 Good, so this is a paper about booking a puzzle and this paper is part of a wider project. This project is called GAP and it's a set of country case studies and in these country case studies we try to figure out rigorous growth inequality and poverty triangle. So it's a sort of rigorous poverty assessment and of course also to come up with the explanatory factors behind these movements and after my presentation there's a presentation by Andy McKay and also it's not the case study within the GAP project he's presenting but it's somehow related also to that work. And this is joint work with Claude Wetter and Aud Nickerman both from Bookina Faso. So I start with this figure here so what you see is the blue line this is a cross of GDP per capita in real terms and you see that this was quite sustained so in this period 1994 so just after the devaluation of the CFA Frank you see that there's an average growth of about 3% per year so that's relatively high. Of course some interruptions there was a drought in 1997-98 it was a food crisis in 2008 so I get back to these shocks but overall this again is quite sustained but if you look at the poverty figures and these are these red boxes then you see that there's first an increase of poverty so it's a poverty headcount this is basically due to this drought in 1997-98 so if we had household survey data one year earlier that would be not such extreme and probably not even an increase. If you look then at 2003 we see a slight decline of poverty and then up to 2009 again a decline but it's relatively modest, modest in particular compared to this gross pass and if we compute the gross elasticity of poverty we get a value here of minus 0.5 and this is relatively low compared to many other countries where we see an elasticity close to one if not significantly above one so a question is here I mean what happened and of course we know if we have such an continuous gross process and we have only a moderate reduction poverty so there must be an increase in inequality and so I tried to show you what was driving the increase in inequality so the story I try to tell is a story where we have basically two sources of gross the first one is a massive rural urban migration so people migrating from the rural sector basically agriculture to the urban sector and here basically the informal sector by migrating they increase their income because wages even in the informal sector higher than the agriculture sector it's a compositional effect and the second source is a moderate increase in agriculture productivity and more massive increase in land use so there's an expansion of the land used for agriculture but in particular this land expansion and also this migration these are not sources of gross that are sustainable so we would need structured change but this structured change is really absent I will show you evidence for this and so because we have this low agriculture productivity and no structured change in the secondary and tertiary sector food prices go all to up so they are endogenous in this process and this is eroding in particular the purchasing power of the poor because a high share of their consumption goes into food and this is so substantial as I will show that this is not only increasing poverty it's also increasing deprivation in health you see that the indicators of children's health over at least an important part of the period I consider here we're deteriorating good so let me first look at sectoral growth so here we have the primary secondary and tertiary sector this is in levels and so it's aggregate GDP in these three sectors again over this period you have seen in the first slide you see these in all three sectors we have some growth of course I mean you have seen the the aggregate GDP before but of course if we talk about poverty we are interested in per capita terms so we have to bring this into figures per head so we need to look into population growth first and if we assume that because the primary sector this is basically in the rural part of the country and the secondary and tertiary sector is in the urban part then we should use these differential population growth rates and you see that rural areas also the total fertility rate is of course much higher in rural areas than in urban areas the population growth is only around 2% whereas in urban areas this is rather around 4 to 7% and this is again due to this massive migration from rural to urban areas okay so if we apply now the rural and urban population growth rate to these aggregate GDP figures then we get these movements here so you see that there's virtually no growth in per capita terms in the secondary and tertiary sector there's even a small decline in fact and there's a slight growth in the primary sector so some growth in the agricultural sector but also not very strong okay good so I said not much of a structural change in the country and you see that this is confirmed if you look at the employment structure so here you see that for rural areas and urban areas again so rural areas again it's basically agriculture there was in particular in the 90s and early 2000s a lot of movement into cotton production because the cotton price was going up and the devaluation also promoted these exports that was and still is the main export crop but yeah basically people are in agriculture and in urban areas you see that the the formal sector and the public sector that did not increase over time if you compare 1994 to 2005 this is the newest figures I have on this you see that there's still a very very tiny formal wage sector and also the public sector is not much larger so most people are still in the informal non- agriculture sector or there's also a bit of agriculture in these urban or semi urban areas but there's no significant change in what people are doing over the time so that also explains by the say the productivity what we have seen on the previous slide was not going up over time if you look now specifically into the agriculture sector and here separately for the food crop sector and the cotton sector you see that the increase in production was mainly achieved through an expansion of land so if you look here in the to the first and the first column you see that the hectares