 I would like to throw it open for a little bit of audience interaction with the panel. I will ask the panel as we go along to make any comments they want to do on the other panelist members presentation. So that we develop something of a debate going forward here. So as you ask a question and please be brief. If you can give your name and if you have an affiliation, you can be anonymous It always helps for people in the room to know where you're coming from. And please use the microphone. Thank you. We'll take three questions to start. John-Luc Maurier, Graduate Institute Geneva. I have two questions for Isabelle and one for Andrea. Isabelle, thank you for your very interesting and very wide presentation about the global picture basically. Don't you think that one of the ways to bring equity back yn y diwylliant ymddangos – ac yn amlwg, am i'n ffordd i ddyddyn ni cyntr o'r cas i pleidyn nifreib. Mae'n cymaint i'r pallma harmoniaidau, sy'n mynd i'w cael eu swyddfa yn bwysig o'n cyfrydd o polycynyddol. Ond wrth i'n gwybod, dyna fydd ychydig i'r llwysig ymddangos o ddysgu Ymdig, rydyn ni yw eich pellma harmoniaidau, efallai gallwn ni'nid i gFit mewn gwirio ar y ffordd. Yn mynd i'n meddwl yma, ond mae'n ffordd o'r polisi o'r oriantau sy'n meddwl polisi. Yn gyfnod, mae'r gennyd ddim gennyddiolol yma, 042-038. Ieith yw'r parwy o'r panfodd pylmau? Ond, mae'n gofynu'n gweld. Felly, Ynryd, ysgrifenni arweinydd i'r ddechrau mewn ffordd i'r ffordd i'r ffordd o'i gweld arlau'r hyn. Ond ydy'n dweud y byddai'n problemu? Yn ymdyn nhw'n gwybod Lleodraeth, mae'n dweud yw'n dweud y byddai'n dweud, ond mae'n dweud o'n dweud. Dwy'n dweud o'n dweud o'n dweud, ac mae'n dweud o'n dweud o'n dweud. A dyna, mae'n dweud o'n 0,5 o'n 0,5, ac mae'n dweud o 0,43, 0,45, dweud o 0,4. Yn ymdyn nhw, mae'n dweud o'n Lleodraeth Lleodraeth, yn cymdeithasol y gwirionedd iawn ar y Mdegy anodd yng nghymru, yth功 that the 110% of the richest would not have more than the 40% poorest. I'd like to have your comments on that. Okay, thank you. If I could take Voughton next, I'll take Rolf. For Isabel, to what extent can the poverty agenda be taken independently from the inequality agenda? In other words, is it possible to have a real, let's say human rights kind of based strategy eich cyfnod o'ch cyrfryd yn ysgolig yw'r cyfrwyng o'r cyfrwyng mae'n bywch gynhyrchu'r cyfrwyng gyda'r cyfrwyng o'r cyfrwyng hon o'r cyfrwyng ar hynny'r cyfrwyng yn y cyfrwyng. Yr ysgrifennu'r gweithio'r Rhysgwrt eras, nid oed yn gweithio'r ddau a'r ddau i'r ddau'i ddau'r ddau pethau. Yr ysgol cerddau ymlaen, y dyfodol, y dyfodol wcwyddiadau has been proposed actually by the IMF as a substitute for the financial transaction tax. I know that Mr Michael Keane of the Fiscal Affairs Department in the IMF has in his drawer since two years, let's say, a proposal in order to do this financial activity tax, which is basically some sort of a value added tax for the financial sector, but it doesn't, and I have been tackling him then for about two years, but it doesn't come out of his drawer because of financial pressure. So what can be done? Rolfen Overn from Institute of Social Studies in the Hague. Three brief questions. My first question actually was to Andrea, but it was the same as Jean-Luc Marrair on the regression towards the mean in terms of inequality, that a letter mag is very high. It's going back, but it's still very high, and I don't think the figures show that trends will go really down to a world average of 0.4 or something like that. So I'd like to have your opinion on that. Then a question to Richard. You mentioned the first previous lecture, and in that you mentioned actually what previous mentioned on North-South is still valid today. I'd like to challenge you on that. We have seen that there is much more integration between the economies in the South of the North. Most of the poor people in the world are not living anymore in the poor developing countries. So don't we see any more actually a situation where part of the South is now living in the North that we see much more an interconnectedness in the world which translates also to greater inequality between countries and that the actual classical North-South divide is actually disappearing. And then on Isabel, I liked your presentation very much. In the end you referred to the post 2015 agenda and you said inequality is back on agenda. How strong is inequality back on agenda? If you see the high level panel for example last year blocked an indicator of inequality. There was the personal intervention of Cameroon in the high level panel. And also in the negotiations in New York there are several countries which don't want to talk about inequality. So are you not a bit too optimistic that inequality is really back on the agenda? And then the query question is why is there not much more political upheaval in many countries. We have seen a weak occupy movement but that has gone already. So how do you see that? Gentleman at the back, could you tell us who you are perhaps? My name is Taro Boel. I work for Angtard. My question is to Professor Cornia. He taught me microeconomics and I'm grateful for that. My question is about the interplay between cultural aspects and national policies in Latin America because I presume that there is a level of inequality that may be accepted in Ecuador for example. That is not accepted in Chile. So how is this playing out in your regressions? Thank you. Thank you. I'm working in the research department of the ILO. And I would like to ask a question to Mr Cornia. You are showing that in Latin American countries you have the issue that you have already screwed up education and attainment structure. That means you have normally higher shares of tertiary education than of upper secondary education. Meaning that the rich children