Challenge for humanity. This is why we do what we do. May I request people to get seated? We are the United Nations University World Institute for Development Economics Research.  For more than 30 years, we have generated ideas that support sustainable and equitable development. Part of the United Nations and based in Helsinki, we are a global think tank that provides a forum for original research and policy discussion. Our work currently focuses on three core development challenges – transformation, inclusion and sustainability. These interact differently in specific country contexts. To create ideas on how best to address these challenges, we bring together local researchers with international experts. Jointly, we assess available options and help design effective policies. This is how we work, with a global network of researchers and leading institutions from all around the world. It is the power of the network that gives you a new wider credibility as a quality source of knowledge on development. In the Growth and Poverty Project, for example, we brought together an interdisciplinary team of international and local researchers to assess recent trends in poverty and growth in sub-Saharan Africa. A striking diversity of experiences emerged. Monetary indicators improved in many countries. Others are yet to succeed in channeling the benefits of growth to the poor. Some even failed to grow. Simultaneously, a large majority of countries have made impressive progress in non-monetary indicators, such as infant mortality rates and school enrollments. These analyses are feeding into government policies, addressing the challenges of inclusive growth and poverty reduction in Africa. To be useful, new knowledge is shared and discussed at all levels, amongst researchers, policymakers and practitioners. To illustrate in why the development conferences, senior and junior researchers share common platforms with policymakers. These conferences also connect developing country researchers to international debates and provide UNUIDA with a global focus. Good morning. May I request everybody to be seated? Minister Toyvaka. Excellencies, distinguished colleagues, guests from all around the world, friends of UNUIDA, old and new. It's a great pleasure for all of the UNUIDA staff, myself included, to wish you a warm welcome to the 30th Anniversary Conference of UNUIDA. We tried to put together an exciting program, including a keynote by Professor Joe Stiglis and the wider annual lecture to be delivered by Professor Marcia Sen. It's our sincere hope that the wider 30th will be a memorable event, focused on the largest issues in global development in the traditional, wider way, with a lot of learning, frank dialogue, and collegiality. Some 600 people will participate in the conference, including participants from no less than 75 countries. And this wider anniversary brings 325 guests to Finland at a key point of time in global development and discussions. There are senior people coming to this conference who were with WIDA in its very earliest days. Indeed, it was Amartya Sen who came up with the acronym WIDA, to focus our minds on the wider perspectives in development and to question orthodoxy. Many young people are also present. It is in WIDA's genes to help foster the talents of the rising generation of researchers, especially from the developing world. In preparing this conference, we've highlighted the importance of our profession to engage with the big questions in development which policymakers face day in and day out. And there's a fine tradition in development economics of academics crossing back and forth between academic life and the policy world, either in their national governments or donor agencies or international organizations. Hopefully, this conference will inspire the up-and-coming generation to get involved in policy and big issues as they think of their next academic publication. WIDA is every day working all over the world. We are a global network. At the same time, WIDA has had its main hub here in Helsinki for three decades. So, Helsinki is the base to the core wider personnel who come from more than 25 countries. I would therefore like to express on this occasion our warmest gratitude to the Finnish government and the Finnish people for all of their hospitality and support extended to the staff and network members of WIDA over these many years. Importantly, Finland championed 30 years ago the WIDA Endowment Fund, also fueled by Sweden, Japan and India. A sincere vote of thanks goes as well to the current countries and institutions which support WIDA financially, including the Ministry of Foreign Affairs of Finland, CEDA, DFID, Danita, the Government of South Africa and Koika. It is on this background both a pleasure and a great privilege to introduce to you her Excellency Lennita Toibacca, Minister for Foreign Trade and Development in Finland. We are grateful to you, Minister, for wishing on this day to convey a welcome message to the conference participants. Minister, may I request you to take the floor? Thank you. Good morning, ladies and gentlemen and our dear guests from all around the world. I really wish you all warmly welcome to Helsinki and Finland. I hope you enjoy your stay here. And let me begin by congratulating you and you, WIDA, for its 30th anniversary. It was 1985, 30 years ago, when WIDA began its very important work here in Helsinki. Since then, thousands of researchers and policymakers have passed through its doors and have taken part in hundreds of WIDA events in all regions of the world. WIDA has an especially fine tradition of bringing senior researchers, including Nobel laureates, together with early career researchers, particularly from the developing world. That tradition continues with this conference. Over the next three days, you will participate in discussion on the biggest topics in global development today and in the future. Poverty, inequality, climate change, conflict, trade and finance, to name only few. This conference is appropriately titled Mapping the Future of Development Economics. As a policymaker, I'm very much interested in how research of that kind you do can contribute to helping make better policies. Research is like a good map, as we see here, in the way it can help guide governments and societies. WIDA is also very well named. WIDA has encouraged as wide a spectrum of views as possible. There is not one single model of successful development. Countries can achieve economic transformation, inclusive development and environmentally sustainable societies using many very different institutions and policies. But success is led by countries themselves, their people and their governments. Many of you hold very important positions in your governments, universities and development organizations. Many of the young people here today will hold such positions in the future. The international community is helping governments and societies across the developing world. And Finland's support to WIDA helps good research in its mission to inform practical action and policymaking. Ladies and gentlemen, I'm very happy that more countries are now moving from low to middle income status. Africa's progress is very welcome. It's good to see so many African colleagues also here at this conference. We look forward to learning from your insights and experiences. Yet our work is not done. Ongoing climate change poses a serious threat that could undermine future development progress and indeed the future of humankind. This is why we in Nordic region are strongly committed to do our utmost best to promote environmentally sustainability and more generally their 2030 sustainable development agenda. Social inclusion in which we believe strongly, it's not just about reducing absolute poverty. It's about reducing inequality as well and this has been a constant theme on wider research now over 30 years. We cannot achieve true inclusion until we achieve gender equality for girls and women. This is both good economics and a basic human right and actually one of the priorities of Finland's development policy. We are therefore pleased to see that WIDA has taken major new research initiative in this area. Finland also has a deep concern for peace and ending the suffering caused by conflicts. Today conflict is undermining development and deepening poverty. It's good to remember that United Nations was founded 70 years ago in the aftermath of a catastrophic war. Finland is a strong believer in the values of the United Nations and as an institution of the United Nations University WIDA celebrates now its 30 years as United Nations celebrates its 70 years and the United Nations University its 40 years birthday. And I think we need a strong United Nations now more than ever. Finland has been proud to host WIDA in its Helsinki home for 30 years now. This anniversary conference shows the value of international collaboration. There are people here from all over the world including Asia, Africa and Latin America and Europe of course. We are here to learn from each other. Thank you UNU WIDA and Finland welcomes you all. Have a nice seminar. Minister, thank you so much for these kind words to welcome all of the participants. And may I now request the chair of the first session Dr. Kristina Kuvea to get us going to an exciting opening panel. Please may I request all of you to get us going. Dear minister, colleagues and friends, it is a great pleasure and an honour to chair the opening session of the UNU WIDA conference today. As you have all seen the title of the opening panel is Key Ideas and Outcomes of Global Development. Now this opening panel is aimed at giving a framework or setting the scene for the coming discussions within the three days ahead of us. It will do that in two different ways. First and foremost it will look at global as well as regional perspectives of development. Secondly it will look at ideas, policies and outcomes and their interlinkages and even dynamics between the three. So this would be the aim of the opening panel and we have four leading international scholars that are going to speak in the panel and let me introduce them briefly. First and foremost we have Professor Ernest Arjitig, he is the Vice Chancellor of University of Ghana and he is currently also acting as the chair of the UNU WIDA board. Then Professor Justin Lin, he is the founding director of the China Center for Economic Research at Beijing University. He has served as the former chief economist of the World Bank and during the years he has had the wealth of interaction and cooperation with the UNU WIDA. Then we have Professor Nora Lustig, she is Samuel C. Stone Professor of Latin American Economics at the Tulane University. She is also a non-resident fellow at the Center for Global Development and the Inter-American Dialogue. Professor Nora Lustig has also served in the UNU WIDA board. And then fourthly Professor Deepak Nayar, she is Emeritus Professor of Economics at the Jabahal Nehru University in New Delhi and he is the former chair of the UNU WIDA board. So these are our distinguished speakers in the opening panel and without further delay I would say let's go and get to the business. I would give Professor Arjitig the floor. Please Ernest, maybe you can go to the podium. Madam Chair, distinguished ladies and gentlemen, I am certainly very pleased to be here this morning to discuss the issue of links between ideas and development outcomes. I will be asking