 Okay, John. You've been looking at the employment poverty reduction equation in the African context. What have you found? Okay, well let me start with an acknowledgement as a baby did. This is joint work with a baby and his colleagues at the African bank. Again, great marks and high credit to them while I was sitting safely in Washington and Tokyo. They were doing a lot of the data work in the current context of the Arab Spring. What we wanted to do was try to drill down on some of the things that Martin and Gary were talking about, but in Africa. And so we tried to do two things. We tried to look at the headline news on employment and unemployment in Africa and the headline news on poverty and then connect the two through looking at the structure of Africa's economies. So the headline news on employment. We find exactly what Gary is talking about. Low official unemployment, but poor jobs. 81% of Africans work in what's called vulnerable jobs according to the ILO. 25% of Africans work in marginal jobs, one that they can't even rely on being there the next day. What's even more striking though in the data is the fastest growing economies in Africa and we celebrate ourselves since 1995 about fast growth are the ones that have the least employment impact. The elasticity of growth with respect to employment is lowest in the fastest growers, the Tanzanias, the Kenyans, the Ganas of Africa. What do we know about poverty? Well, that's the mirror image of the employment story. Okay, for those of us who are really bad at reading graphs, can you please tell me what that is? Red line at the very top is the rate of poverty, dollar a day poverty, year by year from 1980 to 2010. Green line is East Asia, blue line is South Asia. Our headline news about growth in Africa. Since 1995, Africa's been growing a little bit slower than East Asia and faster than South Asia. What do you see in terms of the rate of poverty reduction? It's flat. It's become part of the political discourse in every African country I know and I travel extensively in the continent to talk about growth without poverty reduction and jobless growth. We just were interested in how you link the two. Well, how do you? Our hypothesis was that the growth that's taken place in Africa since 1995 has been growth that's occurred without structural change. Don't need a graph yet. What do I need about structural change? Structural change is the movement of people, mainly from low productivity to high productivity jobs. Those are also the jobs that are capable of paying better wages, giving better working conditions and providing decent work to use the ILO term, a term I like a lot. What do we actually find in the data for Africa? What we find in the data for Africa is that while growth of productivity industry by industry sector by sector has been about equal to that in East Asia, structural change has been moving in the wrong direction. One way to think about this, it's not quite right, but at least it's easy, is that people have been moving from better jobs to worse jobs. In fact, what's really been happening is a rapidly expanding labor force has been increasingly crowding themselves into jobs that are lower output per worker. Well, what does that mean for poverty? If you do the global data, what it means is we find a much better, stronger statistical relationship between structural change and poverty reduction than we do between the rather weak relationship we've all found between growth of output per person and poverty reduction. But for Africa, we have a picture, which is kind of nice, and Hillary hates my pictures because they're hard to interpret. If you look at the top line, the gray boxes, that's the actual relationship for 18 countries for which we have unit level data, household data, between growth on the horizontal axis and poverty reduction on the vertical axis. And what you see here is that the ratio, relationship is really weak, very flat, exactly what we saw. The green dots are a simple simulation. We could be very wrong in terms of what we did, but we said, let's just take the same overall rate of growth of employment. But instead of letting people go to the sectors in which they actually found employment, let's have them go to the sectors in which the highest value added per worker was present. What you can see is that the rate of poverty reduction is phenomenally greater in terms of growth than it is for the actual statistics. So what do we conclude? Part of the poverty problem in Africa, and I think it echoes what Martin was saying, is the failure of African economies to create good jobs, even since 1995. You've lost me, John. So I mean, you haven't lost me, I'm following you, but I don't know where the questions were. We had to, after much jet lag last night, so I'm basically letting you carry on. You wanna know what that means? Yes, what does it mean? What's the punchline? What is the punchline? Simple punchline. If you're going to accelerate poverty reduction in Africa, which I think we share as a goal, part of what you have to worry about is employment, and part of what you have to worry about is not just, as Gary said, raising the productivity of people where they find themselves, but also the increasing the opportunities in African economies for people to find better jobs. It's both halves of Gary's equation. And what we're really focusing on here in