very much Masoud and hello everybody my name is Sarah Stevano my lecture saw us and I'm quickly stepping in for Randa who's got problems with her internet connection so we have only a few minutes left so instead of going to Khaled and Vladimir first I'm going to just share with all of the speakers the three questions from the audience and then we can do a round of responses starting with Khaled of Vladimir and then Masoud again and then if Randa is back with us and does she can answer some of the questions okay so if you don't mind I'm just going to put the questions because we're very short with time so there is a question from Sana who is saying Lebanon as you mentioned just half of its population living under the poverty gap got hit severely severely by the pandemic corrupt government's explosion and so forth there has been foreign intervention and IMF yet there aren't any significant changes so what is the way to go from here and what are some of the baby steps it can take to move forward at least then there is another forward-looking question from Batul who's saying foreign aid interventions and local aid has been more widespread during the pandemic but would the shifting focus from poverty reduction to simply alleviating the threats of COVID-19 be one of the main drivers so that results in an increase in the poverty gap what should be done differently to ensure that these interventions actually target poverty reduction and then one final question from Omar who's saying regarding the wealth tax I'll join make close the poverty gap is it not merely a redistribution of wealth which does not tackle the lack of opportunities that you mentioned earlier so if we can go around with some reflections both on Masouz points and then on some of these questions as you see fit so that would be greater in the very last a few minutes so thank you Khalid okay thank you sir I mean this is obviously very difficult to to respond to all of these questions in a matter of minutes but but I would like to thank Masouz obviously for his very pertinent and very and really very deep analysis of some of the intricate issues and I fully agree with him that there are you know there are many data problems and of course we do rely on many assumptions many of these forecasts should be taken to be rough estimates of order of magnitude possible order of magnitudes of the impacts rather than precise estimates so that's my and we really do try in the paper to highlight that all of the assumptions that were involved and all of the problems with the data that we rely on but let me go back to some of his more interesting issues first of all the sovereign wealth funds idea is very interesting but of course that is only applicable for the GCC countries because many middle-income countries which is the ones where you get hard hit and the LDCs they don't really have that ability but for these GCC countries the idea and the notion of a universal basic income is very much I think the way to go and and and again that's a governance issue it's not just a technical political issue how are governments coping with covid we did actually a lot of work on that I mean that's another subject that we can you know speak on for another lecture but if you go to the escrow website there is now a whole project that we have on monitoring social expenditures which tries to get much more in detail on how governments are spending especially on the on the social side by function by locality etc and we're trying to better gather the infrastructure data infrastructure to answer that question but there's also been an assessment of all the stimulus packages that we've had in the region so far whether they've been in employment benefits whether they've been in income transfers whether they've been health support and especially to the vulnerable groups clearly a lot has been done but it's I mean in Egypt for example there's been you know almost like 100 billion pounds which I don't know is equivalent to maybe four billion dollars just in one country in one year and we did an analysis just to see whether the impact of that stimulus package has made a difference and it clearly has on the poverty story so there are many many such stories but that's a subject for for perhaps a more extended extended discussion. Sarah Lebanon what can be done the way forward it's it's very complex I don't know how to answer that question Rhonda's here she can probably help me but out on this but if you don't have a government in place you really don't have any options so clearly the first thing is you need to have a government and then it's going to be a very rough road but everybody knows the problems in Lebanon are not economic they're not related to the human capital Lebanon has a wealth of economic potential human capital resources are the best in the region whether you measure them years of schooling or health or otherwise it's really more of a governance issue I think and and Lebanon is the classic example of the need for governance reforms and everybody recognizes that but it's a political stalemate so I don't know I really don't know the answer to that question even though I've been living in this country for 15 years so one final short redistribution will not tackle the structural issues I fully agree this short is short-term analysis and that also goes back to Massoud's question I mean this is not a long-term solution this is basically what you can do in the short to medium term but that's why my last slide I tried to go to the whole issue about reimagining the role of the state and reimagining the function of the state in public service delivery in health delivery and education delivery if you do that and you rethink as Massoud and I have been arguing the nature of macroeconomic policies so that you can address Massoud the opportunities that go to these vulnerable groups and you can better tilt the scale towards them then you have a shot at getting this Arab inequality paradox to be resolved at heart but that's obviously you know it's going to be hard when you have run-tier systems or when you have a political economy that's been based on a very different social contract than the one that you desire is there hope I think with the declining rents per capita and with the current situation being in so many different aspects very challenging I think that there is hope because there is no other option but the other option as we've seen is is conflict and I don't think anybody wants that let me stop here and hand it back over to you thank you very much for Khaled so I will need to ask everybody else if you want to add some thoughts so be incredibly brief I'm sorry but we are already over the allocated time so Vladimir do you have anything to add then Randa and Massoud no I think Khaled already gave a good version of some rise all the important points that I would think of thank you that's great thank you Randa would you like to add yeah I mean it's very difficult in short time but just an anecdotal evidence in Lebanon apart from having seven billionaires it has more scanners medical scanners per capita than Saudi Arabia Turkey or Qatar so obviously you know when you leave your health system without leadership you know to the private sector in a conflict situation with lack of this redistribution lack of rights that's what you get you get a national catastrophe in a middle-income country plus you have it's a product of the political failure this is the title of a paper assessing the impact of the explosion and covid so you know the pandemic has highlighted the intersection later of the challenges and it's not the poverty or covid they go together you know if you want to stop the transmission of covid if you want to give poor people jobs they work together so it's not either or it's you know it's it's very very challenging on our own level and there is work being done but unfortunately we're also caught in the fault lines of the past and the systems that produce those inequalities and they don't disappear easily and I think that the work of Esco is just signaling the need for distribution really the fact that we don't have systems for distribution is a shame really because we now people are dying because of it and I think as the it will come to home people I think it's a very personal lot but I'm here thank you very much I'm sorry about the interruption and thank you for joining thank you Randa don't worry Masouda a 30 seconds thought okay well just yeah I think you know this wealth tax is very important that is raised by Esquire because it also encourages the researchers within countries and the governments to start paying attention and doing the estimates and going forward and also the reform of the tax is important on the sovereign wealth funds I didn't mean a fund for the all rich countries themselves but a fund provided by all rich countries for the region as a whole I think this is very important I mean this is important in the sense that you know we have a region which part of it is a washing capital another part is a wash in very skilled labor etc very complimentary and therefore I mean talking about this sovereign wealth fund which is not really eating into their capital but it's using some of the income at this particular juncture and hopefully it opens the you know the room for cooperation and finally I want to say about you and redistribution okay redistribution is good in itself but really it doesn't provide the resources for a lot of these countries which are balance of payment constraints they need external assistance they need to import a lot of their you know even the vaccines etc but also in terms of you know going forward if you redistribute and your consumption levels go up you need you need supports so that's that's another thing to keep in mind which relates to restructuring of the economies thank you very much thank you very much Masoud and thanks again to Randa also for having organized this webinar and to Khalid and Vladimir we are very grateful to have had you with us today and before you all go I just would like to mention that our next webinar in the South Economics webinar series is coming up in a couple of weeks on the 23rd on the 24th of February and it will be on rebuilding macroeconomics from the margins so we will be discussing two projects led by Elisa van Bayenberg one and Daniela Gaboor the other one so do join us in a couple of weeks time but thank you all again to particularly our speakers and also to our audience and have a good evening to all of you thank you thank you sir thank you everybody pleasure to be so much thank you bye bye