 Good morning, everyone. Welcome to the 2018 Australasian Aid Conference. And before we do anything else, let us begin by acknowledging and celebrating the first Australians, the traditional owners of the land on which we're meeting, and let us pay our respects to the elders of the Nunnable people, past and present. My name is Stephen Howes, and I'm the Director of the Development Policy Centre here at the ANU. And on behalf of the Development Policy Centre, I'd like, and the Crawford School, College of the Asia Pacific, and the ANU, I'd like to welcome you all to this conference. I'll have more to say a little bit later, but we are pressed for time this morning. So I'm going to, without further ado, ask you to join me to welcome Vice-Chancellor Professor Brian Schmidt. Thank you, Stephen. And thank you for your acknowledgement to country here and to the elders of the Nunnable people, past, present, and emerging here on our campus. Welcome, everyone, to ANU. It's great to see such a big crowd, and it was wonderful to see everyone walking down Liversidge due to the poor availability of parking down at this end, but it showed just how big and diverse this crowd is. This has become a prominent, this conference has become a prominent fixture on the ANU calendar, and it is great to see it just growing from strength to strength each year. Aid is an extraordinarily important part of diplomacy, and one would argue, perhaps the most effective way to spend one's defense budget. And so one can do aid well or one can do it poorly, and of course today we're all about doing aid well, and I look forward to hearing the results of this conference. We're very fortunate today to have Senator Penny Wong to address us. A very prominent figure in Australian politics, a person who continually shows rationality in an era of less than rational thinking sometimes, and so it is great to have her to address us today. A shadow minister for foreign affairs, Senator Wong will give us some insights on how the Labour Party plans to move forward with Australia's aid and development policy and its approach in engaging in our region. Senator Wong has to rush back, so it's going to be a, unfortunately, a fairly short Q&A session. We'll see exactly how long she takes, but until then I look forward to welcoming Senator Penny Wong. Thanks very much for that. May I begin on this the 10th anniversary of the apology to the stolen generation with a particularly heartfelt welcome, acknowledgement of country. We stand on the lands of the Nunnamul and Nambri peoples, and we pay our respects to elders past and present. To Ryan, thank you for the introduction. I didn't realise I was taking Q&A because tactics has been held for me, but that's okay. You know, we go with the flow. To Stephen, who's I think one of Australia's great contributors and interleagues when it comes to development. Thank you for the opportunity to speak with you all this morning, A&U and the Asia Foundation. I really to be congratulated for your work in this area, and I hope that this conference continues that forensic examination and creative thinking about development. So shadow foreign minister, I've been seeking to lay out a framework for Labour's foreign policy. That is one of purpose, energy and conviction that protects and advances our national interests and projects our identity and standing in the world. And of course, I agree with Ryan that a central aspect of such a foreign policy is development assistance. But simply, development assistance is central and will be central to the way in which Labour would realise its foreign policy. In refining our approach, I've had the invaluable assistance of Senator Claire Moore, another shadow minister in my portfolio and a range of Labour colleagues, Julian Hill, Madeline King, Sharon Clayton, Lisa Singh, Tim Watts, Josh Wilson, Peter Keele, Khalil, Mike Freelander and Milton Dick. They've consulted widely, probably with some many of you, and I've drawn on their work in preparing not only this morning's presentation, but I intend to use it as some of the foundational material as we develop our policy in the lead up to the election. As public policy makers, we must ask ourselves, how do we maintain public support for development assistance and increase the public's confidence that the funding achieves its purpose? Purpose deals with the question why, and the why of foreign policy really is the same as the why of all public policy. The realisation of our national interests informed by our values, that is what we stand for. I outlined Labour's interests and values in presentations I delivered last year to the Lowe Institute and also to Griffith University. Our national interests are the security of the nation and its people, the economic prosperity of the nation and its people, a stable, cooperative, strategic system in our system, in our region anchored in the rule of law and of course, constructive internationalism. And our values, compassion, equity, inclusion, mutual respect and more, find expression in the rule of law, that is the basis of our democratic practice, the contract between government and the people. So the answer to the question, why do we invest in development assistance is because it is unquestionably in Australia's interests to create a more stable and secure world by helping reduce poverty, improve health and education and fight inequality. And how do we do this? We do this by building social and human capital. It's a lovely ring. For a democratic hearing in generous nation like Australia, international development assistance has long been a central element of our foreign policy consistent with our values and our national interests. We have a deep interest in and commitment to the maintenance of stability in our region and to reducing poverty where we can. And if the generosity that is a natural consequence of our respect for our shared humanity is not sufficient motivation, we should recognise too the economic and security consequences of instability and poverty. These consequences are not only borne by the individual communities and the nation affected but in an increasingly interconnected world they impact on us all. Failure to recognise this is profoundly short-sighted. Moreover, the decision by the Abbott and Turnbull governments to walk away from international development assistance funding, I would argue, undermines our national interests. So I can make this commitment today. A Labor government will rebuild Australia's international development assistance program and accordingly will increase its investment beyond the current levels. The coalition's attack on the development assistance budget has been tantamount to vandalism. It has not only impugned our reputation as an active and generous supporter of our neighbours in the region but even more significantly it has worked actively against our foreign policy interests. We give just $0.22 in every $100 of our national income to development assistance. This is the lowest level since records were kept. Now, we have previously called on the coalition to join us in a bipartisan commitment to rebuilding Australia's aid and development programs. We've sought this because we understand the human costs of the $11.3 billion in cuts. These are cuts that affect the lives of people who can least afford it. We all understand that reduced international development assistance leads to less development, poorer health outcomes, more poverty and greater deprivation. In particular, we know that such cuts translate to more maternal deaths, fewer vaccinated children, fewer girls in schools and greater numbers of vulnerable communities experiencing disproportionately the impacts of climate change. So with this in mind, I can say to you today with confidence a shortened labour government will contribute more to international development assistance than the current government and we will ensure more of it gets to the people who it is meant to be assisting. We will to the fullest extent that financial circumstances allow rebuild and grow the aid program in a timely manner because our intention is that it once again reflects the generosity of the Australian people. So I again encourage the government to return to a properly bipartisan approach to international development assistance because their current budgeted levels, which will see a relative decline, are really not defensible. As you know, poverty is the red column of the economic inequality ledger. Streamer studies continue to demonstrate that at the national level economic equality, inequality has grown across the globe. In this 2016 study, an economy for the 1% Oxfam showed that the richest 1% now own more than the rest of the world combined. In 2015, 62 individuals have the same wealth as 3.6 billion people. In the previous decade and a half, the bottom half of humanity gained just 1% of the total increase in global wealth while 50% went to the top 1%. So whilst development assistance will continue to be critical, if structural inequality is to be addressed effectively, we do know that it aligns doesn't fix the problem and it will need to be accommodated or continue to be accommodated between a broader framework of economic management that recognises and takes into account matters like trade liberalisation, lending and investment practices and international cooperation to address multinational tax avoidance. At the ACFID conference in November last year, I spoke about how global inequality and the poverty it generates cannot be addressed simply as a function of economic growth. In the current climate, it is even more apparent that for growth to have wide benefits, it must take into account distribution. The ANU's Development Policy Centre produces excellent work on development assistance and its survey suggests that whilst the Australian community is uncertain about the levels of funding and the results achieved, it continues to support development funding. Well, as you know, in this area, as in any public policy area, public support is critical. In our nearby region, demand for assistance far outstrips the capacity of donors, both government and NGO, to deliver. The flow of Rohingya refugees to Bangladesh imposes enormous demands on a country that is struggling to meet its own development goals. Refugee flows resulting from ongoing armed conflict in Syria and in Yemen continue to strain international agencies and aid donors. Many parts of Africa are in crisis as a result of civil war, consequent displacement of populations and drought, and the 65 million people who are currently displaced globally surpass the number of those displaced after World War Two during and after. Meeting demand has been made enormously more difficult as a result of the coalition's cuts, but even when we do, as a nation, return to historical levels of international development assistance, the need is greater than our ability to meet demand. It is for this reason, amongst others, we see the emergence of new development assistance donors and new approaches to financing. It is important that new donors and new approaches are sensitive to the on-ground needs of the recipients and that projects are carefully calibrated to the ability of recipients both to absorb and maintain the assistance provided. This is particularly important if assistance is provided in the form of soft loans. Such loans must reflect the recipient's ability to service them. The need for our neighbours, the need of our neighbours for assistance and advice on the provisions of all forms of development assistance, didn't wane when the Australian government abandoned the development assistance priorities laid down by successive governments since the 1970s. If anything, the