 Danone, da sleejamo, da se našli, da incrediblena več o njih nekaj sem iztenila. Preješem možemo potratiti mobilne importe, zato se nekaj nekaj zvenoje razdenišljno, tako, čas ker smo pri olmazne presahom, pa nekaj tako nekaj nekaj nekaj, nekaj je njeljene objev edikei. Daj sem Andrej Androni. Znamen v ekonomiki, industrial development and policy cluster, hosted by the economics department here at SOAS. This is a research cluster that brings together researchers from SOAS and beyond, as well as policy makers who are dealing with structural transformation, technological change, manufacturing development, developmental finance, and so on and so forth in Africa, Asia and Middle East. We run a regular lecture series and this is in fact the seventh event since we started and this is involved international leading scholars. We've been adding Robert Wade, Santame Go, Mariana Mazzucato, Rafi Kaplinski, and so on and so forth. And at the end of this meeting I will announce the next events that we are going to host. This night event was made possible by the active participation of one of the working groups within the cluster, which is the ETA Economic Transformation in Africa Working Group, which is an initiative launched by a group of PhD students in SOAS in Cambridge, which received support from INET, the Institute for Economic Thinking. This is another group organizing seminars, reading groups and other activities in focusing in particular on structural transformation and technological change in Africa. This night is a really a special night in this series because we are hosting this event with the United Nations Economic Commission for Africa and we are extremely pleased to have you here. As Adam later will talk in more detail, UNEK has been doing pioneering work and promoting pioneering work on industrial transformation and is one of the main reference points in among African countries on this team. And many of our colleagues in the economics department have been contributing to their intellectual discussion, so this is actually a continuation of a dialogue that we have been having over the last years. There is a final reason why this night is special, is because we have a very distinguished scholar, Ajun Chang from the University of Cambridge. He is a reader in the political economy of development there and has been there for 25 years. He is one of the most well-known institutional development economists. His work has been focusing on industrial development in policy, institutional economics and many other key topics in the current development debate. Among his books he will recognize the political economy of industrial policy in 1994, kicking away the latter, Betsam Aritans, 23rds, they don't tell you about capitalism or recently the economics user guide. I am particularly pleased to have Ajun this night here because Ajun also agreed to become an associate member of the economics department, so we are extremely happy to start this discussion within this night. The format of the night will be, we will have Ajun presenting the main findings of this report. This is a quite big report, so we are going to go through a number of many issues, actually a chapter of this report, but we will actually leave to the discussion then the possibility to go deeper into the analysis. This report has been written also by other colleagues from the University of Cambridge, in particular Justin Florog, who is doing current PhD with Ajun on the effects of global value chain expansion on Africa industrial policy and with a particular focus on Ethiopia. I was going to say, another good reason why we are pleased to have Justin here is because Justin was actually one of our products, if you want to use this. I am very happy to use this expression. And after that we are going to have Adam Elirakai, who is going, sorry for that, who is the director of the macroeconomic policy division within the United Nations Economic Commission for Africa, who is going to give us a very important overview of really how this report is linked to their activities and what other type of initiatives they are at the moment developing. So, for those of you who are a fan of Twitter, please use the hashtag, capital letters E in capital letters. Sophie, is it correct? Great. So, thanks to everyone for being here. We are going to have 13 years discussion, 15, so we will have almost one hour for proper discussion. Let me give you this. Okay, let me start while Antonio is setting this up. Thank you everyone for coming. It was a great pleasure to be in source, my second home. And I know so many people here. I mean, sometimes I think that this is where I work. And I even see some students from Cambridge sitting here, so I'm even more confused. Well, this report was commissioned to our team, myself, Justin and Muamad Irfan, who now works for the Pakistani Ministry of Commerce and Industry. About a year ago, and we submitted this report at the end of the summer, and then it has been revised and going through various last-minute preparation, which will be launched officially in April in the regular UNECA annual meeting. But this is your chance to have a sneak preview. This is things that you get only when you are friends of Hollywood producers and so on, so I'm glad that we are giving you that. Well, the report consists of four main parts. The first chapter is the introduction. The second chapter critically reviews the prevailing discourses on African development. First, the so-called African growth tragedy arguments associated with names like Paul Collier and Jeffrey Sacks and William Easterly argument that somehow Africa has all these geographical, historical, cultural, natural conditions that make it impossible to develop. And then, of course, the world has these moments of manic depression, so now it's in the manic mood about Africa, Africa rising, African lions instead of Asian tigers. No, it's actually quite amazing this about turn. And then we have the next chapter that talks about theories of industrial policy and the fourth chapter is review of industrial policy experiences in a wide range of countries. I'm not going to go into the detail now. And in the final substantive chapter, chapter 5, we discussed whether industrial policy is still possible because even among the supporters of industrial policy there's now this prevailing view that it's not possible anymore. The WTO, bilateral free trade agreement, regional free trade agreement like EPA, economic partnership agreement, the rise of global value chain. It would be nice if you could do this, but it's not possible anymore. So we addressed that question. I'm not really going to dwell on chapter 2. I mean, I can always come back if you want, but amazing range of things have been cited as the reasons why Africa will never develop. Climate, geography, history, culture is quite amazing. I mean, things like this. Samuel Huntington, the author of the famous book Clash of Culture at Civilizations, commenting on the comparison of Ghana in South Korea had this to say, basically saying that the Ghanans cannot develop because they are Ghanans. What else is it? Well, very quickly the point is that all these meta-structural factors have existed throughout Africa's post-independent history, but why did it manage to do better in the 1960s and 70s? I mean, Africa's, sub-Saharan Africa's, especially per capita income in the last 30 years has been stagnant. The region, the sub-region managed to grow at 1.5%, 2% in the 60s and 70s. So if history, culture, these things are so important, it should have been more important earlier than now, and there are things that hasn't changed at the location in the tropics, so how come these were not such an obstacle in the earlier period, but became so important in the later period, basically the point is that these arguments are used as excuses to explain why all these supposedly correct policies of structural adjustment program didn't work. Part of what I call the ABP discourse, anything but policy, it's actually amazing how much that research has come out since the 1990s to explain growth failures in developing countries in terms of anything but policy. This is very strange because in the 1970s, when some dependency theories that tried to explain the economic successes of Korea and Taiwan, which they had predicted impossible by using geopolitical argument, history argument, neoclassical economist put this idea, economics is economics everywhere, it shouldn't matter whether it's Ghana or Germany. Now that their theories are not working, they have to find excuses, and what do they find? Exactly the same thing. Korea developed only because of American support, kind of argument. Anyway, look at the case of Ethiopia, according to people like Professor Sacks he should have completely crashed in the last 15 years because when Eritrea succeeded, it became landlocked. According to his theory, being landlocked is a disaster. Now this country accelerated this growth after this event. Anyway, also many of these were present in today's developed countries. Again, many of these arguments are mixing the symptoms with the causes of underdevelopment. The argument of being landlocked limits your trading possibilities. Yes it does, but then why is that Switzerland and Austria, both landlocked countries, why are these two countries very rich? Basically they found other ways to trade. And as for culture arguments, you go back long enough, you will find all kinds of negative comments about people who are supposed to have developed because of the right culture, like the