would attend secondary education and then continue to tertiary education. So you have this low share of secondary education because the poor children would not come to that level. Now my question is, because you were raising the issue of you still have a problem at the tertiary education level. If you increase in enrollment of poor children in tertiary education level, that would then maybe mean that you have to reduce the share of the rich children. And I think there you will have a political economy problem. And I would be interested in this issue can be tackled with. Thank you. Thank you very much. So panel, a very good range of questions. People wanting to push you back into more pessimism on one level. The preference maybe for the Palmer over the genie is inequality really in the post 2015 agenda. And what's the story around education? Can I actually work the magic bullets? And please as we go along comment on the presentations and interventions by other panel members. So who wants to go first? I think Isabel. Thank you very much Tony and thank you very much everybody for the questions. Regarding the Palmer index, yes of course there's something you don't know before I joined ILO actually I was at Columbia University. And together with other colleagues in Oxfam and other institutions, we were actually sending letters and calling the high level panel to do please include inequality properly and the Palmer index. So yes, unfortunately we were not heard. But yes, I do agree with you. Then you did actually a very important very interesting questions and both of you linked to Rolf and Bouter. And you know up to one point, you know the poverty and inequality agenda linked and up to one point there is a new equity agenda. Well, it's all in the making, but it is there. And now if we put things in perspective, if we count the 80s and 90s when the poverty agenda came in the 1990s, you know, that was something to welcome. Because so far there was a complete link between any economic and for the case any public policy with the social impacts. So of course we all knew that it was imperfect and just to focus the attention only on the poorest was not solution for development, but he was certainly welcome. And in the same note, it is to welcome the wall bank talking about shared prosperity is better to focus on the 40% than not only on the 12%. But of course the perfect will be to focus in the 100% in development for all, which is at the end the United Nations idea of paradigm and the basis of any social contract. It should be for everybody. So from that point of view, there is a shaping agenda and you find it since the 2000s at the beginning. And some areas are very consolidated and you have results from all the UN, the for all really, you know, has consolidated. Many countries have signed to it. You do have it in many UN declarations and countries and number of countries are applying it. So yes, it is there now that it is not perfect that it can be improved. I know that we all know that, but as we all know, you know, life is a struggle. So this is part why we are all here in our jobs and you know, trying our best. Thank you. Richard. Prebis, what was if he was here today, what would he be telling us? I guess he would still be calling political economy the way to go as the paradigm in response to Ralph's question. I mean, this comes up all the time about somehow the end of the North South divide, I guess. I mean, Mike, in terms of the some of the discussion we've had today, you know, once you take China, I mean, there has been an improvement in, I think, the lightest figures by Milanovic show so a slight improvement of income distribution worldwide globally over the last maybe decade. It had a recent piece that I saw briefly. You know, China and there's no doubt that China and certainly India, maybe India since 2000 have the main fact, the rapid growth in China and India are the main factors still behind that. I'm not convinced that even when you take, if you just take China out of the story, that the world has changed enough to say that this kind of dynamic is over. Brazil's share of the world economy today is what it was in early 1980s. Russia's obviously is a lower share of world income than it was in 1980. China's an amazing story that complicates the global picture. But the basic structural weaknesses that is what North South is ultimately, it's a structural story. It's not an income story. I mean, you know, Latin America has gone back in terms of its increased reliance as Andrea said on commodity exports. It's failed to kind of diversify its industrial base in a way that is at least, I think, is a necessary part of sustained development. And I think those challenges remain at the heart of the development agenda. So, yes, there, I mean, I don't think that even the horror stories like Detroit, it's not the horror story that you see in most parts of the developing world. I mean, it's a shocking indictment of 25 years of failed neoliberalism in the North. But I don't think it's, I think to talk about the South in the North is a slight exaggeration in that sense. So I still think that, I still think that picture that Prebish had in the early 1980s still has a lot of resonance. The big difference that Prebish didn't see is the rise of finance. I think that wasn't in his story. And he didn't see the way in which the rise of finance, and in particular the rise of private debt, could somehow counteract the tendencies towards secular stagnation that he saw in the early 1980s. He didn't have that story in there. But much of his underlying dynamics, I guess I think, is still quite relevant. And that, I mean, I don't have a solution to the rise of finance. What Simon Johnson and what Simon Johnson, the former chief economist of the IMF, calls the quiet coup, the