the African Bank and with our colleagues is what might the role of aid be in promoting that process of structural change? That's the question. And what is it? Well, let me just give you one more thing to focus your attention, which is what it isn't. This is aid per unit of GDP, percentage of aid in GDP, plotted against the employment impact of growth. Now, if we were really aiming aid to improve employment impact, I'd like to see that line going up and to the right. Instead, what I see is it going down and to the right. Somehow, we're not targeting aid in Africa to employment creation. And by employment creation here, I'm really talking about, again, the aspect of moving people from poorer jobs to better jobs. We have done a pretty good job of targeting aid to raise the productivity of people within the jobs in which they find themselves. So this is only one aspect of the two that Gary was talking about. And then what? So what would be the new focus of aid? Let me give you three headlines. The first one, I hope this will be really unconventional wisdom. Aid needs to focus on helping natural resource rich economies use those natural resources to diversify and create jobs. What is striking in the last five years in Africa is how many formerly non-resource rich economies are suddenly resource rich. If you just take East Africa, natural gas in Mozambique, natural gas in Tanzania, oil in Kenya, oil in Uganda, heaven knows what else we'll find. The continent is underexplored. One of the things we find in our data is that the countries that have the most difficulty with the transition in terms of structural change and with creating better jobs and therefore with poverty are the resource rich economies. So public expenditure issues, revenue management issues, all of the things that we think about in terms of, well, it's a good thing to help people manage their natural resources. Let's help them manage natural resources for jobs. That's something we can do. Second point, investment climate. Martin talked a little bit around it. There's even one question on it. This is fundamentally important because it's the private sector that creates the jobs. But here my message would be twofold. One, there's been too much of a temptation, particularly, unfortunately, Martin, I apologize, by the World Bank but also by bilaterals. On a set of regulatory reforms that were invented in Washington and retailed to everybody under doing business and way too little emphasis on the two major constraints to the private sector, infrastructure and skills. Infrastructure as a share of ODA has gone down every year since 1987. Do you think that's because it's not a quick enough return? That's partly that but it's also because it's no accident that the DAC meets in Paris. Aids a fashion-driven industry. And the fashion for the last few years has been the MDGs. There is no infrastructure MDG. There is no jobs in DJ. There's no growth MDG. I'm almost tempted to pursue that but I think I'll be a little bit more diplomatic. Okay, can I give my third point then? You can. Agricultural productivity. Now I'm gonna swing back to where Gary's coming from. We've under-invested in agricultural innovations but a point that is increasingly coming online at least from the economists who look at these things is we've also probably ignored the fact that they have to be profitable for the farmer. And seed biologists with apologies to Finn because I know his distaff side is involved in these sorts of things. And agricultural innovators are interested in maximizing yields for the particular innovation. But what's relevant to the farmer is not the maximization of yield, it's the maximization of the return on his land. It's harder in Africa because we have so many micro climates and we have so many different agro climatic challenges. So that's one thing the aid industry can really help here. The second is we've gotta get back and revitalize the innovation systems in Africa's economies. Extension, innovation, the value chain, if you like, that works between an idea and the farmer actually using it has broken down in Africa and really deserves to be refurbished. Thank you. And I'm gonna take you over here with me, John. Okay, yes, Lydia. So that this, it's easier for me to control this. And if we have any questions or comments, please press your green button. Oh, we already have two. So Niels Christensen, where are you, Niels? Great. I'm very interested in that structural change you said, but I would like to know how do you see private sector organizations in Africa or the business organizations play a role in that? Private sector is fundamental. That's what's going to drive structural change. One of the areas that we'll talk a little bit about in the afternoon with Tetsushi and Kay and Mons is the lack of capabilities in Africa. Business associations are important, I think, in two respects. One, in the traditional sense that we tend to think about them at least in the United States, as advocates to relieve the constraints to private business as a way of getting ideas into government to change. But I think they're also important because they can become activists to bring ideas, to bring new investment, to actually solve the collective action problem of getting better management practices and better capabilities in. And you're not gonna solve what I think of as a broad industrialization