nature and pace of economic and social developments and challenges in our region accelerator just at the time as the coalition government's pulled back. So it's unsurprising that our neighbours seek assistance from other countries and other institutions. Countries will do so. Seek assistance and support for their development priorities wherever they can and donors will respond to such requests as they see fit. Because there is far greater unmet demand and scope for all forms of development assistance that can ever be met by single country or institution no matter how large. What has become clear is the need for greater efforts to coordinate the design and delivery of development assistance programs across our region, both to protect against duplication and to ensure that the programs delivered and their associated financing packages meet the needs of recipients. Greater dovetailing of assistance activities will certainly generate greater efficiencies at a time when funding levels are under pressure. So how would Australia's development assistance program operate in this environment? Well first of all, Labor accepts that the UN mandated Sustainable Development Goals provide a guide to development assistance outcomes. They offer a framework for implementing the grand bargain struck by major aid organisations and donors at their meeting in Istanbul in 2016. The grand bargain recognised that the status quo is no longer an option. We need to find and create efficiency which in turn demands innovation, collaboration and changed mindsets and central to change mindsets is a focus on social and human capital because when they increase poverty reduces. Secondly, Labor will work to ensure that development and delivery mechanisms are streamlined. At the ACFID conference last November, I put on record Labor's disagreement with the decision to terminate AusAID and move its functions into DFAT. It was a deeply counterintuitive decision but I also said that the egg can't be unscrambled and that we'll have to do what we can to ensure that it works. Senator Moore and the aid team of back benches that I've outlined has consulted widely within the international development assistance sector. And I would say this to you, the sector expressed to us a great many problems. They identified problems, structural inadequacies, management failings, DFAT's growing dependence on managing contractors as its own expertise and skills have declined. One stakeholder commented, you can't outsource your brain, that's what DFAT tries to do. I report that without comment. We have listened carefully to the sector's comments and ideas and in government we would ask the department to address them. This will also entail ongoing consultation with recipients. We do need to ensure that DFAT is fit for purpose and its capability and management of its international development assistance responsibilities and I'm sure that the department's leadership would agree. Thirdly, we need to recognise that the various outcomes identified by the SDGs are interlinked and that's what happens in one target area may affect other target areas in quite profound ways. To illustrate that, I want to look briefly at four particular streams of development assistance. They are climate change, health, gender and education. In the November 2017 conference of the parties in Bonn, Fiji and the World Bank released their climate vulnerability assessment which highlighted the fact that climate change presents poverty reduction with even more formidable odds. The assessment acknowledges that Fiji is already exposed to large natural risks but that climate change is likely to amplify these risks. This threatens the objectives of Fiji's national development plan. The vulnerability assessment predicted that by 2050 in excess of 30,000 Fijians will be pushed into poverty every year as a result of floods and tropical cyclones. But of course Fiji is not the only country in this position. If you look at the World Bank OECD report, climate and disaster resilience financing from February 2017, you see the following facts. Banuatu which received 69.8 million dollars in ODA from Australia loses over 50 million or 6.6 percent of annual GDP due to natural disasters. Tonga suffers a 4.4 percent loss of annual GDP, some 17 million dollars. And both Fiji and the Solomon Islands incur losses of 2.6 percent and nearly 3 percent of GDP respectively as a result of natural disasters, amounting to over 150 million dollars each year. So far, Development Assistance Program is seeking to grow the social and human capital that enables people to be lifted or lift themselves out of poverty whilst the consequences of climate change continue to undermine that outcome. Then clearly the action must become a more prominent feature of our Development Assistance Planning. The fact is climate change impacts every aspect of our aid program such that we cannot be serious about tackling poverty in our region if we are not serious about tackling climate change. The 2014 report that the WHO release forecast that climate change will cause an additional 250,000 deaths per annum between 2030 and 2050 that are 8,000 from heat exposure, 60,000 from malaria, 48,000 from diarrhea and 95,000 from malnutrition. Yet the regional effects of climate change have largely been ignored by the coalition although I do note Ms Bishop has sought quietly to maintain some programs. Yet they constitute an existential threat to many states and we need to invest in building the national resilience, their capacity to deal with the challenge that climate change represents because of course what happens in the Pacific affects us. If we want to stable and prosperous region we have to confront its realities and the cynicism of Peter Dutton's remarks, time doesn't mean anything when you're about to have water lapping at your door reminds us just how far this government needs to travel if it is to understand this basic fact. Health is an area in which Australia can make a real difference when it has been withdrawn. Development assistance investment in health sits at just over 13% of our current aid program. When labelled as lasting government health accounted for 17% within a significantly larger funding pool. They have however being some indications from the foreign minister that Australia's development assistance program is beginning to take health more seriously and I welcome that. In recent weeks we've seen the minister accept a position on the end and the long awaited health security initiative for the Indo-Pacific region is developing but like the questionable innovation exchange this initiative does look at the moment somewhat bureaucratic and disconnected from the research centres and delivery systems that already exist in Australia. I do want to say that I am convinced by the need for greater innovation in our international development program. I am however unconvinced that the innovation exchange model is the right one. Leaving aside the unfortunate emphasis on celebrity and in the parent fascination with bean bags I do question whether it adds a sufficiently ambitious degree of innovation to our aid program. There seems to be some view that innovation comprises a series of light bulb moments rather than recognising the merit of creative and dynamic partnerships that bring a wide range of perspectives to problem solving. Certainly the feedback from many outstanding research bodies here in Australia would suggest there is much more to offer from collaboration than we are currently attaining. The innovation exchange also operates in what appears to be relative isolation not only in its location but in its impact on the aid program. So we do want we do want if elected to make a much more considered approach as to how innovation can be integrated across our aid program. The Australian health research community's expertise lends itself well to the Indo-Pacific health security initiative. We can hope that with the awarding of both the health policy research proposals and the product development partnership funding programs later this year our aid program will improve as a result of the Australian scientific community's engagement. Because health along with education is of course a fundamental contributor to development. Chronic but preventable ill health is a showstopper with respect to economic participation and without economic participation individuals and communities are consigned to continue to poverty. And as I wrote on the development policy blog late last year, poor health comes self-evidently hinder economic development. For example one of the biggest challenges facing our region is child stunting due to poor and unhygienic nutrition. I wonder how many Australians know that 60% of children in Timor-Leste 44% of children in PNG, a third of the children in Kiribati and 26% of the children in Vanuatu are stunted. All preventable. And despite many countries and regions improving nutrition levels as they meet the MDGs we have seen no substantial improvement in the Pacific since the 1990s. The Pacific and Timor-Leste have incredibly young populations and without health interventions at an early age the potential quality of life for individuals and the future economic development of the region will be severely diminished before many of these children have even started school. Addressing the health needs of children in the region has a strong return on investment and of course intervention in children's health reduces a future cost on a recipient country's health infrastructure. According to Save the Children specific nutrition interventions can deliver a return on investment of $16 to $1. Double the return of aid for children in the region will be significantly lower than other areas of the Indo-Pacific. Yet according to the 2015 Office for Development Effectiveness report into child under nutrition nutrition programs account for only 2.4% accounted for only 2.4% of the spend in the previous financial year. So within the aid budget we need to sharpen our focus on child health particularly in the Pacific where the low availability and use of the HIV vaccine is of real concern and in South East Asia there is 80% coverage compared with 28% in the West Pacific region. So we need to do more to engage with governments and multilateral funds such as GAVI to improve the health outcomes of children in our region. When I spoke at ACFID I also said Labor would seek to build on the work that the current government has done for the aid program. Of course the focus on the empowerment of women must also address structural factors because it is structural factors which allow discrimination that causes gender inequality and if we don't address them we find ourselves in the scenario we've had in P&G during the recent election where despite having a record number of female candidates many of whom were supported by Australia's aid program and I support that achieving change takes time and our funding cycles also need to reflect this and there are also continuing health challenges facing women. Labor and government will seek to build on the current government efforts to achieve 80% of programming targeted improving the equality of women and girls. We know that the maternal death rate in Pacific and Timor-Leste remains unacceptably high and they can be reduced. That can be reduced to properly funded sexual health and family planning programs. This is an area of programming which has experienced turbulent changes as a result of the global gag rule which Murray Stopes International claims has resulted in the deaths of nearly 7000 women and girls due to entirely avoidable maternal health complications. We must also not forget that upon coming to