capture of state institutions and state policies by financial interests, which has become a, I mean, is a problem of, I mean, the North loves to lecture developing countries on good governance. But the capture of corporate and financial interests of states in the North is a quite shocking indictment of the state of political discourse in advanced countries. And, I mean, I don't think the financial transaction, it was a throwing sand in the wheel story when it was first devised back in the early 1970s, where the financial tax story. I don't think it can begin to address the problem of banks that are too big to fail and are even bigger today than they were before the crisis. I don't think it can address the problems of shadow banking, which has become such a large part of the international financial system. But I think the shocking thing is that there's an interesting debate going on between Krugman and Bill Black. You know, Krugman had an interesting piece defending Obama against the progressives. Interesting, silly piece really, defending Obama against the progressives, the progressive left in America saying that he's done a lot more than they think he have. One of the areas that he thinks they've done a lot more on is controlling finance and using the Dodd-Frank legislation as an example. Bill Black, who himself was a regulator and is now I think at the University of Kansas, maybe or Missouri or somewhere, I mean, shows how little, eh, how little Obama has done, how ineffective most of the Dodd-Frank legislation is, but also, in fact, what could be done by a progressive government that is still just using the tools that are already in place and are not being used. And obviously a lot of that is down to the lobbying power of the financial sector and that's not only true, I think, of Washington. It's also true of Brussels, where the amount spent in Brussels by financial, we have some numbers in this year's trade and development report. I mean, it's quite shocking. I mean, it's pretty depressing. I don't have a, I think the financial, the lack of progress for the IMF to push a financial transaction tax is probably the least of the indictments of a failure to regulate the financial system, but I find it a shocking state of affairs, I must say. Just on education because we're meant to interact with my sartorial friend at the end of the panel here. I mean, I was struck by the fact that the two countries where inequality has not changed very much, Mexico and in the case of Nicaragua, I think you said it's increased, they'd actually shown all improvement in the education genie that you had in one of your last slides. And I just wonder when you see discrepancies between improvement in education and no improvement in equality, what lessons you might take from that? Well, I mean, if Marcelo Neri, I mean, the Brazilian minister who spoke in Helsinki one month ago is right, and he has a PhD in economics, it's not a product of some political regime. I mean, he's right, I mean, there seems to be a sort of a structure. So now there is, I mean, if you look at the data for 11 countries, there is sort of a slowdown in genie in 2012. If you include Uruguay, the slowdown is less visible. If you take other measures like the side ratios, it's even less visible. In fact, Sepal argues that there is no slowdown. I say what, a little bit, the same as to be. So let us see. Now, let me be quite honest. I don't think the Palma index is particularly useful. And I've read several articles since I work in this business and basically say, why would it be that for which law of motion the share of the middle class would remain constant in Burundi and Sweden? It makes no sense because it doesn't explain why it is that. Secondly, if you take the data for Latin America, we looked at during the 80s and 90s, and the share of the middle class was affected negatively. And during the periods of recovery was affected positively. So it's not true that it's completely stable. So the statistics of the Palma index, and the explanation of why the Palma index is like that, I mean, is the middle class completely exempted from any loss and any gain? Why? Because there is no explanation of that. Now, and then if you have that, do you have a better policy indication on what to do? No. Unfortunately, I have to engage in all these decompositions and they may be particularly unpleasant and not always easy to communicate politically. But this is where the nuts and bolts are. I mean, you want to know whether it's the unskilled wages or the skilled wages of the transfers. I mean, even if you say, Palma index should go from, I don't know, 3 to 5, whatever. Then what do you do policy-wise? Basically, it does not inform you anything. And if I can say, no, sorry, I shouldn't say that, but referring journals for journals. So now, on the convergence, I'm equally unconvinced. I mean, there are people saying that. Now, how can I argue on the basis of economic theory that the country with the huge land concentration, persisting land concentration, specializing in the mining sector, which is, I mean, let's say Chilord Peru will converge to the same level in a quarter of Sweden. I mean, it's totally against any economic theory. So it would be, I mean, it's fascinating. And then, in addition, it's not entirely true that all the countries are converging. Because if you go to West Africa, the countries that remain at a low level of inequality. So in Western Africa, where Taro comes from, basically you have still semi-communal ownership land. So basically, if you are an institutional economist, you say it's nine, not true. And because you can't explain it. So then, if it happens, it's sort of a statistical findings, but then you are unable to explain it. Now, one article I would like to refer you to say is that in