myself the question that Fin posed us. Do ideas drive outcomes? And I will be arguing that yes, ideas do drive outcomes to a very large extent and indeed the current situation around the world where we seem not to be getting much outcome is a direct consequence of the absence of big ideas. Indeed there is a certain perception around the world that development economics has run out of new ideas. This may not be entirely true but clearly it is obvious to me that people are comparing the ideas of today to the ideas of 50 years ago. So there may be some truth in that. Most of the ideas that drive how economies are money today are not properly guided by any big thoughts. That's the argument. In doing this, I want to look briefly at the history of development thoughts. We all remember in the 1950s the works of people like Zinstein Rodin. We all remember the works of Herschman. We remember Gunamedo and we remember Athaloys. These were the thought leaders that Paul Krugman had described as bringing about the high development theory. They brought these theories and so today we remember arguments about the big push. We remember discussions of cumulative causation. We do remember things like balance growth. We may not entirely agree with the arguments therein but yes they were ideas that were formed. Those ideas in the 60s influenced governments in many countries. So it take a place like Africa where government in the 1960s soon after independence were beginning to craft development plans in Ghana, Tanzania, Nigeria, many places. They looked for thoughts. They looked for ideas from many of these men that I've mentioned. So Athaloys coming to Ghana or Nicolaus Kala coming to Ghana to talk to the President and influence the government was no accident. That's how development economics was positioning itself to influence policy. So many were those who believed at the time that it was not going to be possible to have different policies in place without linking them to the thoughts and the ideas coming from the leaders at the time. So we saw that and we've seen how by the late 60s to the 70s many of these ideas were beginning to falter. We saw how governments began to fall as they suffered from one crisis after the other and how the blame was shifted from the way policy was implemented to the kinds of ideas behind the policies that happened in the 70s. After the 70s we began to model through. It's very interesting that Paul Krugman in his discussion of the rise of these new ideas begins to think that the problem was the way in which the ideas were formulated and the methodologies that were associated with that. Clearly there may be some element of truth in that but that's only one part of the story. Since the 1970s we've been through a world in which we've likely tried to model through. A major concept of the earlier high development theories was likely that we're looking at the external economies and we're looking at the economies of scale. And these were things that were difficult to model in those times. By the 1970s we had moved well beyond that. Development outcomes had moved well beyond that. So we saw a world in which markets played a much more important role than had been the case in the earlier development ideas of the 50s and 60s. In these new thoughts of the latter part we no longer focused on the big ideas but we focused more on how to get policies running as a result of new global debates. But those new global debates were not based on any particular set of ideas. Those new global debates were actually an offspring of mainstream economics where the dominant force was the market. The assumption of free markets and competition dominated the thoughts of the 80s. And so we saw in the 80s reform after reform in various countries driven by the Oshite consensus. Now have we seen a change in the performance of countries as a result of this? Yes and no. We've seen very performance across countries whether in Africa or in Asia or Latin America. We've seen very performance. As early world drives growth and diversification in any of these economies we're not yet able to pinpoint it varies from place to place. We saw the transformation in large parts of Southeast Asia. The recent story of China poses for us a new question as early world drives growth. The ideas, what kind of ideas? Are they mainstream ideas? The performance of some countries Latin America, especially Chile, posed new questions for us in development. And the varied performance of countries in Africa led to even more questions. So as early what role do these ideas play? And as early what is wrong with all the ideas of the 50s and 60s that form the foundation of development economics? The main importance in there that we have not paid enough attention to my view has been the role of the state. The role of the state in the making of policy. The role of the state in the allocation of resources and the role of the state in facilitating a relationship between various economic agents. We haven't done that. So why are there no big ideas today? Why are there no big ideas today? In fact, there are some big ideas. There are some big ideas. The biggest idea in the last two decades has been the Millennium Development Goals. That has been the biggest idea of our time, the Millennium Development Goals. These came as a foundation to new thoughts being brought together by the international community. The emphasis on the removal of poverty and inequality. The emphasis on improving social standards as a result of what we have seen in the earlier decade of improvements in the economic performance. It was a very sensible thing to do. And indeed it was a sensible thing to do. So we saw for 15 years the domination of the Millennium Development Goals. How countries pursue these varied from place to place, not according to any particular development concept. So we've seen as a result of this varied approach to the pursuit of the MDGs, varied outcomes. There are countries around the world that have reduced poverty significantly. And some in doing that have also seen inequality come down. But for many, inequality went up. For many, we saw growth accompanied by unemployment, very significant unemployment. Throughout the developing world, especially in Africa, we've seen the absence of diversification of economies. So while China has been able to diversify, and part of South Asia has been able to diversify, we haven't seen that in Africa. That the absence of a particular type of philosophy or idea behind development. I've argued that there were four reasons that there are no big ideas. The first is the rejection of the high development theories as a result of the argument about methodology. So there were ideas, and we liked the basic principles of those ideas. But as economists, we faltered them for the absence of rigor, and we faltered them for the absence of mathematical models underlying most of them. That was the first. So we threw at the baby the bathwater. We failed to appreciate what balance growth meant, or what the big push was all about. We failed to appreciate that and see how best that could be achieved. Analyzing most of the ideas was an implicit role of the state, but this was never properly interrogated. Because we didn't trust the state in many places. Because the state had failed in many places, we never really gave ourselves a chance to interrogate the role of the state. What role should the state be in terms of the allocation of resources? We didn't do that. But today, based on experience from many parts of the world, especially Asia, we know that the state has a role to play, has a very significant role to play. But that role must be modified to suit every particular culture. That role must be designed to lead to particular outcomes. We haven't done that. The third point I make is that mainstream economics has never properly come to terms with their role of the state. Largely as a result of the fact that most of our interventions are intended to stimulate the market and its performance, we haven't really given enough attention to what role the state should play. So what should be the role of the state in bring about transformation? Should the state simply be an agent for stepping in when markets fumble? We've seen that happen. And indeed, that's what many people do recommend. That the state should step in when markets fumble. And I guess they can do more than that. There are places where the markets don't exist. And there are many places. That's why the new research economics directs us. When the market is unable to perform, the state must be ready to do that. Should the state have a more direct role in the allocation of resources? The example of many parts of Asia tell us that it depends. There are clearly good examples where in China we've seen the state help the market to grow. That example I'm sure, just as we're talking about that, that example is one. But can you transfer the experience of China to Africa? Clearly, we have to be done with some circumspection and some modification. Should the state in Africa, for example, be given a much more visible role in the allocation of resources? Today, one can argue that most African states have come a long way compared to where they were in the 60s and 70s. Today, institutions in Africa are a lot different from what they were 30 years ago. So the African state has a much better grasp of policy and ideas. The problem for the African state today is that it has been looking outside of Africa for those big ideas. It has been looking for close to three decades and not found those big ideas. It is used to having seen the big ideas of the 50s and 60s and is still looking for something similar. But that something similar has sort of invaded it. That's the problem that many African states face. So moving forward, what should be the role of the state? How should the African state, for example, position itself to play a much bigger role in development in bringing about transformation? First, the African state has to accept that its main purpose is to bring about transformation. That simply achieving higher growth rates cannot be enough. Simply reducing poverty cannot be enough. Bees have to be sustained over the long term. And that is going to come about only through transformation, trachea transformation. That's the first thing that the African state has to accept. When that is done, when that has been done, the state then needs to build the institutions that would allow it to pursue the idea of transformation. Unfortunately today, in many African economies, governments look outside for guidance in terms of what institutions are best. It's good in my view that issues like good governance, corruption, etc. are a very major part of the agenda for discussion in your average African economy. It's good that African governments recognize the need to deal with these. It's good that they recognize the need for education in order to ensure a much better workforce. It's good that they recognize the role of infrastructure in bringing about change. What they need to work out in this scheme is how the allocation of resources is done, in a manner transparent, in a manner that leads to the outcomes that are associated with transformation. That has not yet been done. But the African state cannot be uniform across Africa. There are large states in Africa, like Nigeria, like South Africa, and there are small states like Togo and here, Benin, Gambia, etc. They have to approach the role of the state