government Australia's family planning program was cut by 40% by the coalition. I do note and support last year's pledge by the ambassador for women and girls for an additional funding of $33.5 million over four years. Cervical cancer rates in the Pacific are amongst the highest in the world. Women in the Pacific are dying at the rate of up to nine times that of Australia due to the fact that screening is not available. In the Pacific the incidence of cervical cancer rests between 13.3% 13.3% and 27.8% per 100,000 and sadly for these women the diagnosis of cancer often comes too late. Given our leadership in HPV development and subsidised public immunisation there's genuine hope that the virus can be eradicated. We can and should try to have a much bigger impact. Besides health education is another pillar on which social and human capital are built. At present we dedicate $675 million of our ODA funding to education. This does compare unfavourably with the Labour Government's investment in education in 2012 when 21% of again a much bigger development assistance budget was earmarked for education. In an ODA assistance budget totaling $5.2 billion education attracted over a billion dollars. In a report published in May last year UNESCO demonstrated that globally development assistance in education plateaued in 2010 and has been stagnating ever since. This is due in part to the reallocation of development assistance funds to read Fiji assistance permissible under the aid rules and in part also to the decline of aid funding in the aftermath of the GFC. Under this government we've seen a continued decline in education funding including the reduction of its already low contribution to the global education by further $50 million. But if developing countries are to develop the social and human capital necessary to develop education must be principal target because together with health education, particularly education for women and girls is just so important and I say to you today it will be a hallmark of our approach to development assistance policy in government. The coalition's unprecedented cuts to development assistance over the last four years have caused great harm and they've caused great harm to some of the poorest people in our region. They've also impugned our reputation internationally and I would argue have undermined our national interests. They've harmed our efforts to alleviate poverty and to make our region safer and more secure and they have diminished our standing in the region. And they also, I firmly believe, are at odds with the generous spirit of the Australian people. That is why Labor considers we must work together. So I have pledged to you today that Labor and government will rebuild our international development assistance program and increase investment beyond current levels. But to be frank with you what I would much prefer is to take all the politics out of aid and have the government join with us in a bipartisan commitment to rebuilding Australia's aid and development programs. And I fervently hope that we can once more commit, as we both did on partisan goal, to improve Australia's record on development assistance for the sake of all those living poverty and especially those children whose lives are stunted by poverty, poor health or lack of education. Thank you very much. Thank you Senator Wong. I think the audience is going to take great heart at your comprehensive analysis of development aid and certainly this group is clearly keen to help with that based on evidence and experience. And I think you bringing lots of evidence and strong ideas to the fore. Great. Now, I did highlight that we probably wouldn't be able to have Q&A because you need to leave at 828 and it's 828. But if you want to take one or two? Okay, great. Over to you. Hands up if you want to ask Senator Wong a question. Just yell. Yeah, please, in the red. Well, I thought I did seek to address the domestic program or internationally? I thought I referenced that. We'd seek to build on the programs that deal with women's inequality. The policy point I was seeking to make though was I suppose it's the difference between a liberal feminist and a social democratic feminist. I actually think there are structural factors which you have to address as well and there is, it's not without purpose, without merit, but I think addressing the empowerment of women in the abstract and failing to recognise sufficiently in how you design your programs that there are structural inequalities which bear upon gender equality is problematic. That was the point I was seeking to make. I clearly didn't make it very clearly. We'll take one more question. You get a real usually in an audience, three men in a row is my rule and then I say the next question has come from women. We've had two of them. No, it's not about you. Actually, it's about them. I'm giving them a compliment. Marie Nutt from Results Australia. Senator Wong, thanks very much for your comments this morning. Particularly the last ones about taking politics out of aid and having a bipartisan approach. So taking a slight tangent, I wondered if you were concerned about the threats to civil society voice around this and bringing the public into the conversation about aid with the proposed charity legislation that's with the government at the moment. Well, when I was finance minister we had a policy and in fact I think I put it in legislation but it was overridden that we couldn't include gag clauses in government funding arrangements which I think this government has moved beyond. If you're talking about the foreign interference laws yes, I mean I'm on that committee so the intelligence committee so I try not to make too many public comments about it but I would say that the evidence given by the sector in public hearing demonstrated some real problems in the way the legislation has been drafted and I welcome Mr. Porter the new attorney generals delaying the passage of that legislation or the consideration of that legislation through the parliament because I think that is one of a number of factors that need to be addressed. What I would say is this though more broadly on the issue of civil society and development assistance. We live in what I've described and others have described as disrupted times and one aspect of that disruption globally and here in Australia has been the rise of populism and nationalism and that's well documented we could have a long discussion about that. How that translates into the aid discussion here in Australia is you have voices inside the parliament who are strongly advocating against any development assistance and consequently and concomitantly you have voices inside the coalition who are advocating against any development assistance. Now I place on record that you know whilst Ms Bishop hasn't been able to defend the budget from all cuts she has said and done as much as she has been able if we are going to rebuild our development assistance budget which I think is actually in our national interest and it will take a long time Stephen House did an article last year which actually calculated some of the effect in the forward estimates that will require support from both parties of government ultimately at least from some people within it and the problem we have at the moment is too much of that populism and we shouldn't be sending any money offshore line from Ms Hansen and others gets too much traction and that's a job for all of us. Thank you very much. Thank you Penny Wong on behalf of the A&U and our co-sponsor of the Asia Foundation quite different in quite different categories our co-host and it has been since our first conference and this is now the fifth and we really value that partnership and it enables us to bring out a whole range of speakers and cover a range of topics please come and say a few words. Please welcome Gordon White. Thank you very much Stephen. Good morning everyone and welcome to all of you on behalf of the Asia Foundation let me express our thanks to Vice Chancellor Schmidt and to Stephen House Development Policy Center and to say how pleased we are to be joining with them in this important event. As Stephen noted this marks the fifth time the Australasian aid conference has been held here at the A&U and it's been our honor to be part of it since the beginning in a relatively short time this annual conference has evolved and grown tremendously in size and scope can't even begin to accommodate all the people who would like to be here to Stephen's leadership in the Development Policy Center success in organizing the conference. A growing number of participants from throughout the region and around the world and it's established itself as an important venue for serious discussion of national, regional and global issues in international development and development cooperation. In the same way the research the publications the regular blogs coming out produced by the A&U and I think for all of us must reads for people interested in the current state and emerging trends in international development. For those of you who may not be so familiar with the Asia Foundation let me say just very briefly we are a non-profit non-government international development and foreign affairs organization founded in 1954. We have our headquarters in San Francisco where I am based but what's most important is that we have three offices throughout Asia many of which have been in place since the 1950s and each of which is deeply embedded in the local societies in which we work. Working with local partners in government, civil society private sector in the academic and research community we support and implement programs in five main areas governance and law, women's empowerment and gender equality, economic development the environment and international relations. We have a robust research and survey agenda and in December we signed an MOU with the A&U with the Australia Survey Archive to be the repository and distributor of our extensive collection of perception surveys. Going back to 2004 our work has benefited greatly from support, cooperation and partnership with the Australian Department of Foreign Affairs and Trade to publicly express our gratitude to DFAT for that strong and close relationship. For the past eight years as Asian countries have emerged as major providers of international development assistance we have been implementing a program focused on emerging Asian donors seeking to better understand and to add value to the global conversation about how Asian providers are changing the aid landscape and how these changes can support and foster more effective development especially in the Asia Pacific. Through this program we have been able to contribute Asian perspectives to the global development discourse as well as support capacity development for Asian providers and encourage more effective South-South cooperation. As part of this effort every year we organize panels at this conference showcasing the perspectives of development experts and practitioners from different Asian countries and we will have a plenary session focused on the growing role of Asian civil society actors in Asian led development cooperation. In closing let me just say again how pleased we are to be collaborating with Stephen House and Development Policy Center in this important conference we look forward to continuing and expanding this cooperation going forward. We have got an incredibly rich agenda in front of us. I think we're all suffering from this dilemma of which panels to go to because we'd like to go to all of them. I know we're all going to learn a lot over the next two days and I know I'm certainly looking forward to it. Thank you very