 Well, thank you very much. I'm delighted to be here. I need to thank Wider, Finthop, Tony Addison, and the leadership team of Wider for inviting me. I have about 20 minutes. OK, well, I have a series of slides which I hope will provide some stylized facts and maybe more questions than answers. Trying to reinforce some of the messages that Justin Lin just put on the table, but perhaps looking at things from a slightly different perspective. So this is my outline. I'm not sure I'll be able to go through everything. I need to start by briefly explaining a broader project which Wider has supported and which brought me here. And then I'll move into my presentation on what I call the economics of preconditions. This kind of prelude is about this Oxford handbook of Africa and economics, which Justin Lin and I are leading. In fact, the project is completed and we're very grateful to have benefited from a lot of support, including from Wider, from the African Development Bank, from our two employers, the World Bank for Myself and Pekin University for Justin Lin. I should also mention, perhaps recognize quickly, one person here. When I got the phone call from Oxford that the project had been accepted after calling Justin to let him know about it, the first person I called was Ambassador David Malone. I sent him an email because I had contributed with Justin to his volume on development thinking. And I knew he had gone through this and I wanted to get his advice. And he was traveling in Brazil. And some people are just strange. He found the time to respond to my email and give me a phone number in Brazil to call him. And I was able to spend, I don't know, maybe 45 minutes on the phone with him and get a lot of useful advice as to how to lead this. So thank you, Ambassador Malone. The handbook is obviously a very ambitious project which nobody can summarize easily. Two volumes, 93 chapters. And I've put here some of the contributors just so that you can see that there's really no ideological preconception here. You have people from Andrew Berg, from the IMF, to Hajun Chang, from Cambridge, to many, many people. And we've been very fortunate to have an Oxford great understanding and a lot of flexibility, giving us the possibility of having, hosting, even conflicting views on certain topics. So happy, really, that we are wrapping up this project. And the next 15, 20 minutes that I'm going to use now to talk about my presentation is not an attempt to summarize what could be in a handbook like this, but just perhaps one theme that I picked up from doing this work. Now, the traditional recipe for economic prosperity, it's something quite simple. Microstabilization, structural reform, and institutional reforms. That's basically what Prime Minister would hear if he or she asked what to do. And this is obviously the result of several decades of thinking about development. Now, concretely, you have all these policy domains that I purposely wrote this so that nobody could read to give you a hint as to the kind of challenges that this imply. These are just on the left, the key policy domains, the justification, and each of these policy domains has like 10, 20 policy recommendations that you need to implement to be a successful economy. Now, most of these things make a lot of sense and are results of long thinking, but you can see being, putting yourself in the shoes of a Prime Minister or Minister of Finance who has maybe a timeline of two, three years to make something happen in a poor country, the challenges that this implies and the difficulties. So one of them gave me this map, which is a public map from Transparency International, a very reputable organization. Saying to me, well, I just read this new report from Transparency International on one of the very first preconditions to growth, which is fighting corruption. Since this team, this is an important team for this conference, I thought I should pick up on this. Well, what's interesting in this map, and I didn't see this even though it was obvious to me until the Minister pointed out to me, he said, well, did you notice that all the good guys, all the non-corrupt countries are yellow and we are all red? And the point the Minister was trying to make was that it is again this, you know, us versus them, you know, they think that everything we are doing is bad and everything they are doing is good. And of course, you know, it's a bit of a caricature, but you cannot look at the map and not pause and ask yourself what may be going on? Why is it that all the non-corrupt countries are Western countries and perhaps Japan or Australia, which many people would consider Western countries, and perhaps Chile in Latin America and a little bit of Uruguay in Africa is just Botswana, which is a bit yellowish, but otherwise the word is us versus them. So that raises, you know, the issue of universalism versus relativism, which I won't get into, perhaps. But it was interesting that I got this from this Minister and I decided to think a little more about it. So I went to look at the data from Transparency International. I'm sure Fintab will be happy to see that his country, Denmark, ranks first, the least corrupt country in the world. My beloved Cameroon doesn't perform very well, so I had to pick another country to feel better, so I picked Kenya, but even Kenya is doing less bad than me than us. And then I decided to look at some of the fastest growing economies in the world to see how they are doing, and then I was puzzled. Look at China, ATF, Vietnam, 123rd, Brazil 69, Namibia less corrupt. And then I called the minister and the minister said, well, I'm sure people in Namibia would want to have the growth that the Chinese got if they have bad reputation from Transparency. You see his point. Now, I went even further and looked at the broader governance indicators, not just corruption, war governance indicators