differently. They have to understand that the role cannot be uniform across the region, depending on ethnic composition, depending on the social dynamics, depending on the state of the workforce, depending on relations with the outside world. The state's role can be crafted. So it is my view that in moving forward, wider institutions will have to look a lot more closely into how African states and in these states all around the world can play a more decisive role. It's important for the state to understand that ideas for transformation all have to come from within. It's important for the African state to understand whether arguments are going to be made for the big push or balance growth and how these may be achieved, those discussions will have to take place from within. It's only from within that they would understand the agencies surrounding many of these. One example I often give when discussing health matters in developing countries is everybody understands the need for a vaccine for malaria, largely because malaria is the major thing that is killing both the young and old in many countries. And yet the search for a malaria vaccine is done outside of Africa. You find in various places large numbers of researchers paying attention to the search for a malaria vaccine. Very few African researchers are part of that discussion. And I've said to many of them there's a personal interest in ensuring that there's a malaria vaccine as soon as possible. For many of the non-Africans, the attention to a malaria vaccine will disappear with time when publications have been found. So it's for the Africans to look inside for that malaria vaccine. It's the same thing with development. There is an agency that might be attached to it. An agency, the African academics, is attached to the search for new ideas. We've seen that new ideas can lead to effective outcomes. We've seen how ideas led to the transformation of China and we've seen how these ideas are today transforming India and other places. So clearly new ideas, big bold ideas have a role to play and these must be harnessed from within. Thank you very much. Thank you very much, Ernest. That was an excellent opening for the panel looking at the history and the role of big ideas. And I think what you were pointing out is very timely. I think that within less than two weeks the world leaders are deciding on another global big idea called the Sustainable Development Goals and I think that you set the scene beautifully in that respect. Next we have Professor Justin Lin and he's going to speak about the experience of China and East Asian economies in the pursuit of economic development after the Second World War. Justin, the floor is yours. Well ladies and gentlemen, I would like to take this occasion to congratulate UNU Widers for its achievement as a platform for debating development ideas and also as an incubation center for generating new development ideas in the past 30 years. And in my short intervention, I'd like to have a review of development ideas and development performance from my own new structural economics perspective to become a dynamically growing high income country. It's a dream, shared by all the developing countries. However, among nearly 200 developing economies since the Second World War, so far only two have moved from low income to middle income to high income. One is Korea, the other one was a place where I was born, Taiwan, China. And mainland China is likely to be the third one by the time of 2020 to move from low income to high income. And only 13 economies move from middle income to high income. Among those 13 economies, eight were European countries surrounding Western Europe. Their gap was small to start with while all your producing countries. And the other five are Japan and four small East Asian dragons like Korea, Taiwan, Hong Kong, Singapore. So this result should be considered as very disappointing for us as development economists. And the nature of modern economic growth actually is quite simple. It's a process of continuous technological innovation and industrial upgrading which increase labor productivity and income, and also improvement of soft and hard infrastructures which reduce transaction costs. And the developing countries should have the advantage of that awareness in the process of technological innovation, industrial upgrading and institutional improvement because they can learn from the high income country. And so theoretically, they should be able to achieve the convergence. However, most developing countries have been trapped in low income status or middle income status in the past six, 70 years. And so this phenomenon should be considered as puzzling. Capital is important because in the process of industrial upgrading, and technological innovation, and infrastructure improvement, certainly we need to have capital to do that. And according to the report of the growth commission, the 13 economies who achieve 7% or more growth rate per year continuously for 25 or more years, there were five status facts. Openness, maker stability, and a high rate of saving and investment, and a market mechanism as well as capable, committed government. And so from the status facts, we know one of that is high rate of capital accumulation. But there's a Lucas paradox because theoretically the capital was scarce in the developing country. And the return to capital should be higher in the developing country. So we should observe the flow of capital from high income country to the developing country. But the reality was reversed. We observed the capital flow from the developing country to the high income country. And this paradox is a symptom of the development value in the developing world. And like Ken said, I think the poor development performance was due to inappropriate development ideas. And so I'd like to have a review of the development ideas we have since development economics is a sub-discipline of modern economics. In the post-world period, the development idea was structurally them. And the idea at that time was to focus on the market value for the developing countries in ability to develop modern, larger-scale, capital-intensive industries. And at that time the policy framework was used active government intervention to adopt a policy framework of import substitution. But we know this kind of ideas help the developing country to achieve a few years of investment that grows. But quickly the economy turned into stagnation and frequently hit by crisis. And then the gap with the high income country continued to widening. So by the time of the 1980s and 90s, the idea changed to the neoliberalism. The focus was government values. And the policy framework was to have Washington consensus structure up in order to, you know, adopt all the modern market institutions like the high income country. But the result was the developing country followed these ideas. The average annual growth rate of growth was lower than the 1960s and 70s. And the frequency of the crisis was even higher than the 1960s and 70s. And so some economists referred to the 1980s and 1990s as the last decades for the developing world. And during this period of time, a few economies were successful. In the 1950s, 1960s, Japan and the East Asian dragons, they adopted expert promotion instead of import substitution. And they started to develop traditional, small-scale, labor-intensive industries and instead to develop large-scale modern industries. And in the 1980s, 1990s, during this transition reform period, China and Vietnam performed quite well, but they did not adopt the Washington consensus structure up. They adopted some kind of gradual piecemeal dual-track approach, and that approach was considered the wrong approach from the development ideas of time. And all the successful countries had something in common. They were either market economy were transition to market, but their government also played a proactive role. And so for this, we know that the development idea did not deliver, and those successful economies, their policy could not be analyzed by the development ideas that we had in the past. So we need to have a rethinking. And for that, I'd like to propose my own ideas of development, the new structural economics. The new structural economics, you know, the hypothesis was that the industrial structure was economic structure in our country is endogenous to its endowment structure. And endowment, we know that is capital, labor, and natural resources. They were given at a given time, but they are changeable over time. And the importance of endowments are that the total endowments of an economy actually is the total budget of the economy at that time. In a certain country, some are rich in capital, some are rich in natural resources level. And this kind of relative endowment will determine the relative factor price for the country at that time. And for economists, we know the total budget and relative prices are two most important parameters in our analysis. And these kind of different endowments will determine the different competitive advantage of the economy at any specific time. And to follow the competitive advantage of the economy to develop the economy will make the economy more competitive. And so the industrial structure or economic structure that are consistent with the country's endowment should be considered as the optimal structure. Certainly our goal is to raise income, but if you want to raise income you need to move to more capital intensive industries because economic structure is indaginal to the endowment structure. But if you want to move to more capital intensive industries, you should increase the capital availability of the economy. And if you can increase the capital availability of the economy, then economic structure will change to more capital intensive. But certainly in the process, you also need to improve the soft institution and hard infrastructure. And from what I see, countries are trapped in low income status or middle income status was because those countries cannot have these kind of dynamic changes in its economic structure. But how to change the endowment structure? Because everything is indaginal to the endowment structure. And my argument is that to follow the competitive advantage of the economy to develop the economy will be the best way. Because if you follow your competitive advantages, you will be most competitive. And you can generate the most capital, the surplus in the economy, so you have more to save. And also if your economy is consistent with your competitive advantages, the return to capital will be highest. Then you will have the highest incentive to accumulate. And this way you can change your endowment structure at the farthest way.  