Germans, the Japanese, and the Koreans. Germans are stupid, they are too emotional, Japanese don't keep time, they are lazy, Koreans are the worst people in the world. And this was said by the supposed leader of Fabian socialism. If a socialist thought like that, you can imagine what the other people thought about my ancestors. This is frankly the worst description of any people by anyone. I can lay my hands on. And as for all this Africa rising discourse, basically the explanation is Africa has sorted out all these problems through structure adjustment. So I have become more conducive to take off. And it's not totally unfounded, but basically it's implying that it's now doing well, because it went through this structure adjustment process. Well, unfortunately in park chapter terms, Africa's growth has not been very impressive. And even this is unlikely to be sustained in most countries, not everywhere, but in many countries they have relied on primary commodities, whose prices are falling. And also the growth has been poor quality in terms of employment and poverty reduction. And we attribute this to the negligible role of manufacturing in the African economies. There is some typo there. So please excuse us for that. And now moving on to the theoretical perspectives. I'm not going to go through the details. I mean, we discussed the definition of industrial policy and discussed why manufacturing is important, all the usual reasons that many of you know. Faster productivity growth, spillover into other sectors in terms of productivity impacts. Also we extensively criticize the currently popular discourse in the post-industrial service economy or knowledge economy. I don't have time to go into this, but we provide basically criticisms that these are discourses that are very misguided. And also it's not able to recognize the interdependence of the high value services in manufacturing, basically high value services like design, engineering, finance. I mean, there are customers that are in manufacturing firms. So that you actually need a vibrant manufacturing sector to have these high value services. Also low tradeability about services is a problem for developing countries with balance of payments constraint. And yeah, especially in the African case, it is even more important to develop manufacturing through the well-known terms of trade effect, the impact in terms of creating secure employment and reducing macroeconomic stability and so on. Now, let me elaborate on this a little bit. We talk about two visions of industrial policy. The currently dominant vision is the neoclassical vision based on this notion of comparative advantage. Now, comparative advantage has two versions. One is Ricardo and the other is neoclassical. Ricardo's theory tries to explain trade pattern according to different levels of technological capabilities in different countries, so he sees them as fixed. Neoclassical theory, however, actually starts by assuming that all countries have the same technological capabilities. It's only the differences in the relative endowments in capital and neighbor that compel them to specialize in different things. So if a country like Guatemala is not producing things like BMWs, it's not because they cannot, but because they shouldn't. They find it unprofitable. But for us, this is like the Hamlet without the Prince of Denmark is assuming away the very essence of development problem. Development countries are poor mainly because they lack technological capabilities. So we argued that we need to base our understanding of industrial policy in the theory of infant industry promotion in which development of technological capabilities is the key. Of course, this does not mean that we should completely ignore comparative advantage. At least in the short run, you have to take it as given and try to maximize the benefits of development while investing in developing your technological capabilities. And this is exactly what countries like South Korea and Taiwan did. They started from the lowest of the lowest because in the beginning the technological capability was zero. So in the early 60s, one of the biggest export items of South Korea's weeks. I don't know about today, but workers had to plan each strand of hair onto the artificial sculpt or whatever you may call it. And this is very labor intensive. You couldn't do it except in countries with the lowest wages like South Korea. So at that level it conformed to its neoclassical comparative advantage, labor intensive. But the whole point is that they used the money the foreign exchange, they earned from this to buy machines and technologies for higher industries. First electronics, well, cheap electronics are nothing fancy. Steel and then motor cars, ships, semiconductors and so on. But these two are not necessarily incompatible. Following comparative advantage in some industries is actually necessary to achieve productive capabilities development. So after setting that theoretical vision out, we discussed various types of theories of industrial policy. Once again, I don't have time to go through them, demand complementarities, externalities, coordination and then the second category is capabilities of course the in-front industry argument but some of the other arguments related to technology and support for SMEs and then we also have the third category that talks about risk and uncertainty involved in industrial development process. And then we talk about implementation issues. Policies have to be realistic but not too realistic because if you are completely realistic you will always be producing the same way cheap transitions of radio stitched garment. You have to push the boundary. Needless to say this industrial policy needs to be constantly adapted to changing conditions and it requires the right political base well at this point some people then take it to the extreme it's a very important point but take it to the extreme and say we can't do anything because we don't have the right political base for industrial policy but history has plenty of examples where this has changed often involving necessarily always involving violent processes so basically new political coalition for industrial development was built in the United States and pressure in the late 19th century in the mid 20th century this was also done in Latin America and East Asia of course some held some didn't but you know as always possible to do that and then we have issues of embedded autonomy which I assume you all know we emphasize the issue of pragmatism in Singapore is the ultimate example in this regard because when you read about Singapore in the financial press or standard textbooks you will only hear about Singapore's free trade policy and its welcoming attitude towards foreign investors but you will never hear that 90% of the land is owned by the government and very closely monitored for industrial planning purpose 85% of housing is provided by government owned housing corporation and a staggering 22% of GDP is produced by state owned enterprises so is it capitalism socialism very difficult to say also implementation requires increasing implementation capabilities because if you don't have good policy capabilities whatever good policy on paper you have you will not succeed but we emphasize that this does not mean hiring more economists no, I mean there is a very serious point here also we emphasize that administrative capabilities are not just those possessed by the individuals but also by organizations that all kinds of people with high degrees but if the government is not well organized if it lacks internal coordination then the policies will not be successful and then we talk about the incentive system this is well known stuff and to moving on to chapter 4 where we talk about experiences we really talk about the range of countries today's rich countries but also more advanced developing countries also the poorest developing countries now we completely agree with people who say that you cannot just transplant other countries experiences but once again any sensible point that can be taken too far and it has often been taken too far you can always learn lessons you don't have to copy things that are straightforward and we gave a range of experiences because we think it is very important to free the policy imagination of the policy makers because unless you know these cases especially in an environment where one particular type of economy makes one particular ideology dominates you just cannot imagine how things can be different seriously I often challenge my students do you think you could have designed something like Singapore if you relied only on theories never mind whatever theories you can't it's a product of pragmatic evolution of policies and unless you know these cases you will not have the imagination to think different alternative so we talk about first experiences of today's rich countries in the post-second world war period you might think that it's just Japan Korea, Taiwan some people know that France did some of this stuff no more than that but actually there was industrial policy everywhere of course different patterns but hardly any country didn't use any for example the US is a great example sometimes joke that the most successful the United States has the most successful state-owned enterprise in human history except that it's not called a state-owned enterprise it's called US military they financed research and development in all the high-tech industries that you can imagine you probably have heard of computer internet and so on but did