 Yes, thank you so much. Let me start with a couple of preliminary observations. First, I am really grateful to the organizers of the conference and to Tony Edison in particular for having me today and for arranging the whole thing. And second, the fiscal issues in transition economies. This is a misprint, sorry. This is a huge area. And it's impossible to deal with that in 15 minutes. So I decided to concentrate on some of the conclusions in three areas. The first one is the collapse of the government that took place in transition economies. And transition economies are the economies that had central planning before. So basically these are communist and post-communist countries. These are countries like Vietnam and China and Mongolia and former Soviet Union countries and East European countries. So in these countries, there was sort of a natural experiment. In most of these countries, there was a reduction and in some of those countries there was a sharp reduction of government spending and government revenues as a percentage of GDP. And this was sort of a natural experiment and it shows us what can happen in a middle income country or in a low income country if there is a sudden and rapid reduction of government revenues and expenditure. And the second area is the government investment. Also in those countries, there was a decline in investment and the story is that it was possible to support this decline in investment by increasing government investment. The decline of private investment could have been compensated by the increase in government investment. But this did not happen in most of the countries. And the third story is the story of industrial policy. It's a separate area, but industrial policy is also related to fiscal issues. So I'm going to speculate a little bit about that. In most of the countries, except for the several countries like China, Vietnam, Central European countries, Belarus, and Uzbekistan, very different countries by their characteristics. But in those countries, there was some kind of favorable developments with regard to the three issues that I just described. But in other countries, the developments were very unfavorable and I'm just going to talk about that. Now, if you look at the dynamics of government revenues and expenditure in transition, you can see that in most countries, excluding Central European countries, where the decline in the government revenues as a share of GDP was pronounced, but not that pronounced, in other countries, in other areas, the decline in government spending in GDP in 1990s, when the transition was taking place, was very sharp. And the sharp decline resulted, in fact, in the government failure. The story of transition was very much the story of the government failure, not the story of the market failure. Most of the literature treats the outcome of the reforms, the reforms were the marketization of the economy, the transition from the central planning to market-oriented economy. Most of the literature considers the outcome of the reforms as a function of the speed of the liberalization, or as a function of other developments. But in fact, the major story of transition, somehow it was not that well described in the literature. The major story was the collapse of the government and the inability of the government to provide traditional public goods that the government is supposed to provide. Just to give you one example, this is what happened in Russia. Government spending was at a level of over 60% of GDP, and this government spending went down to 40, 30% of GDP, and 40% of GDP. Now, government spending and government revenues. To make things worse, the GDP itself went down by nearly 50%. So in real terms, the share of government spending and revenues in GDP went down two times by, it declined from 60% to 30%, and the GDP itself went down by 50%. So what happened to the real government spending was the decline by 75%. Well, actually a little bit less 66%, but this is the story. So when the government spending suddenly goes down by two thirds, then basically it's equivalent to the government collapse, where you had previously three policemen, now you have only one policeman, or you have the same three policemen, but you pay those policemen considerably less. And if you pay considerably less, they're trying to compensate the through bribes and so on. Now, in transition economies, there are basically three models of the change of government spending. One was the East European model, Poland, the other was the East Asian model, China, and Vietnam is actually here as well, and the other was former Soviet Union model. Now, not all the countries fit into the scheme, but the general scheme was this one. If you consider only the expenditure for the ordinary government, the ordinary government is everything except for those items, for the debt service, for the funds, for subsidies, and for investment. Ordinary government is the traditional government functions of providing public goods, healthcare, education, government administration, maintaining law and order, and these are sort of non-traditional functions, debt service, defense, subsidies, investment, or better to say, these are the functions that are not associated with the government capacity to provide the public goods. So if you consider the change in the total government spending and in the expenditure for the ordinary government, you see that in Poland, even though in Central Europe, even though there was decline in the total government spending, there was no decline in the spending for the ordinary government. In China, there was a decline in total government spending, but no decline in the spending for the ordinary government. And in the former USSR and in Russia, there was a decline in total government spending and a decline in the spending for the ordinary government. Now, to remind you, in China, from 1978 to 1994, the GDP increased properly four times. So the government spending increased in real terms also four times. They were growing together with the increase in GDP, but in former Soviet Union countries, there was a decline in the GDP and there was a decline in the share of government spending in GDP. So basically, the government spending in real terms declined by something like two thirds. Now, there is, I have several articles which compare the performance of the economies in transition and basically the conclusion of these articles is that the greater was the collapse of the government, the greater was the decline in the government spending as a share of GDP, the greater was the reduction of output. And I have some regressions to support it and I can just refer you to those articles. I will not go, of course, into these regressions, but basically the story was that the collapse of output, this is 1989, and the collapse of output in the former Soviet Republic and in Central Europe was of the magnitude of 50 and more than 50% during the period of nearly 10 years. For some countries, it was more than 10 years. The output was going down for more than 10 years. So this collapse of output is correlated with the reduction of government spending and government revenues in GDP, controlling for other factors, controlling for objective circumstances, for the level of development, for macroeconomic policy like inflation and so on. So this is the first story of skip regressions. This is just to show you that I have some calculations. And if you look at the social changes in the social picture in transition economies, you get pretty much the same story. The increase in crime, in mortality, in suicides, this increase was very much correlated with the government failure story. This is the chart for Russia, but in other countries, you have pretty much the same story. The increase in crime levels was two to three times. The increase in mortality and suicides was significant. So this is the first story of the collapse of the government. Now Vietnam stands out of the crowd. Vietnam, in a sense, is the outlier. Vietnam, here, the statistics starts for Vietnam. This is Vietnam, the large squares, red squares. So here, the statistics starts in 1998, but there is some statistics that