 OK, let's start. Welcome to our first issue briefing of the World Economic Forum on Africa 2016. Great to see so many people here on day one. The format and the purpose of these issues briefings is their 30 minute short sessions. We hope they're high impact. We hope they tackle some of the tougher issues that we discuss here at the meeting. We hope they inspire blunt talking and a bit of interaction and exchange between you, the audience and the panel here. We're going to try to keep things as interactive as possible. Cymru roi'r panel, a llwyddo'n gwneud yw'r cyffredinol. Hysbeth wnaeth i'w gweld i'r uchelwch yn y gyrsgaredd yma ar y ff Bastion. Yn Gweithio Ym Mheithlachwch Cymru, Oxfam international, Gweithio'r ysgolwch, fyddai'n gwneud yma ar gweithio yma a heddiw i'w ffastion gyda'n gwneud. Yn gweithio'r gwneud jennifor Blankey, cyfrannu'r gweithi ar y Fastion gweithio'r gweithio'r gweithio. I wneud ychydig ar yr adnod o'r ffordd a'n gweithio i ddod y byddiol, a'r adnod i gyhoeddiadau a'r adnod i gyhoeddiadau. Rydyn ni'n gweithio ymlaen nhw'n ddim yn ddod ar y Lywodraeth, Feidliadau Ffosuun, Ddeftydau Gwylliannol, Ffildfawr E dysgu o'r parwyr o'r iail o'r Llyfrgellol, Oeddem yn Llyfrgellai Ffifolio, o'r Llyfrgellol, o'r Llyfrgellol a'r Cyfoddol. yn y sector i fynd yn gwahnod ein ddalig adrodau, a'r pethau rydyn ni'n ddweud? Dwi'm iawn i'n gwybod am ymgyrch, a'r bynnag i'w amgyrch hyd yn cytuno o'r gweithfodol o'r enghraifftau yn y gwirionedd. Yn hollwch chi'n ennill, o'n ei bwysig, yn y cyd-gredig. Felly, byddwch no'n ysgrifwll walantal, hefyd yma i'r cynnig o'r gweithwyr hyn i'ch gweithfodol ac yn ei gweithfodol, yn yr cysyffyr iawn, argymno'r ysgolio ar y Llywodraeth. Jedef yn gweithio ar gyfer. Ond yn dda, mae'n gweld yma'r ddweud i'w rhai. Yn ystafell, mae'n ddweud yn cael ei ffordd. Mae'n ddweud i'r ddweud yma. Mae'n rhaid i ddweud i'r ddweud i'r ddweud. Gwenni'n ddweud i'r ddweud i'r ddweud i'r ddweud. Mae'n ddweud i'r ddweud i'r ddweud i'r ddweud i'r ddweud. Felly ydych yn gwahodd hwnnw i'w ddiwrnod yn gweithio gyda Gweithio? Ymgyrch yn ymlaen i'r ddiolch i'r ddweud? Yn ymwysgur yma? Mae hynny'n cael cael eu cyfnodd, a maen nhw'n gwahodd i'r meddwl i ddim yn ymlaen o'r amddangos. Ymlaen i'r meddwl i'r ddweud, o'r ddweud o'r ddweud, mae'n ddweud o'r ddweud o'r ddweud, yn ymdyn nhw, a dyfodd yn ymdyn nhw'n gweithio yn Afrika. Y Davos yn January rydyn ni'n gweithio ymdyn nhw'n cymhwyl, ac rydyn ni'n ddweud yw'r unrhywun 62 bilyniadau yn ymddangos, ond mae'r gweithio ymdyn nhw'n gweithio'n 50% yw'r unrhywun yn gweithio'n gweithio. 3,6 bilyniadau. We have a global economy that's working for a small elite at the top and that is at the expense of the majority. Wealth is not trickling down on the other hand income and wealth are flowing upwards at a frightening rate. Here in Africa this is the second most unequal region in the world Next to Latin America. Six out of ten most unequal countries in the world are Africa. The most unequal country in the whole world is South Africa. And the rate at which wealth is being accumulated at the top and poverty is increasing at the bottom is alarming. The number of African billionaires has doubled since 2010. The number of poor people has increased by 50 million since 1990. Equatoria Guinea, an African country, has a per capita income the same as that of Spain. It's as rich as Spain, but it has a child mortality rate as low as Burundi. These are shameful facts. The IMF likes to compare Vietnam with Mozambique. In the last ten years they were achieving the same levels of growth, same rate of growth. Vietnam was able to use that growth to create two million jobs through industry, as well as millions of other jobs in agriculture, in agriculture business, through supporting small scale agriculture. Mozambique created 160,000 jobs. That is how African growth is structured. It is being captured by a few and leaving the majority of young people without jobs, without livelihoods. But it doesn't need to be like this. African countries can do something about it. This form says that now that growth has slowed, we are at 3% lower than the global average for the first time in a number of years. It's a wake-up call and that wake-up call should not mean that a smaller budget means cut social spending, cut health, cut education, bring the private sector to deliver education. No, maintain investments in education and health because that is the most important way that you will reduce inequalities and bring back that link again between growth and poverty reduction. Free quality, primary and second education, free health are not things to cut or to negotiate around. Maintain those investments at all costs and keep them publicly provided. The temptation to bring the private sector in is a wrong one to be resisted. Then we ask African governments to invest in agriculture, small scale agriculture. That is the starting point. That is where Africa has some comparative advantage and where the majority of adults work, working people are. The investment in agriculture is critical, but again we are seeing that the attention is towards big agribusiness, not the empowerment of small scale agriculture, women, farmers, increasing their productivity, linking them to markets, research and development to help them, know it's more about let's bring in the big business that will do it for us. That's not proven, it's risky, it takes the risks from the