 So, good afternoon everybody and welcome to this closing panel where the aim is to focus on the links between research and policy and lessons from this conference. I have a special and very warm welcome to the members of our panel who include President Tarja Hallonen, the 11th President of the Republic of Finland. President Hallonen was Finland's first female head of state, serving two terms from 2000 to 2012, and President Hallonen has also played an active and much appreciated international role in many committees and boards advocating human rights, equality and sustainable development. Welcome President Hallonen, we appreciate your presence. Mr. Schwell, Kato Netsitense, who has a long history in the government of South Africa, and currently he is the Executive Director of the Mapungugpa Institute for Strategic Reflection, MISTRA. He is a member of the ANC National Executive Committee and is a member of the boards of Netbank Group and the advisory board of the Nelson Mandela Trust. Welcome Schwell. Dr. Annika Sundin, the Chief Economist of the Swedish International Development Corporation Agency CEDA, prior to joining the civil service and Associate Director for Research at the Center for Retirement Research and an Economist at the Federal Reserve Board in Washington, D.C. Her interests in research include the economics of retirement, pensions and social security as well as household savings behavior. Annika, welcome. And last, James E. Foster, Professor of Economics and International Affairs at the George Washington University and Director of the Institute for International Economic Policy in the Elliott School of International Affairs. His research focuses on welfare economics using economic tools to evaluate and enhance the well-being of people. Welcome, James. When we were originally planning this final plenary, we invited the President of the Korean International Cooperation Agency, Koike, to help kick us off. Jungmok Kim, however, could not be with us here today, but here is what he wishes to convey to us all. So there is a video now, which will be shown. Hello, everyone. How is the conference? I regret that I'm speaking only to you from Korea, missing good discussions, nice hospitality and lay some awareness. I miss you all. Dear Dr. Fintham, distinguished guests and friends, let me first congratulate you on the successful hosting of this important conference and thank all the speakers and distinguished guests for their contributions. You have selected the right subject at the right time. I should also commend the academic contributions of UN Wider on the broad topics of poverty, inequality, and growth, which have resulted in the world inequality database. Today, Wider has expanded its scope to measurement, trends, impact, and policies of inequality, which I believe are instrumental to upgrade our common efforts to reduce inequality on a global level. I'm honored and happy to speak to you in this rare, but timely opportunity, which we serve as a valuable platform for every one of us. Distinguished guests, these days inequality has emerged as a major agent worldwide. The popularity of capital in the 21st century by Thomas Piketty indicates that the public discontent caused by rising inequality should have been felt by many throughout the world. A number of prominent economists joined the debate on what Piketty is. While Piketty and other prominent Western economists have focused analysis on major advanced economies, there still remains a question of how inequality opportunities to the context of global development, particularly in relation to eradicating poverty and sustaining growth in developing countries. Even though inequality has sharply risen in individual countries, the global landscape of inequality has been improved over the past few decades. Inequality between rich and poor nations has been narrowed thanks to the economic surges of many countries, like China, India, and Brazil. It would be fair to note that globalization in trade, investment, technology, and human resources contributed to this balance. With that being said, it is also true that the concentration of income and wealth within the top 10% has surprisingly increased. In 2010, an estimated 18% of the world's wealth belonged to the top 1% compared to 1980 when it was only 8%. Many studies have warned that rising inequality, as observed in many emerging economies, can seriously undermine social stability and ultimately impede sustainable growth. A recent OEC report, policy challenges for the next 50 years, states that sustaining growth while addressing rising inequality will be the major policy challenges for every country. Therefore, reducing inequality must be dealt in close association with the eradication of poverty. The population living on $1.25 per day has reduced by half in the last two decades. The population living on $2 per day has only been reduced by a mere 7% to $2.4 billion. Despite the growth and development of middle income countries, 70% of the world's population living on the extreme poverty still exist in these countries. Now, as we enter in the post-2015 era, we need to take up the issue of inequality at the top of our age. Share the prosperity which the World Bank Group has set as it's newborn is not achievable if we are not able to include those people at the large bottom in the process of growth. From the perspective of the world development community, including me, the proportion of inequality may matter less than inclusion of the people left behind. In most developing economies, inequality does not stop at income. Highly inequality exists in terms of access to the most critical services in public goods such as water, proper sanitation, basic healthcare, education, running electricity, online information, and protection from natural disaster, et cetera. There are also inequalities in civil rights and good governance along with reflective institutions. Inequality will become much more acceptable, I believe, when the bottom is lifted upward and given better opportunities and equal access to these public goods. Today, we witness more than 33 million people who are being falsely displaced from their homes due to war, conflict, and terror. War destroyed decades of achievement. It is not too difficult to image the liveness of people living under extreme poverty or the plight of displacement. Crustration and desperation can make these people feel isolated and affected. Thus, it holds a dangerous threat to the sense of ownership that serves as the base for inclusion-based growth. From the Korean experience, transforming desperation into hope was too key to inclusion. Without the same motivation of the people, the will to rise up from poverty and desire for inclusion, smart policy and investment will have little effect. Our role is not only deliver services, but whether empower the people. Then it is equally important for individual governments to take the inclusion-based life empowerment as a national development policy to create larger impact on a national level. For this task, we begin to find out that road coalition or wider coalition among public sectors is required. That coalition or inclusive, wider partnership will be able to organize tangible, intangible assets by coordination of government, but mostly activated by the people having ownership. Activation of criticalness among the people would be the first step to lift up the people at the bottom to the level of a value chain. I hope we will be able to make the right strategy enabling us to make the most of all assets available. In this context, impact measurement and data will be crucial. I am confident that extensive discussion at this conference and beyond will create the base from which future actions will be taken. Wider participation is needed. Please continue to enjoy your together. Thank you so much. Thank you very much. The format will now be that I try to the best of my ability to ask some motivating questions to our panel and then subsequently we will have a free flowing interaction between the panel and the floor. So I would ask that we try to not sort of have presentations of half an hour. It would be good to have this free flowing interaction. President Halman, you've been an active champion of the Nordic social and economic model which tries to combine an efficient market economy with a necrotitarian distribution of both income and other dimensions of welfare. Could you try to sort of elaborate what policies and initiatives have in your view been really of key importance to get this Nordic model to work? And to what