a world characterized by free trade and free finance, all countries will have the same distribution. Then it means that Latin America and Latifundia disappear. And this is basically... Now, and then the other point, Jean-Luc, is that in the Southeast Asia, I've done a paper for Mi Haifes for the UNCTAD for the issue of 2012 on inequality. And basically in Southeast Asia, there are a few countries where inequality is falling. South Korea, for instance. South Korea, Malaysia. And then, so it's not true either. And then as the stop, as inequality rise in China continues, it's falling by one and a half points now. This is on unchecked sources. This is what the Central Statistical Office says. There is no private survey that continues to say that. So if China continues to grow on the coast and in the way that it does, inequality will not drop. And so basically the way to this to the institution, geography and all that, I mean it's too far to claim that there is conversion to anything. This is my own view. Although it may sound interesting. Now, Taro asks, what is the inequality version? Because one could argue that, okay, if you are in the US, I mean using the concept developed by our gurus, Professor Tony Atkinson, inequality version, societies are different. I mean, the Americans basically they say that the gene of 0.4 is fine. Perhaps it should be higher. So people, they fight higher to climb the social ladder equal opportunity, which they don't. So that is, now in Latin America I think that will depend on the political process. And then my observation is that at least I mean the country I know the best in Latin America now is, before it was Chile, now it's Argentina. And I have long discussion with Alfredo and the Argentinians. And I see a lot of discussion. I mean people they are not possibly accepting a level of, now there is a big fight Alfredo tells me on the controls of the means of communication which are influencing public perceptions in this area. So my view is that the Latinos, the Latino people, particularly with an increase in education, there will be continuously unhappy about the state of the art. And then I think that is important because then people vote. And if I were to say what has driven, take Italy, take Europe, what has been the main equalizing factor? Education. Education has been, in Italy there has been very modest land reform, partial and came in after World War II. And the main factor which has increased education, I mean reduced inequality, now is rising again. Basically where compulsory, universally and free education, first for the primary then the second and now after 18 years of age. That is what she says. Basically you are not taking, this is a reproducible captain, you know. So if you do a land reform, it takes away its land so it will resist. And so you really need a highly repressive regime like Guatemala, when the Jesuit went there to promote primary education on the children, they shot all the Jesuits because they understood that these people would have been thinking with their own head and would have revolted eventually. So that is, no. I think that you may have an argument because no, if the government improves secondary education, then the children of the poor will take an entry examination being well better prepared than before. So some children of the rich who went to private schools may be left out. But perhaps enrollment will increase. Now you say it didn't increase much but it may increase. I mean think of, I mean Chile must be a few generation of ways from western Europe. So if you think the history of enrollment and education, when I went to university and now, I mean the numbers are totally different. So there might be, again, is a reproducible captain. And then you say but then there will be too many grads. Well it depends how the technology will go. It depends on, but in the short term I think it's quite plausible they may have Thank you. I'd like to take the gentleman at the front there and the gentleman behind. So if you would like to tell us who you are. Michael Hopkins, I used to work in this august or institution. I've done a few things since. I'm surprised at the debate. So I have a comment and a question. That it seemed a little bit sanitised this debate. Normally the sanitised version will come from the UN, not from my august college colleague Andrea who used to be radical and leads me to my comment is that we didn't hear very much about the distribution of power and what's been happening in our societies. Why is it as it is we heard about education but not about the distribution of power and structure. I should mention it in his comment. I apologise for not hearing his speech earlier. But he started talking about structure and alluded to the finance. I guess UNCTAD is less important unfortunately these days than it was in the prebiage era. Perhaps you've got more liberty to talk about these things but when I was a lad in this organisation we used to talk about structure and power. I didn't hear very much about it today and I'm a bit surprised that Andrea was jumping right into that particular area and my last comment to characterise that is that Richard mentioned Obama and I have this conversation with my wife continually by the way who was pro Obama when I was anti but you mentioned Obama and his difficulties with the financial institutions but you didn't mention the cock brothers and I think that's symptomatic of what's going on in the world. The power is being concentrated in so few hands and not all together to the common good. I'd like to see anyway in the future if you could talk more about that and let me ask Andrea how come he's not talking about these things. Thank you. My name is Min Fu Li from the Institute of International Labour and Social Security of China I have question