 Is that too loud? We're OK? OK, thank you. Thank you, Henrik. Yes, it's good to be back in Southeast Asia. Last time I was in Vietnam was in 1992, so it's nice to be back and see the changes that have taken place over too long a period. So I'm here talking about agricultural productivity agricultural sector and the non-farm economy in Ethiopia and the experiences that have taken place there in the past 10, 20 years. And so let me just start by just giving you an overview of my story in the next 20 minutes. And the idea here is that Ethiopia has experienced some strong economic changes growth in particular has been quite impressive and changing economic landscape. And the reforms that have taken place since 1991 with all of the DERG have been based largely on agricultural development led industrialization strategy. But I want to focus in particular here on the non-farm economy. And I want to stress that the non-farm economy is important in terms of employment and in terms of income, but it is neglected in policy circles, as Henrik had alluded to. And we'll conclude that, well, perhaps this neglect is benign, but for the time being. And so let's see what we mean by that as we proceed. So just to give you a sense of the structure of GDP in Ethiopia and what the changes that have taken place in the past decade or so. Pretty standard for an African economy. So you have large employment in agriculture. So agriculture is the main employer and mostly small holder agriculture, but low productivity. So about 50% of GDP is made up of agricultural production, but 85% of employment. Now services, on the other hand, are a smaller portion of employment, but make up a larger percent of GDP. This is where I think the remarkable story for Ethiopia is in the African setting is the high growth rates that are experienced there. Now I should caution that there is some skepticism about these numbers for Ethiopia, and there's been quite a bit written about the numbers that come out of the central statistical agency. But what we see here, according to the official figures, is between 2000, 2012, an overall growth rate of 9.4% per year. Quite remarkable. The service sector driving a lot of this, but in agriculture we see 7% growth per year. OK, even if we don't believe those numbers, if you look on the ground, we do see things going on. We do see changes taking place in the agricultural sector in Ethiopia from various different measures. And so what we are seeing growth, we are seeing changes in the economic landscape. The precise numbers are kind of hard to pin down. So here's an example of the changes that we're seeing in the rural sector. So this is based on work that Tasu, Woldohana, and I have done with Wider's Growth and Poverty Project, where we've constructed these poverty incidents because really the cumulative distribution of per capita household consumption from three household survey years. And what we see here is the vertical black line is the poverty line. The narrow or the thin black distribution line is for 2000, and the blue one is for 2005. And here we see some moderate growth throughout the distribution in rural areas. In urban areas, we saw much larger growth, but I'm focusing on the rural sector here. But then between 2005 and 2010, we've seen considerable growth. And across the board, with the exception of the poorest 10% of the population in rural areas. And this is consistent with other data that we see in terms of non-monetary measures of welfare and the like. So we're seeing considerable changes in well-being in Ethiopia. And so now we've seen the structure. Let's think about what has happened since 1991. And this was in 1991 was when the Derg government of Manjistu was overthrown and policy reforms were implemented that introduced a market-oriented approach. Yet, I should be very clear, the government maintained strong control. So a market within confined bounds. And I'll talk a bit more about some of those bounds. And as I said before, the driving force of the core of these development strategy is this agricultural development-led industrialization strategy, with the idea here being that there's broad base growth of smallholder agriculture will not only result in less food and security, but will also lead to broader race growth in smallholders, but would also spur industrialization through forward and backward linkages. So forward linkages, for example, through the production of a wage-type foods or industrial products. And backward linkages through the demand for fertilizers and the like. Now the reform experiences, the focus has been on agricultural production. And so let's just take a look at and see what has happened. So in terms of production growth, we saw that there was considerable production growth from the previous slides. And much of this growth has been in the form of expansion of land, not so much through agricultural productivity. And this is not terribly surprising, given how little modern input use is observed. But there is some evidence that there are changes that are taking place that lead to productivity gains. So for example, the expanded agricultural extension system. Currently, there are some 42,000 extension agents in Ethiopia, which gives you, on average, about three extension agents per ward, which is the highest number of agricultural extension agents per farmer. So presumably, there is some dissemination of information going on here. There's