extent could other countries which do not have similar income levels, state capacity and maybe social cohesion, learn from that experience? I'm not talking about copying, but is there something there which should be kicked into our debates? Anybody here from Guatemala? No. So once years ago I was in Guatemala at the university and so I had an opportunity to tell about the Nordic welfare model. And then I underlined both how to create incomes for the society and then how to have a fair share of this property. And then one of the young gentlemen took on floor and said to me that, yes, madam, but we are much poorer. And we do that when we are rich, but we cannot do it now. And I answered to him quite roughly. I said, you will never be rich if you don't do it now. And I think that this is the first reason that all European countries are almost all. We have been once very poor. Finland has been 700 years apart of Sweden. And I said, under the Swedish kings and queens, then Swedish kings lost the war against Russia and then they gave us to Russia. And then we were 100 years under the Russian Tsar. And then just we had a good, good eyes for good timing. And so when the Red Revolution started in St. Petersburg, so we declared ourselves independent. And yes, it succeeded. But afterwards we have one civil war immediately and then two other wars because Mr. Stalin was not as friendly as we could hope. But then still we have a Nordic model. We were the last and the poor is to do it. So with Sweden, for instance, I'm sure we have not only here, but there are also somebody from Sweden. Sweden has been one of the center powers like Denmark in the north. So you can say that they have been never imperialist in that way, that they could get a lot of resources from somewhere else. But in some way they had a stronger position than what Norway, Iceland, and Finland had. So but it has been possible to create also in poor circumstances. And so I think that I don't know really why we have had it here in the north, but I think that one reason is perhaps that this nature, it's hard to believe when you see now our late summer. But this is pretty hard. And so you don't survive over the winter if you don't work very, very hard. Really it's a struggle in all days especially. And even if you do all the things what you could be expected and even more, so it can be so that you have a failure. And then we learn that then we help each other. So I think that one of these is the hardship by the nature which was not too hard. I mean, we could survive. And then we learn also to see the future and to save and to help each other to be more, not only individual, individuals had to work very hard, but also so that you have a collective feeling that you can survive. So I think that that has been perhaps the base. Then we have had a very good luck during the history. For instance, first we got, we didn't wish it, but we got the Christianity from the western and east. It was a Catholic religion, but then the Swedish king decided to become a Lutheran. And then with Martin Luther, the German Christian philosopher. So we learn that you have to be able to read yourself Bible, which means that then you have to read and write. And I think that the Finnish church found one of the best bonus for the young ones. They said that they don't press officially their marriages if you cannot read and write. I hope that they could find, I ask, good bonuses today. And so we have created very early the tradition that the good citizen will be able to read and write. In some other societies, it's not considered so important. And education has been through the history, one of the ideas. We are not so noble, but as I said, we hadn't too much natural resources. So we had to invest in people, and so we have succeeded that. And now later on, I think that the independence struggle in the early years of the last century, it united people, and it's just the right time so that also the emancipation was good one. And so the women and men gave the rights to vote and to be elected at the same time. And I think that this, the co-activity, the hard-working, and then education, it has been one of the basic elements. But of course, the social welfare has been also important. And then the last one, what I nowadays repeat every basis, and I think you have heard it also during this week, is the taxation. You don't get it just like that. You have to have also resources. And then in all countries at all economical level, you have to find a way how to make even a minimum but certain fair way to collect resources to the society. So that's, I would say, is good. And the last one is that the system where you say that it's a system of the nature that winner takes all doesn't fit to the sustainable development. Even when we need strong personalities, we need a lot of the collective feeling. And I think that that perhaps the message we can give also the others. How you do it in your own society? I don't know. You know best your own society. And so try hard and have a lot of sense of humor. Because during the years, you will hear many times that how terrible, how stupid you are, how your ideas are just next to nothing and so on. But then if you know and you have experience and you have friends in the international as a society, so you can tell that no, this has worked there and there and they are not smarter than us, so it could perhaps also work with us. Okay, thanks. Thank you, President. Shwell, you're in charge of an institute of strategic reflection in South Africa, a country that has been marked by high inequality. And if I may add a personal sort of note to that, I mean when I was emerging out of the 1980s and had sort of established my so-called underground credentials in relation to the South African struggle, we did engage on lots of policy analysis in South Africa. And then by around 1994, 95, I kind of gave up a little bit, sort of frustrated as an academic. So I'm sort of, I mean, I'm burning to ask you the following question. Why is it so hard to reduce inequality in South Africa? And what do you take from this conference when you travel home? Is there anything that you kind of felt this gave you something which you might wanna think about? So is there something in that combination of your experience, your in-depth background of this process over these past 20, 25 years? And then were there any clues here at this conference? Shwell. Thank you very much. Perhaps just to set the scene to the question that you have posed. In the analysis that we have done about the socioeconomic progress that South Africa has made since 1994, a few stuck figures stand out. The first one being that income poverty has declined. Secondly, the functional distribution of income has not declined, which means inequality has increased. Also interestingly, the change in the share of income has not favored the middle class. And so you find that the per capita expenditure growth incidence curve, it's U shaped. Poor rest of the poor have benefited from social grants and other programs of that kind. The richest have also benefited, but the curve is U shaped. The third and perhaps most important observation is that inequality between the races has declined somewhat, but inequality within the races, even amongst the black community has widened. So as you are reducing inequality in society, even within the black community, there are those who are benefiting much, much more than the rest of society. And so the issue arises as you have posed the question. Has there been sufficient emphasis on dealing with inequality in South Africa's policies since 1994? The first point that needs to be made in that regard is that there's been seriousness in dealing with poverty. There's been seriousness in trying to deal with challenges of social exclusion. And I decided to do a very rough exercise specifically on the issue of inequality. And what I established is that in the document that was developed by the ANC, African National Congress, which is the ruling party, just before 1994, a document that was defining how it will change the apartheid system, the word inequality there appeared, I think, only three times in a very long document dealing with transformation of the apartheid system. Then after that was the white paper on reconstruction and development. Immediately after the ANC came into government, the word inequality there appears only five times. But interestingly, in the review that was done in 2009 on the performance of government, the word inequality appears 41 times. And in one that was done a few months