 Thank you all for sticking with us as we move through this intense program today. That was a great discussion of the policy options that Brazil may be able to consider and hopefully also that many of its partners will consider as well because this is something that – there's a lot that can be done here but there's a lot that countries must work on together, so we look forward to seeing more progress on that in the future. The next stage in our program is our keynote speaker, Sir Rogeria Studart, who currently serves as the alternate executive director to the World Bank Group, representing Brazil, Colombia, the Dominican Republic, Ecuador, Haiti, Panama, the Philippines, Suriname, Trinidad, and Tobago, so quite a portfolio that he has. He is a member of the Committee on Development Effectiveness and chairman of the G24 and represents Brazil at the IDA 16 replenishment meetings. Prior to his current appointment, Mr. Studart served as the executive director of the same country constituency as executive director. He was a member of the budget and personal committees and chairman of the ad hoc committee on rules for the 2008 regular election of bank and MIGA executive directors. He also served as vice chairman of the G24 from March 2008 to October 2009. Prior to his appointment as executive director, he served as the executive director for Brazil and Suriname at the Inter-American Development Bank and the Inter-American Investment Corporation. From 2003 to 2004, he worked as financial market specialist at the Inter-American Development Bank. He has previously also held positions with UN ECLAC, UN CTAD, and the Brazilian Institute of Statistics and Geography, as well as Chase Manhattan Bank in Brazil. He is an economist by training and holds a PhD from the University of London. He has published many articles and books on macroeconomics, finance, and development finance. He also holds a professorship with the Institute of Economics at the Federal University here in Rio de Janeiro. So I will invite Rogério to take my place up here at the podium, and he will deliver his remarks to you all. Please welcome him. Thank you. I was almost getting afraid that you will not mention the fact that I'm an associate professor at the Federal University of Rio, which is the part that I'm most proud of in my CV. So let me stop by saying that I, even though my title is executive director, I represent Brazil and eight other countries at the board of executive directors of the World Bank. And having said that, what I'm going to say here is just my personal opinions. I want to thank Reina and your team, GFI, for hosting this excellent conference and for allowing me to learn a lot about the subject. I want to thank you all for being here. When Raymond invited me to talk here, I told him that even though I'm a macroeconomist and I've done some work on financial flows, I do not understand anything about listed financial flows. Having thought about that, it says something good about me. But he agreed that I came and he asked me to come. So I just want to tell you a little bit about what I've learned from reading the report, from reading all the reports and from listening to you, what are my main conclusions here. First of all, of course, I was very, at the same time, I was very concerned with the numbers I saw about listed financial flows from Brazil. We talked about 30 something in the past three years, billion dollars a year. That's a lot, it's a huge amount of money. We should be concerned about that for at least two reasons. The issue of tax evasion, which is really important for us. But also because of the reserves that we are losing, and we need those reserves very much for reasons that I'm going to be discussing now. On the other hand, how long do I have? I have 30 minutes. I can talk about my whole life in 30 minutes, but let's start it. The other thing is that we have a little fruit here in Brazil called jabuticaba. Whenever you want to say that nothing, you only find it in Brazil. It's perhaps one of the only unique things that Brazil has. Whenever you want to say that it's not unique, in Brazil we say it's not a jabuticaba. So my first conclusion is that the case of illicit financial flows in Brazil is not, even though we have to be concerned about it, it's not a jabuticaba. The second thing is that it is, if it's a global systemic phenomena, we have to understand it from both the economic and the political point of view to see how to address that. The third thing that I learned is that there's no way for you to combat this issue from a national level. It has to be a multilateral effort. I prepare very quickly a presentation here. I hope that you don't mind that. Just to give you some evidence, I should have produced more of that, but I think that some of the slides here will be able. First, do I have control here? OK, first, as I said, I don't think that the case of Brazil is a jabuticaba is not unique, but we should be very concerned with that. The numbers that you showed to us are quite astonishing, quite astonishing. When you look particularly in the last five years, and even more in the past three years of your database, you're talking about 30 something billion dollars. But then if you look at your other reports on the word volume, you see that from 2002 to 2011, there has been a significant increase of illicit financial flows from developing countries. It should not be a relief to anyone, to individual countries, but at least I do not go out thinking, oh, corruption or lack of governance has become