about the growth and the inequality because the gentleman said that growth is not the solution for quality for the solution for inequality I quite agree with that I think growth is the basis for the maneuver of policies for setting out equality policies since for example in my country it's possible for us to the extension of social security coverage to all the people especially in healthcare area. So I think high growth is the basis for that policy maneuver. So high growth is quite important to that and my question to the gentleman there is that we now on the verge of possible third deep for the Eurozone area many countries on the verge of economic recession again so do you think there is still a possibility for labour market adjustment for example for wage increase in some crisis hit countries such as Greece Portugal and some other countries because I think for the government of these countries they think it's almost impossible to increase wages the easy way for them to do is to cut employment, to cut to patients and to cut wages so gentlemen what is your recipe for their solutions we know that it's unfair for the workers to reduce wages and reduce unemployment but the immediate solution I think the easy way is to cut wages and cut patients is your suggestion so back to the panel and my question to the panel will also be if there is one policy for the audience to take away particularly back to their own countries what would that one policy to reduce inequality be so back to our panel if you could be brief but Mike is demanding that you're not radical enough it's true unfortunately I don't think there's any relationship between marginal and taking progressive positions necessarily if my institution is anything to go by but I'll leave Andrea to ask the question of why he's ignoring the question of power on China I mean as I said I would recommend that you take a look at our trade and development report where we explicitly criticised the European austerity labour market flexibility agenda I mean obviously cutting wages in a period of slow growth cutting wages is a self-defeating strategy because ultimately the demand for what you produce comes from the wages that you pay to your workers and we've been very consistent criticising the wage slashing strategy as a self-defeating strategy and as I said in my presentation we do offer alternative policy agenda for developed countries in general but particularly the eurozone because the eurozone is obviously at the heart of the problem at the heart of the problem right now I guess my my crude strategy my crude policy is you know control finance properly tame finance labour Well adding to Richard a couple of things of course there are many topics that have not been included and we could go on and on because simply there are many aspects of it but I think what is important it is to see the evolution of the development agenda that is becoming more and more progressive I mean now the World Bank publishes on land reform ok that was unthinkable two decades ago only whether they do it or not is another thing ok and as it was mentioned here by the panel before there is a difference between the discourse and the policy action at the country level but still you know it's an opening and it is about moving that forward and I don't think there is one policy for which you can generate more equality and I think from my perspective what is critical to understand is a set of policies and you need to tackle different you know sectors and macroeconomic policies at the same time otherwise is not going to work in the long term Thank you Isabel back to the package that Richard emphasized earlier we will tweet about that point later ok Andrea briefly we are not as powerful radical as we were once we were lads in short trousers now first of all we did talk about that we did talk about the changes in political regimes which have occurred but you had no time to write before now but we also emphasize that there has been no even the center left regimes which with one or two exceptions basically could be characterized as sort of like Latin America goes to social democratic Europe that is the road you know so no land redistribution no sort of nationalization of some strategic assets only moralism so I think that now and then I have been discussing what has happened and saying that perhaps we should have done more and I think that what we said is that they are reducing equality in 10 years all the increase in equality of the prior 20 years but they haven't tackled the structural issue which is a structural issue distribution of assets all assets education, credit land and everything else now in general terms I think that if I remove myself from the current situation and I agree with Richard I think that there is a new monsters we are unable to control which is finance so now for instance the Renzi government is discussing in Italy to do this, that and the other and in one week 65 billion euro just left the Italian banks so how nice is that so but if you if you assume that we are able to do that and I think we will there will be another 1929 and then after that there will be another glass and steel then I will say that longer term growth and if you want to have an equalizing solution I think that basically equalizes access to assets that is the point ok thank you very much Andrea so we have run out of time apologies if you couldn't ask a question or make a comment it remains for me to thank you the audience very much for participating today to thank our excellent panel Isabelle from ILO which also hosted the meeting today Richard from Ungthad and Andrea from University of Florence do join us on our respective websites do follow us on twitter and we thank you very much and it is still a gloriously sunny day in Geneva, thank you bye bye