ago, it appears 43 times. What does that mean? So what it means is that there is now a better appreciation that whilst you might have dealt with poverty, you have not resolved the challenges of inequality. And that income inequality is, in fact, inimical to social cohesion. It's inimical to stability within society. But the question then needs to be posed. Does it mean that ANC government was not interested in dealing with inequality? And the answer is no. My own assessment is that the assumption was that the post-apartheid dividend, where you dealt with generic challenges of exclusion through generic socioeconomic policies, would help address inequality as such. That was the first assumption. The second assumption, which is not much different from what has happened in Southeast Asia, was that if you had very high rates of economic growth, the wave would lift all the boats. Even if the pace at which the boats are rising might not be the same, it will not matter as long as the rate of growth is high enough. But we have now come to appreciate, for instance, that even during the years of high growth between 2003 and 2008 when the economy was growing at about 5%, in fact, inequality wasn't. Because the rich were better able to take advantage of the growth, the economic growth, than the poor. And so currently you have discourse in the country about the kind of measures that need to be introduced specifically to address the challenge of inequality. I'm not sure whether I have sufficient time, but I can just list a few of them. The first one is about whether you do not need to introduce a national minimum wage. Secondly, whether you do not need to introduce a national incomes policy that would deal with differentials within companies and enterprises and within society as a whole. Then there is the issue about addressing the cost of living as it affects the poor. Just to give you an example, employers in South Africa complain that the cost of labor is too high. But in reality, we've been saying to them if you compare the wage that a South African worker gets and the wage of, say, a Chinese worker who produces the same goods, what you will discover is that the Chinese worker stays in a compound and walks to work. But because of apartheid in South Africa and the spatial patterns arising out of that, the South African worker spends 40% of their wages on transport. So the interventions that are required need to deal with that cost of living as it impacts on the poor. The last issue that is under discussion is whether you do not need to think about such measures as employee ownership programs, profit sharing and so on so that you ensure that those miners who went on strike for some six and more months recently feel part of the enterprise and share not only in terms of the wages, but also in terms of profit sharing. So what does one take from this conference? It will be too many things to list, but maybe a few observations, three of them. Firstly, one had always assumed that the counter-intuitive tendency that we have observed in Brazil where inequality has been reduced when globally inequality has been increasing applies only to Brazil, but the presentations have demonstrated that many other countries in Latin America have experienced a reduction in inequality. And therefore it would become necessary to study the reasons behind that and see whether these could be applicable not only to South Africa, but to Southern Africa and Sub-Saharan Africa. The second issue which is subject to debate is one about absorption of as many people as possible into economic activity and whether you can achieve that at high levels of payment or whether you would want to start off in a phase in which you absorb as many people as possible and then improve their payments as time goes on. China is changing and its inequality is going down because initially they absorb as many people as possible but now they're climbing in the manufacturing sophistication ladder. It's an issue that needs to be reflected on, an issue that is being debated with the trade union movement. And the last issue that one takes from this conference I think relates to perhaps insufficient discourse on the implications of inequality on the progress of countries, the relationship between inequality and social cohesion. A national development plan has been developed in South Africa, it has got some targets for 2030 but for you to succeed in implementing it you need minimum levels of social cohesion but if there is social anomy, if there is a sense that there is no preparedness on the part of the reach to sacrifice then workers will not be prepared to cooperate in contributing to the implementation of the national development plan. So taking inequality becomes, should be an objective of the national development plan but to some extent it's also a condition for its implementation. You have that kind of a cycle that you need to address. I'll stop there for now, thanks. Thank you very much Joel, may I add that when we are going to try to have a debate between the floor and the panel, it's also allowed for the panel members to ask questions to each other. So Annika, your chief economist of a major European or Nordic aid agency, the Swedish CEDA, what role do you see for the donor community to meet the inequality challenge in developing countries and is there anything that you would sort of want to add to what President Harlan and Shreya said? Thank you. I think that this conference has shown that addressing inequality is necessary to achieve sustainable and inclusive development and growth and I think that donor agencies have an important role to play here. I think the research results presented at this conference provides very important policy lessons that we in the donor community has to embrace and take into when we design our policies and interventions but just going back to and commenting a bit on President Harlan's remarks, I very much agree with the fact that poor countries can work effectively with combating inequality and the Nordic example shows that that's possible and like President Harlan, I'm not promoting that we should copy the Nordic model but I think there are some important lessons and those lessons are that it's possible to combine universal systems like social pensions, child allowances with policies that promote employment and the presentations yesterday and the evidence from Latin America clearly showed that labor income is crucial for reducing inequality so by having a system that promotes employment and creates incentives for employment by providing education and healthcare at the same time as protecting people against the risks in life, becoming sick unemployed but also protecting people during periods when you cannot work, when you're a child, when you're old, provides a fruitful way of reducing inequality and in particular, in here I want to talk a little bit about the universality and I think universal systems, they may seem expensive or you may say that we can't afford them but I'm not so sure of that because what a universal system can do is that it creates buy-in by including everyone by including the growing middle class you get a willingness to pay for these systems so that in turn will mobilize domestic resources. It's possible then to mobilize and design a tax system. People are willing to pay taxes because you get something back so I think that's something to consider when choosing between a targeted system and a universal system and that's something we can talk more about and I think also if you look at this year's human development report there are some interesting examples there that show this is possible. So and in terms of them what can donors do I think in terms of creating or promoting employment there's a lot to do but I don't think donor, the donor community can do this by themselves. Here we need to work with others, we need to work with other actors, we need to work with private industry because it's firms that create jobs not donor agencies and in Sweden at SIDA we've established a network with the private sector in Sweden to work together to create or promote decent work in Bangladesh in several African countries where we have common interests and then those common interests can then help us get more jobs. I think I'll stop there for now. Okay, thank you Eineke. James, you have for decades, oops, maybe I shouldn't say for many decades, two decades, right? I think we met the first time in 1996 in Copenhagen but what I can attest to these is that you have one of the most crisp and imaginative brains in