top, passes the risks to the bottom and just maximises profits that go out. So there's every reason to be optimistic for the future of Africa. Why? Because everything shows that the resources are there. The resources are there but are not being collected because Africa is cheated through illicit financial flows, tax dodging and harmful tax competition. If Africa can tackle those, there are huge resources available to maintain these important investments that will generate growth. $14 billion, $14 billion of tax revenue could be collected from the wealth of rich Africans that is hidden offshore. That is an estimate we have made. $14 billion, that would save the lives of 4 million children and also pay for all the teachers to keep every child in a classroom in Africa. So we are not pessimistic about Africa in spite of this slowing growth but we believe that for Africa to continue to rise, it must tackle rising inequality through these particular ways of maintaining and increasing the investments in people in our youth, in health and education and investing in agriculture, small-scale agriculture. Thank you. So it's a message we hear a lot and we speak of ourselves investing in health, in education, in the small holder farmer. But are you more optimistic or less than you were a year ago? Actually, I am still as optimistic as I was a year ago because you see I think it is problems that make people wake up and get serious. As I've said, we've had growth but growth has been squandered. I hate to use the word but growth has been squandered to the extent that we have a growth figure but we have poverty increasing especially in those countries with the highest growth figures, the Congo's, the Sudan's, the Namibia's, huge mineral wealth that is not being first of all taxed enough, the tax dodging and the resources obtained not being channeled into the sectors where jobs can be created. But if now there's a wake up call, we probably will see political leaders being forced to prioritise and to do what's right for African people. Jennifer, you're a chief economist as well as heading up our work on inclusive growth. So you no doubt you'll have thoughts and comments of your own on whether the growth and the good years have been lost behind or squandered. First of all, the work you're doing, the optimist in me tells me that with the knowledge that we're now acquiring about how to pull the right policy levers to drive inclusive growth, things could get better. Yeah, I'm definitely probably one of the more optimistic in terms of what we're able to do and I think there I echo what Winnie said. Look, we've known that we needed to make these changes for a long time and I agree with Winnie that the world has squandered the good times, not just Africa. We've had many good years, Latin America, many, many different parts of the world have not taken advantage of that to make the sorts of changes that are necessary to have sustainably growing economies in a very inclusive way. And let me just come back to that because Winnie did mention some of the key areas that I think are often discussed when you think about inclusive growth and there is no doubt that education is one very important vehicle. And so is redistribution and fair taxation and that's something that Oxfam has worked on a lot and there's no doubt that, and as we've noticed with the Panama Papers, there are resources out there. And it's a question of identifying them and making sure that they're collected properly. But I think just in terms of the work that we've done at the World Economic Forum on Inclusive Growth, what we've tried to do is take a step back and look at the many things that drive both growth and social inclusion to make a point that there's many things that are good for both. So the two that I mentioned, no doubt, but also things like entrepreneurship, you know, for the creation of new businesses, access to finance, especially for real economy investment to create new jobs, access to basic services including health but also transportation. We were just talking about energy recently. This is something that's very critical and very importantly and something that I think probably isn't discussed enough is corruption. If you want to think of something more insidious, both for social inclusion and for growth, that is corruption. It's people at every level of the power that they have exploiting those below them in order to get something now and that is not something that is sustainable. So what we're trying to do with the work that we're doing is to have a much less polemic discussion because we're showing that there's things that basically everyone can pretty much agree on. It's hard to say you don't think that entrepreneurship is a good thing or you don't think that access to basic services is a good thing or that, you know, trying to deal with corruption is a good thing. So I just, you know, want to kind of put that on the table, which is something that we've really been discussing a lot. Now just coming back to the World Economic Forum's perspective on this and also business because I think a lot of our constituents are business. The reason we're working on this is because the business and government leaders that we deal with are very concerned and it's become a bottom line issue for them. So we know that the IMF and the OECD have been doing a lot of research on this and they've actually been showing. I mean