of cultivable land were significantly increased but if you look at productivity so the the production per land you see there's only a slight increase over time it's about one percent per year yeah so it's all through the expansion of land and there was not much of say technology adoption terms of fertilizer or irrigation all this was quite stagnant yeah so definitely not something would call here a green revolution if you look at the cotton price so I said cotton the main export crop again this was quite favorable in the 90s and early 2000s but since then there's no further increase here in the price index so whether you look at the farm gate price index or the Liverpool price index or the international price so that's also not any more substantial source of economic or agriculture growth good so what happens given this low performance in the agriculture sector what happens to food prices and the purchasing power of the poor so here you see prices for the three main food crops that are consumed in the country millet sorghum and mice so they are quite volatile but if you look at the trend this is this thin line here you see that this is continuously increasing so food stuff gets more and more expensive so the inflation is much higher than for the channel CPI this is this bold line here the only food stuff for basic cereal that didn't really get very expensive or where the movement was less in preference is rice but if you calculate the price in per calorie terms this is so expensive that this is not really a possibility to substitute in for the poor population good if you look at the butter chairs so again here for three years 1994 1998 and 2003 and you have it always for the for all households of these rural areas here then the poorest and the richest quintile you see that over time the share of the total expenditures that is spent on these basic cereal so the millet sorghum and mice is continuously going up it was particularly high of course in 1998 so after that truck and food prices were really high but even in 2003 this is still much higher than in 1998 so this documents this continuous erosion of the purchasing power of the poor and that of course was increasing inequality because the rich were less affected by this differential inflation so to document this a bit further you can apply this decomposition so some of you may know this gen rebellion decomposition but you decompose a change in poverty into a cross and a distribution component so you want to know to what extent the general economic growth contribute to a change in poverty and to what extent redistribution so we add a fourth earth sorry a third component here we call it the poverty line effect so this is the differential inflation so the fact that the goods that are consumed by the poor have a different inflation than the goods that are consumed by the rich and you see that if you look over this entire period 1994 to 2003 that indeed grows and redistribution contributed to a poverty reduction the fact that the purchasing power of the poor was eroded in fact offset part of that poverty reduction so overall the decline in poverty was quite modest yeah this is this yellow bar good and I said at the beginning that you can even see of course this is not causal evidence it's just suggestive but what this yeah seems to suggest is that this rice in the price of food stuff made it quite difficult in fact to bring these indicators of malnutrition down so if you look at stunting for instance you see that at least in the nineties here and early 2000s that in fact stunting was on the rise and not on the decline yeah also that was already in the period where the PRSP was implemented and so on so where in fact a lot of effort was made to bring these things down and if you look at these other indicators or the mortality you see that at least for quite a long time the things rather deteriorated than improved so in a conclusion we can say that since 1985 we have almost all we have a doubling of the population we have a rapid rapid urbanization and we have literally no structured change so some of our stagnant economy we have now one million more poor people than in 1994 in absolute terms and so what we need here is some new sources of growth so again the land expansion is not sustainable the just the migration from workers into the informal sectors not sustainable so we need technology adoption and other changes in their countryside and we need changes towards jobs with higher productivity in the urban economy yeah so this is sort of a I mean if I refer back to the title I call it chipping around the Malthusian trap so it's not that I'm more thinking that say the Malthusian model has any validity in general but we see that some countries in some periods are somehow in a sort of or at risk in falling in a Malthusian trap in a sense that we have high population growth that is somehow endogenous to this entire process and we would need somehow to live this country on a new growth strategy or a new growth path to bring down these population growth rates to increase the the productivity and therefore to have substantial poverty reduction and to bring inequality levels again down maybe a last word some of you may know these papers by Pinkovsky and Salah I martin and also the paper by young two papers that argue that we have a poor poverty reduction in Africa and I just want to highlight here that the driving force we see here this endogenous food food price inflation that is largely driving this increase in inequality and the modest gross elasticity of poverty would not be detected in these two approaches because the Pinkovsky and Salah I martin paper is basically relying on aggregate figures and takes just the distributional pattern from the micro data does not account for this differential inflation and the young paper where the development is based on the say asset ownership over time assumes that the demand elasticity of the income elasticity of demand is constant over time but if we have such massive changes in relative prices this is a very strong assumption we cannot assume that the income elasticity of demand would be constant so again something which is not incorporated here and this is okay thank you thank you very much