this area. You've been a leading researcher in the topic of this conference. I mean, what do you see as the main challenges for researchers who wish to contribute to better policy in reducing inequality and obviously there is a very strong gender bias, gender dimension to inequality. What do you recommend researchers focus on in the years to come to help improve policy in that area? Hmm, well I think the first thing that I'd have to, I think everyone in the room who was at yesterday's session would agree that most important for researchers is that those of you at the other end of the table help us to have the right data we need to help inform you when you have questions for us. And I think that is the main challenge that I'm seeing. I'm seeing it with the post 2015 discussion. What is this data revolution and who is gonna fund it? But it needs to happen if we're going to have a successful goal and period over the next two years as we decide what's going on afterwards. So data is the first answer I would say. Secondly, be clear what form of inequality you want to reduce and why. I would take my cue from policy makers, but there are basically three forms of inequality. Vertical, that's poverty, inequality and polarization included. Horizontal, which is inequality across salient groups in society and polarization moves into that area as well. And finally, dimensional. Dimensional is the toughest of all because you're going into different types of spaces where you don't have the same easy access to data or perhaps easy access to the quality of data and measurement terms. Cardinal variables are easy. Ordinal or qualitative data is hard to process. But in any case, there are three forms of inequality. It's important to understand what is important at the time. If it's between groups, in particular, ethnic groups, racial groups, then it should be focused on and analyzed. It should be clear ahead of time what you're getting into. I should mention that vertical inequality is actually a very simple thing. And most people don't realize how simple it is. It's basically two incomes being compared against one another. So you have one so-called income standard, a representative income representing the entire distribution in terms of one income that's coming from the right eye. Well, right for a good reason. It represents the higher incomes. And then from the left eye, you have incomes at the lower end. And this income that represents those incomes at the lower end is compared to the other income standard. And that's how all inequality measures are constructed. The genie, the tile, the variance of logarithm. All of them have this basic fundamental structure. So following the two income standards, one of which is usually the mean, reveals everything that you'd want to know about both growth and inequality at the same time. So when you have abstract inequality, it can mean, well, that you have too high-high or too low-low. To solve inequality, you can do it in two ways. Bring down the upper income standard or bring up the lower. If I have no other connection to anything, no other inside idea of power or pressure, then I actually would rather focus on the lower end, bringing them up. Of course, there are connections and externalities that the rich are gathering the power through wealth and other things. But let's document them. Let's make sure that we know what they are and therefore decide what it means to lower the high and why we are doing it, not just for the sake of lowering it, but to know and predict what the impact and what we're trying to achieve through doing that. Poverty, by the way, is also twin income standards, but one of them happens to be a poverty line. So therefore, when you lower poverty, you're increasing the other standard among the poor people, which is unambiguously a good thing, but it's bringing them closer to the rest of society, hence inequality is likewise falling at the same time. My opinion is that inequality that is decreased across the poor and the rich is better than inequality that's decreased within the poor which is one of the critiques that Nora has had of certain inequality-based poverty measures. One of the problems is what policy and how? How do you in effect inequality? Well, that's the toughest thing. We've heard some great discussions, but most often they involve other dimensions, and so we have to get into those other dimensions. It's hard to measure inequality in those other dimensions, and we have to look very carefully at how we measure inequality when we don't have the nice properties of the variables. And now I'm verging into the other question which was what is it that we could do in the gender area? Well, once again, the data revolution. We have to have the data. There's so much missing data on issues relevant to gender. It's incredible. We're really hemmed in by the availability of data. Now there are great new movements forward. There's the Women's Empowerment and Agriculture Index which went out, gathered great data to try and find out who's empowered in the household in making agricultural decisions, and those kinds of data gathering exercises are extremely important. What to do with the data once you have them? Well, they're mostly qualitative, and so constructing quantitative data from qualitative data is exceptionally important and rather difficult, but we've seen examples of it at the conference with the multi-dimensional poverty measure and so forth. I really do think that the caregiving economy needs to be studied much more intensively. That's where the action is among the old, that's where the action is among the young, and it is gendered in most societies. I think that it involves a very important way of modeling the increase in capabilities in people. The, in fact, creation of capabilities takes place at an early time, and Heckman has been very emphatic in studying this part of the life cycle for its creation of capabilities. How has it done? As the parent, it gives it to the child. How do you model it though? You have to bring together Heckman and Sen. It's rather difficult, but I think you guys can handle it. Thank you. Thank you very much, James. Thank you to the rest of the panel. President, you wanted to, okay. Now we are opening up. Okay, can I, when I was the first one, there was a little bit of a comment. Sure. Perhaps they too, and then you come with us. Because I think that, and of course, I would love to have a lecture, but I have promised to myself that I will keep it brief. So. You can easily arrange another date. I think that my family at home is already now suffering from the situation that I'm here, and we will have a guest at CERNCOR. I have tried to share the work, but anyway. So, it's how you see it, because I think that in this country and in all Nordic countries, we have also the tendency for the, for some recent years that they say that why we are so jealous if envy if somebody is getting richer? That it means that everybody comes little by little richer. No, it's not true. It's a certain amount, okay, but then we notice that it's one sign of what we have always taught that there is a dynamic, creative dynamism in market economy, so that people want to have an entrepreneurship, they want to do things, and they of course would also win something about that. But then we noticed also that even that creativity have to have the limits. It had to see that how to do it. So, what I have now followed with great interest is that better people become more active or not active when they become richer. So, everybody can tell that if you give money for the poor one, he or she will use the money for her living, and so it means quicker economic circle in that way. So, it would be better to give for the more than for one. But then we come also to another issue what Anika, you took already very well. What I have noticed during the 40 years I have been in politics, that very easily we say we and those, we and those in different ways, race, gender, whatever you might find. And always if you compare the welfare systems, any kind of the welfare system, it's easily you will meet every elections which are very often in democratic system that why they get everything and we have to pay it. So, the universal system is best in such a way that the taxation, I love progressive taxation, but at least you have a taxation. If you want to be progressive, you do it there. And then if you give something, you give it in equal terms because you know that with taxation you take it back. So, it's the easiest. Otherwise, being a long time in social politics, I