Winnie talks about it and I think there is an undercurrent of development there but actually these guys are showing that it's bad for growth. It's simply bad for growth to be highly unequal. And so this is something that companies are taking very seriously because what does it mean? It means you don't have a growing middle class, right? Who's going to spend? I mean just in terms of mathematics it's something that is not good for growth. And so very interestingly and I would just point to two other things that we're working on. First of all just to mention there's a lot of companies in the US and other places that are taking this seriously and they're starting to actually take action. So for example there are a number of companies including Walmart but also Starbucks, Etna that have been actually raising minimum wages. They're basically raising wages ahead of policy because they recognize sort of like Henry Ford did back in the day if people can't afford to buy your stuff you're not paying them correctly. And so that it's a win-win also Chobani which is a big yogurt company recently came out and said they're going to be doing sort of a profit sharing scheme with their staff. And again very interesting activities being undertaken by private companies in order to sort of address some of these challenges. The last thing I'll just say on this is that we have been working with the Schwab Foundation on social entrepreneurship in order to really start identifying what it is that companies can do. We're calling it corporate social innovation. What are things that companies can do to align their social or environmental activities with their underlying strategy? Why? Because that makes it sustainable and there are more and more companies that are doing that. We actually came out with a report a few months ago that codifies that it's a bit of a how-to kit and really companies are basically coming to us and saying can you help us to talk to the right people in other companies because we'd really like to share practices. So that's kind of how we're trying to work on this. And so I just end by basically saying that a lot is being done. A lot of different voices are coming to the fore and talking about how it's important. I think Oxfann comes at this very much from a human rights perspective. We come at it very much from a business and economics perspective but we all end up in the same place which is that something is broken and that we're all not going to really make it if we don't do something about it. So I'll just sort of end on that and I think the last thing I would say is that both the ILO and Oxfam have been very important partners on everything that I've been talking about and we're quite excited to continue on the journey together to make things better. Thanks. Thanks Jennifer. I'm delighted to have you on the panel for two reasons. I want to hear about your work at the ILO but also I want to cast your mind back to your days as Prime Minister of Togo. You would have had people such as Willie and Jennifer giving you advice telling you not just what the problem is but how to fix it. What are the problems from your perspective? Is there somebody who is trying to implement policies? Thank you so much. I will start by maybe taking it from where Jennifer left it. From my perspective you look at several issues. One important dimension is to make sure that when you are preparing your development plan you want to make sure that you really focus on the job-rich growth strategies. Because now at this, let's face it, if you want to reduce inequality you need to provide job to most of the youth. So by making the choice for job-rich growth strategy that is part of it. That being said, a government can come and make a decision that I have a comparative advantage in this segment which will bring wealth to my country yet it might not be the sector that will create a lot of job because of the skill gap. Of course as a government you don't want to let that wealth go, you'll bring it. That will therefore bring the issue about the income redistribution which I believe my colleague both Jennifer and Winnie touched on. The other point that I want to make is the importance of start thinking of moving from the concept of minimum wage to a concept and implementation of a living wage, especially in the rural area. We know in our continent we still have two-thirds of the population that lives in the rural area and the pinnability of the job is an issue. So it's important not to just thinking that because I'm meeting the minimum requirement I'm fine, that will not help. Third point, we need to make sure when we talk about the income inequality we were chatting just before this briefing, one thing is to talk about income inequality, another thing is to talk about inequality just inequality. So while your strategy to have an inclusive growth might take three to five years or more to give concrete results, it is important for the government to really take action, I believe this is the education health that Winnie was touching on, to really take actions for some minimum social protection flows. And I will give very quick pragmatic, now to answer your question, pragmatic example. When you sit in the government you want to make sure as a minimum that all the citizens have access to health care. So the accessibility to health care and universal health care coverage is an important matter. And on that