a major endemic problem in my country. It's just a small relief. Now, of course, you already mentioned and you already have mentioned the fact that this is very much related. This is Fred. I recommend this website for everyone. It's the Federal Reserve database, it's quite exciting to use that. And this exports value of goods for Brazil monthly. It's an average monthly rate for each year. So you can see Brazil has gone from a monthly exports of around $4 billion to about $20 billion a month in a very short period of time. This has been an incredible, an incredible pace of growth. If you think that, let's go back, if you think about the $30 billion, we're talking one and a half month, less than one and a half month of total exports. Should we be concerned? Yes, definitely. Any money being evaded from our tax base or from our reserves should be something that we should be looking very carefully. But if we think that this is a proportion, then it makes a little bit more sense. And if you look at Oxfam, the Oxfam report that you have in your, I don't think this is from Oxfam. It's from your own report about what you call Brazil's underground economy. Is that informal economy or underground economy? Okay, no, because it makes a difference. Well, first is if we had in the 1970s, 55% of the economy, as underground economy, we would be a country of Matthew also. So maybe you should change that for informal. But anyways, that shows a little bit that what has been also good in the case of Brazil, that size of what you call underground economy has been reduced significantly. As a matter of fact, after the re-democratization of Brazil, the level of transparency, both of government accounts, but also in many other levels, has been increased significantly. If you want to know, for instance, nowadays, how much a government official is spending today on her or his credit card, you can find it on the website. And you can put together all the fiscal data that you want from the website. It's a public availability, not perfect. It could be much improved, but I have to share something with you. I've been abroad and representing Brazil for ten years. I have seen very little cases that match that kind of transparency. And I'm not boasting. I think Brazil is a long way from being the country of the governance that I desire. But the steps that we have taken from the obscure times of the dictatorship to the times of democracy have been extraordinary. Now, as an economist, I've been trying to understand why there has been an overall increase of illicit financial flows for developing countries. It's not just that corruption has increased that substantially. Corruption, I believe, has been in the very high level everywhere, unfortunately, but something has changed. I have, I want to share with you a theory about that. And it has to do with the recent case of financial globalization that we have had. Which has been too much based on deregulation, first of all. And also, which led to financial, illicit financial flows being much more volatile. That has created instability in many levels, in micro-economies, but also particularly in foreign exchange markets. Developing countries are particularly vulnerable to that. And if you look at the foreign exchange volatility index, you see that there was a significant increase of that throughout these years. Now, if I'm a company and I want to keep part of my reserves, I want to keep, in terms of cash, I would prefer to have it in a currency that is strong enough that would withstand the volatility of the international markets. So this is what happens. I mean, there's a tendency for the companies to say, where do I put my money as reserve of value that is going to guarantee that I'm sheltering myself against this volatility? Now, the flight towards stability has not just been an issue of the private sector. Governments have clearly shown their concerns. We have had several cases of financial instability in developing and developed countries now, unfortunately. And countries like Brazil, for instance, have been increasing its international reserves like never before in order to shelter ourselves against this volatility. So the idea that we are living in a more insecure international financial system is not just for the companies. And Brazil is not the only country that has been doing that. Several other, I'm sorry, when you look at the blue line there, which is China, it's not negative in the 1980s. It's just that I put in the right side axis because the increase was so significant that you wouldn't be able to see the other ones. But it's very clear from the literature that accumulation of reserves has been done on purpose in developing countries. In order to shelter themselves from the security of the international financial system. Now, oh, this is moving with this one. OK, now Brazil is a curious case. We have adopted, since this would take much longer time for me to discuss that, but I think most Brazilians are familiarized with that. Remember that I said that probably companies are trying to shelter themselves from exchange rate volatility by putting more money outside. Brazil is a different case because we have had appreciation of the currency, even though the volatility of our currency has increased quite substantially. But if you think, if you are a Brazilian, particularly if you're an entrepreneur in Brazil, probably any Brazilian has heard that you have in your mind that the real has been appreciated for a long period of time. So I think that what will come to your