you know that semiconductors was initially developed with money from the US Navy we don't hear about these things and of course as a result the most important industrial policy of the United States is to convince other people that they don't have industrial policy and there are other stupid people like my fellow Koreans say Americans don't have industrial policy we should abolish ours I have written especially in this book about industrial policies in today's rich countries in the earlier period I don't want to go into this I'm just going to show you some of the things and then we also talk about industrial policy experiences of the more advanced developing countries as well as some of the poorest countries and actually that we show that in these rather unpromising cases you see some success stories in some sectors showing that despite all the problems of low capabilities increasingly restrictive global policy environment and so on you can do some things so to some of this empirical chapter basically that we very much emphasize the development of productive capabilities we suggest that countries need to exploit their comparative advantage but defy it at least in some sectors and we show that there are many different paths towards developing productive capabilities and unless you know a range of real life cases you actually not be able to imagine how diverse this could be simply by thinking in theoretical terms and also there is a huge range of tools that you can use so trade restrictions, subsidies coordination licensing FDI, use of state-owned enterprises government procurement and so on so that you need to also free your imagination about the policy tools because very often people think that it's all about tariff protection and since there are restrictions on that in the WTO there's no industrial policy that you can do this is not true okay and then moving on to the last substantive chapter how the industrial policy environment has changed and how it affects countries ability to conduct industrial policy especially especially with the establishment of the WTO but also with the recent proliferation of bilateral and regional agreements on trade and investment there's an increasing influence of view that industrial policy cannot be used anymore but this is not true there are many industrial policy measures that can still be used legally so for example the WTO ban, export subsidies but not for the least developed countries roughly speaking countries with less than $1,000 per capita income there are policy measures which are inherently domestic in nature and therefore not subject to international agreements there are policy measures that are allowed because no international consensus has evolved on how to regulate this there are lots of ambiguities so that basically as a rule of thumb we suggested if a policy measure does not affect export or imports directly it does not fall under the WTO laws and therefore allowed WTO members have been required to bind their tariffs but not necessarily to eliminate it also currently many countries use levels of tariffs well below the bound levels so they can still raise tariffs you can renegotiate some of these tariffs you can use extra tariffs to legitimately to address the balance of payments problems Korea used to use it a lot even under the gap Ecuador has used this two or three times I think Indonesia and a few other countries have also used it so why not subsidies yes I mean WTO does not actually ban all subsidies only the export subsidies and subsidies requiring local contents that are explicitly banned all other subsidies are actionable which means that if a country has been injured by another country's subsidy it can take the other country to the WTO and get a ruling and in light of the ruling can impose trade sanctions against the offending country but this process itself takes a few years so you can use it until it is resolved more importantly there are subsidies that can be used more safely until 1999 they were explicitly allowed subsidies for R&D upgrading of disadvantage regions developing environmentally friendly technologies these were explicitly allowed until 1999 now they are not but as far as we could find there was no case that was brought in these regards to the WTO probably because these subsidies mainly used by the rich countries so you can use that as a precedent and use it and if someone challenges you you have a good reference point there regulation of foreign investment is restricted by the so called TRIMS agreement trade related investment measures yes these prohibit domestic content requirements and foreign exchange balancing requirements this was frequently used by India which says that if you are a foreign company you have to export at least as much as you are importing this cannot be done now but there are many other measures that you can use to encourage technology transfer and spillover so you can have requirements on joint venture technology transfer limitations on foreign equity ownership and so on so the restrictions imposed by the WTO WTO are considerable but not overwhelming however developing countries need to be extremely careful with these bilateral or regional agreements because they are very aggressive especially if you sign it with the United States I mean Europeans are only slightly better but you can at least when it comes to investment agreement and we negotiated some countries have actually revoked including South Africa some of the investment agreements and of course many of these agreements have a close saying even if you revoke it you will have to give the same treatment to our companies for the next 15 years or whatever so they really make sure that you suffer it's late better late than never and finally we talk about the expansion of global value chains which can bring certain benefits especially it makes it possible to participate in sectors without developing a whole range of activities in the old days if you want to participate in the automobile sector you I expected to have an assembly line and then all the things that go with it like the suppliers and so on today you can become a world class producer of say hub cab so in that sense entering the automobile industry has become easier and if you do it well participation can bring great benefits however I mean this proliferation of global value chains is happening in a context of increased consolidation at the top so lower level participants are finding it increasingly difficult to appropriate the suppliers so you need to be careful with that and in the long run if developing countries have to capture larger shares of profits they need to upgrade within the global value chains and also eventually create and control at least some of the global value chains I mean that once again in Korea started by assembling cheap transistor radios but then they upgraded within it so first it was cheap transistor radio and then black and white TV and color TV simple microchips but at some point they said we are going to do it Samsung will design its own chips they announced it in 1983 it was at the time an international joke Samsung lost money for 10 years in electronics in semiconductors if you want to do that you need intelligent industrial policy actually GBC makes it even more necessary to have an intelligent industrial policy because there are so many things that you have to navigate now in the old style protectionism you say we want to make cars we put up tariff barrier animal multinational company who finds it attractive enough given our market size and our labor of tariff please come and invest this is what Brazil did that requires far less clever thinking on industrial policy so in a way this is made even more necessary because now you have to really choose the right segment you need to have a plan to plan to upgrade possibly plan to branch out and create your own chain you have to think about the linkages spilovers and then with the increasing separation of productive services from manufacturing production activities you also need to think about producer services which you really didn't worry about in the past so actually the expansion of global value chains has made it in a way more necessary to have clever industrial policy so let me just quickly run through summary and conclusion the importance of productive capability building this has to be emphasized again and again and again because that's the essence of development that's what industrial policy should be trying to achieve second point economic theories are necessarily limited but industrial policy makers need to clearly understand the key theories so while emphasizing importance of knowing the key theories we suggest that the policy makers shouldn't be slaves of theories because they're all limited and industrial policy makers need to acquaint themselves with a range of industrial policy experiences and my favorite motto is that life is stranger than fiction if you're not convinced just think Singapore no, I mean no one could have invented Singapore purely in terms of economic theory and imagination and we argued that without knowing all these different cases, policy makers will be bound by theoretical demarcations and cannot fully exercise our policy imaginations especially in this environment of monolithic theories you know even someone like Danny Roderich says we all have to think in terms of neoclocal theories and he's supposed to be the left thing fringe of the mainstream so if you don't know these cases it's very difficult to break away from this tyranny of a very particular