 Thank you very much. We will now move to the questions and answers section. May I ask you to be a bit concise when you put your question, but there will be a possibility to ask questions to Marcelo Neri after this presentation. I'm going to start over here, and then I'm going to move over there, and I'm going to collect four questions, and then we will see how much time we have left. So starting over here. Okay, Andrea? No, Andrea, you need to put the mic, otherwise nobody has a chance to hear. Thank you very much for this presentation, and this afternoon I will say something similar about Latin America. Now, some Brazilian colleagues have met in meetings. They say that all this is true, but that does not take into account the fact that the rich Brazilian now have moved all the russets abroad, and therefore all the incomes they earn basically they are unaccounted for. So the distribution moves in the right direction, but less so than what is revealed by domestic incomes. Okay, anybody else here? You're only going to have one chance. Okay, here? Yes, here, Subbu in the front. Here in the front. I have a very instructive talk. Just very briefly, from what you've said, it would appear that Brazil embarked on a conscious and deliberate policy of intervention by the state in redistribution. Now, in India, however, there is a great deal of pessimism or war taxation, because it is seen as only having disincentive effects on investment and on growth, and an equally great level of pessimism on public spending, which is seen simply as bankrupting the exchequer. Now, I think it would be really useful if you can say something about the reasonableness of a position such as this in the light of your own experience. Thank you. Okay, thank you. And then a little bit down the row. Just go back up there. No, no, no. That way. Yeah. Here we go. Okay. Thanks. I was possible about the information you gave about the household survey data compared to the GDP. Is it possible that some of that can be explained by changes in the average size of the household, say, over that 10-year period? And the second question is, I guess, a little bit related to the very first question. How about the illicit financial flows going out of the country? But is there any good data, and I know this is difficult, on levels of corruption in Brazil? So again, the trend line in the generation of potentially illicit capital outflows over that 10-year period. Thanks. Okay. Francois Bourguignon in the back. Okay. Thank you very much, Marcelo, for this very nice presentation. The question I wanted to ask is about the perception. What you presented is quite interesting, and we're very happy to see that Brazil is, in many ways, a country of the future. I would like to refer to a survey on the perception of inequality in Brazil. There was this poll which was taken a couple of years ago comparing countries. And Brazil, of course, was among the countries where people thought that they were living in the most unfair society. France was not bad from that point of view, too. But most importantly, when people were asked whether they had the feeling that inequality had increased or not in the past 10 years, when it was in 2011, then people said, definitely, inequality has increased enormously. And it was a time where it was going down. So what is the kind of explanation that you can give to that? Okay. Thank you, Francois. Yeah. I'll be in the front. Thank you, Nora Rustig. Thank you very much, Marcelo, for such a wonderful and comprehensive presentation. I miss you in academia, but the Brazilian government is really very lucky to have you. I have two questions. You didn't talk about the minimum wage. And a lot of people think that what happened in Brazil is attributable to the rise in the minimum wage. And in fact, now in Mexico, there's a big movement trying to increase the minimum wage. And they use Brazil as an example, even though inequality also declined in Mexico. They use Brazil as an example of how it helped bring up the bottom incomes. The second thing is I discovered recently that both in Brazil and Mexico, people with tertiary education's wages declined, not only in relative terms, but in real terms. And I'm really puzzled by that result. And I think, you know, in the case of Brazil, then maybe behind the discontent. But what's behind this decline in real wages of people with tertiary education? They're different hypotheses. And I wonder whether you have been actually, I know Náercio Meneses Filho has been working on this. But what's your take on that? Thank you very much, Nora. Marcelo, you want to try to address? Okay. Thank you very much for the very interesting questions. Try to answer them. First, I forgot to mention that. Perhaps, you know, Freud explains that. But Brazil, in this period in the last 20 years, there's a big rise on the tax burden from something like a 10 percentage point rise. And it was already a high tax burden. So Brazil tax burdened something like 36, 37 percent of GDP, which is much, much higher than most of Latin American countries. So this would explain, you know, some of the wealth flowing abroad, not such a good level of investment. And this is an important part. With respect to corruption, we don't know, it's difficult to access the level of corruption because, you know, the ways to detect corruption change over time. There is some good evidence on data, especially by Claudio Feijais from Catholic University who studies through data from the Justice on impacts of corruption. But the level, I think, it's hard to tell. I know, I have a feeling that today, corruption is more readily