one is also quite interesting if you're a multinational or a big company you are having a country, very likely you want to make sure that you provide enough coverage, adequate coverage to the workers. But sometime by doing that you help your workers but you may not be helping the nationwide plan. Because most likely your workers are well protected are in that group of less risky and therefore the notion of solidarity in the insurance principle will suffer. So it's important that through your business associations you can also work with the government to make sure that they have a sustainable plan to have health care coverage. Another dimension is if you can, if I take my example in Togo, most of the foreign investment will want to be in the capital or in the suburb. But what we try to do is to create some kind of incentives to encourage the business to also go and settle in the most where the poverty rate is higher in the country. And therefore making sure that you can also create the job at a local level and encourage the local economy to help. Because the income inequality can be between the 10% and the bottom of the pyramid. But sometime it's also between the regions which can lead to a possible potential social unrest which we know very well on the continent. And then maybe one last point just not to take too much of the floor. It's going to be important to also think about the government's capacity to deliver the minimum basic services. This morning in another setup I was talking about the challenge we all experienced with managing the Ebola crisis. And one of the critical dimension is the capacity of countries in the region to deliver the minimum health services in addition to the availability of the treatment and so forth. And doing so to just to conclude the point I really want to make is one thing is to work on inclusive growth strategies that will bring wealth at all level of the population. But it's important to associate with that the distribution issues and the minimum social protection flow in a different level. Not forgetting cash transfer, a lot of countries are doing the cash transfer now. The school feeding programmes in a lot of our countries, as I said, two turbin from the rural area, when they get old there's no pension. And just by making sure that people over 65 for example, over 60, they receive at the end of the month a very minimum cash amount can also help bridging the gap in those inequalities. Thank you. We'll have a quick show of hands to see how many questions there are. Maybe we have some pessimists out there. OK, we'll have the gentleman there. Can you please give us your name and tell us where you're from? Hi, I'm Kevadiah Kevadiah. I head up the Banking Association of South Africa. I just want to pick up on the last point and some of the points that have been made. We're saying South Africa is the most unequal country in the world today. And yet South Africa has one of the most progressive social policies and social nets. So there's something not telling there, right? And so I just think that, and I want to pick up something that Blanca said as well. We're seeing certainly, I'm quite involved in this current initiative in South Africa between business and government. Because we're in crisis and so minds have been focused. And I'm beginning to see that businesses, particularly at the top level, chief executive level, and we need to work this down, are actually beginning to see the importance of inclusion and equity to their long-term sustainability. If you don't do it, in 20 years' time you're not doing business. It's simple, it's not rocket science. So I think that we do need to find some way. So Oxfam is saying that government must free education so on. Business mustn't do it. Business, I believe, is beginning to recognize it's imperative to skill people for its own businesses. And somewhere we've got to find a meeting of the minds. If government regulates properly, collects taxes properly and ensures that business does business according to those regulations, we can actually get somewhere. Because we need growth, businesses create most of the growth. And so there's got to be a meeting of the minds somewhere. And I think that the conversation in my view has to change. It can't be government and business. Business, economics and human rights, there's no lines between the three of them anymore. And we need to change the conversation accordingly. Thank you, sir. Just pass the microphone along. And we'll take the second question. Hello everyone, I'm Gatlachol. I'm a global shaper from the Chaborone Hub. And my question is how do we feel we can modify the private public partnerships model to take CSR into CSI and not have this haves and have nots? Because businesses tend to see CSR initiatives as losing or playing it very strategically, rather than investing in different initiatives that are already being done on the ground. Thank you. Okay, well let's start with the first question, the progressive social policies and the extreme inequality. Where to find that middle ground? First, on that question, corporate social responsibility. I don't believe in that. I believe that a responsible company, a company of the future, must look at its supply chain and make sure that the social, the environmental impacts there are positive. So the profit, the financial line, the social line, the environmental line, all must be positive. So go on