much. Thank you Gordon. So we, it's a huge conference and we're fortunate here to have a great team organizing it. We'll thank them all at the end but I'd now like to call on Ashley Betteridge, our center manager Ashley. Thanks Stephen. After many months of getting ready for the conference it's always fantastic to see everyone arrive, particularly our speakers I'm always relieved when I see them get off the plane so it's great to be here this morning and I hope everyone has a fantastic time at the conference. I just need to run through a few housekeeping and logistic things just so we can enjoy the amazing program over the next few days so bear with me I'll be quick in case you hadn't noticed this conference is huge. For those of you who didn't get a chance to get your lanyards this morning please do go and get them a morning tea. There are 150 people downstairs as well as about 220 in this theater so there's a lot of us here over the next two days. So just keeping that in mind for those who are on shared registrations I just ask you to please follow those rules of the shared registration with one person present per shared registration at any one time. It's as Stephen's mentioned it's first addressed for the plenaries in this theater so congratulations sorry to Western and Acton theatergoers so do arrive early if you do want to get a seat in the room and we'll keep advocating for like a mezzanine floor in here for next year. So the main sessions are also being live streamed into Western and onto the web and if you're having trouble choosing which sessions to attend we do have details in the program but the full abstract book is also online on our website. The dinner this evening has sold out it's sold out very early so you do need to be registered to attend if you can't remember if you include a dinner in your registration it should say in the emails you got from Eventbrite otherwise you can check with one of our team downstairs at the registration desk but those who didn't make it to Nick Danziger's talk last night it was fantastic and thanks for everyone who turned out we've still got time to go and see his amazing exhibition Revisited at Drill Hall Gallery it's going to be open between 12 and 2 every day of the conference and then from next week it will be open longer days if you're at Canberra so do definitely get along and see that he goes back to the same places in 2005, 2010 and 2015 and looks at the impact of development, some positive stories and unfortunately some very sad ones but it's definitely worth seeing so throughout the conference because I've got to talk about food that's always an important thing on the feedback forms morning, afternoon tea and lunch and tea and coffee will be served downstairs outside the Barton Theatre and if you've let us know about any special dietary requirements just let the catering staff know and they'll get you either a special meal or tell you what you can and can't have so because the conference is so huge with so many concurrent sessions and very busy and full days we do really need to keep on time so for those chairing sessions we need your help in making sure we stick to time each session will have an event assistant or a volunteer assigned to look after it and help out and they will identify themselves to you prior to the start of the session so do let them know how they can assist you in timekeeping for the sessions we have cards to help people know when there's five minutes, one minute or four so definitely let those help us know so that they can help you keep the session on time and presenters please do stick to your time so that everyone gets a fair go plus every year in the feedback survey everyone wants more Q&A so everyone needs to stick to time if we're going to achieve that goal and as I mentioned we're live streaming from Melongolo so if you're talking in this room you need to use a microphone just so that people at home and downstairs can hear so tomorrow is our popular three minute aid pitch session back for the second year and that involves interactive audience voting so do bring along your smartphone or tablet or laptop to the session so that you can vote for your favourite pitch and we'll be handing out instructions in the session tomorrow and since you all have your devices you can see our hashtag up here there's already a bit of activity on the hashtag after Senator Wong's speech so do get involved we'd also just like to invite everyone to engage with our wonderful sponsors for this year's conference who have exhibition stands just outside here in the Melongolo Theatre we're really grateful for their support as Stephen mentioned and we hope to see you tomorrow evening at the closing reception for the conference which is also serving as the opening session for the DFAT aid suppliers conference which starts on Thursday and it will be a great way to close I know it will be a fabulous few days but we'll do our best to help and we'd also love it if you could complete the conference feedback survey because we're always trying to do better each year and that's all I have to say I got through it on time I think so yeah the only thing left is to say thank you for coming and have a fantastic conference Alright thank you Ashley and yeah if I don't get another chance thank you to Ashley and the team that have worked so hard to put this conference on and bring it all together I'd like to call on Blair Excel Blair is now the Acting Deputy Secretary for Development within the Department of Foreign Affairs and Trade taking over from Ewa McDonald and I'm sure many of you know Blair he has been the Assistant Secretary of Development Policy within DFAT and before that served in a variety of senior roles in AusAid heading up Solomon Islands and Indonesia among other positions and we really appreciate the partnership we have with DFAT in different ways and I think it's very appropriate that Blair has agreed to chair the Nancy Birds or keynote speech so please welcome Blair Excel Thank you Steven for those kind words it's my pleasure also to welcome you all here today so I've certainly been to all five in the last five years different guys in different roles but it's a real privilege to actually be so close to be able to duck down and participate like many other colleagues from DFAT do so we really also appreciate it let me join colleagues and also begin by acknowledging the traditional custodians of the land in which we meet today and pay my respects to the elders past and present it is my absolute privilege though for my key role here this morning to introduce our keynote speaker from the Centre of Global Development Dr Nancy Birdsall for those that don't know as I said yesterday the CGD is one of the leading global and highly influential think tanks that really thinks hard about development based in Washington DC it's known for independent research that leads to practical creative solutions to some of the most pressing problems that the world faces today Dr Nancy Birds was the Senior Fellow and President Emeritus at the Centre for Global Development before launching the Centre which I think is nothing in itself from 2001 Nancy served for three years as a Senior Associate and Director of Economic Reform Project at the Carnegie Endowment for International Peace from 93 to 98 she was Executive Vice President of the Inter-American Development Bank before joining the Inter-American Inter-American Development Bank she spent 14 years in research policy and other management positions at the World Bank Dr Birdsall is the author and co-author and editor of more than a dozen books about global development issues author of over 75 articles on development with my favourite title being the Development Agenda at the Global Social Contract or we're all in the development boat together apart from Dev Policy and the Age of Foundation CGD is my go-to website and certainly my go-to podcast when I'm travelling for when I know what's happening so there's a personal plug-plug there Turning to today's talk we meet the world to eradicate extreme poverty and reduce inequality within and between countries one way that we can contribute to both those goals to focus on people who live just above the poverty line but through the experience of shocks are likely to fall back into poverty there are many people many of these people living in middle-income countries including in our neighbourhood in fact we spend quite a lot of time thinking about our region and countries moving through the incomes levels it's something that we think about a lot as a major as Stephen said in fact I recall Stephen making a visit when he was the Chief Economist Rosé and we spent quite a bit of time debating this issue with Indonesia in itself a very good example of a large number of people living just above the poverty line that can move in and out so as people concerned about development and poverty reduction we need to actively work to reduce the vulnerability of this group so today Nancy will address the issue of the large number of people living often as I said in middle-income countries and in doing so reduce their vulnerability to falling back into poverty so without further ado let me welcome Nancy's stage and I think we will take questions and answers at the end thank you well thank you very much Blair my goodness it's really a privilege to be here in Australia I was thinking when your Shadow Minister was talking that this is the land I'm coming from the tumult and Australia seems to me very much a land of civility and calm I want to thank Stephen House particularly and his colleagues Ashley and others at the Development Policy Institute and of course it's a great pleasure to realize that this conference is co-hosted by the Asia Foundation a group I've long admired since I first came into acquaintance with the work of Asia Foundation in Vietnam a long time ago and saw how well embedded it is in each country and how important that is the last thing I want to say is I found very civilizing and speak something about values in Australia this allusion to the traditional custodians of the land so it's really a great pleasure to be here I want to say one word about CGD's work the Center for Global Development which I think is interesting and important even though it is not particularly the focus of what I'm going to talk about today but CGD's mission is as is the case for so many of you here to reduce poverty and inequality in the world the focus of our work however has been primarily on what the rich world can do to improve the lives of people in the developing world and so we look at not only aid but at migration issues trade climate the climate challenge technology transfer the whole range of decisions and policies and behavior the rich part of the world including obviously Australia that have good or bad effects and so our policy push has very much been to for example try to tell default how to do better in a way so I wonder if Ashley is probably gone to worry about other things but I'd like to have a signal at 30 minutes great so there's plenty of time for Q&A and I do sometimes tend to talk too much so my topic is strugglers this century's new development challenge and the idea of this talk is to try to bring you along to a somewhat different lens on the development challenges in this century compared to the 20th century when we can look back and say there's been a tremendous amount of success and it's symbolized most commonly by the reality that billions of people were lifted out of poverty but I want to talk about I want to start with this gentleman I don't know how many of you remember the name Mohammed Bouazizi in 2010 it's already seven years ago in December of 2010 Mohammed Bouazizi