observed because of technology, you know. But I think it's very hard to address that. With respect to the income of the riches or the income of people abroad, that's very hard to address. We're starting to have access and this is a good thing. It's just now almost onwards on the income tax basis. I show some data here, you know, public use data on income tax. And this will allow to have a better idea of income distribution changes. I think in a way the answer to income inequality, we already have the most part of the national household surveys. Because to study inequality, you have to look at the whole population. But income tax will help us to give like a zoom in the rich part and have a better picture. But I don't think the income tax will provide the answer to that. Especially because most of the capital that people own, for example, housing capital or shares in stock markets and vehicles, which are the three most important assets, are in historical values in income taxes. So I think we have to work in a very... to create this puzzle to fill some blankets using different data sets. But respect to people's income outside, et cetera, I find very hard to... because sometimes you know that some trends, for example, in the income tax data review that, well, some of the intuition that people have been saying is correct, but the size is just not that big. So, you know, the question is how to fit everything in one data set. In one full picture. Now, with respect to Francois Bourguignon's question on people's perception of sensibility with respect to inequality, the first point, you know, Brazil has been called the country of the future, not even sometimes, you know, joking, you know, we always be the country of the future. But in a sense, Brazil has been in the last 10 years, 11 years, the country of the past, where people who are left behind, you know, people in the rural areas, black people, illiterate people, they are the ones who are performing really well since the dawn of the millennium. And the perceptions on inequality, this is... I find very interesting question and very hard to answer. I think the protests in a way, the demonstrations, are a little, I think it's a side effect of the change of inequality. It's a strong thing to say, but I say that one year ago, I had a lot of, you know, bad reactions for that, but, you know, that's what... I cannot reject that in the data. And so we have to see how well these surveys cover as, you know, the movements, how well they represent the whole population. But I think the income tax data shows something that is a bit worrying, but I think in the end is a good news. You know, I'm saying that income tax, net income tax by the families has increased much, much more than GDP, which would be a sign of formality, perhaps, but perhaps increase of inequality that the surveys are not capturing. It's a possibility. But I think there is a lot, lots of contradictions, and I think one of the most important contradictions of real data and subjective data. When, you know, I think, when Brazilians are asked about their lives, the answer is very good. When you ask about the city, about the country, about the quality of public services, the questionnaires are not only worse, but they are going down, which I think is a good sign, because there is also an aspiration effect, you know, as people improve their lives, people want more, and this is good, especially in the democratic environment. It may improve the quality of public policy, but I think, in a way, the fact that inequality is falling Brazil as other Latin American countries, it's by review preference, you know, an idea that, you know, inequality aversion of the society has increased in, you know, in the last 12, 13 years, but how people see it, I find it's hard to understand. Okay. Additional questions? The minimum wage question. Yeah, your minimum wage, yes. I can answer that if you... Okay, please go ahead first, answer that, and then we will take the next question. The minimum wage in Brazil is a very... we have a certain fruit in Brazil called jabutcaba, which there is only in Brazil. So we say in Brazil if there is a thing that is only in Brazil and it's not jabutcaba is not a good thing, okay? And minimum wage in Brazil is one of those things in the sense that minimum wage in Brazil is not only the floor of labor market, but also of the whole system of social transfer, except Bolsa Família, which is out of this system. It's not linked to the minimum wage. So when you rise minimum wage, you do not only increase the bottom, you know, of the labor market, which may generate unemployment, informality, increases in wage, especially in the formal sector, that's surprising. But my feeling that, you know, after 15 years of rising the minimum wage, because the minimum wage in Brazil is linked to the previous GDP growth, two years lag GDP growth, total GDP, not per capita GDP. So there is a bias upwards in the room and the fact that, for example, this year the government is giving for 2015 a higher than the rule, but I see minimum wage a very good policy for the middle part, not for the bottom part of the distribution. And I think inequality in 2014 will fall very drastically. It's falling. In 2014 we didn't get a big minimum wage hike and the inequality is falling, labor markets. We won't get an effect on the public accounts, social spending, turning to the middle part of the distribution, but since there is a big Bolsa Família increase, because Bolsa Família has been increased without losing its targeting ability. That's the interesting part. And minimum wage lost its targeting