And so you can move faster than the high income country. And you achieve the convergence. And in this process, to follow the competitive advantages, to develop the economy is a term only understandable to economists. And how to translate this idea to the spontaneous choice of the entrepreneurs? Then we need to have an institution. That is the market institution. Because only competitive market can generate the relative prices that reflect the relative abundance of factor endowments. And if you have those kind of relative prices, entrepreneur who is sick of its profitability, they will adopt the technology which are consistent with your endowment structure and also go to the industry which are consistent with your endowment structure. So you need to have a competitive market as an institutional basis. But the state is also important because economic development is a process of continuous upgrading in its technology and industry and also includes infrastructure like transportation system, power facilities, and soft infrastructure like institution, legal system, financial system. And in this process, you need to have a state to address the incentive issue of the first mover because first mover creates all kind of externality to the followers. And you also need to coordinate a lot of the effort. Some of the changes that, you know, may be able to make by the private sector, for example, improvement of the infrastructure power facility or transportation system. But you need to have a state to coordinate that otherwise the infrastructure development may not be as quick as the industrial development. But some of them cannot be changed by the private sector like legal system, like financial regulation. So you need to have a state to play the coordination role. So the key is to have a competitive market and also a steady state. And I like to say actually the ideas of develop your economy according to your competitive advantages can provide a recipe. And the recipe can synthesize the status facts of the growth commission report. The first one is that the recommendation is following competitive advantages in the process of economic development but far other preconditions. You need to have a competitive market, you need to have a sedentary state. And those are the status facts of four and number five of the growth commission report status facts. And the other three of the growth commission report actually is the result of following the competitive advantage in the process of economic development.  And that is the status facts one of the growth commission report. And if you follow your competitive advantages, certainly you will be more competitive and you will have less internal driven crises. And if you encounter some kind of external shock, the government will have the best position to adopt counter secret measure because a physical position will be the strongest possible. And so that is condition number two. And then if you follow your competitive advantages, you are going to generate the largest possible economic surprise. And it will have the highest incentive to make investment. And that is the status facts number three of the growth commission report. So this idea seems to be able to explain the success. And actually this framework can also explain why the development ideas in the past failed. The structuralism, its idea was to, you know, develop a large scale modern industry, but the country was poor. And those kind of industries went against the countries compared advantages from those kind of private sectors Unavailable. And to make those kind of Not well-affirmed to survive, you need to give all kind of Protection and subsidies. And those kind of protection Subsidies created, you call it misallocation of resources And corruption and social problems. And as a result, the return to the capital access role So capital will have a fright instead of capital, you Know, will have an inflow. And this can also explain how Washington consensus failed. For two reasons, because the Starting point of the transition was you have a lot of firms Which are in wrong sectors. They are not viable. And they rely on all kind of protection and subsidies to Survive. And if you remove all the Protection and subsidies, they are all go bankrupt. And sometimes the government, for value, for concern about Employment issue, those kind of sectors are considered Important for the national security. Even after the Probabilization, the government continues to provide all kind of Subsidium protection. And those kind of, you know, Impresses subsidy protection actually was less efficient than The old subsidy protection. And that's the reason why the Washington consensus did not work well. And the return to capital continued to be low, so we Observe the capital of right. And a successful country in The transition process, they adopt some kind of gradual Dual track. And it's reasonable, because this Kind of dual track, Washington continues to provide some Kind of transitory protection to all sectors to Maintain stability. But liberalize and facilitation The entry to the new level intensive sector so you can Enjoy the competitiveness and dynamic economic growth. And this kind of growth also creates a condition for the Reform in all sectors. And China, Vietnam, and America are allowed to follow that, but I'd like to say Actually, this approach, the first country to adopt this Approach was Mauritius in the 1970s. It started with Simba Substitution in the 1970s. It started to set up Special economic zone. Everything was liberalized, but the Domestic economy continued to be protected by all kind of Interventions. And Mauritius now is the Most successful country in Africa. Its per capita income Is 1610,000 u.s. dollars. Then that's the new Structure economic idea of work in the modern world that we Can help the low income country to transform to have a Structure transformation. And i say yes, and i'm a person Belong in if the knowledge is right, we should put that Into action and to see the result. From historically, we know a few successful Countries. They follow in some kind of Flying geese pattern. The government played the Facility role to help the private sector capture the Window opportunity from the relocation of labor Intensive industry due to the current, in cuban country, The wage rolls. And that was the case in The possible period of Japan. In the 1960s, the small Dragons in the 1980s, China. They all, the government Did this kind of facilitation role to capture the Window opportunity for the global relocation of Labor-intensive industry to jump start the Industrialization process. And in my wider lecture 2011, And i argue, actually there's an opportunity for the war Today, because China had absorbed other surplus Labels. And the wage rate in China Started to rise, and China is going to release 85 Million jobs in the labor-intensive industries. And that will be largely now for almost all the developing Country in the world. And informed by this finding, The prime minister met us of Ethiopia. After he read my report, my lectures, and he went To China in August 2011. Actively invite the Labor-intensive sector operators in the shoe Sector to make investment in Ethiopia. And it's a one firm called Huajian. After the invitation From the prime minister, organized a delegation to With Ethiopia in October 2011. And decided to make Investment in October 2011. And in January 2012, two Production lines with sex and workers started to Operate. In march, this firm started to export. In the end of the year, it employed 2,000 workers. The second year, it employed 4,000 workers. It was a quick success. And the important of this quick success was not this firm Only. Because it demonstrated Ethiopia Can be manufacturing for the world if the government Provide those kind of active facilitation role. And so the government set up industrial park in 2013. And the first stage was to build up 22 factories within 3 months, all those 23 factories. This out to labor-intensive In a firm in shoes and garment for exporting. And that was unimaginable in the past. And so encouraged by the success of the industrial park, The war bank, the first time, gave 250 million u.s. Dollars to support the construction of industrial park In the second phase and the third phase. And again, encouraged by the quick success of this factory in Ethiopia, president kagame Started to have active investment promotion to Attract the firm direct investment in that manufacturing. And shieh government decided to invest in kigali economy in 2012. And training of 300 Rwandan workers to produce protective clothes and t-shirts For export started in march this year. And employment by July reached 500. And in August, this firm started to export this clothes To China and Europe. And shieh government Planned to increase the employment to 1,000 by March next year. And i'm sure this Success story will demonstrate. Like rwanda can also be a Manifesto flow for the world. And it can create a job And facilitate the structure transformation in Rwanda in Ethiopia. And like rwanda in Ethiopia can have this kind of structure transformation. I think other african country and developing Country. If they follow the right idea to Have a competitive market with the Facilities in government, they can Catch this opportunity and to have a successful Transformation. So my conclusion remark, Four developments and transition performance in many Department world was in the past, the policy Were guided by inappropriate ideas. And if we have appropriate ideas, every developing Country should have the opportunity to have Dynamic economic growth and transform Themself within one or two generations. But to have these ideas, i think we need to change our Development thinking. Because in the past, Our developing country's thinking always used high Income country as a reference. To ship what high Income country had, what high income country could do Well, and advise developing country to own what High income country had or did as what high Income country did. I think the right Development ideas should look at what the Development country have now and based on what they Have, they can do well and the government should Scale up what they can do well. Then they can Competitive, they can have a dynamic structure Transformation. Thank you very much. That was a good overview of the historical Experience from China and East Asia as well as some Of the practical lessons to be taken even globally. Now, let's move to Latin America and we have Professor Nora Lastig, Nora Flores, yours. Good morning. First of all, thank you very Much to Fin Tarpe and Wider in general for inviting Me to be here in the inaugural panel. It is a delight and a pleasure and an honor and also I want to start by congratulating Wider for Its 30th anniversary. I think that today not Only me but many of my colleagues that are Sitting around are examples of Wider's Commitment to helping young scholars come to fruition from developing countries because many Years ago, many of us sitting here today participated In projects that Wider sponsored and coordinated. So thank you for that as well. I'm going to talk About something that you asked us when you Invited us to come and make our presentations Which are the ideas, policies and outcomes In developing economics by looking at the Influence of Latin America's structuralist Economic thought. I should start by a word Of caution that because of the brevity of our Intervention, I'm not going to be able to do Justice to all the thinkers, to the analytical Frameworks or to the nuances that have Characterized the evolution of thought And outcomes in Latin America. But I hope that With my remarks, I will be able to give some Highlights of how ideas, policies, outcomes And ideology actually shape what happens on the Ground. So no power point. Today I'm going to actually read, which I Usually don't do, and I hope that I am not Going to bore you to death. So after the Second World War and up to the 1980s, the main Gold of economic policies in Latin America was To develop an indigenous industrial sector Seen as essential to become a mature economy. Given that Latin America was a latecomer Industrialization