at the days where you did damage in your production and then did a little project that you called corporate social responsibility. It's accountability in your supply chain and then paying fair share of taxes. That's for me the role of business. Now coming to the comments from my brother from South Africa. South Africa is coming from a very, very bottom base, very low base, from being very unequal. So yes it has some very good innovative policies that help to reduce the gap but there's a long journey to go. We did a study and looked at the top 10% and the bottom 10%. Just after apartheid and almost 20 years later, we found that the top 10% had doubled their income. The bottom 10% static, no change in their incomes. So there's something there. There are some people on the gravy train and there are others who are left out. So there's a lot to do. On taxation, the point you touched on, African taxation is very regressive. 67% of the revenue comes from indirect taxes, VAT particularly. We need to shift, place a burden more on those who earn more, who have the shoulders to bear the burden. Capital gains tax, corporation tax, shift to that and take the tax burden away from poor people. I was in Kibira recently in Kenya, Islam area. I found this market women. They get about four o'clock to go to buy their stock for their store. They are taxed there where they buy the stock. They reach the slum. They pay a tax to enter their slum. Then they take the stock up to their store. They pay a tax at the store, three taxes on top of the consumption taxes. We've created this enabling environment for big business and we've passed the burden of taxation to the poor. We need to lift it and pass it back and the opportunities for collecting taxes from those who make the wealth are there. I would actually just, going back to how you think about including people in the process. South Africa has its own issues and I think a dual economy is part of it. When you think about people being included in the process of economic development and growth, the idea is that they actually are part of the real economy that they have gainful employment, which actually gives them a sense of self-worth. I mean there's many other things that are going on. Normally the whole redistribution question, and I agree with Winnie, it has to be fair taxation. It has to be progressive taxation. That should only have to happen once you've already had a system that is fair in the first place or that integrates people. It's not even a question of fairness for me. I go back to efficiency. If you want a well-functioning economy, you want to be using all the talent. You want everybody to be able to contribute. So I think that's one of the big issues in South Africa and other places. I would say also places like France actually outside of Africa where I really worry about the sustainability of the model because if you're not producing enough and you don't have enough vibrancy in the first place, you're overtaxing and you're not taxing properly, it will hit a wall at some point. So that's why you really have to have a holistic approach. I think that that's really important. And then just to go to the question of CSI, and I'm not sure if I fully understood, but I think the idea is that that whole idea, and I think that's kind of what Winnie meant, of like hiding off your CSI activities and putting them in an apartment and saying, okay, we've got that covered because it's over there and those guys do that, is really passe. And I have to say a lot of the companies that you might even be surprised at, really big corporations are saying that that is just not worth it. And an interesting thing is, and talking to a shaper, is that the companies tell us, because we've had a number of workshops on this, with the company saying we really need to mainstream this, it has to be really in line with our underlying strategy and when it's in line with our underlying strategy it's something that is good for us on many different levels. They say the millennials and younger who are working for us, they will not put up with it either. So it's not even a question of the consumers who have access to information and are fed up, but it's even their employees who are saying we really care about what this company is doing and in order to motivate them, actually do their work, this is very important. So it's, I at least over the last 10 years I've seen a massive shift and I really do believe that there's something that's changing. Not everywhere, not every company is enlightened, but it is changing. Is your bet, please? Give us your views. I know we're running out of time. What I just want to say, I fully agree with the colleague that CSI, for me even the CSI is the most important thing, starting by ourselves, the government and the business partners, is to stop thinking that what I'm doing is a social action. It is a must. I believe the head of the business community in South Africa said it. If you want to survive 10 years from now, you want to make sure. I'm telling people that look at what's happened in Tunisia five years ago. Yet Tunisia is not the poorest country compared to other South Africa countries. So what we're saying is that either you continue closing your eyes, then it doesn't make business sense. So for me it's a business case. Thanks very much indeed. Huge levels of optimism for varying degrees maybe on the panel. We are running out