ability. So minimum wage 15, 20 years ago had a huge impact on inequality and poverty. But since it's more than double, almost triple its real value now, is not doing that much. We have better instruments. So now it's affecting mostly the median of the distribution, but each hell you spend on Bolsa Família has 400 times bigger effect on the genie than a minimum wage rise through public expenditures. So Bolsa Família, if the objective is to reduce inequality, that's the shortest the move. And now since the tax burden is very, very high in Brazil, and this has impact, because I think Brazil is an interesting case. That's a country who say, well, let's reduce inequality implicitly in the policies. And the economy is slowing down maybe because of that at some point, because of tax burden. And it's a choice. So I think now we are in a moment where we look ahead and see, well, we did very well. But how about productivity? How about other dimensions besides inequality? So maybe think on a shared prosperity type. How to combine better both? I think this is the question. Okay, thank you. There was one question here in the middle, yes? Thank you very much for your fascinating and informative presentation. You gave a profile of demonstrators of the protests last year, and you said that these are people who are working, who are highly educated, and who use public services. And I was reminded of a World Bank paper on the middle class in Brazil, and what that paper highlights, one of the things it highlights is that as people join that middle income bracket, but at this point I'm not sure if it's the new middle class or the traditional middle class, but as people join that bracket, they use public services less and less, and they go for privately provided services. So I don't know, I was just trying to reconcile two images in my head. I was wondering if you could clarify that. And secondly, this is more of a comment. You said that the rate of return for increased to productive assets is less than the access to those assets themselves. That is education, professional courses, and things like that. And you said that this is a phenomenon that is sort of exclusive to South America. I just wanted to highlight that I think there's a similar trend in Sub-Saharan Africa as well, where you have increasingly highly educated people who cannot find good jobs and who in fact have to end up in the informal sector. That's just a comment. Thank you. Thank you very much. We're at the far back. Thank you. Just a quick question. You concluded that inequality in the last decade has been falling. And I was wondering whether this is a universal thing or we can have some disaggregation of your data with regards to urban and rural and where the most impact is being felt. And also looking at the happiness that you reported both the past and the present vis-a-vis the beneficiaries and non-beneficiaries, are these people who are reporting being happier relative to the non-beneficiaries, people who cut across the country or people who are based in the rural areas vis-a-vis the urban areas? Thank you. Okay. There was one other here in the front and then we will take one more in the back and then we will be starting to draw to a close. Thank you for the presentation. My question relates to the greater access to productive assets but then falling returns. I am just wondering if you made a sufficient link between the falling inequality and economic growth as a whole. Whether there is a possibility of sacrificing growth, a short run in the attempt to reduce inequality for Brazil and maybe for other countries as well. Thank you. Okay. In the back. I would like to know if... Could you give an example of a good risk because you talk about good risk but I don't know what you mean about good risk. Can you elaborate on good risk and give a few examples? Thank you. Thank you. So let me start with this last question. Good risk is in the sense, you know, of going up, you know, across the median. So this was 16 out of 100 people in 2002-2003 rose, you know, across in the median and now it's 27 out of 100. So it's the risk of going up and then this went up and the risk of... which maybe I shouldn't call risk is the opportunity to rise and the risk to go down has done a lot of ways. So it's basically, you know, the idea of when your income is zero, risk is good for you. You cannot do worse, you know. So the question on the... on the returns to education which reminds me of Nora, previous questions that I forgot to answer, it's... I mean, there are various possibilities why the returns to education and to other productive attributes is falling. One possibility is... is lack... is the deterioration in the quality of education. This is one possibility, you know. You increase the basis, but the quality is not as good as it was previously in the marginal. That's one possibility. So we don't have good enough data to disentangle that as I know which if it's a quality effect I think at least in the part of the distribution I showed here, I think the story... because people say, well, education in Brazil is very bad which I agree completely. But the fact that what is happening is that people are moving from very bad education to a little bit better education. And there is no supply of unskilled labor anymore in Brazil. So I think Brazil is very different coming to the question of the protests and in this sense because Brazil is not going that much GDP-wise but the labor market is tight. And there is, in particular, there is no supply of unskilled labor. It's the first time of Brazilian history that we have that. Brazil was the last