theoretical paradigm only when you can say but how about Ethiopia, how about Singapore how about South Korea in the 70s you can think another world is possible as a policy maker the shrinkage in the policy space and the rise of GBCs made industrial policy irrelevant if anything they have made them more important and sometimes people use these things as excuses not to work I sometimes joke that the biggest friend of developing government officials ministries of industry in developing countries is the WTO because whenever you don't want to work you can tell the minister that's banned by the WTO the ministers are not going to go through 1,450 pages of WTO documents they say no no actually you can do it you will say okay so we really need to take these constraints seriously and think that we should not think that this is the end of industrial policy okay thank you you can actually go from there as we are recording hello so let me use this chance to elaborate further on a few aspects of the report one of the most common questions I've had directed at me when presenting research that has gone into this report the role of services versus that of manufacturing in industrial policymaking can't services be in equally valid route to development as manufacturing activities had you talked a bit about this already but let me elaborate a bit more on why manufacturing is so vital to economic development services are indeed more tradable than before in here for example I said lots of call services for non-Indian companies the one that has also managed to derive some successful services like tourism and ICT and in some digitalized services you see scale economies that exceed even that of some manufacturing industries there are plenty of reasons why manufacturing remains such a strong driver or stronger driver than services for economic development one the expansion of the services sector is slightly an illusion on some of his writings in economics users guide for example provides example of some services being used to be provided in in-house manufacturing operations like catering and security guards but are now not another is a lot of the productivity derived from services come from the manufacturing sector so think about manufacturing computers or transport equipment and as Arjun already mentioned low tradability really lies at the root of services they have in fact been stuck at around 20% of international trade since the 1990s so for countries with a sizable domestic market as their economies grow if they continue to rely on imports of all manufacturing products that's going to cause severe balance of payment problems and also for African countries there are plenty of additional reasons why manufacturing will be a stronger driver for economic development and services one is a deteriorating in terms of trade that published singer hypothesis that Arjun mentioned another is that manufacturing tends to be a very very strong driver for employment generation especially in developing countries so in a lot of African countries there is very high vulnerable employment rates the ILO has recently done some research on this and found that there is a very very strong correlation between people in paid employment and also the level of industrialization another not so much talked about factories inequality but the great political economist Alice Amston focused on this in her works and the importance of the manufacturing sector for reducing inequality she argued that in industry that have higher skills and where knowledge is a barrier to entry such as manufacturing wages are likely to be higher so she for example in her recent book Escape from Empire compares the growth experience of Taiwan and Chile and Taiwan had a much more rapid rise in wages because they relied more on manufacturing as that Chile relied on extractive industries but however there are always exceptions to this China has proven an exception and also Brazil the second point I wanted to emphasize or rather elaborate on is strategist based on emulation of all policies this is something that we emphasize in the chapter where we provide all the experiences of industrial policy in the past because some people say nowadays that basically emulating or doing industrial policy like it was done by the Asian Tigers or even before that that's not possible anymore so I wanted to provide you with example in Ethiopia which is a country that I study and show how this country actually uses lots of industrial policies that are emulated from previous successful examples so let's first look at tariffs and subsidies which have been proven all the way back to perhaps most prominently the US in the 19th century which has very, very high tariffs so Ethiopia uses tariffs for example in the garment industry to protect domestic firms producing for the domestic market and subsidies for example tax holidays which is an indirect subsidy for firms that produce for the export market the second tool if you want to call it that is the use of development banks in Ethiopia they've set up the development bank of Ethiopia which has been very, very crucial in providing term capital for investment projects again, development banks have been of overwhelming importance in almost all catch-up economies going back to 19th century France another one is fiber development plans again, lots of countries have used these dating all the way back to the Soviet Union the setup of state-owned enterprises in Ethiopia the most prominent example of this is perhaps the Ethiopian Airlines if you go back to the Asian Tigers again, especially Taiwan had a very, very high share of state-owned enterprises in the economy, but also South Korea and Singapore today you'll find lots of state-owned enterprises in countries like China and Vietnam another point is and this has become much more I would say crucial and also prominent today is the strategic attraction foreign direct investments and here I put emphasis on strategic attraction and the use of industrial clusters to cater for foreign firms Taiwan in the 1970s being an example and again today Vietnam and China attract quite a few foreign firms in their industrialization strategies and also using export processing zones to cater for these foreign firms ok, I'll leave it at that and give it over to Adam ok, good evening I'm happy to be here I used to be in academia for 13 years before joining the UN for the last I've been with the UN for the last 11 years I would like to thank Antonio and his colleagues at South for this opportunity and to share with you some ideas about the project we have started a few years ago on industrialization in Africa when I was a young graduate student like most of you we used to read economic theories and I today look back and I think that those economic theories which we used to study are the theories and models that failed Africa really when I was a student graduate student in the 80s we had theories of economic deolism do you still use Tadaro? it was mainly about economic deolism advising developing countries Africa in particular to neglect agriculture in favor of manufacturing Africa and many developing countries failed to promote manufacturing by neglecting agriculture later on because of food insecurity issues Africa was advised to go back to agriculture to promote agriculture and leave manufacturing to the private sector it didn't work either so now we need to have a more comprehensive development model and that was the starting point for our work on industrialization in Africa we have a sister organization in the United Nations called UNIDO and we are not satisfied with what UNIDO was doing because UNIDO has ideological bias and a model that focuses on sectors a sectoral approach we need a comprehensive approach a development and planning approach that looks at industrial policy as a central policy that should be integrated and coherent and other economic policies including fiscal policy monetary policy and others but not a sectoral policy and industrial policy should not be left to the market for too long Africa relied on the market but the market did not solve very, very simple constraints and issues we ask ourselves and we had a meeting with the former governor of central bank of Nigeria why is Nigeria exporting crude oil but importing refined oil it's unbelievable Nigeria is a big country with huge agricultural potential Nigeria imports almost all the tomato paste they consume do they need rocket science to produce tomato paste now but why the private sector was not able to do it here is the issue of market failures and government has to step in to help address issues of market failure so a lot of economists will tell you now be careful especially international financial institutions will tell you industrial policy is too risky and they confuse the definition of industrial policy for us it is very simple government cannot replace the private sector for us industrial policy it is about addressing the constraint that constraint private investment in diversified industries and in manufacturing in particular and there are five constraints which we have identified yearly on one access to market two infrastructure three access to finance four human capital fifth institutions in general institutions that promote the investment environment and that regulate and support businesses so this is why we started to work on industrialization I'm going to be very brief because I would like to really listen to your questions and comments so we started to work on this early on in 2010 we produced a report on promoting high level