called for the protection Against foreign competition of the Indigenous sector and state support. This gave rise to the well known import Substitution industrialization strategy. During this period economic policy was Characterized by a heavy dose of protectionism, Vis-a-vis manufacturing imports and Foreign direct investment, and other Components of state-led development. The import substitution industrialization Strategy was at the core what is known, The Latin America structuralist economic Thought. It can be said that this Thought officially began towards the end of The 1940s and the beginning of the 1950s With a publication by the U.N. Economic Commission for Latin America and the Caribbean Of two documents. The economic Develops of Latin America and some of its Main problems and the economic study of Latin America in 1949. In spite of the fact that these were Two official documents of a united Organization's organizations, their main Ideas can be attributed to the work of The very influential Argentine Economist, Raul Previch, then the head Of ECLAC. Previch developed the Intellectual framework of the center Periphery approach and together with The Brazilian economist Hans Singer, The theory of secular deterioration Of terms of trade for commodity Producers and exporters. Both were The intellectual backbone, both Theories, intellectual backbone of Developing the import substitution Industrialization strategy in Latin America. The view at the time was Very optimistic. It was that without Protecting imports from foreign Competition, Latin America would never Industrialize and without a robust Industrial sector, the economies of The region would never fully develop Them. Thinkers at the time assumed That industrialization through import Substitution would lead the Economic economies to a more independent Democratic and egalitarian growth path Than growth based on primary goods Exports. Sound familiar? We all Mentioned this, my predecessors mentioned This and I'm sure Deepa will too. But as Justin mentioned and Ernest Before me, reality turned out to be Very different. The severe Limitations of industrialization via Input substitution became evident All too soon. As industrialization Proceeded, the problem of externally Balances became more acute and Unmanageable. Balance of payments Crisis became frequent. Because Import substitution industrialization Strategy relied on implicitly and Explicitly taxing the primary goods Sector, agriculture became less Dynamic and the stagnating Agricultural sector resulted in Bottlenecks in the production of Foodstuffs and hence in inflationary Pressures. Second, because Industrial sector used imported Capital intensive technologies Employment in urban areas did not Grow fast enough to absorb migrant Labor from depressed rural areas Giving rise to expanding urban Poverty. Third, as the import Substitution process advanced, The resources that could be Transferred from the primary sector To industry decline and the process Defended more and more on state Substitutes to make it viable While public expenditures Complimentary to the industrialization Process increased, government Revenues could not keep up Because of a stagnating primary Sector and a subsidized industrial Sector and imbalance in the public Finances with us unleashed Resulting in demand pressures that Contribute to higher inflation And eventually fiscal crisis Disappointment with the results Substitution process gave way to New currents of thought within Structuralism. And I think there Were two main views at the time. One was the radical view. I don't Know, we haven't talked so much about That, but at some point people Thought that development for the Periphery within capitalism was not Possible and therefore revolution Was the alternative and moved to A socialist regime and that was Done through revolution in Cuba And attempts to do it through Chile. Then there was another group The more reformist economists That argued that development within Capitalism was feasible but Required reinforcement of the Inward looking strategy through Changes in the composition of Domestic consumer demand. Growth within capitalism existed But only if the distribution of Income became decidedly more equal. Furtado, who was a very influential Brazilian structuralist economist Was among the main proponents of This view and developed a model In which he considered that the Main constraints for growth And development in emerging Countries was supply driven That was the result of a productive Structure that moved increasingly To more capital intensive sectors With also higher import Requirements. This resource Allocation in turn was the result Of an unequal distribution of Income that generated a demand Profiled bias towards these sectors And the growth pattern exacerbated Both inequality, poverty And foreign dependency. Within This framework then a more equal Distribution of income would be Accompanied by higher output And employment growth rates as well As a higher degree of national control Of domestic capital and output. These ideas were tested by many People, some of you are here Actually I also wrote some Trying to test some of those and The studies that tried to link The relationship between inequality And growth through the impact of the Former on savings, the composition Of demand, and the capital Import intensive output in general Found some evidence of a Potentially positive yet Smallish, very small Relationship between greater Equality and growth. However, perhaps more importantly All the attempts at redistribution In Latin America Really failed In the period Of the 1960s And early 1970s We can look at the socialist Reform is experienced in Chile Under Allende in the early 70s Or the Sandinistas in Nicaragua In the late 70s The state sponsored land Reforms in Bolivia and Peru And the attempts to increase real Wages through minimum wages and For friendly legislation in Argentina Brazil, Mexico, Peru, and Uruguay During the 70s and 80s Did not succeed They tended to generate Output shortages and fuel inflation Moreover, reformists of Revolutionary distributed Processes entailed conflicts That caused financial and physical Decapitalization, both of which Negatively affected output Income redistribution Turned out to be much more difficult To participate It led to economic chaos And social conflicts Reformist redistribution was attempted At the same time that in most Latin American countries there were Leftist guerrilla movements whose objectives Was to overthrow capitalism Those were the days of the Cold War And ideology really influenced The policies that people wanted to Adopt The economic, political, and military Elites could rely on support Absolutely the United States in fighting The left and leftist economic thinking Or progressive economic thinking Many countries in Latin America Faced military coups and Long years of bloody and Repressive authoritarian regimes Attempts at trying to Remove the bottlenecks associated With import substitution, racialization Strategy through redistribution As I said backfires So far from resulting In self-sustained growth Distributed policies, exacerbated Inbalances, and undermined Democracy. However The import substitution Industrialization Strategy was given Some respite When Rising external and physical deficits To the second half of the 1970s Were funded by rich Country commercial banks eager to Recycle a flood of the So-called petrodollars of the time As a result, Latin American sovereign Private foreign debt rose in country After country When interest rates started to rise In the US in the early 80s That servicing became Increasingly more difficult With commodity prices Signaling a downward trend And rising interest rates in the United States, commercial banks Became increasingly reluctant to Lend to a region whose economic Prospects seem shaky Sounds rather familiar The debt prices ensued In order to avoid default And stabilize domestic Prices under macroeconomy Governments had to borrow From multilateral financial institutions Such as the IMF The World Bank And the Inter-American Development Bank In the context of Latin America This lending however Came with strict Conditionality Involved draconian Fiscal austerity And major changes in economic policy In order to have access to the much Needed foreign exchange Latin American governments had to give up Its inward-looking State-led development strategy And slash fiscal deficits Devalue other currencies, liberalize Its trade and foreign investment regimes As well as its financial sector Private state companies And dismantle its industrial policies These set of policies As was already mentioned Associated with mainly Chicago But not only trained economists Became eventually known as the Washington Consensus A term coined by Washington-based economists John Williamson The dominant mainstream Thinking at the time Considered That the policies pursued under Impulse substitution with our State of Latin America's poor economic performance And structuralist thinking Was demonized and banished From mainstream circles I should say that at that time Wider was an exception Because in the mid-1980s I forget when we had the first meeting Lance Taylor 1985 We were here from the very beginning In 1985 Wider invited The director of Wider then Staylor to organize A project That would look at Adjustment and stabilization policies From a heterodox Perspective And many of us were there Raise your hands if you were there Okay So The project covered Africa, Latin America, Middle East Asia And many of the people who were In that project actually later became Ministers, vice ministers Directors of central banks Examples here One of the Tanzanian Head of the central bank Beno Dulu was there too And interestingly I always remember this At the same time Wider was holding A conference of the more orthodox Economists Project led by Michael Bruno And Stan Fischer That's the only Interaction we had then At least we were able to Take a boat trip together The recurrent failure Of IMF led programs To curb inflation in Latin America During the debt crisis However led to the eventual Development and legitimization Of more heterodox approaches I went Forgive me but I lost Patient patient I'll be there in a minute Okay so The structuralist theory of inflation Gave great importance To something that was ignored By the orthodox stabilization approaches Which were the transmission mechanisms Such as wage indexation And oligopolistic pricing By which inflationary pressures Are translated in an increase in the general level Of prices in the entire economy With so called Inertial inflation So This Led to several scores in the region Particularly some Brazilian economists Were leading the economic thinking At the time and some of our Colleagues here Derived sophisticated models Of inertial inflation and the ideas Were incorporated into policy In several countries such as Plan Australia in Argentina With different degrees of success At the beginning structuralist ideas About stabilization were treated With utmost suspicion by the International financial institutions And many of the more conservative policy makers However over time some of its Tennis were increasingly embraced By mainstream economics Both in academia and policy circles And I think you know one prominent example Of success of ideas Making it eventually into policy Because they showed that they could Do better than otherwise Was implementation of the Mexican Pacto