evidence of increased modern input use as well. Most of this in terms of seeds, most of this in the form of modern varieties of maize. But in a recent value chain study for TEF, my co-author has done, we see that there's more use of modern seeds for TEF as well. Fertilizer use. Fertilizer use has doubled over the past decade. And if you think about where these seeds and fertilizer come from, they come through government organized cooperatives. So just keep in mind that the role of the government here in providing those inputs. The focus of Adley has not just been on increasing agricultural productivity through extension, through the use of modern inputs and the like, but has also focused on improving the physical infrastructure. And the Ethiopian government has invested enormous sums of money in building up the physical infrastructure. And this is where we could think about Koshik's comment this morning about the macro effects of some of these policies, which include the use of the financial system and the credit difficulty of small-scale farmers, small-scale enterprises having access to credit because of the use of that for developing the physical infrastructure. But now let me just focus on the outcome of this. And starting with roads. Starting in 1997, the government has poured enormous resources into improving and expanding the road network. So the major trunk roads have the length of all-weather surface roads has doubled in 15 years and has more than doubled since 1997 to this date. And most regional capitals are connected to one another, which means that the wholesale markets in these regional capitals are connected. And I'll talk a bit more about that in just a minute. In terms of remoteness, there's less remoteness as well. So if we think of the percentage of the population that's over five hours from the city, this has fallen from 82% in 1997 with the start of the road building project to 38% in 2007. Roads have not been the only emphasis, but also electricity. The Ethiopian government has devoted resources as well to building hydroelectric dams. And the construction that was initiated prior to 2000 has resulted in increasing generating capacity from 7 watts per person in 2000 to 21 watts per person in 2010. And with the government is currently in the process of building a dam, damming the Blue Nile, the Grand Millennium Dam, which would place Ethiopian a position to not only provide electricity for the domestic needs, but also export to Sudan, Djibouti, and to Kenya. But this is a sensitive issue, especially with the Egyptians and the downstream countries, the Egyptians and Sudanese. So we'll see where that takes us. In terms of telecommunications as well, fixed phone lines have more than doubled since 2000. But more impressively, mobile subscriptions have risen from 50,000 in 2003 to 10 million in 2011. So quite remarkable changes. So what are the consequences of this in terms of the rural sector, in terms of the marketing of production in the rural sector? And this is where Bart Menton and I did some work on interviewing traders and brokers and truckers in all of the major wholesale markets in Ethiopia. And we found, among other things, that these changes over the past decade have improved spatial market integration or serial markets. There's been a 50% reduction in transportation cost between these wholesale markets. And that marketing margins in these serial markets have fallen as there's been more competition. And you see, more competition and greater flows of cereals through these markets. And here are some of the small-scale traders are some of the non-farm workers that we're thinking about here. Now, in terms of policy and the non-farm sector, the government has been explicit in its PRSP or its five-year plan, the most recent of which is the Growth and Transformation Plan, that medium and small-scale enterprises are central and an important part to rural development. But even though that's noted explicitly, implicitly, it's treated as if the agricultural development is a prerequisite for any investment on the part of the government in the rural non-farm enterprises. So the idea here is, well, the consequence of this is that the rural non-farm sector falls through the institutional gaps. On the side of the MSEs in the Growth and Transformation Plan, the Ministry of Commerce, their entire focus is on urban MSEs. It's quite explicit that that's urban MSEs, and all of the follow-up has been clear that that is where all the emphasis has been placed. Now, for the Ministry of Agriculture and Rural Development, which is arguably the one ministry that has the largest presence in rural areas, its focus has been on agricultural productivity primarily. And so where does the rural non-farm economy fall in there? It's not covered institutionally. So let's just take a minute to examine some of the characteristics of non-farm employment. And OK, thanks. Our best source of information about the non-farm sector is a rural investment climate survey that the bank did back in 2006 and 2007, though. Recent household surveys give a consistent picture with this. It's important for rural employment. 