sustainable growth to reduce unemployment in Africa and we identified the issues with Africa's growth model which is very limited and highly dependent on primary commodities so the narrow growth low quality growth professor hadn't talked about 2011 we looked at the key questions which we identified and produced a report on governing development in Africa the role of the state in economic transformation so we we identified the issue with market failures in Africa and argued that governments have to step in no country on earth developed relying on market forces government has to have a role has to have a role and 2012 we looked at whether Africa has the potential to become a global growth poll does Africa really has the resources and the opportunities and the answer is yes and we have very simple simulations that show that with good policies Africa can double its share in global growth in about 15 to 20 years global output Africa's share in global output can be doubled in a matter of 15 to 20 years 2013 we looked at the most challenging question that relates to primary commodities Africa has a lot of primary commodities probably 50 to 60% of natural resources in the world today are in Africa and we start to look at the question of can Africa really industrialize beginning with its comparative advantage in natural resources of course the answer is yes but comparative advantage is not enough you have to use your comparative advantage to eventually build competitive advantage in new industries and not all African countries are rich in commodities then that report was about making the most of Africa's commodities starting with comparative advantage moving on to promote comparative advantage then 2014 we looked at the question why industrial policy has not been successful very briefly it has not been successful because as dictated by international financial institutions African countries were advised almost all the time to have generalized industrial policies including tax holidays including access to keep finance and so on that really did not work did not attract the kind of investment that will help African countries diversify their economies so they need new kind of industrial policy well targeted industrial policies 2015 we produced a report industrializing through trade industrializing Africa through trade now we are working on a report which we are going to launch along with the book on smart industrialization on greening Africa industrialization and the year after we will have a report on industrialization and urbanization this shows how committed we are to the question of industrialization because without industrialization there is no hope for Africa to really promote sustainable and inclusive development and we believe that Africa can industrialize Africa of today very briefly is very different from Africa when I was student like most of you here Africa of 20 years ago was very different now many African countries have really put in place innovations that promote macroeconomic stability as well as growth and provide a good environment and conducive environment for investment and so on so we have seen this pain for Africa during the 2007-2008 financial crisis Africa was the continent that was able more than many other regions to mitigate the influence and negative impact of those crises and we can see Africa moving forward despite the challenges and despite the growth moderation we are seeing now we are very confident that African countries will pull ahead but they are still heavily dependent on primary commodities and they need to break from these dependence so translating Africa's growth into meaningful creation of those requires long term institutions and policies and Africa needs to really invest more on processing its natural commodities and Africa need to have new kind of industrial policies which Hajun talked about industrial policies that are dynamic and organic, foster public private sector dialogue in sure high level of coordination and political support and grant embedded autonomy and enhance regulatory effectiveness and so on so I'm actually trying to market these products and showing the link to our products in our website but the key question we started to ask in 2012 was what are the factors that influence linkage development in the heart and soft commodity sectors and perpetuate Africa's dependence on natural resource extraction and exports and we developed the framework linkage forward linkage development and we assessed all these factors that affect linkage development in Africa not going to go through these factors but we have conducted 10 country case studies in 2012 and provided recommendations on how African countries can really address these factors and promote linkage development at local level and then also insert their firms into the global regional and global value chains and we provided a lot of examples African countries are highly really unlike what we hear in the media African countries are highly integrated into the globally common but unfortunately at the lower level we just produce commodities in this report we provided figures that show that African countries earn just 10% of the global value of the goods produced based on their own commodities including cocoa including including a lot of metals so African countries earn just 10% of the global value chain based on the commodities they produce and you can see the potential there we also looked at the critical success factors and provided a framework for African countries to make the most of their commodities but to start with African countries need to have long term development plans and strategies to go back to long term development plan the issues professor had been talked about no country on earth developed without having long term development visions and plans and Africa has to do that and within that framework African countries need to think outside the box and I always say this to African policy makers nobody including African like me who work for international organizations will think outside the box for you you have to do it yourself and we have seen it happening in a number of African countries I just want to give you some examples Morocco started very recently to invest on new technologies and processing they started processing goods based on primary commodities produced in sub-Saharan Africa in Morocco exported to Europe but they saw the limitation of this in terms of job creation and then they started to invest in modern technology high tech industries and just guess now they produce parts and components for Airbus for Boeing for Rene Nissan and they created close to 20,000 jobs in these industries in a few years of time and the potential is huge and we have seen how Ethiopia I always mention Ethiopia because I come from a country next to Syria, Sudan but for us Ethiopia was known for you know families, droughts, famines and so on especially in the 1980s and believe it or not 20 years ago their capital income in Syria was $90 $90 a year this is their capital income and Syria was one of the poorest two countries on earth now government put in place in this strategy of course the country still has a lot of challenges and you will still see pictures in TV people still suffer from food shortage due to a nano and the drought but government in Syria has consistently focused attention on addressing the challenges I mentioned building infrastructure providing finance to investors improving access to markets and building human capacity and their capital income now is seven times what it used to be one, two infrastructure now you see roads and you see power lines everywhere you go and I was involved in the discussion on the millennium millennium dam which cost is $5 billion World Bank IMAF advice government not to invest on it because they said you will be bankrupt or economy will collapse Syria was able to generate most of the resources needed domestically I know the story about there is poor bonds and the national power the dam bonds sold domestically and then the country was able to raise more than $1 billion in World Street and now World Bank is coming back to be part of this story really so we also looked at the issues of industrial policy institutions we need to have dynamic institutions as the report is there for you to read but we are calling on African countries to have a new approach to industrial policy not the old failed industrial policy but the government has to be at the center of this not to own investment not to own productive enterprises to provide the environment to provide the institutions that help the country and the investors to address constraints and build on their potential so this is a kind of industrial policy we want them to have in place this industrial policy that is coordinated and that is integrated and coherent with overall development policies and strategies and we want industrial policy organizations that address the issues we identified with existing industrial policies which are including structural holiness operational failures and lack of dynamics and lack of inclusion in 2015 we looked at issues of trade and industrialization in Africa and I think professor Hajoum talked about key findings and opportunities for Africa to have really to have industrial policies that are fully integrated with their trade policies and for them to do that we proposed this framework for policy making we have to start with a national development strategy and then identify opportunities for trade and the challenges and how to address them and to have selected trade