mind is that at some moment, this has got to change. Therefore, you would prefer to maintain part of your reserves of value abroad in order to shelter you from what is possible going to come at some point with the devaluation of the real. Actually, as it's happening since 2000, and yes, to get better eyes on it. But it's bound to happen, it's bound to happen. So it makes completely sense from the commercial point of view. The third part that I learned here is that, remember that I said that this, I believe that this has to do with the very peculiar type of financial globalization that we have. I'm not against financial globalization. Just think that financial globalization, as we had in the recent past, has been very, very negative because the main pillar has been deregulation rather than having better regulation and better rules of the game. So what the deregulation of the international financial system has done is also to facilitate the illicit financial flows through the creation of a significant number of, not only a creation of short financial sectors, centers, but also allowing much more freedom for companies and financial institutions to move money from one to the other. And there should be to increase its transparency. But we need to do more on that. And I know as a member of G20 that we are doing that the global, we, Brazil is a signatory of the global forum, but I think we need to do more. We have to ask our colleagues from the G20 to use their capacity to influence that more. Now, I cannot see that. When you look, the situation has become extremely, and that's also from the Oxfam report, extremely dangerous. When you see that a significant part of foreign direct investment now is coming from offshore financial centers. When that happens, it clearly shows you that it's difficult, if it is difficult for the G8 countries to have that kind of information for their own international financial offshore, imagine for us to have that kind of information. The same thing applies for that. So I don't need to do that. So my conclusions are from this seminar, which I think very much. I really learned a lot about this. It's that first, the increase in illicit financial flows from Brazil are a problem that we should all be concerned here. But it's not an isolated problem. It's not a jabuticada. Second, as I said, it's a matter of extreme concern for moral reasons. I think I don't have to say to you that in a community, when you're evading from paying your taxes, there's a moral issue related to that. But also, there are economic consequences for that. I don't think like Leonardo said, I think the economic consequence, I disagree with you, I may be wrong, but we can discuss that. It is not so much on the level of investment. That money cannot be used to raise investment. Investment, that's a longer discussion. But it does affect our tax base, which is extremely important for sustainable growth, sustainable long-term growth. And also, diminish our international reserves, which we badly need in order to maintain a cushion against the stability of the international financial system, which, by the way, has only increased after the 2008 crisis. Let me mention to you, let me say something to you before I forget that I want to raise your attention to. Mario Draghi, the president of the European Central Bank, has just declared that the eurozone is going to adopt a quantitative easing that is similar or higher than the one that has already been adopted by the United States and Japan. Now, the quantitative easing and the so-called non-conventional monetary policies in those countries that have hard currency are creating a major danger for the international financial system, but particularly a potential source of instability in the near future. We need those reserves to cushion against that kind of increased potential volatility and the existing potential volatility. So it's a matter of extreme concern, as I said, for moral reasons, but also for economic reasons. For any, I wouldn't say even developing country, for any country that cannot issue a hard currency, which, by the way, can only be done by very few countries. Third, higher forex volatility greater, higher demand for stability. This is a problem. It has been an increase of what Keynes would call liquidity preference, but for liquidity in other currencies, this is dangerous. Global financial deregulation made it easier to fly from volatility. And this is one of the underlying reasons why we have those results. Should we be concerned, as I said that, for tax evasion reasons and for international reserve vision? Finally, and that's what I wanted to stress, as I have done before, curbing illicit financial flows is a matter that should be of concern of all of us, the G20, but also the international community. It cannot be dealt nationally, bilaterally. It can only be dealt multilaterally. Let me just share with you, Raymond, as part of the multilateral systems that I've been for 10 years, I'm concerned. I'm really concerned that the multilateral actions that are needed to address the issues that we're facing now are becoming even more and more difficult and people are recurring more and more their national capacities to address the crisis. Thank you so much. Thank you again for this excellent conference, for my learning a lot, and also for bringing this issue to Brazil, because I think this is one issue that should be brought not only to the government, but for the private sector and for the public opinion. And it's an important issue. Thank you.