25% of households report some form of non-farm income. It's especially important for female-headed households, where 41% of female-headed households report some. And only 3% of households report this as their sole source of income. So agriculture remains the key sector for households, but the non-farm sector is also important for some. And it's important in terms of sources of rural incomes. Among those who report some form of non-farm activity, that activity makes up, on average, 42% of their income. And if we look at all households, looking at a household survey, 17% of households in the poorest quintile is made up of non-farm income, on average, among all households, and 13% for those in the richest quintile. So what we're seeing here is that the non-farm sector is an important source of employment and income for disadvantaged households and for female-headed households. Now in terms of the composition, it's not just manufacturing. In fact, it's not primarily manufacturing, it's services. And it's the small-scale enterprises, on average, 1.4 workers per enterprise. And 99% of the enterprises have three or few workers. And they're low earnings. What are the reasons for startups? We have both push and pull factors. You can see that those who aren't able to produce as much because of lack of access to land, or if they have bad years in terms of agriculture production, they're pushed into the non-farm sector. On the pull side, if you have a good year, then this gives you a means of using the agricultural income that you have earned. Interestingly, market opportunities are not one of the biggest draws. We see that this makes up a small percentage of the reasons why households started non-farm enterprises. So what we can see here is that there's this close relationship between agriculture and the non-farm sector. Let's just highlight some of these very quickly here. First, agricultural production affects demand for non-farm employment. The local agricultural production does. And the farm income is also a source of non-farm investment. And the non-farm income is a source for inputs into farm production. So it goes both ways. I'm going through this quickly. Here's, I'll skip this. And non-farm labor activities are seasonal and counter-scyclical with agriculture. So the idea here is that the peak activity periods for the non-farm sector are during the slack demand periods in agriculture. And the low periods of activity are during the planting and the harvesting period. So in other words, the non-farm labor is, non-farm employment soaks up the labor when an opportunity cost of labor is low. And so effectively, the non-farm sector and the agriculture sector are complements. Now constraints to growth in the non-farm sector on the supply side, we have the investment climate. So our costs are high. So you have cost of transportation, telecommunications, and the like. On the demand side, we have limited local demand that's related to agriculture. This follows from markets being fragmented. Now just let me speak briefly about the political economy issues that play here as we think about the role of policy in the non-farm economy. The government controls the land and supply of agricultural inputs. And the government owns all land in Ethiopia and leases this land out to small scale farmers or to anyone who uses the land. And so for small holders, this allows the government to maintain its authority over the small scale holders. And in this context, by maintaining this authority, the government can safely stimulate growth. And without worrying about, as Lavra says, the emergence of a class of large holders who might translate economic power into political power. On the non-farm side, it's not clear that the state has a similar mechanism to maintain its authority. And so this might be one reason why we observe this neglect on the part of the government of developing this sector. Now, hard to prove this, but there clearly is a palpable sense of mistrust of the private sector on the part of the government. And conversely, then the private sector mistrust of the government on the part of the private sector. So it's within this context that we are observing a neglect of the private sector. And also, we need to think about what's going to happen in the coming years once Meles has passed away two years ago. Now, my last slide, I promise. So way forward. Now, this is where I think of Koshik's comment this morning. I wave the data and I say, therefore. So this is speculative, right? So I should make very clear that that's where we stand now. So the way forward is alleviating the demand constraints for now. That makes a good sense if we're thinking about the non-farm sector. So as Loning et al. point out, that efforts to alleviate the supply side constraints might not have much of an impact if the binding constraint is on the demand side. So it makes sense to stimulate agricultural productivity now. But in doing so, we can also approach both the agriculture and the non-farm economy through broad-based policies that benefit both of those. And you're addressing access to finance, transportation, and the like. And then finally, small towns could be a good way to bridge that link, where the markets, I wasn't able to talk about it before, but the fragmented markets are largely due to all of the transportation costs and like, but that farmers and traders report that their most important buyers are in the local markets or in the neighborhood. So if you develop more small towns, then this could be a way of providing the greater demand for agricultural production, which then benefits the rural non-farm economy, but also the opportunities for the non-farm workers. So thank you.