 You deferred to old age. I was his opponent when he got his PhD. Thank you very much for this address to Professor Abba Omar. Your presentation was extremely transparent. Now what I miss completely in the presentation is any discussion of the means, the instruments, the policies, the institutions that would be required to achieve those targets. Now again, excuse me for asking this question, but I was brought up in the, I was a student of Tinbergen and his contribution was really to the theory of economic policy and the essence of the theory of economic policy is of course you have to specify your objectives, your targets but you have to also have a clear conception of the instruments including institutions, policies that are needed to achieve those objectives and maybe the scarcity of time made it impossible for you to go into it. But I think it's quite incomplete to just set a list of targets and then leave it at that because the extent to which the realization of these objectives is possible or not depends very much on the political feasibility of the right types of institutions and policies. Thank you. Thank you. I was quite interested in this Brazilian presentation and you had some conclusions and discussions about what could be carried over to Africa. And one of the themes you mentioned was national consensus around this policy efforts and if you look at Africa I think there is pretty broad national consensus on the contents of policies in the countries that I know of. The problem Africa seems to emerge when you implement them, who is going to be in power, which ethnic group or which side is going to manage these and that is where the consensus breaks down and imbalanced supply of public goods across the regions or groups that tend to undermine the support for the government which is required for this to work. And I've been looking a bit at industrial policies for example that you also discussed where they've taken over some good ideas from Asia but they've broken down by the partial implementation of the policies. So my question is really is Brazil immune to this kind of distributional risks associated with interventionist policies. In Africa this is a serious concern I think. Thank you Nadia von Jacoby from the University of Pavia. Thank you very much for two very interesting presentations. I have a question for Armando and Ed and my question is partially linked to the question that was just made because I think the real issue is how do you really get to the consensus who are the agents that drive this and I was wondering from what I read about Brazil whether you think that the crucial role was deployed by the PT, the Workers Party in really bringing together the poor and the hidden middle class or whether you think that it was the tools used in particular the sort of control of inflation and a mix of policies that made every group partially content. My question relates to the Brazilian model and its sustainability and the question is what about the sustained, less destructive and more globally, environmentally friendly use of Brazil's natural resources. Then we have here. Okay, Jukka Birtele from University of Tambere here in Finland. I have a question to the first two speakers. You referred to the important role of tax system in collecting the tax revenue and obviously financing the transfers and that of course also depends on the extent of the shadow economy and the informal sector. So could you comment on the relative size of that in Brazil and in some of the African countries? And secondly, has Brazil conducted specific measures to combat the informal sector and have this been evaluated? Okay, why don't we start applying this one. The Brazilian, perhaps? Yes, of course. The Anglo-Brazilian. Thanks very much for those very interesting well put questions. A lot there. This issue of the national consensus, how does one build that in countries in Africa where there are clear ethnic divisions? Is there anything similar that we see in Brazil? Well, not in the same way, but we have to recognize that Brazil is a highly diverse country from a regional perspective. There are parts of the country that have historically been acutely poor. There are parts of the country that have historically been at the federal level politically highly over represented. So somehow a consensus has been manufactured despite those very clear historical differences which run right back to the colonial era and I think there may be something there that Africa can learn from pretending that we're dealing with something which is identical at all. Clearly that isn't the case. But I think it's long been part of Brazilian political culture the importance of arriving at a consensus and I think that partly answers another question that we had. Is this all about the PT? Was it the PT that articulated the views of certain sectors of society that weren't articulated before? Well, it's certainly been very effective at doing that but we have to understand this whole program and this model if we could call it that that we're seeing unfold at the moment is a product not just of the PT's own activism but in fact what's happened under the previous governments of Fernando Enrique Cardozo who was a social democrat. So it goes a bit further than just looking at one admittedly highly successful and influential political party. It's looking at an entire political system an entire political culture which getting back to the first point has somehow been able to put this consensus together despite quite significant internal spatial divisions in terms of the distribution of income and of course as we know in Brazil there are strong ethnic divisions as well and it is an ethnically divided society. We can't overlook that. I think sometimes in Brazil they wish that we would overlook that but there are those clear divisions there. So there are some limited parallels. I'll just say one more thing before I hand over to Armando on this business of the informal sector because there's a specific point I can put here. How do you bring the informal sector into the tax base? How do you strengthen the revenue streams? Well Brazil actually has done this with some of the indirect taxes with a system known as C-samples, simple, which is about making it easier for micro enterprises to register for tax purposes to reduce the amount of paperwork that they have to do and many businesses have then found it advantageous actually to come clean and emerge into the formal economy and file accounts and do their taxes because the compliance costs have reduced very significantly and that's one of the factors although by no means the only factor which has helped Brazil to strengthen its revenue base