in 1988 Mexico had followed Very orthodox, was a poster child Of orthodox policymaking in the 1980s But when Things didn't work out eventually The government agreed to Implement a combination Of more orthodox tenets With heteroscenits And introduce a coordination Of price setting And wage setting that actually Brought inflation down for the first Time in Mexico in six years Decidedly down And paved the way for Mexico's recovery So you know the development Of anti-inflation programs that Combined some ingredients from orthodox Economies and heterodox Latin Americans structurally I think Is an example in which outcomes Fed into ideas that In turn brought policy and led to A public policy that could claim success I need to go a little fast here And I think that I want to illustrate I mean one of the I think messages that I want to leave Here today is that Maybe thanks to the fact that we have Ideology With a much smaller presence In determining the way we think And the fact that Fundamentalist policies Or principles in economics Have actually been eroded There's been a trend towards Mixing much more Ideas from different Works of life In economic thinking That are much more promising In terms of generating Policy-making that will help Produce outcomes That would result Hopefully eventually in more inclusive Growth. And I wanted to mention Two salient examples of the Mainstreaming of structuralist thinking That Include one, the importers attributed To creating new comparative Advantage through state intervention Which the other authors Also alluded to A modern form of industrial policy And the rising concern with A negative impact of inequality On the growth. The realization that market failures May be at the root of Latin Americans Like last performance gave rise To a new form of industrial policy Whose objectives are to internalize Externalities, improve efficiency Provide public goods And address coordination failures And capital market imperfections These are currently known as Productive development policies In some circles. And have been Applied with different degrees In different countries in the world The link between Inequality and growth has also been The subject of renewed theoretical Empirical research. I think That from the Structuralist thinking of the past The most complete Framework used to link Inequality and growth In terms of how inequality Shaped the composition of Consumer demand which in turn Fostered the composition of supply For growth. Well this relationship Now has been mainstream And it's for example discussed in One of the common Graduate development textbooks By Debra Ray. Another example of new economic thinking On the relation between inequality and growth Which was also present in Structuralist thinking emphasizes The role of imperfect capital markets And indivisibilities in available Technologies and how in their presence The poor may be unable to Invest in profitable ventures Because they usually find themselves Shout out of lending markets In this case a one time Redistribution could actually Help reduce poverty And also Result in higher Income per capita. Thus both mechanisms Shaping a country's comparative Advantage through state intervention And addressing the link between Inequality, Composition of Growth which were present in Structuralist thinking from the very Early on have been gentrified By present day development Economists through the use of Rigorous theoretical models. We have come so far that today One of the key voices in warning The world about the perilous consequence Of inequality for growth is no other Than the IMF itself. Things have changed. It is encouraging to observe How economic theories By economists, international financial Organizations and governments Have given up fundamentalist positions And chosen a path that integrates Views from different schools of thought. Hopefully this open mind In the realm of ideas will result In policy making that produces Inclusive and sustainable growth As well. Thank you very much. Thank you very much Nora For the insights on the Transformations in Latin America and Particularly the Importance between growth and Inequality and I think that we All also appreciated your insights On the history of Wider. During the very beginning Of the Institute. Now I have professor Deepak Nayar He's sort of going to wrap up the Panel. He's going to look at The relation between Development ideas and outcomes Across the Developing world. So Deepak, the floor is yours. Thank you chair. Distinguished Participants. At the outset I'd like to Congratulate Wider On its 30th anniversary And on our behalf Wish it the very very best In its life and times to come. Birthdays are time For celebration And time for reflection I hope that this event Is going to provide us just The right mix of the two As over the next three days We learn from each other Meet Many old friends And make some new friends The world economy Since 1980 Has witnessed profound changes Associated with Structural transformations Which have exercised an enormous Influence on the process Of and outcomes in development In reflecting on this past And thinking about The future of development I have decided to focus on the Growing relative importance Of developing countries in the World economy. Not only because This is among the most Significant changes over the Past 30 years, but also Because it has the potential Of transforming the lives Of large numbers of people Over the next 30 years. The object Of my presentation Is to focus on these outcomes In development, analyze The underlying factors And consider the future Implications. In doing so I will also touch upon the Relationship between ideas And outcomes in Development. Now, let me begin With an overview. First I will sketch the contours of Change in the significance Of developing countries in The world economy over the Past 30 years. Second I will highlight the disparate Outcomes across regions and Between countries within Regions in the developing world On these two points to save Time I will be brief. Third, I will consider the Lessons that emerge from the Development experience of Countries that have led this Process for countries that Might follow in their footsteps. Fourth, I will share some reflections On the potential for and Possibilities of developing futures In countries that are Followers or latecomers. Now, even if aggregates Sometime conceal more than They reveal, I believe That the future I am going to Sketch is important. The three plus decades Since 1980 Have Bitten us some catching up By developing countries. By which I mean Asia, Excluding Japan, Africa And Latin America including The Caribbean. Between 1980 and 2013 Their share of world GDP In current prices at Exchange rates increased from 21% to 37%. By 16 percentage points Mostly at the expense of Industrialized countries. Attributable to much faster Growth. Consider 1981-2013 Their GDP growth Threat at about 5% per annum Was roughly double that In industrialized countries. Moreover as population Growth slowed down Growth in their GDP At more than 3% per annum Was two and a half times that In industrialized countries. Yet GDP per capita In developing countries as a Proportion of that in industrialized Economies witnessed Little convergence Although it did mark the End of divergence. However, there was a Significant convergence Towards per capita income levels In economies and in the world As a whole. But there was A massive new divergence Away from the least developed Countries. Now the catch up In industrialization was even More significant. There was a Dramatic transformation in just Three decades. Between 1980 and 2013 The share of developing countries In world manufacturing value added Rows from 18% to 45%. Similarly Their share of world exports of Manufactured goods jumped from 12% To 43%. The engagement Of developing countries With the world economy through Trade, investment and migration Also gathered momentum over These decades. Their share in World merchandise trade for Example both exports and imports Increased from 25% To 45%. Now The structural transformation in World economy over the past 30 Years associated with the Dramatic increase in their Relative importance was Concentrated mostly in Asia. Latin America stayed roughly Where it was while Africa Experienced a decline. Development was uneven Not only among regions But also between Countries within regions. There was a high degree of Concentration among a few. China, India, Indonesia, Malaysia, South Korea, Thailand, Taiwan and Turkey In Asia, Argentina, Brazil, Chile and Mexico in Latin America, Egypt and South Africa in Africa. Which I Described in my book catch up As the next 14. Thus Bricks, Brazil, India, China and South Africa, without Russia in This case, are a subset of The next 14. At the other End of the spectrum, there were The least developed countries As many as 48 that fell Behind rapidly during this Period. Indeed, disparate Outcomes in development across Geographical space are striking Whether we consider regions Or country groups. Among regions, Asia led The process throughout the three Decades. Latin America Fade badly in the 1980s. It's lost decade to recover But stayed roughly where it was While Africa did poorly In the 1980s and 90s. It's lost decades and with Some retrogression despite Recovery in the 2000s. This is clearly reflected in Their shares of respective shares Of GDP, industrial production And merchandise trade in the World economy. The differences In their comparative growth Performance, both GDP and GDP per capita are also Although both Africa and Latin America did much better after 2000 than they had before. In country groups, the next 14 were the analog of Asia And led the process throughout These three decades, although There were differences among them. The BRICS were an important And leading subset of the Next 14. The LDCs Even more than Africa In the regional grouping Experienced a significant And fell behind rapidly In every sphere. As country groups, the next 14 and BRICS witnessed some Convergence in income levels with The world, particularly after 2000, while the least developed Countries witnessed a massive Divergence. It needs to be Said that China was the most Important among the BRICS Just as the next 14 Were the most important in The developing world. Yet There was much more to BRICS than China and much more than The next 14 to the developing World. There is another Related dimension of Uneven development that deserves Mention here, even if it is Not my focus this morning. The catch up process is Characterized by emerging Divergences in the world economy. There has been an increase In economic inequality Between countries and between People within countries. There is Not only an exclusion of countries But also of regions within Countries and of people in Countries almost everywhere from This process. Let me now turn To the two main parts Lessons in learning And Development futures. The industrialization and Development experience of the next 14 World. Suggest that there were Differences in size, settings, Drivers, emphases and Transitions. There were Differences in economic size. Some countries were small. Others Were medium size while a few Were very large. There were Different settings. Some Countries were resource rich and Land abundant. Other countries Were resource poor and Landscares. There were Natural resources as the base For manufacturing while other Countries relied on cheap