will say that you have a very, very difficult system how you have to avoid different kind of gaps what you will get. But that was one thing why I wanted to comment on it, Anika. Then another thing is that what you mentioned about the cost of labor. I don't know any country where the cost of labor would be enough low. Wherever you go, whether it's South Africa, Germany, Finland, Russia, Kampuchea, always somebody's company, all the, it's too much the cost of labor. And I think that it's not that people are evil. It's a question more that other resources in production are not priced well, fair way. So the more we have limited resources by nature, the more we see that also the human labor is something you can take. Because again I say, if we have we and those, those don't need so much and we can get more. But as soon as you have to get it for the seven or eight billion people and you have really to respect all the human rights, natural resources, sustainable development, so you have to price it new way. And that was the best thing, one of the best things in Rio Plus 20, that we say that pricing is very important. And then in that kind of the society, consumption is no more that one, the wheel which brings the economy going faster and faster, but you have to see which kind of the consumption. So I think that this is it. I would love to speak more about the women, but I hope I have more time. And then one thing what I will say to all of them, I say, one thing what I really enjoy nowadays, whether it's concerning statistics, whether it's concerning economics, whether it's concerning the climate change or the seas. It's fantastic to see that what those scientists who were with the climate change started, I've now spread all about. And our slogan, release the scientist. I mean, in a way that you have to speak with everybody, not only with the political leaders and hope that you will get the strong leader, but you have to speak a different kind of the cruise because this is the only way to work in the democratic, more and more democratic world. Thank you. Thank you. We're now going to open up Marcelo. I can see you're in a hurry. Do you have any burning question? Minister, thank you very much for your participation and have a safe flight back home. Thank you. I'm now going to start on this side and then I will gradually be moving to the other side. I don't know whether it corresponds to my age that I start on the left and continue towards the right, but let me start this side. Anybody? Yes, please. And please identify yourself because there may be people on the panel who do not know you and then address the, if there is a specific question to be addressed to a specific person, please identify to whom it is. My name is Andrea Brandolini from the Bank of Italy. I have two points picking on what you have just said. The first one, James mentioned the gender issue. I have in mind a very intriguing paper by Josta Esping Anderson. And in that paper, what he suggested that in not the country, the results in terms of equality in the income distribution or less inequality in the income distribution was not purchased per se, but was the results of other policy, especially policy of equal opportunity for the genders. What do you think? Do you think that is a fair interpretation or just too speculative stretching the point? And the second point is I'm struck by your insistence on universal welfare system. I totally agree with you, but it's not what international organization suggests should be done in most countries. I mean, the emphasis now is on targeting because we cannot afford universal systems. I disagree with this point, but I wonder why Nordic countries that are so influential in the international debate have just been defeated on this point. That was two big questions. So we just agreed, Anika and I, that Anika takes the last one and I take the first one. Okay, why don't you take it right away? Yeah, the first one, the question about the women. I think that even the former lawyer like me saw such kind of the simple mathematics that if you limit your resources, what you will have only taking the half and not another half. So, and you know that they are equal smart, so we guess. So of course my possibility is to get the best resources. I have minimized myself with 50% compared to that, that if I take the whole room and then try to find the best possible persons for different jobs. I normally say for the men who are worried about that, so don't worry, smart men will survive. And so far I have managed with that. But of course then you will come also to another aspect than the gender. One is family of course, family background. The first wave of the general large education, of course, brings the most resources. But then if you don't look after the system all the time, you will face also the fact that whatever is the education system, so those families where the parents have better education or they are more committed and so the children might make better at school or at university because their parents encourage them and they say that okay, you are fine boy, you will do that and so on. And then you don't say that no, don't think so that nobody has done it in our family. So I think that when we cannot choose direct our parents, so the society have to be all the time literally helping those who have not been so lucky. And so in that way I will say that the gender is important but more and more we have to see also the boys now and say that boys are boys but they live in modern society and they have also studied hard. That's it, Annika. Annika, talk a bit versus university. Well I think we have to show the evidence more. I mean, of course universal systems can be expensive if you start on a high level but if you look at the Nordic examples when for example social pensions were introduced, they were at a very low level. They were paid at age 67 when life expectancy was 58. And then as the country became richer in growth you could expand these systems. And you do see social pensions becoming more common. I do think we have to show the research, show the results and show the effects and also show the link between the universal system and the resource mobilization. What it does for getting support for tax systems. So going back to the points that were heard this morning looking at tax systems together with this expenditure side. Could I just also make one comment on the first question and I think just in addition to what President Hollande was talking about. It'd be interesting if you disagree with Tyrone. No, no, not at all. Not at all. I think we completely agree. She agreed to it better. No, no, no, no, no, not at all. A little bit of a different point and I think also going back to the Nordic example and going back to the role of employment and labor. Nordic policies have been very much enabling women to participate in the labor force by providing universal childcare for example. So there is somebody who can take care of your children when you go to work. And that childcare has been, as we become richer, subsidized so everyone can afford it. So I know, I mean it's several policies that work together to enable women to participate. Yeah, education is always fine, but anybody from Jordan. Because the Jordan has the highest quote that very good quality of the education of the women in the Mediterranean, let's say the South area. But the fact is that only 14% of those women we take part in labor force. Of course it's nice that the women we get as a mothers and wives this kind of education. But I think that they themselves and the society will lose something when the circumstances have not made possible to them to go to work. As they, at least so they said to me when I have been a few times there. Sure. Joel, I'm gonna come to you in just one second because there was somebody here who was sitting way with two hands. Joel, I will come back to you just one sec. Yes. I hope it's one sec. Nora Lustig from Tulane University. I respectfully disagree. I don't think we can start with universal programs in very unequal societies, even if from the political economy it looks right. I think the principle of solidarity has to be there to make sure that the ones that are really at the bottom. I mean, I am from Latin America. And I can tell you that I have done studies comparing systems that are more universal with systems that are more targeted. For example, Bolivia, which has a much higher poverty rate than other countries, has universal systems of distributions because they decided when they privatize their minds to