country in the Western Hemisphere to abolish slavery. Then we have immigration of unskilled people. Then we had a demographic bonus. Now there is no supply of skilled labor which explains... unskilled labor which explains why the price, the wage in the bottom part of the distribution is going up because education moves. So the daughter of a domestic servant doesn't want to be a domestic servant. The son of a builder, a manual construction worker doesn't want to be a construction worker because he's on secondary education or he plans to get there. But for me it's not clear what he explained this fall on the top of education returns. I don't know if wages are really falling on the top but I agree that they are stagnant depending on the basis. With respect to the protests I think there is a very complex phenomenon. I think first there is a technological change, you know, use of social media, social networks is something, you know, hyperconnectivity. So there is a technology that allows to organize movements, real movements, not only in the internet. When they are in the internet it's one thing. When they go to the streets that's another. The second thing, there is this... I think there is an aspiration effect as I showed here, the quality of education in Brazil, at least using PISA and we have lots of tests in Brazil. Every public school is evaluated, etc. We have a view that in the first years of schooling the performance has been gone a lot, you know, up. In the youth I think we are losing the battle. The youth records are improving but because of the previous performance not because of the increase in the youth. The education wise, labor wise, what is happening to the youth, they are not getting a marginal increase during the youth years. So this may be associated with that. And also an aspiration effect where I know you, I think in Brazil first education was the seventh priority and people thought it was good. Now is the second priority only after health and people know it's bad. So there is a kind of... which I think is very healthy for improving and on top of that, or not on top of that, but also I think there is maybe this issue on inequality. You know, there is. Many stories and they don't contradict each other. They just add up in a sense. Technology, aspirations, inequality, and so on. Okay, thank you very much minister. I have to draw this to a close now cognizant of the time. Please join me in applauding Marcelo for this. Can I ask you just to stay seated just for a couple of minutes. I just have a couple of things that I need to say. One is please, before you go to coffee, don't rush up here all of you to take the documents. We will make sure that they will be outside so that you can collect them. May I quickly add that all plenaries will take place here in this room. The four parallels will be held here in this room and in Naojica also on this floor. And then at the second floor in two rooms. The coffee breaks will be upstairs, second floor in the foyer there. And the lunches and the conference centers just outside here and you're all warmly welcome at seven o'clock tonight. Presenters, please get your PowerPoints to the people in the presenting rooms as quickly as possible. You should be aware that all sessions are video recorded with the PowerPoints embedded and then it will be on via the YouTube channel afterwards. The poster session tomorrow afternoon will be held in the foyer at the second floor and there will basically be a rotating system where presenters will be presenting six times so that you have a possibility to see all of the presenters in action. The posters are already up there so have a look at them in advance. For those of you entitled to you and your wider travel support please ask at the registration desk if you have any questions and please go to the boardroom of the you and your wider premises at the third floor for your payments. Now I'm requested to say that this is a non-smoking facility. If you do need to smoke please go to the balconies outside and please do turn off your mobile phones. This is a UN event. You are please requested to keep your badges on at all times for security reasons and so on. You can leave your coats and so on out here in the cloakroom but do not leave money or other things there. If you have any questions contact anyone of the wider staff who are walking around with a blue tag and there are quite a few around and now may I say that by the end of the conference you are going to receive a feedback questionnaire please would you kindly fill it in say what you think one of the other indicators that our funders monitor is the answering rate and then also what you do state so please I know they are boring these questionnaires but please. Now last but not least UNI-wide offers a visiting scholars program and a PST intern program. You may wish to note that the deadline for the next application is 30 September. Please help us spread the word. Now may I finally say that tomorrow's closing panel is at 4, 4 p.m. May I request that you are quickly in your seat at 4 o'clock President Halonen will be here and as you know she is finished. Enjoy your coffee. Let me just for the sort of advice of the chairs of the next session we will be trying to get back after coffee 11, 20 so a 15 minute coffee break we are harming the Brazilian coffee export a little bit maybe but we will start the sessions at 11, 20 and we will then inform the launch place that we will start launch at 12, 45 and then hoping that we can reconvene in the afternoon at 1. Okay did you get that small adjustment? Thank you very much and thank you Marcelo.