labor. There were different emphases for Some countries external markets And external resources were Critical in industrialization Whereas for other countries domestic Resources and domestic Markets were the drivers. But for a few, among The next 14, it was External markets and domestic Resources. There were Different patterns of structural Change. There were also Different models of Industrialization. The Latin American model relied on foreign Capital, foreign technology and Foreign markets in which Brazil Was the exception but South Africa came close. The East Station model in the next 14 Had two variations. There were Countries such as Malaysia, Thailand and Indonesia where the Size ranged from small to Capital, foreign technology and Foreign markets. There were Countries such as South Korea and Taiwan that relied on foreign Markets but mobilized domestic Resources and developed Domestic technological capabilities Instead of relying on foreign Capital and foreign technology. The mega economy model followed By China and India relied mostly On domestic markets, domestic Resources and domestic Technologies in the earlier stages But at later stages both these Countries joined the quest for External markets as also Foreign technology and Foreign Capital. Brazil, Turkey And Egypt in three different Continents adopted a model that Sort to find a blend of domestic And foreign in markets, Capital And technology which evolved Over time in their pursuit of Industrialization. These Industrialization models must Also be situated in the wider Context of their development models Each with its mix of the state And the market or openness And intervention that differed Across countries and changed Over time. And there are Possible clusters in terms of Development models which range From a strong reliance on Markets and openness. Argentina Chile, Mexico, South Africa, Malaysia, Thailand and Indonesia. Through state Support with moderated Openness. Brazil, Egypt and Turkey. Or strategic Intervention with calibrated Openness, South Korea and Taiwan to state intervention And controlled openness, China And India. The differences are More than nuances. Moderated Openness was largely open Economies with few restrictions In some spheres. Calibrated Openness was asymmetries and Openness by design manifest In strategic trade policy that For the export sector but restricted For other sectors with limits On openness to foreign capital and Tight curves on foreign brand names. Controlled openness was much More extensive not only in trade But also with respect To foreign investment and foreign Technology. Now if you think Of similarities and common Factors, the analytical Clusters I have created Help to focus on what was Common among these countries Despite their apparent diversity Even if reduced to smaller Subsets. But they had Even more in common across Subsets in factors that put them On the path to sustained Industrialization. Now it is Possible to identify three such Factors, stylized facts, Initial conditions, enabling Institutions and supportive Governments. There were two Aspects of initial conditions. The first was the existence of The second was the spread of Education in society in both a Critical minimum was essential To kickstart industrialization and Countries created these initial Conditions or built upon what Existed essentially through Governments. Similarly for the Next 14, some institutions may Have been inherited from the past But only in small part. The Framework of enabling Institutions to support a Foster industrialization in Creative Governments. In the Pursuit of industrialization, the Role of Governments in evolving Policies, nurturing institutions And making strategic interventions Whether as a catalyst or a Leader was central to the process Almost everywhere. For countries That stress markets and openness It was about minimizing market Failure. The emphasis was on Getting prices right and buying The skills or technologies needed For industrialization. For Countries that stress state Intervention, it was about Minimizing government failure. The Emphasis was in getting Institutions right and building The skills or technologies needed For industrialization. Now What are the lessons for Followers? The clusters of Size, settings, drivers, Emphasis, transitions and models Among the next 14 suggest A wide range of attributes that Most developing countries except For small island economies or Landlocked countries would have Something in common with one, Two or a few of them so that There are lessons to be drawn From their experience. Clearly These experiences cannot be Replicated and their lessons Must be contextualized. Moreover Differences among the next 14 Clearly show that there are Alternative paths to development So that there is no unique Solution. Indeed, there are These technologies to be made That are bound to be influenced By history and conjuncture but Should also be saved by Characteristics and circumstances Of countries. In fact, many of The present laggards in Industrialization or development May not be very different from What these leaders in Industrialization or development Were 50 years ago. So that The possibilities of and Potential for development are Increased. I would like to address A question that is easy to ask But difficult to answer. What Can be learned from the Experience of the past 30 years That have witnessed a substantial Change in the economic significance Of developing countries even if It has been concentrated in One region, Asia and a few Countries. The next 14 About the possibilities of Development in other low-income Or middle-income countries over In doing so, I would like to stress Three propositions. First, inclusive Societies alone can sustain Rapid growth and transform it Into development that improves The well-being of their people. Second, there are alternative Parts to development rather Than unique solutions because One size cannot fit all so That there are choices to be Made. Third, learning to Unlearn from development is Just as important as learning From development. Now Development is about creating Production capabilities in Economies and ensuring well-being Of people in countries. Initial Conditions, enabling institutions And supportive governments are Necessary to kickstart industrialization Which would transform capabilities In the spheres of production And technology, what Justin Talked about. But these might Not be sufficient to sustain Economic growth in the long-term And transform it into meaningful Development if it does not improve The living conditions of people. In the pursuit of development, Poverty eradication, employment Creation and inclusive growth Then are an imperative. For one, these are constitutive As essential objectives of Development. For another, These are instrumental as the Primary means of bringing about Development. This is the only Sustainable way forward for developing Countries because it will enable them To mobilize their most abundant Resource people for the purpose Of development. The same People who constitute resources on The supply side provide markets On the demand side to reinforce The process of growth through Cumulative causation. Therefore, developing countries Must endeavour to combine Economic growth with human Development and social progress. This is a lesson for leaders and Followers alike. The leaders, the next 14, can Sustain their growth in future Only by ensuring that the benefits Of catch-up are distributed in a far More equal manner between people And regions within countries. The Followers can provide An emphasis to their growth With a faster transformation into Meaningful development if the Process includes more and more People. Now The possibilities of doing better Or the prospects of catching up On the part of developing countries In the world economy depend not Only on how the next 14 fare In times to come but also on Whether this process spreads to Other countries in the developing World. Now there is some good News in terms of the Determinance of potential growth. There is bad news in terms Of endogenous or Extrogenous constraints. But in some if we reflect on it There are possibilities. Now The diversity among the next 14 Makes it clear that there are No unique solutions or magic Ones to development. In fact The experience of the next 14 Suggest that there are alternative Parts. Hence as I said There are choices to be made. To some extent these choices Depend on size and Endurance. However the Emphasis say the importance Of domestic or external markets Resources and technology Also depend on country specific Conjunctures and circumstances. Moreover there are strategic Choices to be made between Different development models. Each With its mix of the state in the Market or open nets and intervention These choice have And will make the difference Between success and failure. To conclude learning from Experience is of critical Problems. It is about correcting For mistakes. Everybody would Agree. But it is just as important To unlearn from experience. It is about questioning long Health beliefs and thinking anew. Most have not thought about it. In retrospect it is clear That turning points in thinking About development which reshaped Policies or strategies were Strongly influenced by history The past and conjuncture. The Present reinforced by the Dominant political ideology of the Times. The development consensus For example evolved in the early 50s was shaped by the Experience of deindustrialization And under development in the Colonial era and the nationalist Aspirations of newly independent Countries with the beginnings Of decolonization. The Washington Consensus which evolved through The 80s was shaped by The history of development outcomes Over the preceding three decades The success of a few small East Asian countries and failures Elsewhere highlighted Even if this history was Selective and partial. But it Was strongly reinforced by the Conjuncture which witnessed the Political collapse of communism And the change in the dominant Ideology of our times. As Outcome surface advocates of The development consensus did Seek to introduce correctives For past mistakes. To address Human development but did not Rethink strategies. The critics Sort fundamental changes in Economic policies. This culminated In the Washington Consensus Which was implemented everywhere By the late 1980s. But Development outcomes that Followed belied expectations. The promised economic performance Simply did not materialize In a very large number of Countries particularly in Africa And Latin America. Indeed Countries that were non-conformist Using heterodox Or unorthodox policies mostly In Asia. Fared far better Than countries that were conformist Using orthodox policies mostly In Africa and Latin America. This unfolding reality Which revealed a mismatch Between regime change and Economic performance did not Pursuade orthodoxy to think About correctives and policies Except to doing more of the Same or doing it faster. Let alone Rethink strategies. Of course Outcomes did lead to some Debate and some rethinking About development. There was Learning from experience everywhere But it was limited and selective And it differed across schools Of thought for it was shaped Only in part by outcomes. It was also significantly influenced By priors in thinking and Ideology in perspectives. The relationship between ideas And outcomes in development Was asymmetrical, selective And partial since ideas