is a gentleman who emulated himself in a town south of in southern Tunisia and triggered he was kind of the spark his emulation, his self-emulation triggered the Arab Spring when there was a wave of hope for a change of big changes in the direction of democracy and more integration and all of the good things about good government in the Arab world so when he emulated himself I looked tried to understand where he stood in the world in terms of a simple measure I'm an economist, his income his likely income poor man he, thank you very much he was not poor indeed in the newspaper reports it was told that he gave away he had a vegetable cart which he brought into the center of town and sold his produce there and at the end of the day and sometimes the end of the week he gave what hadn't been sold to the poor on the other hand why did he emulate himself it's because in effect he was being harassed by the police he obviously lived in what he must have felt and many of his ilk must have felt was a kind of rigged society a corrupt society the police were bugging him either to pay for a license more often than he might or just from him for the right to be in the village center selling vegetables from his cart and what happened one day the day he emulated himself is that they took away his cart they got irritated and angry they took away his cart and the scale that he used to measure the weights of his produce and he obviously had come to a point of great frustration and anger about the way society was working so it didn't work out the Arab Spring but I think we should still indeed maybe that's why we should think back to the plight of people who are not under the World Bank poverty line of $1.90 a day but are clearly far from anything you or I sitting here would think of as a relatively secure middle class so I'm asking you to you know many of you will know much of what I'm saying but I want you to sort of think of what I call this group the strugglers or the strivers why do they matter how do they matter so the idea of the talk is to first explain the struggler classification and crude economic terms as you'll see based on numbers between $4 a day and $10 a day then to talk a little bit about the characteristics of the people in the world who are in this crude category between $4 and $10 a day of household income per capita then to talk about why they matter and including you know I hope to hear from you because you know your region far better than I do you heard I was at the Inter-American Development Bank I know a lot more about Latin America and I've done much more in Africa than in Southeast Asia Africa, India, but not so much Southeast Asia and then to go on to what did they how to think about how should a sort of recognition of this group change the way we think in the development field and change a little bit what we think is important to do so a little with the focus on the role of outsiders and going back to excuse me the CGD mission of what can outsiders do to supplement and help the movements inside countries for development for improved lives for more people so let me start with this picture that shows you you don't really have to figure it out I'll explain it but it's meant to convince you that there's something to this this is a picture based on data collected in a panel a set of panel surveys in three countries of Latin America over five years or so, three to five years and what it's telling you is if you live between four dollars a day and ten dollars a day between the two vertical lines in those countries you have a relatively high probability of returning below what the country poverty lines are which is around four dollars a day so in the case of living people living at six dollars a day per capita which is probably where Mohammed Bouazizi's family was he had a large family he was the sole breadwinner he was the big brother he was putting his sister hoping to get her through secondary school maybe even get her to the university so maybe five or six dollars a day household income in that family if you have six dollars a day you have more than a 40 percent chance of falling back into poverty over a period of three years if you get up to ten dollars a day your probability declines to about ten percent so with other economists particularly working on Latin America there's been a kind of sense that ten dollars a day is a reasonable line for joining the middle class it's reasonable in the sense of that's when you become materially secure you will not be necessarily secure if there's a long economy wide recession or depression and so we know that the middle class in some countries of the west say in the 1930s in Germany was hit very hard and there's a lot of discussion in the US now about the hollowing out of the middle class because median wages have not been stagnant for so long but I'm not talking about those big shocks I'm talking about household shocks you know as in the case of Buazizi it was a shock his assets his productive assets were destroyed so and he had borrowed the day before to buy the vegetables that he was selling so he was in debt that's a household shock or a child gets sick and so on so the struggles can be defined as those who are vulnerable to falling back into poverty and many of you know who study development that there's a lot of churning around the poverty line this is telling you you know of say two dollars a day that people go back and forth there's been evidence of that what this is telling us is that the churning can occur at higher levels of income and that in effect from some sort of emotional or psychological point of view your life does not change at a dollar ninety one a day it only begins to change when you get up closer to something like ten dollars a day so this is a picture again it's a little bit confusing you don't really need to figure it out some of you will know that recently the World Bank decided to add poverty lines that are higher than a dollar ninety a day and they're set at three dollars and twenty cents for lower middle income countries and five dollars and fifty cents for upper middle income countries so that's very interesting it's recognizing that poverty is relative and I think it helps underline the point that people in some income category well above a dollar ninety a day can still be very poor if you think of poverty in a multi-dimensional sense in terms of the many deprivations and the pressures and the stress and the anxieties that are associated with can I feed my family if not day to day certainly week to week I'm just showing you this to re-emphasize the idea that the struggleers are the new poor and should be thought of in the development community as the new poor of this century so we cannot we can celebrate the reduction in extreme poverty that's occurred over the last twenty five years but at the same time we have to see as a big challenge to figure out how to about the struggle group now how big is this group it's really huge in this graph the red is the poor and orange are the struggleers okay so in the top line you can see that in the developing world most people were really amongst the extreme poor but if you go down to twenty thirty you see that in the developing world reasonable projections based on growth you know projections for countries aggregated suggests that struggleers will still constitute sixty percent of the population of the developing world it's about the same as now it's still sixty percent some people will be moving into the middle class you know this is very mechanical in a way by the way the underlying projections assume no changes within countries in the distribution of income so it's just imposing mechanically growth that's hoped for in the next ten or fifteen years on applying it across the board using whatever distribution now of the benefits of growth prevails in any particular country so this picture is just another way of saying in the last twenty five years things have changed dramatically in the way we should envision in our heads what is going on in the developing world and what life is like for most people you also see in the green the growth of the middle class and I'm going to come back to that in a few minutes but let me say another factoid eighty percent of the developing country population lives under ten dollars a day today and ask yourself what percent of the rich world population lives under ten dollars a day and think of a number and it's estimated to be two point five percent these are really different worlds so this is just a quick picture of what's behind those projections showing a doubling of the middle class which is the green line in the last twenty five years more or less since 1990 the middle class is now about twenty percent of the developing world if we count ten dollars and above as middle class or rich in the same time period of extreme poverty and the number of strugglers in the developing world has also almost doubled so where do they live the point here the size of the circles is related to the numbers of people across countries and most strugglers live in the middle income countries including of course in this part of the world in the countries that you know I hear all talking about the question of more aid for countries that are already middle income and I suppose part of this picture says they probably need not only aid but other kinds of help and will for quite a long time development is a long haul game you see in the lower income countries there are not so many strugglers that's the poorest countries in Africa and South Asia they're there but really it's still the fact that most people are below even a dollar ninety a day so here's a picture that gives you a sense of it's the same thing in twenty thirty across these countries if you combine the red and the orange the poor and the strugglers it's the overwhelming majority of people in countries including Pakistan India but I added Indonesia to this picture to emphasize that Indonesia is different from Ethiopia and Tanzania but not as different as you might think if you only went to Jakarta or Bali right so this is a picture that does the same thing with the middle class in green and the countries are ranked from left to right in order of per capita GDP and so what you see again with Indonesia is not in this picture I'm not sure why oh yes it is you see how large the struggler group is compared to the middle class in green and the same in Sri Lanka I was actually surprised about Sri Lanka sorry no I'm looking myself China then you see the contrast with several countries in Latin America Colombia and Brazil and with Thailand an upper middle income country with now up to 50% as over $10 middle class and maybe I'll come to this a little more later that is interesting because it is in countries like Thailand and Brazil with a large middle class that you're having a lot of some people I would think of as perhaps healthy political disruption as more people are more engaged and have the time to engage with the political systems you probably know Thailand better than I do and you'll think what does that mean maybe I should just invoke Brazil where there's huge corruption scandals going on now including with Lula who's the former president likely to run again and some people say oh you know sign of a problem the middle class doesn't solve things but another way of looking at it is when more people are in middle class there's larger civil society movements more active politics big increase in the number of NGOs all of those things that we associate with the willingness to demand from government accountability so I'll come back to that in a few minutes so what are the key characteristics of struggles beyond this