challenge for Africa. Everything from cut flowers to back office services if you don't get better capabilities in Africa's firms. So they also have a very important role to play there. Linnea Erickson. That's me. Okay, my question to you is 2015 is almost here and there are gonna be some new development goals. Can you please come up with your own for infrastructure and growth right now? Well, let me start with education because that's the easy one. Get a compound measure of the overall level of human capital in a country. And you can negotiate over how much credit you give in terms of primary, secondary, and tertiary. But you see, African governments lack the budget space right now even if they want themselves to invest more in tertiary education because they run up against a brick wall oftentimes from the donor's consortia, saying, no, no, you can't. You haven't achieved MDG one yet. You gotta get back and go and do that. So some subtlety in terms of giving credit where it's due for countries that are trying to create other skills, while still penalizing countries that are not pushing hard enough in reasonable terms on primary. So that would be one. Infrastructure, you could do a similar sort of thing. Growth is harder because even if you do everything right, we know there's just a lot that happens that can spoil growth. So making growth in MDG, I don't think is a particularly wise thing because attribution of the effort to the outcome is really hard. Okay, I just lost somebody. Now I've got three more here and we'll do them all but very quickly. Nils Ellers-Koch. Nope. All right, Jakob Koparut, World Bank. My own. Thanks, John, for interesting comments. Just one quick question. Regional trade in Africa, how much importance would that have to create growth and employment opportunities? And what are the constraints? Regional trade. Regional trade. Regional integration is what you want. Regional trade will be the outcome. The first thing to keep in mind always in Africa is 40% of Africans live in countries without access to the sea. Globally, it's 4%. So if you want to do anything with respect to any kind of trade as a Mali or a Burkina Faso or a Malawi, your fortunes depend fundamentally on your neighbors. So solving the issues of regional transit corridors, regional power projects, these are fundamental. What will then happen is that regional trade will grow as an outcome of that. But I'm actually a big believer in starting small because in a sense it's the hardware, especially in Africa that's so important for interior countries. Not so much whether or not you have a large volume of trade. Across borders, we see a lot. A lot of it's not recorded. So that's a very different thing. The other thing is here's another place where the global community can help. Because right now our systems of preferences, EPA here in Europe will go in America. Do not encourage regional integration. They don't have rules of origin that encourage regional integration. And they don't have ways of guaranteeing if you start to source regionally that you're gonna continue to keep your access if you fall afoul of the political criteria that are being used. And one of your neighbors does something. So both of those are important. Okay, the last one is Peter Froslav Christensen. That's me. It's just done on the issue of industrial policy and industry. So I'm gonna argue that's a key sector if you want the structural transformation and the highest level of convergence to OECD levels of incomes and lower poverty. And do agree on that. And secondly, if that's the case, should we then go back to the somewhat in Africa-tended issue of industrial policy, of much more focus on this, especially in context of the terms of trade, shifting many African economies into commodity focus, into food and mineral production. And then we need to focus on having this kind of, you could say, growth elevator of which industrialization is effective on that. Yeah. Let me start by saying, I'm a big believer in industrialization, both within and without smokestacks. But we have two realities we have to face. The first is that import substituting industrialization through state ownership, which we tried in Africa, didn't succeed and won't succeed in the current global economy. The second is natural resources have become such a dominant reality now that those have to be taken into account. Why do I say that? Because I believe in industrial policy, but the kind of industrial policy that will have to be adapted to Africa's situation will vary depending on the country's situation, where it's located, its resource endowment. So as Martin was saying, and now it's become, I'm very happy, maybe it took me retiring to get this to happen, a mantra for the World Bank, one size doesn't fit all. Quite clearly here, one size doesn't fit all, but there are some underlying ideas, and I think we're gonna talk about a few of them this afternoon, actually, in terms of what might be fruitful interventions in places where the aid community can help in terms of kickstarting the industrialization process in Africa. Final note, this is another place where it's not just aid, but trade. And it's the combination of those two, giving market access, and maybe a bit of an advantage through preferences, and supporting the supply response through aid that would be a powerful combination. Thank you, John.