 Okay, so I decided to focus on a particular on a specific case and that's Burkina Faso Which is a country where we saw quite sustained economic growth But only little poverty reduction and it's a case which is quite representative for many of the Francophone best African countries It's a joint work with Claude Wetter and Ordnikema both from Burkina Faso And yeah, you will see in a minute why we refer here to the Malthusian trap Go to here you see the the whole picture you see the growth of GDP per capita It's on average over this period 19 94 to 2012 Almost 3% so that's quite good It's there are few interruptions due to droughts and the food crisis later on but now if you look at the red squares there you see the poverty headcount estimates and You see an increase of poverty in the earlier period and then a decline but this decline is not very pronounced The high level of poverty in 1998 that is in particular due to the draw that just preceded this survey So that's exactly referring to the point David made so the survey Done directly after a very bad harvest of course gives you a very high level of poverty If you look at the overall trend then well you see that there's only modest poverty reduction You know compared to the growth of GDP that the experienced here So you see the gross elasticity of poverty So it's just relating the the change in poverty is to the change in GDP per capita You see it's minus point five. So that is really low. Yeah, you see a few other countries here I mean this is of course not a representative sample, but it's by international standards This is really a low gross elasticity of poverty So there's something here with a distribution that we need to understand, right? Good. So here you get in short the story and then I try to provide the empirical evidence that supports The points that you find on this slide So there are two sources of growth here The first is that we have a massive migration from rural areas to urban areas so people migrating from the countryside into the Cities and or they're not so many in Bokina in fact but entering there the informal sector mainly and the second source of growth is a modest agriculture growth and this is not due to Dormantous increase in productivity. It's mainly due to an expansion of land. Okay so there's Almost no sign of any structural transformation in the country neither in agriculture nor in the Urban economy and Because there's this low agriculture productivity. We see in this country a huge increase in the price of food and this is of course Makes it very difficult somehow for the for the poor So it's really eroding their purchasing power and this at the end you will see explains this low elasticity of poverty with respect to growth and it's endogenous food price inflation Yeah, so it's you will see some of the food price inflation the reflection of this low increase or the the very little increase in agriculture productivity Good so now let me lead you through a few tables and figures So here you see GDP growth by sector So these are aggregate numbers and you see the primary secondary and touch your sector So all these sectors have experienced aggregate growth I mean you saw this in the beginning when I showed you the the GDP figure But what we of course interested in this I mean, how does it look like in per capita terms, right? So here you see a few numbers on population growth So the total fertility rate is still very high in Burkina Faso It's around five and you see that we have a rate of population growth I mean depending on the exact period you look at but between 2.5 and 3.5 percent even going up recently a bit because mortality was going down Now if you look at this separately for rural and urban areas, then we see in rural areas We have about 2% so this shows you already that many people are leaving the countryside therefore the aggregate Demographic growth is a bit lower than the national average and in urban areas in particular more recently We see that we have a close rate of seven percent Very strong in Wagadogu the capital but also in the second city Bobo de la Zoo and if you look at the smaller town 12 8% yes, so a massive Urbanization here. So if you bring this now into the sectoral GDP growth, then we see that you know, there's no growth in the in the touch your sector. That's I mean there's some fluctuations, of course but over looking at this over the entire period there's really no growth in the In the secondary sector same picture even going down a bit and then as I said this little grows in agriculture Right and because there are huge differences in level So again one source of growth that we see is simply that people went from this sector here to this sector Yeah, so they increased of course the income by doing this But we do not see within this sector any growth in productivity Good now if we focus more specifically now on agriculture Sorry, these are first on the sorry on the employment structure So you see this for rural areas and for urban areas zone rural areas Well, this is mainly agriculture. It's a lot of subsistence agriculture There was given the devaluation of the CFA Frank in 1994 and then this a rise of the International price for cotton and this is the main or was at that time the main export commodity of Burkina Many people somehow switch to cotton production But well, we do not have figures here for 2007 But if you look here the we have numbers on the households involved in cotton production You see that this is already going down again a bit because the international price went down And they also hitting limits here to further land expansion for the land that can be used for cotton production Now interestingly if you look at the urban economy We see that the share of those working in the public sector is pretty stable over this entire period and all the private Formal sector is pretty stable. Yeah, it's around seven to eight percent. So still the the Majority of the workforce in the informal sector. Yeah, so there's I mean in terms of employment structure No sign here of any, you know Industrialization and increase of the private formal and probably more productive sector good now Specifically on the agriculture. So I separated this year for food crops and cotton again cotton the main export commodity And if you look at the land use so this is this column here for food crops and this year for cotton Then we see a massive expansion of land more than two percent per year For food crops and almost eight percent For cotton, right? And if you look now at the yields, then you see it's Modest one percent one point two percent for the food crops and one percent for cotton No, that's