crude income classification so I'll go through that quickly now first they are mostly living in urban and peri-urban areas in rural areas at least in Africa and South Asia you know poverty extreme poverty is more common they have primary schooling this is a very complicated graph no need to try to figure it out but what it's saying is that across Latin America where we could look at data that was able to be analyzed household data and isolate 4-10 dollars and then look at how much education people in that group had and it's basically primary education sometimes completed primary education the bottom half of the graph shows for those of you who know about these things you know the standard errors around the mean and there are people with secondary education several years in many countries in Latin America who are living at incomes below 10 dollars a day per capita in their households so it's not a simple story from that point of view at any one point in time but what is fascinating is that if you look at Honduras one of the poorest countries in Latin America in 1980 and you look at Chile one of the richest countries in 2015 on average people under 4 dollars don't have yet full primary education 4 dollars to 10 dollars strugglers on average have primary education it's really interesting in terms of you know what is it in human that links human capital the ability to read at least a little bit and write to an average income is sort of oddly stable over time and across countries so you can feel optimistic about that in the sense that if you could get more children through more schooling where they're actually learning something they will be more productive this is a very indirect way of showing something that economists and others have argued for many decades so on average primary education relatively low human capital this picture is meant to sort of pre-sage it's easier to say most strugglers are informal they're both informal sector workers and they work as informal workers a combination of those two things again this is from data from Latin America and I labeled it they're in between sectors between agriculture and formal sector jobs that's what these crossing lines are basically showing you for different countries this is a very interesting graph from a new study out of the overseas development institute in the UK and the title of their study is informality the new normal or something like that and they're making two points first most people in developing countries who are not middle class or rich work in the informal sectors and they have and they will be for the next 10, 15, 20 years so you know I think we all have a tendency to think of inequality even in the rich world as associated going all the way back to Marx between workers who have a pay stub but a low wage and the rich who have a pay stub or benefit also from capital income but it's the pay stub workers who are the working class and the fighters for better lives and that's the roots of the liberal parties around the world and now worryingly sort of associated in mature democracies with the rise of populism and the right it's a different world out there in the developing countries pretty much most of the populations in most countries don't have a pay stub they live with vulnerability they live with anxiety that's the point here I mean this shows the share of employment for non-agriculture workers from the poorest countries at the top to the richest countries at the bottom so the message is and this is something that's particularly the case for women it includes a lot of female headed households of course do informal kinds of work and we'll come later to the costs of that as well as the benefits so this is Indonesia in the middle here you can read along it's basically showing you the same thing that the poor and struggles in non-agricultural work in Indonesia they make up 90% of informal workers so that's sort of education and work the characteristics of struggle some of you might be familiar with this relatively famous elephant graph of Bronco Milanovic and I want to just talk about this a little bit in the context I'm going to suggest another aspect of being a struggler which in the first place most strugglers out there have succeeded they've lifted themselves out of poverty they're the ones who migrated from rural areas to peri-urban and urban areas who had enough education they had enough capital initially to at least move they are the orange group I've drawn it here redrawn it a little bit so it coincides with actual along the horizontal axis daily income per capita so they're the back of the elephant that had captured a lot of the benefits of growth in the developing world and behind this is the story of globalization and if you're a development person you're sort of a globalist and it's important to recognize how good economic globalization has been for fostering for improving the lives of the poor and lifting people out of poverty right so behind that economic globalization is a view of development where I think we should all be globalists which is a little different from globalization but we should embrace globalism and this takes us back to the tumult in Washington and the call of Senator Wang for a bipartisan agreement because it reflects the idea that in this world we should all be global citizens in our own interests as well as reflecting our values anyway the struggleers were big gainers from what happened between 2008 and 2011 that's the data that Bronco Milanovic put across to draw this graph then you see the middle class in the developing world and green have also gained this is how much they captured growth so they haven't lost out but in relative terms a little bit less than struggleers and of course the rise of populism and so on when the premise is over on the right you have the losers in the rich world US middle class are the big losers right here compared to the richer 1% and 0.01% and so on and now we know from new work of Piketty that many of you will know his name and the well-known book capital that this phenomenon in India is like the top 0.01% of the rich of the population at the top end in India has captured something like the same amount of growth as the bottom 50% of the population so this is this graph is illustrating something that's going on in the world in terms of the way we think about inequality it's interesting however a colleague of mine at the center used data since 2011 to update the elephant and he calls it the Loch Ness monster and in this graph on the far right you go beyond the 99th percentile to you know 0.1 at the top and 0.01 and 0.001 and so on based on more scrutiny by Piketty and others using countries like India that have tax data because the elephant graph is based solely on household survey data where there's considerable underreporting at the top of the distribution and so it doesn't really capture the extent to which the rich have captured so many of the benefits so when you redraw and you take into account which parts of the population captured the most you see that the struggleers in the first well you can see them labeled two to ten dollars in this graph they've still done well but not as well and this is interesting in the context of the growing concern about inequality within countries and what I called expectations maybe aren't being met for continued growth among struggleers who were successful in moving out of poverty and they are still living in an anxious world thirty minutes great okay thanks so let me go to a little bit about why struggleers matter that goes a little closer to not only the economics but the politics of what we're talking about this is a picture by the way from rioting in Brazil in Sao Paulo I think or Rio de Janeiro when bus fares were increased and we did a little analysis at CGD at median income in the city of Rio the increase in the bus fare was a portion too substantial out of the pockets of people who take those two hour bus rides struggleers in and out of the city so they went to the streets they or the middle class we don't really know because we didn't have a chance to survey people in the streets alright so the middle class and the state take a quick read and I'll take a drink of water of what Aristotle had to say so I guess the point of this slide and the message for me is that the middle class is a different phenomenon politically in that the middle class has the income to actually support government and government services through the tax system and because if the middle class pays taxes it has an instrument and principle to hold government accountable so it's not as though the middle class solves all problems of bad governance not at all the middle class can create problems particularly if they're trying to compete with their view of the privileged insider elites who have all kinds of political rents and so on but it may be that overall it helps as you have more people going into the middle class so one way to think about development is building a middle class society in which there's a group of people who can afford to pay taxes that allows for all the social services that helps create sound sustained institutions and hold the political actors accountable now there's a lot of talk about other benefits of the middle class particularly the demand for consumption taking reasonable risks and so on but that's the one that I think is the most interesting in terms of why it's different to be in a society where most people are strugglers than to be in a society where at least 50% or 45% of people are in the middle class now the fact is that in the countries the lower middle income countries many of which are Indonesia and company Sri Lanka and so on Papua New Guinea the countries that I hear about when I'm in this part of the world they are they have very small proportion of population in the middle class it's only Thailand as I said Malaysia of course where there's a larger middle class and one way to think about it is in terms of absolute tax revenues this shows Ethiopia has $73 a year per person in tax revenue the OECD countries have over $13,000 a year per person in tax revenue Indonesia about $400 a year in revenues per person the Indonesian government so it helps just on the simple measure of tax revenue you have more people to tax and this for those of you who might be political scientists talk of the median voter the median voter in Brazil is a struggler right so that makes it hard in Brazil they like too many taxes per person but we can talk about that and even in Brazil don't try to figure this out because I want to stop in a few minutes even in Brazil strugglers lose out they are net payers into the tax system mostly because of indirect taxes consumption the VAT trade taxes and all of those things the rich do pay more but not in any sense proportionately more because of the absence of property taxes in particular and taxes on capital in Indonesia the median voter is poor again it just gives you a feel for the difficulty of having the resources to be a good government when you are a struggler society in India and these are density distributions of income the median it's $1.60 a day in PPP terms of consumption but India is still a society of the truly poor it's amazing actually so let me go quickly to what to do and what to think the first thing I wanted to mention for those of you think about these things like at the development policy institute is economic growth matters enormously that's what brought us a world where most people are strugglers in the developing world rather than poor and the macro fundamentals we know have been incredibly important in this process in Africa from 2000 to 2015 average growth per capita per