give everybody the same amount of money from there in their pension system. But what that means is that you are not addressing the poverty among the very poor. So I think that the principle doesn't have to be that universally means that you have to give everybody the same amount. There has to be a principle of solidarity where in societies that are very, very unequal, you have to bring first people to a minimum level. That's what we need to agree upon because if you emphasize universality, you're gonna constantly in our countries put a lot of money in the pockets of people that don't need it. So much and not address those that are in dire need. We saw in Latin America what percentage of people of the distribution of the wealth are at the bottom in middle income countries, okay? So I respectfully disagree. I would love that model, but we're not there yet. Okay, thanks, Nora. Joel. Yeah, what I wanted to say does relate to this somewhat but slightly different. I think arising from the inputs that have been made by the president and also from the flow is the question about the very definition of inequality. What are the measures that we use? In the first instance, it would be income. Secondly, I think we also need to look at assets and others would argue we also need to look at access to services and opportunity. And that there is a dynamic relationship amongst those various elements of inequality. With regard to services, South Africa has done quite well. I would want to argue. Provision of subsidized housing to the very poor. I think about 11 or so million people have been affected by that housing program. Old age pension, child support grant, but they are somewhat targeted. You have to do an indigence measure to determine who deserve these social grants. But what is it that we have learned between social services and work income? It is that if you provide people with subsidized or free services without providing employment, you might find that there is a negative outcome out of that. Let me just give an example from South Africa. We provide these subsidized housing to the very poor. But what you then discover is that among some of the poor who are engineers, they rent out those houses and go back to stay in the informal settlements in order to get some cash income because they are unemployed. So merely providing services without ensuring that you deal with the problem of unemployment might not have the desired outcome. Inversely, if people are employed and you do not have proper services, the outcome will be, they will be employed, they will get an income, but because water is poor, they will spend their wages paying for health services. So we have to deal with the problem in an integrated fashion. It's not just social services, it's not just social grants. It should be social grants plus economic opportunities. The two should go hand in hand. James, you look at this. I just wanted to make a comment that you're describing a scenario that justifies the whole approach of the multidimensional poverty measures that we've been seeing coming into the fore. And having people where you have multiple deprivations is impossible to move forward, even if you make some movement in one of them, you need to move them all or move a substantial portion of them. So to analyze where the problems are, a multidimensional approach, a multidimensional poverty measure like the MPI, the UN is quite helpful and it accurately depicts what you're talking about. Okay, Annika, are you? Just a short comment to Nora's comment. I mean, of course, the principle of solidarity is very important and that social protection system help build social cohesion. So in that sense, I think you need to think about what should be universal, then health care, help building... It would be for USA, very good case. Education, health care, building capacity, but also thinking about what groups are at certain risk for being poor and here I think children, old people. I mean, those are groups where universal systems could work effectively. Then the example of distributing mineral rents equal for all, I wouldn't argue for that. I mean, I think you have to think about what you want to achieve and who you want to reach. Yeah, it is a bit monotonous that we... We agree so much. We have differences, but we are like a sisters of the safe families, so I mean outsiders think that we are safe. But then coming to this, what you said, of course, in all countries where you have universal system, you have also the certain limits you might have, you have also the certain, how could I say, stronger points where you give, but normally these are just concerning if we take the incomes of course, then we have unemployment, we have sickness, you have old age, then you might have also that they want to support getting children and looking after the family and so on. And then you have services and they are combined in very interesting way because of course, also there you have a political discussion that is it possible that the daycare services are same for the rich and poor in this country, not? They would pay more if you have more incomes. And then you come to this complicated situation where your own salary and the expenses you pay are not perhaps in quite fair way combined. So we have noticed that in that way the taxation many times is much, much easier. But really, I think that especially health and education are such kind which are very important. And for instance, in this country, I think that we have only two or three private schools and these are for the religious reasons. So we, everyone put children to the normal school and they make a success if they make a success. Thank you, thank you very much. Anybody else here more on this side, please? No? Okay, Andrea? Now, mine is a comment Andrea Karnia, formerly wider when President Alonian was Minister of Foreign Affairs and now Florence, University of Florence. And I think that I would like to be a little bit controversial as well. I think that, I mean, look at the impact of the Piketty's book. So in Equality Israel, Toma Piketty wrote this book, Capitalism in the 21st century, saying that inequality is rising everywhere. And this is certainly true in the West. And basically the OECD data show that inequality is rising from low levels, but in practically every single European countries and certainly in the US, in Canada, in the Anglo world. A second observation is that the welfare system in the West are not entirely sustainable. And if you take the OECD data, they show that they're sort of the, I don't know how to call them, basically most pension system, they pay as you go system, they do tend to have a sort of outstanding liabilities which would make them look bankrupt, at least for the future. Now, take the European labor market. Well, Italy, Germany, France, Spain, I mean, basically are more and more segmented. So basically in Germany, there are six million young people working with part-time contracts or contracts without all the provision. Italy is the same or worse. Spain is even bigger, the problem. So I would be quite careful in suggesting to South Africa or the other countries to copy us. There are certainly many good things that they can learn from us, but the world is different now. The world is different that we are in an open economy, we are losing a lot of jobs and a lot of employment because of competition from other countries. So I would say two things. One, I'm happy to see the joint says that the inequality decline is feasible because it has fallen in Latin America and some countries in Africa as well. Now, at the same time, in the North inequality is rising. So just why don't you develop your own pattern to development? Okay, thank you Andrea. Yes, nobody has asked you to copy. They asked that if they want to, rather to get a modification from the Nordic system than the Voices American, German, Spanish or Greek, because of course we all learn from each other. And I think that's what we could learn from each other is also that we could perhaps think a little bit more happiness and not only unhappiness. I have been very interested at why Costa Rica and Bhutan are more interested in the happiness index. When we, I think we would consider that the last thing we want to keep is that if we want to be unhappy, we are unhappy, but we want to avoid the situations where the people normally become unhappy. That's all. Okay, James? Yes, I want to clarify the Bhutan Gross National Happiness Index is in fact a flourishing index. You have all that you need to flourish. And it is built on the same