 Yes, I was at the University of Copenhagen, but currently with you and you wider in Mozambique That's always the danger of talking a little bit about work that's been completed because things do change And that's particularly relevant actually in the case of Mozambique. So for those of you who are familiar with Mozambique Two or three years ago, we were having one conversation and now we're having a rather different conversation So unfortunately this work has not fully updated unlike William I didn't have the chance to fully update this analysis But I will try and speak a little bit about, you know, what do we what do we know what what? What can we update given the crisis that Mozambique has recently faced? Nonetheless, I Would say and I think related to the the previous speaker Despite the challenges that Mozambique has faced over the last couple of years I will talk briefly about that the data our database to make additional analysis has not changed So we're still working with household survey data collected in 2014 2015 Whereas we're sitting today at the end of 2018 and a lot has changed So that's a general point. I think of relevance Not just for Mozambique, but in other countries So just a little brief motivation. I've only got 15 minutes. So I'm gonna be Skipping through these slides relatively quickly Mozambique at least in 2016 has been one of the you know regional growth performers Emerging from a post-conflict experience until the early 1990s and sustaining rapid growth Throughout really the the throughout the rest of the 1990s and 2000s At the same time and like many other Sub-Saharan African countries, so Mozambique is certainly not unique there has been a concern that the growth has not been accompanied by What some people would call growth enhancing structural transformation and I will comment on what that what that is or how? We might go about defining that And I think this chimes with some of the other chapters in the book in many ways So just briefly on the for those of you not familiar with the Mozambican experience so Mozambique went through very choppy times in the 1980s associated with with internal conflict but then The the conflict ceased in the early 1990s and as you can see from the green bars There's been consistent growth essentially since then And that has continued to date. We have I mean despite a crisis There has not been a full-blown recession The the macro economic Environment has substantially improved over this period We've seen reductions in inflation consistent with a moderation in many other parts of the world as well Increasing foreign direct investment and as you can see in the latest period Admittedly the data is a little bit old. You can see that the 30% of GDP in FDI in the 2010 to 13 period you know some improvement in in exports and Improvement in in the fiscal position of the government as well Leading to a reduction in reliance on foreign aid Mozambique was one of the country's most reliant on foreign aid And that's no longer the case anymore Although foreign aid has been substantial Accompanying this there have been a series of what we might call micro economic questions in the sense that While there has been progress on many indicators, certainly The progress has been less inspiring particularly when we're looking at things like But things things like poverty reduction or consumption poverty for instance if you look at Panel B here in the slide you can see that consumption poverty fell in the Early part of this period so then from 1996 to 2002 But has but from 2002 to 2008 did not fall substantially and we do have updated figures of 2014 This shows some reduction in poverty, but again not perhaps as inspiring or as robust as one would have wished So what we Wanted to do really in this paper was look at what's been happening in the labor market You know to what extent has the macroeconomic success been accompanied by structural changes in the use of labor through the economy I think this is important Really from the point of view of just having a As best or as careful as possible descriptive or diagnostic analysis of what's going on I think it's very easy To jump to conclusions or causes or look at look at all this intervention works or doesn't work But if we don't have a reasonably detailed diagnostic study of what's going on It can be very difficult to fit that into the bigger picture The challenge as in other Data poor environments is is it has been a lack of data and that that continues to be the case to some extent So to do an employment or labor market analysis we've really had to rely on the series of household surveys which have Limitations when it comes to the the amount of data in terms of employment and also the consistency in which that's being collected Unfortunately, the the surveys haven't been a hundred percent consistent in terms of the the sectoral Classifications and so and so forth that have been used so that does create a number of difficulties in and just putting together a consistent picture Nonetheless, we've done our best So what do we see in terms of GDP trends? So this is not labor. This is output and and as you can see broadly consistent with with the with what we've been hearing Throughout the conference actually is this reduction in in in the share of GDP and agriculture an increase or You know, a certainly a strong role for For services actually throughout the period if you can see that that really almost throughout the period We've seen 50% of GDP has been through services And a moderate role for for for manufacturing That that did actually increase in the middle of the period substantially, but that was really related to one or two very specific high capital intensive FDI projects If we then compare that with labor market trends We see, you know, again an interesting dynamic. We see once more the I mean the dominant role of agriculture From 83 percent to 72 percent of of all employment So agriculture does remain the dominant way in which people are earning a living in Mozambique And but combined with that where have people gone if not in agriculture. Well, they've basically gone to services so again the The the shift or the new entrance in the labor market, of course We're not tracking people over time So we can't tell you whether they've been shifting so much But we do know that that that as a share of employment services has doubled over this period of time So what does this mean in terms of labor productivity? So what we can do I mean, it's very simple is just look at well what is the the the the relative productivity of labor in different sectors and what we see is not a Not a narrowing of relative labor productivity. This is relative to the average We find an a dispersion an increasing dispersion of labor productivity so For instance, what's quite interesting is looking at the mining sector is we see that mining has Dramatically increased its labor productivity relative to other sectors, but if we just go back one one slide Relatively it's actually