project, and look at the top 30 economies in the world, the fastest growing in the past 20 years, and that's even more puzzling, because except for Singapore, really they're not doing very well in terms of corruption. So of course, shouldn't draw the wrong conclusions for it and say well, but it's just puzzling. So Justin Lin and I wrote this paper a couple of years ago where we just plotted, you know, scatterplot, GNI per capita or GDP per capita, and governance indicators on the y-axis, and you have an interesting story here. I mean, this is not the theory, but to just give you stylized facts. Basically, that low income countries tend to have a perception of poor governance, and that the more you increase your GNI, GDP per capita, the better perception you get in terms of governance. Well, and this is just correlations between some of the dimensions of governance, the famous sixth dimension of governance from the world governance indicators, and you can see the very high correlation with GNI per capita. So the issue then is whether having a good perception in terms of corruption and governance is necessarily a precondition for growth, and the answer clearly is no. So I just look at very simply, put long-term growth for a couple of countries and see where they started to pick up and see if we can come up with some preconditions, not only in governance, but also in physical capital, stocks or human capital, a variety of variables. Well, I couldn't find much. China, you know, for a long time, very low growth, and even in 79, when they started what President Barack Obama has called an achievement on parallel in human history, having a country of that size grow nearly 10% for 30 years, you can look at even the physical capital in 78, 79, it wasn't that impressive. We had less than 3,000 kilometers of railways less than Zimbabwe or Mozambique or Uruguay today. You compare that to India, 64,000 or Russia, and then, of course, this is not the theory again. I'm just giving you facts. I'm not jumping to any theory. I'm just trying to wake you up and annoy you a little bit so that before we break, I have perhaps a few things to think about. I look at human capital. Is it a precondition? This is Brazil. I pick average years of schooling, and I put long-term growth in Brazil. What happened in 68 when they had this first big pick? Well, average years of schooling was just about two years. Not very impressive. Even in 93, when they went through this wonderful growth spell with lifting, I don't know, 40 million people out of poverty, average years of schooling was about four years. Lower than Cuba, almost similar number than Ghana. So what's going on? Again, not trying to say that human capital is not important or that physical capital is not important. I'm just trying to say that even in some bad policy environments, some countries have been able to do things, and that's where we need, I believe, to look. I also think why the presentation that Justin Lin just made is to me a very enlightening one. Again, this is China. Human capital, not very impressive. Before 78, let me go quickly. Italy, so I asked myself, was it different for industrialized economies? Let's pick an industrialized economy on which we have long-term historical data and look at average years of schooling. We have this graph for Italy where you can see that, in fact, average years of schooling has been growing, increasing with GDP per capita. So it's not as if you needed to have ten years of average years of schooling before you can do anything. You could even in bad policy environments with the right strategy start doing something, but of course the sustainability of the growth process would have to be dependent on new making progress, on human capital and physical capital, what Justin Lin called the continuous dynamics of upgrading hard and soft infrastructure, as he put it. Do preconditions really matter? Again, human capital. Some countries in 1980, 2012, number of years of schooling, the story is not straightforward. You have Singapore. If you believe these numbers, I put this data source, UNDP, a reputable organization, an institution, so we should believe their numbers. Singapore, China in 1980, less than four years of average years of schooling. Again, lower than Cuba, lower than Vietnam in 1980, and you look at 2012. Spain wasn't very impressive, or even Portugal in 1980. Still, they were already industrialized advanced economists. So again, I'm not building any theory, and I don't want during the question and answer somebody accusing me of jumping from data to theory. I'm just giving you stylized facts so that we can have some thinking and some conversation. I could do this for a number of variables. Let me skip this, but let me perhaps stop here for one second. This is an interesting table from a study by the director of the World Bank Research Group, Asli, Demigur Kunt, and a couple of colleagues. She looked at investment climate variables, and she was trying to see if these investment climate variables and the things that managers actually report to be the major obstacles to productivity growth are real. So these are the results of the service. Managers being asked what are the key obstacles to firm growth, to productivity growth. And the higher the overall number means that this is really an obstacle, and these are the top three or four, taxes and regulation, political instability, inflation, and financing. This is what comes out of the investment climate variable from service by managers, firm managers, so people will know what they're talking about. So Asli and her colleagues took this, and then they did the econometric analysis to go and dig deeper and look at the actual factors that influence firm productivity growth. And interestingly, they came up with exactly the same firms, the same numbers, but with different variables, meaning that managers often