is not comparable with the other. There's statistics, some for the world development indicators, but the other statistics, which is national statistics, tells the story of the increase in government spending during 1990s in Vietnam when the reforms were carried out. Vietnamese reforms started in 1986. There was a Doi Moe course, and then these were gradual reforms in 1989. Vietnam, in fact, enacted shock therapy, the regulation of all the prices and also unification of the multiple exchange rates of the Doi of the currency. So in Vietnam, there was an increase in the share of government spending during transition, and since 1998, when we have comparable statistics for Vietnam and some Asian countries, some of them are less developed like Bangladesh, some of them are more developed like China. In Vietnam, looks pretty impressive. Yes, the government spending in Vietnam were growing, and they were higher than in many countries which are more developed than Vietnam, which is typical for the socialist countries where there were greater expenditure for the social purposes and the government was playing a greater role. Now, if you compare Vietnam with the former socialist countries, basically the picture doesn't seem to be that impressive. Why? Because there are quite a number of countries with a similar level of development. I just happen to know that those countries are Moldova and Mongolia and Kyrgyzstan, and this is, I think, Uzbekistan, or maybe this one is Uzbekistan. So there is quite a number of countries that have the higher level of the government spending as compared to GDP. But anyway, Vietnam at least is not the outlier which lies below the regression line. If the regression line runs something like that, then Vietnam is doing pretty much okay. Now, yeah, these are, if somebody is interested, these are the actual numbers for the chart. And the second story, I'll spend just a couple of minutes on this story, is the story of the investment. In most of the transition economies, there was a decline in investment. Private investment declined considerably. In real terms, as a shared GDP, but in some countries, the government managed to increase the government investment and to compensate for the decline of private investment. There are papers that actually argue that there is no complete crowding out. The conventional theory would say that if the government tries to borrow in the market or tries to tax in order to get some revenue and to make some government investment, then this is something that crowds out private investment. Why? Because when the government borrows, the interest rate goes up, so private sector borrows less, so there is a crowding out. But in fact, the empirical papers, they tell us that there is no crowding out, there is no complete crowding out. So one paper, for instance, says that the crowding out is only something like from 25 cents to 50 cents if the government borrows $1, or if the government gets additional revenues through taxes in the amount of $1. And the other paper for low-income countries, thank you, five minutes is quite enough, thank you. If for low-income countries, the story is actually that there is a crowding in. So if the government's investment increase, because they build infrastructure and because they trigger the flow of private investment, it just happens that not only the government investment increase, but also the private investment increase together with the government investment. So maybe it's the case of public-private partnerships, maybe it's just the effect of government. So if the private sector is not showing any trust into the economic situation and there's not investing any money, the government through government investment can fight this trend, can create counterweights to this trend and pull the economy out of the recession. Unfortunately in most of the countries, this was not a story, but what we see for the ratio of the previous chart was the correlation between the total investment and the private investment. And here we see the correlation between the government investment and public investment. The correlation is not so strong, but there is some correlation obviously, and it is obviously the case that in countries where the government invests more, the total investment are increasing. In fact, the good policy would imply that if private investment is going down, then the government should compensate it through the public investment, and this is not the case. So there should be a negative relationship between public and private investment. This is public investment and this is private investment, but there's no negative relationship. So it seems like the government policy in this case, at least in most of the countries, is not really perfect to put it mildly. And finally, the third story, and I'll spend just one minute on this story, and this would be the end of it, this is the story of industrial policy. It's a separate area in industrial policy and it is only partly related to the fiscal issues and transition, but mostly for industrial policy you spend some money from the government budget. And since you spend some money, well, there are cases of successful industrial policy and non-successful industrial policy. And of course, everyone has an opinion of why particular industrial policies are successful or not. We have stories of dramatic successes in these days of industrial policy. We have stories of dramatic failures in industrial policy in sub-Saharan Africa, in Latin America, but the fact is that the example that I usually give people are two groups of sportsmen. One group is trying to jump over two meters and the other group is not trying to jump over two meters. Well, among those group of sportsmen that try to jump over two meters, some would be able to do it and some will never be able to do it. But among those who are not trying to do it, nobody is going to make it. So if we look at the success stories, it is true that not every industrial policy leads to success, but it is also true that virtually all, if not all, cases of success are associated with industrial policy. So the question is, what is the good industrial policy and what is the bad industrial policy? And then, well, this will take us too far away, but the fact is that Vietnam seems to be the case of successful industrial policy. If we look at the share, it's export-oriented industrial policy. If we look at the share of exports in GDP, this is not only exports, this is total merchandise trade as a percentage of GDP. There was a huge increase, pretty much like in China. Yes, during the reforms, there was a huge increase in the share of trade exports and the imports in GDP and the share of investment in GDP actually increased. Increased from below 20% to nearly to 40% and now it's at the level of about 30%. So here are the conclusions. And the conclusions are that the government failure story is the major story in the transition economies. It is possible to prove that the government failure because of the decline in government spending was the major reason for the poor performance in those countries that performed badly and there was a transformation of recession in most of the countries. Two countries that avoided the transformation of recession was Vietnam and China during transition. In China, there was an increase in the growth rates from 5% before the reforms to 10% during the reforms. In Vietnam, from 5% to about 6% to 7%, not as impressive in China, but still there was an increase in the growth rates. If you look at the non-oil industry, not agriculture, but industry, you'll denote in 1989 after 1989. There was a small decline in output in manufacturing, non-oil industry because there was an increase in oil output at that time in 1990, 1991, but the overall, there was no decline in output because the other sectors, agriculture and oil industry increased. Government investment story, it is good to support the declining investment, private investment for the government's investment, and it is also good to proceed with the industrial policy, whatever the secret of good industrial policies. Thank you so much. Okay, thank you very much, Vladimir.