and I think it is a clear sort of little policy and the scheme of things is quite a small policy maybe again there are potential lessons there. Just a few points. On the shadow economy, I'm not sure about the shadow economy but in terms of informal employment it's around 35% of the labour force. The 35% of the labour force do not have a contract of employment and it covers both urban and rural areas. There are two interesting points about that of course as you rightly point out rates of informality in African countries are much higher, 75%, 80%. So that's an issue. What is interesting about Brazil is that the wages in the informal sector roughly follow the government determination of the minimum wage, that is there is a lighthouse effect so that changes in the minimum wage have an impact both on the transfers provided to people in poverty and to pensioners and so on but it also has an impact on the salaries of people working informally. So that gives a very strong kind of it's almost a single lever that you could change quite a lot just by changing the minimum wage and Lula during his two administrations the minimum wage increased in real terms by 60% and that is really at the back of quite a lot of the good stories about improvements or inclusive growth in Brazil. On the issue of consensus I mean I'm sorry to Eddie's already kind of given some ideas on this I'm sorry to kind of perhaps add to that because this is really kind of crucial. If we want to have a chronology 1985 Brazil recovers from 20 years of dictatorship between 1985 and 1988 there is a big national discussion as to what they are going to do the decision is made to have a new constitution which we can read as a new social contract and the new social contract is extremely progressive for example in terms of rights to social protection rights to health care and education and also provides responsibility of government to take this over perhaps for the first time in certain areas and then from 1988 onwards you have this kind of process that we discussed around 1993 of the implementation of those policies so luckily in Brazil we can even time the point at which that new social contract took place. There are very interesting kind of perhaps second order effects that are really important for example there has been a concentration of power I mean some of the speakers in previous session have mentioned the view that decentralization might be important in the context of Africa in fact what has happened in Brazil is a concentration of power in the federal government particularly in terms of tax collation Bolsa Familia is a federal policy as opposed to a local policy although it had its origin in municipal kind of innovation so I think there are those issues too it's true as the point that was made the workers party has now become a national party which used to be very regionally based on the south of Brazil but it now extends to other regions in Brazil people say that it's to do with Bolsa Familia because that allows the workers party to have something to contribute in those areas so there are kind of interesting issues about the kind of political regime and how that has developed over time and I'll stop there okay thank you firstly I'm not a professor I hope I do sound like one thank you very much for raising that question I think I've touched on some of it in the paper and so as you quite correctly said trying to cram a lot of the stuff in but if you look at direct poverty reduction measures it's covered the full gamut of no fee schools subsidizing housing medical services and so forth but also direct social grants as well so you find that the numbers increased from in 1997 were about 2.4 million to about 12 million by 2012 on social grants now this has had a number of different effects because you find that although there's almost universal entry into the education system but the throughput to the matriculation there's a dramatic drop and so we've been looking at the possibility of some of the Brazilian experience where you incentivize certain sort of results so that people actually finish say the education, the full metric schooling so that the child and one of the ways we're doing that is ensuring that the child support grant should be extended to the year that we expect them to finish matric and that on completion that they would continue to be receiving that kind of thing so there's been a number of instruments around that and then on the industrial side one example is the investment to the automotive sector there's been a number of initiatives around agricultural sector but the most important one which is again from the figures you would have seen in previous presentation the problem with the supply of skilled and semi-skilled labor coming into an economy which is increasingly demanding that so on the further education training which is sort of post-secondary education but not quite university level we're seeing an expansion of service providers in that area sponsored by government so there's a plethora of different measures that we're trying to implement Thank you Let me close this session but let me first make an observation on the pessimistic Nordic observation by Arne I think there are examples of societies where these ethnic divisions have been more or less bridged over I think the most famous one is Malaysia so Malaysia applied policies in which the very rigid division in employment, jobs I mean the Chinese basically run the business and then the Malay, the countryside and the administration has been reduced there are still tensions but the income gap has been reduced and another one is Northern Ireland and for Africa there is a very interesting paper by Francis Toit who looks at six African countries and looks at horizontal inequality which is a specialty and in which different ethnic groups declare different propensities to make peace or to cooperate and so on and so forth with others and the question is I think that in the northeast I mean in the case in Brazil the northeast was like a piece of poor Africa not rich Africa in Brazil so at least the literature argues that if you are able to create a large enough middle class if you are from northeast or Tutsi or Hutu or so on and so forth you may create a common interest or if you are really you may be right or I mean if racial hatred is really so deep then even if you equalize opportunities I mean the class then people will I mean the problem will persist but in many cases that perhaps may be a proxy of economic discrimination or spatial discrimination and then in fact we do have examples where the problem has been partly resolved so thank you very much to our finalist and thank you very much to you well done