exactly the opposite that we would find say if you look at Indonesia, you know During the the green revolution you would see a huge increase in productivity. We do not see this year Yeah, it's mainly land and of course land is limited. So this can't be a sustainable source of economic growth Good and I said already that somehow the Opportunities for making money in cotton that went Not so I mean was quite good in the beginning here after the devaluation and when the international price rose But then somehow this is nowadays not anymore really a very promising source of growth Good so what is the consequence on food prices, you know of this low increase of productivity So here you see a couple of commodities the main food crops people consume our millet sorghum and Mice and you see these three commodities here It's quite volatile of volatile, of course But if you look at the trend line, there's a huge increase in the in the average price of these commodities Yeah, so it coming more and more expensive for the households to to Finance of their consumption if you look at the CPI that's this bold line So here the increase is much lower Yeah, and there's one commodity rice where the increase is not so tremendous But if you compute the cost per calorie, it's much higher than for these other commodities So that's not really a commodity house poor households can substitute it. Okay, so they have to rely On these three other commodities Good if you look at their budget chairs So again for these three surveys the survey is 94 98 in 2003 then you see that in 94 The the poorest quintile the poorest 20% Spent about 60% on food and of this 27% on the food crops now in 98 after This short year. This was even 70% and in 2003 which was a much better year in terms of the Acriculture production still this was close to 70% and even if you look at the richer quintile the Q5 It's quite high and it's much higher this share than what you find in the CPI Yeah, so this has implications of how you compute your poverty figures Yeah, and now you could say well if the prices are high is that not I mean good news for rural households Because some of them should be net sellers of these commodities So we have let me go to 98 So you see 94% of rural households are producing these crops But only 15% we're selling these crops and the share of the purchased food crops is 50% of the total consumption so The typical household or the majority of the household that they are not sellers They are not net sellers and do not benefit from this price increase, right? Good now What does it mean this this huge increase in food prices for our poverty figures? typically we Inflate our poverty line over time with the CPI, but this is of course wrong if Somehow the poor consume much more food in relative terms than other income groups And if food prices rise much stronger than other prices, so here you see modified version of the That rebellion decomposition though the standard decomposition is that you decompose a change in poverty in a gross component and a redistribution Component so we added here a third component, which is the the difference in the inflation between the poverty line and the CPI So to what extent the purchasing power of the poor has been eroded more than the average And if you look over the entire period 1994 to 2003 you see that gross and redistribution Contributed to poverty reduction, but a lot of this was offset by this huge inflation that was relevant to the poor, right? Good and you see this even yeah, that's fine if you look at malnutrition for children Which improved in many years in many other countries you see here in Burkina Faso at least in this earlier period 1998 and 2003 that For instance of the share of children stunted increase strongly between 93 and 98 again keep in mind There was a detroit, but even 2003 quite high and only afterwards somehow this is going down a bit So this also is of course not any causal Conclusion that I can draw here, but somehow suggest that this food price inflation has also some effects on health in particular children cells Good so to conclude We have a country here where we have Massive population growth so in absolute numbers of the population since 1985 has doubled We have an absolute numbers because we talked this morning about the relative The head count and also the absolute numbers of poor So here we have a case where we have now 1 million people more in poverty than in 1994 and Well given that every year now about point 3.5 million men and women are entering the labor force Somehow we need some structural transformation to deal with this right and I mean you may have heard in the news There was again a good guitar and so there's certainly not the best precondition for making this change happen I think the study highlights nicely the role of endogenous food price inflation and what that means for the measurement of inequality and Poverty yeah, if you account for this differential inflation You see an increase in inequality over time if you would just use Expansions deflated by the CPI then you do not see this increase That's just by accounting for the differential inflation that you have across the income distribution and two last comments and then I'm done I mean there's a lot of discussion on the media about the Gross prospects in Africa and the poverty reduction and there are two papers that are very often mentioned Particularly in magazines like the Economist the paper by Pinkovsky and Salah in our team Which is now published in the Journal of Economic Rose and the one by young Published in the Journal of political economy and both are very optimistic about the poverty decline that we have seen recently and just to say in the two approaches so the first is largely based on on aggregate figures and The the thing by Salah e-Martin and the second one by young looks at asset ownership that both methodologies would not some of Take into account the the effect that we see that stems from the food food price inflation Yeah, if you look at assets for instance This is based on an assumption that you have a constant income elasticity of asset demand But it's clear if you have huge changes in relative prices that you cannot make the assumption that the income elasticity of asset Demand is constant over time and therefore taking this into account. I think the results would look very different what you see So we should probably take these studies with a lot of caution and I mean David said it already We the one aim of this project of this gap was really to do very detailed country case studies And somehow to get this tree angle between gross poverty and inequality, right? Thank you