year was 5% the highest in the world the highest in the world for any region and it was all based on just getting dealing appropriately with macro management so I wanted to say that but also obviously from so much of what I've said it's inclusive growth that matters and for that you need an active effective state so what to do if you're a development thinker a development advocate for maybe the thinkers more focus on how to improve productivity in the informal sector itself the answer is not manufacturing so the old story of structural change and growth isn't going to work we will have high levels of informality for another 10 to 15 years straight through 2030 the year of the sustainable development goals more focus on social insurance not just redistribution cash transfers for the extreme poor but setting up systems of social insurance from which most struggles in most countries do not benefit pensions health insurance and so on the politics of tax policy that I've alluded to a little bit design of automatic stabilizers be careful when the IMF says you have to reduce fuel subsidies they're right in the medium term but in the short run there will be many people in the struggling group who absolutely cannot afford to buy kerosene if you increase the price by 50% so there's a transition and all the issues of universal basic income and distribution of natural resource rents, countries like PNG some new thinking about how to make transfer programs work within countries as well as across countries in the age of robots the obsession with problems of automation true but that is not necessarily the best way to think about the future of work in the developing world development thinkers have to think about a new way to think about it and then finally what to do the role of outsiders much of what the shadow minister said was really great and so wonderfully evidence based so I'm not adding anything new here except to focus on the on-date constructing a just global system trade, technology, the things that I mentioned CGD worries about support for the multilateral institutions and globalism support for NGOs and civil society and think tanks in the developing world because I'm a think tank person I can't believe how little support there is for independent thinking within countries that people who can become in a watch dogs for their own governments and then finally of course the problem of collective action I didn't put it down here in a global system what to do about climate change what to do about a pandemic disease risk what to do about the lack of research into agriculture for countries that still have very low agricultural productivity on and on the SDGs and the Paris Accord let me end on a high note thank you very much let me end this should be really remember Mohammed Bouazizi's sister he wanted her to go to university and we don't know if she made it I worry that she didn't but I hope she did because women's empowerment is so key thank you Nancy that's fantastic and I think there is you can see in your presentation that the culture that you brought to CGD and kind of continues through which is evidence based I love as a policy maker there's a very short list of what we get to do to fix it a few of those things are a little tricky but that actually may be what we can explore now so I think we've got about 15 minutes Steven or 20 for questions and answers I think we only have one microphone so that we may kind of need to go one by one unless people are sitting right beside each other so that we encourage if the person beside you is asking a question then you should do one as well okay who's going to go first we have one over here thanks and then we'll come up here next anyone in this group any others my question is about how well do you think organisations based in development are able to account for ideas like that the injustice occurs not at the material level first of all so not associating injustice first of all on the material level with poverty but at the ideational level like yeah the ideas of criticism of coloniality modernity rationality that it's the infantilisation of indigenous economies kind of thing and that yeah injustice I think I understand the question occurs first you know it's interesting that you ask that question because I worked for many years on Latin America and what I learned is that and this is true of India as well and maybe of other societies but you know reflecting my own experience ideas do matter a lot sometimes too much debate that starts with ideas it's not the Asian way I don't know about Australia and I don't know about PNG but certainly in East Asia I think the success of East Asia had to do with pragmatism and not the debaugh kind of so I think it's easy to many people who study Africa say it's all about colonialism but why the question is why has it gone on too long that there is still whatever burdens having bin colonies imposed still matters so on the one hand yes history matters on the other hand it's time to figure out and think intelligently about how these things from the past in the case of indigenous people here how they are sustained and then what to do about it active state thank you so much that was fabulous I'm just wondering if you have much to do with the WHO high level commission on health employment and economic growth and I think that commission looked at quite a new interesting way I think if we recognize healthy communities are obviously a benefit for any society but the influence of this CHI commission was looking at the economic growth of actually putting more resources into health so that actually the whole society can actually support the health systems from the farmer who produces the food to the local unemployed youth who can maybe help with maintenance to a whole variety of health professionals and I think it's an angle we haven't maybe looked at and it certainly seems to fit with your model yeah I don't know the report I bet one of my colleagues at the center we have a lot of really wonderful work on health issues that does know about that WHO report let me just say that your question reminds me to say that we do know now from research that living with anxiety and stress is really bad news for people I mean there are a lot of good studies in the US of African American children who live under a lot of stress sometimes violence at home all of these things discrimination itself and that it affects their health and it affects their long run productivity as individuals their ability to support themselves so I think it's very interesting about that they are struggling they also are striving they have aspirations but that creates a kind of stress and it's not that different from the developing world in that income group than it is for the lower middle class in countries like the US where the inequality problem is creating the fact that they're not benefiting and that the state and the system appears to them to be rigged and it is probably in many ways so I think it's a great idea for that kind of a report about work, productivity stress, mental health that we're paying a very high price even in the rich world for the costs we impose on people associated with vulnerability and uncertainty My name is Andrew Campbell from ACR thank you Nancy for a very fascinating data rich presentation much of your data appeared to focus on people in the non-agricultural economy many of the countries in Pakistan for example 80% of the population still work in agriculture and the data is very clear that improving agricultural productivity disproportionately benefits the poorest of the poor but also is one of the most cost effective ways of lifting people out of poverty so how does the agricultural economy relate to your struggles narrative very good well I think I did some work many years ago on the success of East Asia you know Korea Taiwan, Malaysia Thailand and compared to Latin America agriculture was not taxed in Latin America and in many other developing regions for many years agriculture was taxed in the form of overvalued exchange rates which were good for the poor I mean the urban poor urban workers so and now I'm on the board of IFPRI and I've learned a lot more about that's more up to date on what's going on so I appreciate your question I'm not the best person to answer it but what I think is at the heart of what you're saying is about raising agricultural productivity you know agricultural productivity in Africa sort of is four times lower than in China so big investments are needed including in R&D in figuring out ways but also in the public good of extension and so on but the future I think is I alluded to this when I said it's not going to be the structural shift from agriculture to manufacturing that is so good in Korea and other East Asian economies it has to be in these areas of work including agriculture and you know I think agro industry and food systems how are food systems working the benefits of you know data, data science and data analytics and systems are huge so I don't know if I can add anything to your question except I can't answer it except to say yes absolutely but it may not be simply raised productivity of these farmers it may be again from the top down how to connect them better to markets obviously in Africa it's a complete disaster and the answer to it may not be ag extension and working on ag productivity with farmers it may be building roads you know so that they have access to peri-urban markets so long answer that rambled without good question you're right thanks very much Duncan McIntosh from APNIC the internet registry for the Asia Pacific I wanted to ask about connectivity does it impact or the potential for impact on the struggles that connectivity can provide and do you feel there's enough research in that whole area of the benefits or possible benefits of connectivity yes well I mean you're referring to sort of mobile money maybe or computers or laptops or tablets and the internet connection it's huge right for most people in developing countries after all it's connectivity in the rich world including roads and bridges that has made us rich you know what's the big difference in many ways it's also it's not just computers it's electricity I would put a huge premium on bringing power so we could have a little bit more mechanization in agriculture a little bit more like in Cambodia where there's more activity with more power connectivity not just internet connectivity but power they're getting rich doing milling in rural areas but I do think we should think of the internet as public infrastructure and in places where it's not happening through private investment I think there are huge social returns to public investment in connectivity in the sense that you're discussing it so we can't wait necessarily in every country for the telecommunications firms I mean it worked in Kenya with mobile money but the mystery still I haven't given me an answer is why is it taking so much longer in other places and it has to do with who had the original monopoly in the telecoms area and you know there was one big telecom provider so they had a private return to investing in the places where those of you many of you may know more about this than I do but it had to do with the central bank hands off the top so you know development is about doing the right thing at the macro and meta level and the regulatory areas as well as addressing the needs of people on the ground so connectivity is a great subject in that way especially if it's thought of in broader terms not just the internet but we all need more connections and certainly strugglers do and that's it and that's richer So while the microphone is making its way can I extend that