policies trade theory is about selected trade policy and I will invite you to look at those of you who study trade theory the old trade theory comparative advantage is not enough trade has to be based on selective instruments and selective instruments are not based only on comparative advantage and of course professor Hajoum was extensively and I have professor and my mentor professor maštiku nisanki she was my mentor more than 20 years ago and we are proud to have her with us all the time now she has supported us with our work on industrialization so unless you have selective instruments that can help you to promote competitive advantage then you will not get anywhere now let me move to the final part of my presentation moving forward what are we doing to help African countries really industrialize what we are doing in the United Nations Economic Commission for Africa is really to help African countries build capacity many economists some of them very famous tell African countries that you cannot develop or industrialize because you do not have the capacity but they do not tell them they do not have the capacity so we are supporting them through advisory service to build capacity and they are working with us very closely and we have developed a program that can help us work together with countries and with regional economic communities to have industrial policy frameworks industrialization at national and regional level because professor had been said you need to really today you need to understand how industry operates regional and global value chains now dominate production at all levels at national regional and global levels industrial policy has strong regional and global dimension that is why we are bringing countries to work together and we are bringing them to work together and also managed within the United Nations Economic Commission for Africa and with partners to really put African development issues and thinking on the table and we really influenced major agenda today starting with agenda 2063 if you heard about it that is Africa's agenda for transformation adopted by African head of states in 2013 and we use that framework actually to develop a common African position on post 2015 development agenda and that common position African position really influenced the global development agenda adopted by the general assembly in September 2015 in the form of the SDGs sustainable development course we also which talks about industrialization structural transformation we also influenced the financing for development conference that conference that was held in Addis Ababa in July 2015 and all the priorities Africa's priorities are reflected there also regionally we have comprehensive African agricultural development program that advocates integration between agriculture and manufacturing and we have Africa's program for infrastructure then we were able to work with African development bank very recently at UNIDO for the bank to provide financial support to African countries to address the points I talked about as sorry for the I think it should be actually starting with access to finance as one of the key enablers and supportive policy legislation and institutions and promoting conducive economic environment infrastructure and then access to markets not capital here and human capital these are the priorities for African countries therefore if someone tells you industrial policy is dangerous, is risky ask them about how they define industrial policy this is how we define industrial policy and we think that industrial policy is a must for African countries all the reports I mentioned are available on our website thank you I think there is lots of food for thoughts so we would like to have an open discussion so if you have a question we could start raising 3-4 questions ok, let's start collecting 3 questions and you can also introduce yourself and then we will have another round please so where is this one it's about that and more the more we can actually define this so I'm just wondering why those those inconsistencies or are they part of it of all ok, the second question is that there has been this quote towards how do we make this I'm just wondering if you can see the same how is it is it a complementary thing or is this a real space from your program last question there and then we do another round ok, so let's start in this first round and then we go to the second round thank you for the questions well when I say you need to use in front industry and comparative advantage industries together I mean you apply those things to different industries so some countries should be subject to in front industry promotion others that should be promoted as comparative advantage industry that will allow you to develop foreign exchanges that you need for economic development this is what people often get confused the fact that countries like Korea and Taiwan emphasize export was that is misinterpreted because people think they emphasize export for the sake of export no, they didn't they did it to be able to on the foreign exchange that you need as a developing country to buy advanced machines and technologies for next generation in front industries so you need a portfolio I mean if you cannot put everything into in front industry development you cannot put everything into the promoting cheap labor exports you need a mixture and the reason why you need to do some degree of sexual policies is because what is wrong with the neoclassical theories that in neoclassical theory you keep accumulating capital and then the capital output as a capital labor ratio will go up and then you can move into new industries it doesn't work like that in real life because industrial development requires capabilities that need to be accumulated at the sector level you can't just keep producing t-shirts and one day having seen that your capital output ratio is now above a certain level suddenly start producing automobile you cannot do that because you need to accumulate these capabilities and this also links to this question of infrastructure let growth because yes I mean there will be if you invest a lot in infrastructure there will be some effect on industrial development there is no infrastructure that is completely neutral infrastructure is actually very location specific it has different impacts on different sectors so if you are using the same money to build a railing between I don't know copper mine and the seaport it has very different impacts on different industries when you build an airport for flower exporting region and you cannot once you have built the airport say well flower demand is falling let's move this airport remolded into a railway so that we can increase copper export no this is the absurdity of this idea about general industrial policy because even infrastructure even education except at the primary level is really specific to different industries there is no such thing as a general engineer engineers are highly specialized either you are a mechanical engineer or chemical engineer, electronics engineer you can't just say well we will produce more engineers what kind of engineers, why you need a sexual plan just think about this the Gulf countries have infrastructure coming out of their nose it doesn't need to industrialization all the roads all the ports what are you going to use them for on the question of different tools for different countries in the WTO the WTO has basically made it easier to use policies that are more suited to the developed countries so like R&D subsidies agriculture subsidies but developing countries also can use some of this especially at the middle level countries there are countries that could benefit a lot more from using R&D subsidies Mexico despite having twice the income level of China only spends 0.4% of GDP on R&D China spends 1.8% Mexico could clearly raise that R&D spending but it's not doing it but this is not because of the WTO final question on policy space of course WTO and BITs and so on not the end of the story IMF, World Bank 48 from rich countries but first of all IMF and the World Bank constraints are not permanent as per example you repaid the money you can stop listening to them and actually there was a point in the early 2000s when there were only about 5 countries in the whole world IMF and WTO actually IMF almost went bankrupt it was saved by the global financial crisis because then a lot of countries got into trouble and then it could lend money so of course this means that there will be double triple log so I completely take a point that this need to be taken into account but they are not completely limiting but at another level the biggest constraint might be ideology there is such ideological dominance of free market free trade ideas that even if they instinctively feel that they need to use different policies even if they have no kind of formal regulations like the WTO even informal regulations coming from the aid conditionalities and so on developing hundred policy makers are not even thinking about using some of the policies because they have been trained to think in a particular way ok thank you excellent questions question one partly answered by Prof. Hajun North Africa is part of we always for us North Africa is part of our work and for us in our report we don't use the term sub Saharan Africa it's a colonial term we do not use it anywhere Africa is one continent and we insist on this regional integration within Africa is really the best way forward for Africa I did not have time to mention this 60% of inter-African trade is