of time, but I do want to give my friend Collins from new times Rwanda a chance to ask one more question. Please take the mic. Thank you very much. My name is Colin Smoy. I'm a writer with the New Times Daily. What if I said that the report of Oxford has identified the problem but not the solution? Because you talk of changing the tax for… and regimes that call for tax incentives for big firms. But that has been one of the drivers of investments in Africa by some of the multinationals and biggest firms. So that goes again as to what you're trying to do overall. So you are right about the problem. I'm not sure about the solution. Winnie, it's a fair question. We hear from Jennifer that CSI is taking over from CSR and big businesses are doing quite a bit. Actually, on the issue of tax, we're making a lot of progress and we've been talking to the solution and we're beginning to see the solution. Even more recently, thanks to the Panama scandal, that was a godsend for us because it just proved everything we had been saying. At the time of the financial crisis, the rich countries saw, because of the recession, the need to maximise revenue collection and actually led a process of reforming the global corporate tax system called the BEPS process, BC Rotten and profit shifting, led by the OECD. Through that process, they've been able to achieve some tax reforms that have increased transparency of flaws and reporting, including country by country reporting, and some of the areas where tax is not collected have been plugged. But Oxfam has been at the case of the OECD saying that this is not enough. Developing countries who lose the most are not sitting at this table putting their own tax issues on the table for solution. We fought it so hard that now there is a second round of reforms that is more inclusive, that will include the developing countries, all countries, and that is now hosted by both the IMF, the World Bank, the UN and the OECD. Through that process, we're going to push hard for issues like harmful tax competition. This raises the bottom of our countries, giving away the natural resource. We're going to push hard on extractives and agriculture, which are not included in this narrow set of reforms of the BEPS. So solutions are... I would really like to know if you will agree about this tax issue on the fact that, and especially looking at that from Africa angle, first of all our countries, most of Africa countries, they realize that since ODA has been plateauing, they realize that you cannot count on ODA for your development anymore, and therefore they need to increase your domestic revenue years ago. So now they are struggling to have the best strategy to optimize the tax collection. So when we talk about reforming that, my question is going to be important to make sure that we also keep that in mind what is happening in other regions. We need to make sure that it's not only in Africa or only in some countries. Or that way you don't want to lose your competitive advantage in attracting some investors. Will you agree with that? Absolutely, in fact we need a global corporate tax reform because what companies, the system as it is now was created when business was within boundaries of countries. Now companies cross boundaries unless we are able to tax at source where production, where value is achieved. That is where Africa needs to find. Taxing at source, making sure that the resources, you have sight of the resources collected and therefore the share of tax. So it's a global system, tax havens, hard rich countries, but hard poor countries more. In tax havens we have one third of the wealth of rich Africans. $500 billion is sitting in tax havens and tax. That could bring $14 billion tax revenue today in Africa. So this is a global process but Africans can start by coming together and plugging some of the loopholes, particularly on the harmful tax competition part. But my brother, things are happening, change is happening. Don't think that this is just talk. Reform is happening and Africa can collect more. That's a very good message. The World Economic Forum is not just about talk. This always happens. Half an hour passes by and I find myself wishing we had it twice as much time. Before, at the risk of losing my job, I just want to ask each of you to give us one realistic outcome that you would like to see achieved by this time next year. Start with usual bear. I will hope that all African citizens have universal healthcare. By next year. By the next five years. Starting from next year. Jennifer. I'm usually the eternal optimist, but I'll have a slightly more nuance, which is a very, very good idea of how to drive finance after the SDG discussions, blended finance, et cetera, into Africa to really start to build a lot of these things that are needed. Over to you, Winnie. For me to see African governments come together to see how to reform their tax systems, make them more progressive, less regressivity, and to start tackling the tax loopholes that they can close on their own without waiting for the global reform. Get working on that. Get to work. Something tells me we're going to be talking about this for a while to come yet, but hopefully next year we'll have something more to talk about in progress to discuss. Thank you so much for joining us, and thank you for those of you in the room, for our audience watching live on weforum.org. The session is now over.