question take the chair or the prerogative of the chair just to extend that technology question a little bit and ask you about impact of robots or AI or machinery we talked a bit about manufacturing I think a bit of a time you hinted I think in your presentation about a 10 or 15 or 20 year window there's been a lot of discussion around the impact of robots and technology on manufacturing and what that means for a range of countries that it's squarely in the middle of your data so maybe you want to say something about that Yes it's really I go between thinking absolutely this is really an issue that has to be addressed and thinking the secret for structural change and long term development is with automation but not via manufacturing I think we have to get past that we know Danny Rodrick refers to the phenomenon of premature deindustrialization and what he's saying is just to give you something to hang on to at its maximum in Korea manufacturing took up 40% of the labor force manufacturing has already peaked in India and is now declining it peaked with 8% of the labor force in manufacturing so manufacturing is good in that it leads to higher output per worker but if you're concerned if we're all concerned about robots and AI and the effect on jobs I just think we got to get over this manufacturing thing Ethiopia is trying with Chinese a lot of Chinese technical assistance to become a manufacturing powerhouse but I have colleagues at the center who've done studies the cost of labor is too high in Africa they are not going to be able to compete with Bangladesh and why is the cost of labor too high because agricultural productivity is low and so the real cost of living and eating in urban so this I think your question captures a lot along with this emphasis that I was trying to put on informality about how to rethink what to do if you're in development space that it may be that we need to rejigger our approach a little bit I think in the rich world there's time I'm a little bit of the optimist about that it's all going to work out you know my daughter who's a doctor will not be sort of interneted out of diagnosis work by machine learning there will still be a need but it'll still be different I don't think we can foresee now what jobs will really be like but I'm pretty confident in the rich world it will be such a long slow adjustment in the developing world it's more worrying it's really more worrying and too much talk of the demographic dividend without attention to the demographic dividend in a good policy environment where you have an active effective state doing some reasonable things Thank you very much and Elisa Pritson from the Oversize Development Institute nice to thank you very much for your inspiring keynote speech and somehow to elaborate on the role of outsiders it would be great to hear your thoughts about the role of multilateral development banks I mean you highlighted very clearly that most strugglers will leave and will leave and we know that some shareholders in MDBs would like their management to change programs in multilateral development banks or even stop programs in multilateral development banks so in this particular agenda what should the MDBs do differently Thank you Yes well I'm a great believer I think you're alluding to the discussion about whether the World Bank and maybe the Asian Development Bank should do less particularly the upper middle income countries and remember Tunisia and Mohamed Bouazizi in that context Tunisia became an upper middle income country briefly and then has fallen back given its difficulties in recent years it is still needing support it may not be that we should be doing grants you know in upper middle income countries but there is huge need for continued support through loans and guarantees and public-private partnerships and catalyzing investment I've become a little bit more of a believer and yeah the multilateral banks have to be more bold in working on finding ways to cover the political and regulatory risks to investors associated with moving into investing in infrastructure and so on and there's no question that infrastructure needs including public infrastructure consider mass transit in Mumbai or even in Bangkok you know we've all suffered or many of you will have suffered with the traffic in Bangkok so the multilateral banks are really quite good about doing and monitoring major loans to do major investments I think at the same time I'm a believer in charging more countries that are a little bit richer so that the subsidy they get from multilateral loans is a little smaller than the subsidy you know it shouldn't be the same for Ghana as it is for Thailand I don't know if Thailand even borrows what's another country, Vietnam even so that's my thought on I think this is coming from the US mostly I don't know maybe not from Australia from the Trump administration Thanks Nancy Sakuak-Mimana from DFAT I think the Muhammad Bouazizi story is emblematic not only because of the economic vulnerability and precariousness but also it's very illustrative of the predations of state actors of the humiliations of the individual in the face of petty authority and in many ways this is as much a problem of political management for the countries that lower and upper middle income countries that you're talking about how much awareness do you think of the country's leaders of this demographic and of the pressing nature of some of the policy prescriptions that you were suggesting earlier That's a really good question and I love the way you put it you expressed some of the issues better in relation to the question about ideas humiliation and so on and I don't know the answer to the question of developing countries of whether they're focused in quite this way at the political level but I suppose part of my message is they ought to be but it's not easy because the whole point about the difference between middle class and struggleers the struggleers don't have the time right or the sort of they're not paying taxes they don't have the political agency to make their demands they don't have the time to figure out what their demands are so it's a good point I'd hope that development advocates and development thinkers who work in developing countries would start thinking about it that way you have these new poor and we recognize it's a tough situation and if you don't start making your tax systems that would be one message for me more progressive by developing systems to tax property and to tax high incomes you can increase consumption taxes only so much before you start emissorating the struggleers pushing them back below the poverty line so a good point but I don't know the one thing I want to say because on the question of the multilateral banks about the role of outsiders is these changes in the world the geopolitical shifts the rise of China and countries like Brazil and Turkey I think I'm not always sure it's internalized sufficiently including in the banks that until those governments take ownership of what they need to do no amount of money and harassing so I think in the aid community I'm a big believer in results based outcome based ex-post paying grant money ex-post when progress has been shown by some measures not coming with the blueprint you know now this is what you have to do in secondary education build the schools and train the teachers it's your job in the country so in Asia many countries have succeeded on their own like Indonesia in many areas so more recognition than until the responsibilities with those governments and for producing results even though they're having to have resources because so many people are poor and their tax revenue is not very high given the needs that's sort of the role of outsiders to me is to be inspiring innovation and new ways of thinking and experiments this is the way things worked out in the western democracies you know incremental gains innovation and so on so we're out of time okay Mary has had a hand up for a while so I'm just going to ask a short question really quick Mary Moran from policy cues sorry thank you you mentioned a lot that the real things that have brought people out of poverty are not to do with aid programs they have things like trade threats to it not only the big things have been migration trade agreements those kinds of things so an aid programs often tend to have a bilateral or regional focus trying to deal with the impacts of those changes so for instance what made it impossible very difficult for us to treat HIV patients was the World Trade Organization set the rules that govern the prices of AIDS drugs what I'm wondering do you think it would be helpful for aid programs to shift their weight from bilateral regional focus which they can tend to have and really focus more heavily on influencing those other areas so the trade agreements environment agreements the stuff that's happening with AI they're the things that are going to as you've said determine who stays in or rises from poverty do you think aid programs should be rebalanced a bit I think both have to be on the agenda the way we think of it in a conventional sense and work in development policy maybe not inside the government inside the Crawfers Development Policy Institute and ODI and CGD and Civil Society it got worked out eventually the problem with WTO rules and the pricing of HIV drugs it took too long lives were lost but thanks to huge civil society movement and the Clinton Foundation on pricing and lobbying and so on so I think I suppose I would say I would like more aid to go as I said to groups in developing countries of NGOs civil society think tanks who can carry that message right within their own countries and to the rest of the world and there has been a huge increase in the number of NGOs I said this yesterday to somebody in Asia and Africa that have are internationally you know I've signed up with the UN as international NGOs and I think that's a result in many countries of the middle class being more active so I don't think it's an either or I do think a little bit in the premise of your question was maybe not so much the aid money in the aid community but the larger development community including advocates NGOs, students think tanks more focus on the benefits how to capture the benefits of migration more focus on what to do about distortions in trade rules or in the way they're implemented more focus on technology transfer and who's going to pay for licensing certain new technologies for countries in Africa that's maybe something for the multilateral institutions to think through more so more focus on the global system which is some of what you're implying so you give me heart that this was something we've been trying to do at the center for global development is focus not only on better aid but on better policy in the broader sense in these other areas Thanks Nancy Apologies Stephen for running slightly over time but I think it's a rare privilege to have someone like Nancy Thank you Blair and of course Nancy it's a real privilege to have Nancy Birtzel If you want to hear more from her she's speaking again right don't forget tomorrow at 11 o'clock panel 4B the future of multilateral development banking with Nancy Birtzel and I also want to say it is the Australasian aid conference but it is about aid and international development so all those broader issues we hope to give a lot of discussion we're now going to break from morning tea after morning tea they're parallel sessions parallel sessions nearly all submitted so this is very much a bottom up conference back here at 1.30 the morning tea is brought to us by the Australian Center for International Agricultural Research so thank you Andrew and ACR