multidimensional framework that we were talking about. It's the same exact structure. I'm happy to go there in the next November. Please, let's go. If I can make a small advertisement, the next wider working paper that will be published on Monday is a happiness paper. We are now going to go here. Yes, please. Don't switch on. It should be on. No, it's not. Sorry, let's get another. Thank you. My name is Hayford and my question goes to James. You talked about issues of data and how we need to get a data. And we've been talking about data not just in this conference. Last year it came up and several other conferences we talk about data. And I'm sure we may meet sometime later in the future to look at inequality or other components that affect human welfare and development in general. We keep complaining or we have concerns with some data sets that we have been using globally, whether they are global and different measurements that take place which makes it difficult to make comparisons across maybe countries or across regions. What can we do in terms of coming to a common measurement system where if I'm in Ghana and I am measuring inequality given the data set, I know exactly what I am picking as my data points. Somebody in Costa Rica is picking similar data points so that we can compare results across countries and regions. Thank you. Okay, James? Make a brief answer to that. What can we do? Right now is just the moment to raise ruckus and talk about exactly that issue because now is when post-2015 is upon us and it won't happen unless we have a way of communicating across statistical offices and everyone's talking with us, just with Polly Lovola the other day from South Africa, statistics office. They have, people have to get together and talk about exactly that issue and put the effort in right now at the UNGA and other venues to make it happen. Now, you do with what you can at the moment but that's where the action is going to take place, I think, is at this very moment to motivate the decision makers. Okay, James? Any other one here? Yes, please? Okay, thank you very much. My name is Wisdom Aqbalou and I work with the UNU Wiva. Well, I've listened to so many interesting presentations and I keep thinking, I think building strong institutions, especially in developing countries, precede most of the discussions that we've been having because you need strong institutions to be able to mobilize resources if it is taxes and you need strong institutions when you are disbezing these resources. So we have situations where you may have even well-targeted policies or earmarked revenues, tax revenues to programs and projects but because of leakages due to weaknesses in institutions, these resources are not well mobilized or well utilized. They rather skew distributions even further. So I'm a bit surprised that we haven't paid much attention to building institutions in this conference so if you have anything to say about that. Yeah, Shuel? It will be in response to a number of issues that have been raised. The first issue being about where can we learn from and what should we learn in relation to the experiences of other countries. I would agree that there is a great deal from the logic experience that all countries need to learn given the low levels of inequality. In the context of the South African policy-making processes, you would find formulations that talk about building a developmental state but with the best attributes of social democracy so that you do not rely merely on the trickle down of high economic growth but ensure that that growth benefits all. From Latin America, from the presentations that have been made and particularly the Brazilian experience, I would argue that Bolshe family, for instance, succeeded amongst other things because it was combined with an industrial policy that would result in the expenditure from the poor being captured within the country itself. So if you are providing social grants but then importing the things that the poor buy, then you will not be assisting your own industrial policy and employment. Then as I was saying, from places like China, the question does arise. If China is climbing up the manufacturing sophistication ladder and many companies are shifting their enterprises to Vietnam and Bangladesh looking for cheap labor, should Africa spend that opportunity? Or should we encourage some of these enterprises to locate in Africa as a first phase and then Africa in time will also climb up the manufacturing ladder? I think it's one of the issues that would need debate. Then there's the experience of Germany. High levels of, or low levels of unemployment but informal work amongst the youth was the highest in Europe. Is there a trade off there that in order to get as many young people as employed, they had to do what they did and now they are introducing a minimum wage? Or should you reject that approach altogether? So the point that I'm making is that there are many experiences from all over the world that need to be learned. And lastly, I would agree fully that the issue of state efficiency but I would also add state legitimacy is fundamental to the success of any program to deal with inequality. If the people do not have a sense that the seriousness on the part of state leaders to deal with the challenges that society faces, if people do not have a sense that state resources will be handled in an ethical manner. If people do not have a sense that there is state efficiency then there will be reluctance on the part of those people to pay higher taxes and to cooperate with the state. So institutional issues are fundamental to dealing not only with poverty but also inequality. Thanks. First thing. I continue directly. So I think that this is very, very important because people want to live in somehow, at least somehow, fair society. And that means that they want to see what happens there where he or she is not by him or herself represented. And that's, we come to the good governance and transparency. I always say when somebody asks that, when we have been among the last ones, very often the last one in the list of the corruption, that how we see it possible. Oh, no, we are not saints. We are not saints, but it's thanks for the transparency we get to know if somebody steals from the society. And I hate the whole word corruption because it looks too fine. It smells too fine. It's stealing. And it's much better to say that person who takes such kind of the money is a thief. Sounds much better in such a way. And so I think that that's the way how we think. And so I say that there we get every now and then these persons who have done this. But the question is of course that then you have to come also in more complicated way that what that points as the salaries of the civil servants. If you have so low salary that you cannot live with that, then you in a way push people for the small way to take all money. But then there are of course always the persons who never have got enough. So I mean, then you speak about a big deal. And when you live in the European Union, so you get all the time also this different kind of the traditions. And that's why I say it's not only you. It's the whole world. And then it's the regions and then all that system. So it's very, very tough disease. But anyway, let's try. Anika, you indicated? No, very short. I think it's already been said, but I absolutely agree that building institutions are fundamental and absolutely crucial. And here going back to the original question you asked me, I think the donor community has an important role to pay to help build accounting offices, tax revenue, authorities and so on. And in the same way, the president how long is saying that to create an atmosphere of good governance and transparency? Okay. That is, yes please. Hello, my name is Li Zheng. I'm from Beijing, China. I'm also a student from Laurier University of Applied Sciences. And actually, first before I ask a question, I want to apply to a Chinese philosophy because as Joe also mentioned, there can be a vicious circle when you give always financial support to the poor. There can be, they don't want to, they try to hide and in order to receive the financial offer. So actually from our Chinese philosophy, we have conquered this problem by saying shouzhi yiyu, buru shouzhi yiyu. It sounds the same but it's different yiyu. The first yiyu is the fish. The second yiyu is teach how to fish. So it means by giving the fish to the poor, it's better to teach them how to fish. So, and my question actually is to President Hollenden because I live