in manufactured goods produce any kind of goods clothes in West Africa sell it to neighbor countries they buy but you cannot sell it outside Africa it's difficult to compete 60% of inter-African exports are in manufactured goods so just imagine the potential for the continent to industrialize based on regional market so I hope that one day the term sub Saharan Africa will disappear ERS are related ER economic reports on Africa are related there is apparent contradiction between some of them especially 2013 on making the most of Africa's commodities and the last one and the report and the book being written by Professor Hajun and his colleagues there is slight difference in how we see comparative advantage but I think in essence there is no contradiction what is comparative advantage about for us as far as we are concerned comparative advantage is about making the most of what you already have if you produce diamond then cut it polish it locally we make a lot of money and you need to enforce local contents policies that can force companies that extract diamond to cut it and polish it locally and by doing that you can create a lot of jobs but so on South Africa have created a lot of jobs by just enforcing local content policy on diamond cutting and polishing if you produce leather then process it and go to the next stage to produce fine leather products including shoes in your competitive advantage you have crude oil in Nigeria refine it and so on but we agree that moving forward you have to build competitive advantage you have to be innovative reduce new products and Professor Hajun gave a lot of examples and we know the story of China Professor Matjuko wrote about it in Korea they do not have anything like Africa's natural resources but they developed based on competitive advantage so we need for future development really to build competitive advantage and to invest a lot of human capital in particular and on technology research and development infrastructure it grows infrastructure we cannot build infrastructure just for the sake of building infrastructure we build infrastructure to do something else to move good facilitate movements of goods, capital and so on and investment and so on so infrastructure must be given the scarcity of resources of course it is good to have roads everywhere but given the scarcity of resources we should focus on building infrastructure that promotes investment and promote facilitate marketing and so on well the last question about policy space which Professor Hajun answer talked about but for us policy space really as we defined it is about ownership of your national development strategies and we articulated this issue very clearly and very strongly in the context of Agenda 2063 and Sustainable Development Agenda and Addis Ababa Action Agenda on Financing for Development in order to have policy space we need to rely on your domestic resources and therefore we put forward the argument that external support provided to African countries should be liberated to support African countries mobilize their own resources and use them the way they like so if you cannot do that then you will not have the policy space and I think the work we have done in the United Nations Economic Commission for Africa over the years on debt cancellation in the 1990s and in the context of the MDGs were very limited for us and in the context of aid flexibility has been very supportive now most of the aid that goes to Africa goes to budget support but previously most of it used to be tied to projects and certainly it constrained policy space in Africa but now we want external support that supports Africa's capacity to mobilize resources and to widen its policy space OK, let's look at this side as well one, second and third one up there try to be brief so we can have more questions people cannot hear, sorry if you can just raise your voice OK, thanks, so we have one question for Jun and two for Adam in kind so my first question is about the services versus the impact of the debt I'm wondering if that is very useful for this one we don't have a lot to talk about because the money is very different from when it is merged and when it is loaded so maybe we need to deepen our understanding of how services have been merged and developed and how the money is loaded and then talking about the visual development capabilities my two bikes closely relate to this concept because a lot of times those policy positions when people need to shape they will achieve a great pattern or consolidate industrial policy they have a contest with so how do we make sure that the right people are in the room and then the last thing that I want to understand is that a lot of applicants in development and long-term development teams in Nigeria in 2020 what have been the requirements for all the kind of development can I read just a detour and then over there so this is a question for ideas that are also in general in principle I am very much in favor of this report I haven't read it so I hope some of the things I am going to be saying has already been covered I think that completely agree with you that there is no blueprint for the policy that is a lot of pragmatism that is trying to create the policies in the space but in a sense I am not sure that the fundamental issue is the same that is when you are supporting a sector where you don't have it which doesn't have enough productivity for whatever reason and then the idea is to create capabilities to learn by doing investments for R&D development now in the past majority of cases in developing countries in the state is because support was provided output expanded because normally we are supporting output growth and people say that the policy is succeeding because output is growing but then it turns out that productivity growth in pro-sustaining is not happening and in the long run then it is reversed so the trick is how to sustain that productivity growth which is justified in the past is responsible for productivity growth to very tough positions in many of the examples that we gave in Vietnam which I worked in actually what you find is that the output growth is happening but productivity growth isn't happening and for example, automobile in Vietnam there is a collapse of industrial policy and that is going from it because it couldn't do it so if you are now doing industrial policy in the future you need to think very carefully about how those particular sectors that are in support of are going to achieve for a few years what are these future mechanisms and that connects to the question that someone has asked about the productivity sector because what works in one country what does the other country for a very specific reason is the distribution of power what is the power of the sectors and how do you work around that without that you just create another set of what can succeed by success since you try something of the power sector that won't work and then you have another set of rules that you must avoid the last question then we do the final round Dr. Chen, I wanted to ask you about your recommendations and policy makers to know extensions about community and I'm wondering whether it would be helpful to know something that is underlying this news when you mentioned this department in services in manufacturing I was almost uncanny reminded of Adam Smith's material production in the theory of value where anything that is material in the actual agriculture to use a value that is not services when you were talking about global value change I was again almost uncanny reminded of Mars' idea of a social surplus in fact the global pool of surplus debt for which completely the capital is complete and also owners of starst resource new glass economy in which much of current policy debates is based in fact making every factor every output is classroom and in equilibrium this will reflect that factor so it turns to that factor also classical political economy as I just described it turns it into the accumulation whereas in classical theory in equilibrium is given certain resources so not all the dynamic processes are closed of course all these ideas are very much proposed but I wonder what would it be useful to try to do this ok we can do this yes so many questions is not possible to address them yes very quickly intellectual property rights is the famous trips agreement trade-related intellectual property rights agreement in the WTO today is the main role when it comes to most African countries is to access to restrict access to medicine seas and other things that they need but tomorrow it will become restriction on observing advanced technologies because it will make buying technologies so much more expensive it will make it so much more difficult to reverse engineer things and so on so that this issue has to be addressed but for obvious reasons that this is not being done services versus manufacturing I'm not sure what you mean by different kinds of services but yes I mean in the report we talked about the need to look at certain types of high productivity producer services as part of an industrial strategy because a lot of services have been at least organized and separated from the manufacturing sector and you need to pay attention to them but if you buy these different services mean I don't know things like exports medical tourism and things like that that are often talked about the problem with those things is that they are very very insignificant for example let me give you a figure Czechoslovakia has the largest in propositional terms trade surplus in