get in the wrong when reporting on preconditions. These investment climate variables are obviously very useful, but they do not necessarily provide us with policy levels because sometimes there are symptoms of something else, or sometimes as the econometric analysis by Asli showed, they can just be misleading because the manager is thinking about something else when answering the question. He's thinking about profit, thinking about something else, but not in terms of firm productivity. So again, these are useful tools, but they do not really tell us much, I think, in terms of preconditions for firm performance and for economic growth. So to sum up my point here, it seems to me that development economics has spent a lot of time picking the wrong reference models. We experts or thinkers of development economics, we go to Rwanda or Bolivia, and we look at everything which is missing, which is wrong. And we have in mind the ideal economy, maybe Denmark, maybe Switzerland, and we come up with the list of missing ingredients, and we recommend in good faith that they should improve on this and this and that. It seems to make a lot of sense. But if you think a little harder about it, you will realize that in fact, there will always be missing ingredients. It's an unfinished business. And by definition, these countries are poor because they are missing something, so we are really not telling them much. So perhaps the right thing to do is to start with what they have and how they can maximize it, how they can make the most out of the bad conditions in a world where there are more opportunities today than 30 or 50 years ago, as Justin said. And there's one aspect of it which is often neglected by economists, which is the political feasibility of some of the things that we recommend. Remember the long table that you couldn't read at the beginning of my presentation. Well, when you go to a prime minister and you hand that prime minister a list of 100, 200 policy recommendations to be implemented, the prime minister is nice and polite with you, but he or she understands that you don't understand him or her because no prime minister has the luxury of thinking that long ahead, and it's just very hard. And as the work by Danny Roderick and others has shown us, some of these binding constraints which we identify are less important than others. So by just giving equal weight to everything, we may be wasting some energy and some resources. And we have poor countries and governments with limited capacity being stretched too thin as to do too many things at the same time as a condition for good performance. I think that I hinted to this. I think that we are living in a... This is my own time by telling me that it's time to stop. Let me just maybe take a couple of minutes. Just to say that I really believe that we are living in a much better world for poor countries today than 20, 30 years ago. And I also believe that the main sources of growth for these countries will have to be trade. I know that this view has been a question including by people like Howard Pack at the University of Pennsylvania. I have a lot of respect for the work that he does. He and a few others think that we should be less optimistic about the prospect for world trade. And in fact, yes, if you look at the data for the past couple of years, the growth of world trade has not been what we had expected. But still, I tend to believe that poor countries, low-income countries can do very well in today's world because there will be growth opportunities through trade. But what kind of trade, what kind of reform, what kind of policies? And this graph simply shows you the results of simulations in a study done by the OECD, the World Bank, and the World Economic Forum which is interesting because it highlights one thing. The most important potential source for increasing global GDP lies in value chains, connecting poor countries to global value chains. This study is very interesting because it simply compares two types of trade policies. One would be to remove all tariffs on all imports in the world, across all the countries in the world, and see what would be the benefit for trade. And reducing supply chain barriers, not all of them, but picking two of them, and just trying to make them look halfway as good as those in Singapore. And the results show that, in fact, global GDP would be increased up to six times more by reducing supply chain barriers than by reducing tariffs even to zero. So there are opportunities there. These are, let me skip this, these are opportunities in employment. I can come back to this if we have time. But one thing that we need to do, I believe in advising poor countries, is to help them focus on things which are critical. This table is on Tanzania. I didn't know that Professor Wang with prominent Tanzania economists would be discussing the paper. So I picked Tanzania. This is from work that I've done with Hinden at the World Bank, by the way. Hinden who is here who has a presentation tomorrow has led, I believe, some of the most exciting work at the World Bank in recent years on ways to develop light manufacturing in developing countries. And most of this work is free on the Internet, so you should really get it. So this table, which is from our book on Tanzania, simply shows what we have identified as critical areas for intervention. And what it tells us is that, yes, there are many important things that the government needs to do, but perhaps we should help them focus, identify the most critical one and the most important one instead of letting them randomly do too many things and not doing anything really, really well. So here are my thoughts, a few random thoughts from what I just said. I will not read through this. I will just leave this up there so that you can look at it. And hopefully we can have an interesting question and answer session. Thank you.