reduced its share of labor We also see in some cases in in the case of agriculture also a declining relative productivity of labor So we're not seeing Clear and clear narrowing of labor productivity across the economy Another way to look at that is to look at which Sectors have increased their labor share And then which sectors have increased their labor productivity, and this is an this is an interesting And a relatively simple thing to do, but it does draw out a few important trends. So let's look at services so the change in labor share in In in percentage points of the labor force in services in 97 to 05 was Positive and the mean sorry. This is relative. This is the mean. This isn't a change in productivity This is it's relative labor productivity versus the mean was just above 100 And as you can see in the later period 2006 to 2014 we have a larger increase in the labor share, but a fall in its relative labor productivity So we see the point here I think to make it a bit more simple is to note sectors that are gaining workers Relatively speaking are the ones that are falling in terms of productivity So average productivity is falling in sectors which are expanding in terms of labor basically when we see the opposite in terms of mining Which is interesting here. We see mining which consistent with the previous graph We see mining falling in its relative labor share, but increasing in its relative labor productivity And so it's moving that direction So as you can see this is presenting a number of interesting dynamics and challenges I'm not sure we're in a position where we can suddenly we can definitively state what the causes are but at least this helps us to think through what are the potential sets of causes I Will now skip the I Think we can do this in a bit more of a formal way And for those of you who are interested I would just point you to the paper where we go through a Standard decomposition method that takes you through how to how to tease out the different Contributions to changes in labor productivity over time. I didn't think I'll bother with that right now So what does this mean in terms of findings? And that's kind of what we're here for I guess is we know that Mozambique's labor force does remain dependent on Low productivity agriculture with the productivity of the relative productivity of agriculture declining over time We've seen we do see some Intersectoral labor movement, but that's been dominated by movement or new entrants into the services sector We do see some productivity growth But this is mainly within sector growth and this seems to be slowing over time So this is the result of this decomposition and In a sense what we what we see is a kind of a negative dynamic Reallocation effect. So as I said before Sectors, which are which are gaining workers are declining in their relative productivity And as a result you might say that they're there for is a limited contribution of structural change or structural change has not been growth enhancing in one definition So this leads to briefly some kind of Reflections looking forward. So my last few minutes is What are the policy challenges? Well, the a huge policy challenge in Mozambique is Demographics so so the the fertility rate or population growth remains very robust very very high in fact And so what we're gonna see, you know in built in the mechanism of demographic change is that over the next 30 years there's going to be a very large number of individuals entering the labor market and Given current levels of education many of these are going to be of a relatively low Low qualified or low education What we did actually in the in this paper is we looked at some of the best and worst-case possible scenarios for expansion of education across the population And so what we looked at is we basically said well Let's imagine that we took the you know the the best experience that has occurred in the past 30 years And let's let's let's assume Mozambique achieves that in terms of expanding education in terms of years of schooling What would be what would it look at? What would it look like and this would be the so this gives us a confidence interval saying kind of best and worst-case scenarios, right? And so the best-case scenario is the top end of that gray Interval in the first bar and what you can see there is that even by 2040 you know the average level of education in a best best case scenario is around seven years So we're still saying that on average in a best-case scenario on average workers have a primary education best case scenario Worst case scenario it's substantially lower than that right so it's you know less than six years of education So of course these are the this is a fundamental policy challenge that the Mozambique faces I'm not going to say I have a solution, but I think we need to know what the challenges are before we even pretend to make policies Let me just briefly because I know the time is ticking what is the update so the update on this and this is only a slide so that Indicates that I haven't had sufficient time to fully work on this is that Mozambique has experienced a debt crisis since 2016 The details of that go beyond what we can discuss here, but it does reveal that what we thought was an improving Policy environment clearly had fragilities What this has led to is a reduction in growth in growth high inflation Substantial depreciation and a reduction in aid the situation today as of 2018 is stabilizing Although we do have some evidence of higher unemployment that comes from a manufacturing survey that was undertaken last year But interestingly enough also no evidence of a substantive shift in the policy or economic structure in response to the crisis That could simply reflect the high levels of uncertainty but at the same time we see the the economy and also the political economy is it is treading water until natural grass revenues arrive Whether they will arrive and at what time however remains largely uncertain And certainly the the direction of policy now in Mozambique is is very much focused on What's going to happen with natural gas and natural gas extraction? the threat in this and I mean I think we can maybe discuss this later in the in in in in the In the panel, but I think the threat here is does Mozambique enter a kind of an Angola Nigeria type Direction, which I think unfortunately would be the default Scenario in which you still find the majority of workers in low productivity Agriculture particularly in Mozambique's case But what would be the opportunity? Two minutes, and it's the last slide. So the opportunity would be perhaps Thinking strategically at least assuming this this natural gas revenue comes online. Could there be Distributional policies a UBI or universal basic share that our speakers this morning spoke of and how could that? Update or reinvigorate the employment situation. These are questions that we're Thinking about we're debating in Mozambique, but of course we would love your input as well. Thank you very much