the export in the trade in medical services and it accounts for 1.3% of GDP and it's by far the largest in the world even the US is like 0.3% so if people think that countries can become rich on the basis of medical services, tourism cultural services I think they need to really look at the numbers but I wasn't necessarily implying that that you are asking the question question of political settlements we do mention the importance of having the right political basis for these policies I mean as my good friend the Norwegian Eric Reiner keeps saying Latin America is the United States where the south won the civil war basically the landlord controlled these things that fought too long and they just won the kind of industrialization code engineer in say east Asian countries after the land reform so we are aware of these limitations but addressing this political constraints that is very country specific sector specific exercise I mean that didn't get to go into that however at the broad level we did mention that political collisions can be and have been rebuilt we only cite national examplers but I'm sure that you can find a lot of examples at the sector level Value theories well I suppose that my point I mean first of all it is important to make policymakers aware of different economic theories which do not just give different policy conclusions but conceptualize the world in different ways but at the more pragmatic level I don't know whether they have to study value theory because as it is policymakers in developing countries are struggling with huge burden it's not because they are less intelligent but there are so few people they don't have time to do anything even in rich country governments my rule of thumb is that if at the lowest level of government hierarchy you might occasionally read 30% report section chief, 5 pages deputy minister 2 pages half a page this is a reality so you have to accept that these people won't have enough time to study the intricacies about the Marxist value theory or the Adam Smith's that theory of material production realistically speaking that what we can recently expect from these people is that A, they are aware that there are different ways of theorizing about the economy so they don't get browbeaten by some world bank economists saying free trade is a truth and secondly they'll have to know some theories to be able to make an argument when the world bank economists say well capital labor and comparative advantage they should have the knowledge to say but that's assuming that capabilities are given, technologies are blueprints but deeper than that I think that they practically don't have time to learn thanks, another set of good questions let me be brief the question on aid conditionality and how it affects financing in Africa again I would like to refer you to at this our action agenda on financing for development Africa Africa's regional consultations in preparation for financing for development conference emphasize domestic resource mobilization as the main source of financing Africa's development and international support by donors and by international financial institutions should be focused on building capacity for African countries to mobilize and better manage their own resources and among the resources we are talking about not just private savings and public revenue and so on but also Africa loses a lot of money in the form of illicit financial flows because African countries sell their resources very cheap through natural resource contracts that really end up ripping Africa of huge resources that can be used to finance its development we have a report on that available on our website by panel chaired by President Tabo and Vicky former president of South Africa on the question of on trade agreement economic report on Africa 2015 talks about the importance of trade policy reforms and negotiating agreements that that help Africa really develop its domestic market first before opening it to the rest of the world so we are calling on all African countries to negotiate together this is the main point we have to negotiate together finally on the question of why industrial policy did not work in Nigeria economic report on Africa 2014 on dynamic industrial policy is exactly about this question and Nigeria is one of our case studies it did not work in Nigeria in many African countries because in the context of structural adjustment programs African countries were advised to leave everything thinking, even thinking to the market to the market and then they have talked blueprint industrial policies that are hollow they have nothing inside no institutions to support them nothing, they don't work, they can't work and that's why Nigeria is really started very recently I think more carefully about industrial policies that can work and now the current government despite the challenges of security and the falling oil prices started with building infrastructure making use of about 50% of Nigeria's reserves to build infrastructure Nigeria has a lot of money in the past of course that was a squandered that could have been put on infrastructure but it was not but one of our colleagues who work also on this report is now the advisor to the president he is the economic advisor to the president and hopefully he will provide the kind of thinking ok that's all, thank you ok, Josef, you want to add something ok, thanks let me just briefly add something to the topic of services versus manufacturing as I mentioned and as it was mentioned here there are some new avenues defined in services led growth but I have to second what Hajun said here that I don't think it's very very difficult to become or experience the transition from low to high income truly based on the specialization of services with no manufacturing unless maybe you are a very very small economy we do also mention the importance of trying to engage more in producer services especially now that in certain global value chains where the manufacturing part of the activities are relocated by certain transnational corporations to developing countries footwear, garments, toys textiles and so on there is a greater need to try and engage in the producer services to get higher basically higher profits such as branding and design and so on so this is something I think at the stage of development a lot of African countries are at is more important and just to quickly add something to the debate on defining versus conforming to comparative advantage as Adam said I think there are very very small differences here but I do think we all agree on that countries should use the endowments that they have for the benefit of the economy but economic development of the process of economic development should happen automatically or this is not happening truly by conforming to comparative advantage ok, we are actually over time but are there any last important question that you think we should really raise if there are any please raise your hands ok, Leonardo yes I promised to Leonardo, so someone else three, I did say ok, please Leonardo please get started one thing that I think you stress about the development of the community the last and then goes to what kind of financial system has to be in place and what kind of financial interventions and they have to be in place in order to have to sort of dedicate to the internet and I think we can extend that to what sort of financial regulation has to be in place especially now and is in compasses micro-economic management because this affects a lot interest rates and exchange rates and you have a lot of exchange rates and exchange rates then you will have a problem we carry on sure the last is just in terms of what was China in Africa especially in China in terms of changing the way Africa engages ok, sorry, I was just informed that there is another event few minutes, so if I may ask at June to give one last minute, two minutes comments on Leonardo's point what goes with just an announcement ok, no, frankly we didn't really address the question of finance partly because we basically defined industrial policy rather specifically we didn't write a report on industrialization strategy which would have to include the financial institutions but this was more narrowly defined industrial policy but yes, I completely agree with the financial institutions that are committed to long term financing we need financial regulation that would manage interest rate and exchange rate at the right level the Brazilian macroeconomic policy of the last 20 years has been Brazil has good industrial policy but it cannot function because real interest rate is 10% currency is always overvalued I completely agree that these are the questions that have to be Adam, just one second listen to this question we have a study written by mostly drafted by Prof. Machukonisanki on macroeconomic policy frameworks for structural transformation we are launching in April and it will be available on our websites ok, thanks, let me just conclude this event saying that we are going to have another occasion to discuss on Africa challenges India is the 12th 12th of March here I saw us again and the next event within this series we are going to move to Southeast Asia the event is going to be organized with action aid for the report the diversify and conquer the event is going to be called beyond garments for economic diversification in Bangladesh you will receive information that is on the 10th of March at the Senate House here at 6 and Prof. Mustafa Khan will be one of the main leading discussant in that event thanks a lot