in Finland and I feel you have mentioned that taxation is very important here. And I also feel that taxation is a bit too much sometimes. So, because my husband has worked really hard but we are still living in the lawn because one third of his salary has gone to the states. So, my question is, do you think taxation actually produce or increase the possibility for inequality? Because as Shou has mentioned, the definition of inequality is very important and the three dimensions is assess income and assess two sources. But some people, they do not have the motivation to assess any kind of sources. So, why people who works really hard and try to assess sources, have to get money and they're working for us to those who do not even have motivation to do that. So, thank you. So, if I continue, yes. I think that you are becoming a good film because, yeah, that's the way. So, but then when you make a pause, you will ask that whether you want to get rescued, whether you would like to get a reduction in taxation and smaller benefits and services or would you like to pay the taxation you have today and you will get the better services. People always take the services and the social welfare, the most of that. That has, you can see in most of the statistics. But that doesn't tell that of course in the taxation, you always have something to prepare, to make it better. And so that's why I say that with my experience is so that it's always easier to make clear a little bit progressive taxation and give the benefits as they are. If you try to combine them, so you get the situations where you pay both the taxation and you will pay the services and then finally you count together that what's worth of all this. So the situation have to be also or the system have to be such kind that people themselves understand it. I have seen through these years the different kind of systems how you can take away how much you have paid of medicine and this and that and that which is of course the worst system because you do it afterwards and you need the money when this kind of situation comes. But this is an eternal issue. This is an eternal issue because it's not only the incomes policy, it's also the question that what is the property taxation, what is inheritance taxation, which kind of the taxes you put in the things you consume and so on and put all of that together. And I have not one truth on that but I know that somehow we have to get also the expense, we have to get also the resources to cover the expenses what we think that it's important with every generation to give some kind of the fair start. The fair start because it's not enough that you or even my that we have it, it has to be also the new ones. One last question. I mean maybe I can sort of say that it's sometimes difficult to sit still and be taught if you're hungry but somebody in the back, okay let's take all in the back you're getting in the last one. No, no the down here on the floor. Yeah. Thank you. My name is Vasu from Mozambique. What I'm worried about is that the inequality, addressing inequality is all about creating jobs for the poor. But the question I would like to raise here is related to how donors have been working with the poor countries to help them to create jobs for lifting the poor from the state that they are. The current system of donor is not helpful because most of the donors that tied donations with the obligation for the country sometimes to buy things from the home country. How can we now transform this system in order to build in jobs in the receiving countries, transforming the, let's say the production in the home donors countries to the receiving countries. I can say for example donation from China, from Sweden, from wherever, most of them are tied donations and how can we transform this into the job creation to the receiving countries. Thank you. Thank you very much, Vasu. Somebody want to comment, Annika? Should I come? Maybe I can just sort of supplement the question by saying that the reason why the position paper on aid, growth and employment does point to a rather spotty approach and sometimes sort of disperse too much with too many small, teeny initiatives in the job that there is something more that is required. You know, I mean the donor agencies don't create jobs. It's people and firms in the country that create jobs. What donor agencies can do is to work together with companies domestic and international to provide or to promote decent work and good working conditions and help establish firms. But Swedish aid is not tied to Sweden that you have to buy things from Swedish companies. Companies operate, they have their models and their business models and they should operate that way and donors should operate too. We work to eradicate poverty, that's our goal. So everything that donors do should go towards that aim. But I agree with Finn also. We need to do more and we need to find other, engage other actors in doing this together, I think. Thank you, Annika. If I say very briefly that we in this country we had earlier the idea that it's somehow dirty try to have a trade with those countries who we have a development cooperation relationship. But then we noticed that the countries themselves like Mozambique, they said that, find that you give this development cooperation but it would be much better if any of your enterprises could come and establish the activities in our country that we could get a job and we could get our own system with that. And so we tried to combine it but it comes very clear near also the risk, the difficulty that it goes trade first and then the support. And I think this is really the issue of what you should study in which way you like it. And what I would once again underline that your own regional cooperation sometimes could be helpful because then you could avoid this, how could I say, dumping made by investors. So that if you all say in the same way so they don't find the place where it should be extremely much less expensive because I mean the circumstances where the developing countries have to try to come from the worst to the next step, sometimes it's very cool. Okay, that's fine. Thank you very much. I'd like to thank the panel. Thank you very much, the four of you. And then if you don't mind just being patient for just one or two minutes when I close overall but can we in the meantime give the panel a big hand of applause. We've come to the end of two really busy days and I'd like to begin by expressing my thanks to all of you from all around the world for your many contribution to this development conference on inequality and its different dimensions. I'd like to repeat or reiterate that I thanked Minister Neri on his way out. It was really great to hear about the Brazilian experience but I'd also like to thank you very much, our closing panel, Preston Hallonen, Joel, Anita and James, thank you, thank you very much. But we have also had presenters, we've had session chairs, we've had invited experts and I for one at least have to say that I've picked up a lot of things around the way and for that I would say thank you. I would also like to say thank you very much to the members of the UNU-Wider team for putting together one of the largest conferences in the history of UNU-Wider. I'd like to especially thank the conference team, Mina, where are you? Janice, Anna Tulli, Anna Tulli, where are you? Kennedy, Brooke, Leipo, Anuannette and James, you made sure that the loud-speaking things worked. Maria and Mariam as well for the administrative and accounting information, Juka, you have served as an effective academic focal point together with Tony and I myself. Where are you, Juka? You should get up. So, members of the whole Wider team, you have worked hard for the past few months. I am very grateful for everyone's contribution and I hope that all the participants will join me in applauding you. Thank you. Now last but maybe not least while I speak, all participants will have received an email from UNU-Wider in which we ask for your feedback for this conference. We will be most grateful if you would kindly take a moment to fill it in. It is important for us both to get feedback and I hope that you will take my aside comment in my opening remarks where I said that this is indeed one of the monitoring indicators of our donors. So, please do fill it in and send it back to us. But finally, I wish you all a safe travel back home. Do follow us on www.wider.unu.edu and we look forward to seeing you next time for an engaging encounter. Thank you very much to everybody and safe travel home.