were shaped Far more by ideology than by Outcomes. The reason is clear Enough. Dominant ideologies were Always reluctant to question their Belief systems. It meant seeding Intellectual or political space. Hence the attempts to Unlearn from development with Changed priors of thinking were Few and far between. And it should Come as no surprise that none Dominant doctrines were more willing To learn from development experience It meant capturing intellectual Or political space. Yet once The tables were turned such that Non-dominant doctrines became Dominant ideologies, they also Became reluctant to learn and Unwilling to learn from Experience. Obviously it would Be a formidable challenge to Change this reality. Even so An ability to learn combined With an unwillingness to Unlearn from development could Transform the possibilities of Change for good in the Developing world over the next Thirty years. Thank you. This beautifully wraps up the The panel that has been Looking at a variety of Experiences on economic Structural transformation in Three continents. I think that We have had an opportunity to Look at the impact of big ideas Or their absence from the African perspective. We have Looked at some of the key Elements of the success stories In Asia. We have also Heard experiences on Handling the depth Crisis and it's And it's a great And it's a great And it's a great And it's a great And it's a great And it's a great And it's a great And it's a great And it's a great And it's a great And it's a great And it's a great And it's a great And it's a great And it's a great And it's a great And it's a great And it's a great And it's a great We do have some time for comments, questions from the floor, and I would encourage everybody to think a specific comment, a specific question that you would like to raise at this very point. I would give first floor to the gentleman here in front. Can you just identify yourself and also identify to whom you are addressing the question or comment? Why don't you come here? I was saying Jose Antonio Campo from Columbia, but teaching at Columbia University in New York. So totally Colombian. But I wanted to make two points, one to Justin in partly to Nora, but one to, in a sense, to all the panelists. I mean, the first one is, I don't, I mean, when you say the structuralism was a dismal failure, Justin, I don't know. In Latin America, the only period of fast growth was the period of industrialization from 1945 to 1980. Latin America grew 5.5 percent per year as a comparison since 1990 has grown 3.2 percent per year. In that period, if you take out the effects of demographic boom, for example, you estimate GDP per worker, so productivity, labor productivity, or in fact, total factor productivity is the best period in Latin America history. So I don't know, is that a dismal failure? In a sense, Nora is a bit more nuanced in her comment. But let me say that I was struck by the fact that nobody mentioned financial globalization and the effects on the developing world. Which, if anything, the end of that period was in Latin America due to the first, you know, the first series of crises generated by financial globalization. So it's more the, in a sense, it's more the macro of managing financial volatility. The mic again, are we getting any better with the mics? No. Would you mind coming up here and... Thank you. My name is Mina Baliamou Lutz. I'm a professor at the University of North Florida and I'm also a senior research fellow at the African Center for Economic Transformation in Accra, Ghana. I have a comment but it links like three presentations and all four presentations were excellent. I started by professor IOT who noted that the state has to accept that transformation is needed. It's a problem when the state leaders know that transformation is going to vote them out of office or cut the rent seeking that they are taking advantage of. So I wonder what you have to tell us in that area. How can we make sure that they get it while they know that they're going to be losing in some countries? The second thing is Professor Lin's new structural economic perspective. It's a great and useful to recognize what Professor Nyer emphasized that there are alternatives to development and that it's not a one-size-fits-all. And if you look at African countries, for example, which would work for some of the fast urbanizing countries in Africa would not work for Burundi or Ethiopia or Uganda which are still almost 80% rural. You talked about the importance of contextualization as well. I had another point about financial globalization. I was thinking more about globalization effect which are not new but might be now more intensified than in the past. To participate in global value chains, for example, is it just the responsibility of the state in Africa and the private sector in Africa or does it involve the responsibility of the trading partners as well which are developed countries as well as China and the Indian other countries? Thank you. Thank you very much. We'll take one more question and then I give floor to the panelists. Richard Jolie from the IDS. Thank you very much all of the panelists. It was a very rich, wonderfully diverse and extraordinarily detailed presentation. I want to make one point, however, that none of you spoke about the universality of development as many of us feel it's the way it needs to go. The SDGs, the Sustainable Development Goals, for example, are recognized to be universal. To my mind as a person living in Britain, very important. Secondly, as Jose Antonio has mentioned, the financial crisis, whether it's hitting the developed countries or the developing, it's a one-world financial capitalist problem. And thirdly, speaking as a Brit, what to my mind is interesting is that many of the issues now of developing countries and some of these successes have many lessons for the North. And when I look at the policy and the narrowness of the economic policy in Britain today, I weep for the perspectives, the lack of perspectives which many people in development would take for granted. And as some of us put in a little document about Britain and Europe, be outraged, we say the North now needs to learn from the South. Thank you. Thank you very much for the comment. I think that the comments were more or less addressed to all the panelists, so I would give a floor to the panelists, maybe Ernest, you would like to start. Thank you very much. There was the very first point that we didn't address the issue of financial globalization. I agree. I believe the main reason for not directly alluding to the financial globalization was the fact that we were dealing with ideas coming from other groups or individuals that have more or less influenced the way we pursue development. I would be very surprised if we could consider financial globalization as a result of any one group's ideas. Clearly, it's a function in a manner that has affected every country in the world today. Definitely something, a phenomenon that has to be considered in every consideration of development. But I don't think it qualifies to be one of what we call a set of ideas. Mina was interested in the issue of long-termism when it comes to stricter transformation and the likelihood that governments will find it an unattractive option. I do understand you. At the result of the new democratic dispensation in many countries, at the result of new elections and so on, every government thinks about how to win the next election and so less interest in the longer-term issues of transformation. I agree entirely. We've got to find a way around it. We've got to find a way around it. I believe that as electorates become more and more sophisticated and begin to see that their short-term gains always lead to longer-term losses. They'll find longer-term reforms more acceptable. Typically today, in almost every country, there are issues with power supply. You can't deal with power supply challenges within a short-term framework. And the populations are beginning to understand that, whether it's in South Africa or Ghana or in Kenya, everybody is beginning to understand that you go to deal with infrastructure within a long-term framework. That's beginning to bite. People are beginning to stop asking the question, what are you going to do for me now? We've seen governments lose elections, even though they spend lots and lots of money. Michigali is right in terms of the universality of development. Indeed, the SDGs, and before the MDGs, clearly reminded us of that. By the end of the day, countries still have to make decisions for themselves, likely. So even if we placed the issue of a development approach within a wider context, every country still has to account for its place with that universal set of orientations and choices being made. Every country will have a way of dealing with the SDGs. And so, the fact that we are pursuing development in a universal manner does not preclude the choice of country approaches. What can the North learn from the Southern reform? That's one big question. Clearly, there are many who looked at Greece and said, why doesn't Greece do what African countries learned 15 years ago or 20 years ago? If Greece had learned what African countries went through, they would have probably avoided many of the challenges. Italy can learn a lot from that. Spain can. Clearly, the basic principle surrounding macro reforms doesn't really matter whether it's in Africa or in Asia or Latin America or in Europe. And I believe that that lesson is being learned in many different ways, especially in kind of like Greece, Portugal, and others. Thank you. Well, the first response to Ocea Antonio, I agree with you. Latin America under the structuralism performed better than under the neoliberalism. In my remark, I said, because you look into the average annual growth rate and the stability of the economy, the performance of Latin America was better under the structuralism than under the neoliberalism. However, I think structuralism was still a failure because structuralism did not help the Latin America country to get out of the middle-income trap. Because if you look into the gap between the Latin America country and the U.S. and developed country, the gap did not narrow. That's one thing. And secondly, it was a failure also compared to the good-performing East Asian economies because they were able to move from low income to middle income and to high income, and Latin America was unable to do that. So from that comparison, I think structuralism was still a failure and something new can be learned from the success of the East Asian economy and the failure of the rest of the developing country. And second, comments that certainly agree, there's no one-site fit all policies. But if you look into the basic guiding principles of the transformation, there will be something that should be similar. Because to have a successful transformation in a competitive and inclusive way, the economy needs to be competitive. And how to make the economy competitive certainly in our country will be different from one to the other. But overall, I think the basic principle of competitive advantages, the basic principle of advantage of Back 1S, and the basic principle of to be pragmatic in your policy design, I think it should be applicable to almost all the countries. And I use the example, the quick wins in Ethiopia and also in Rwanda to demonstrate if you have a pragmatic approach and a government facilitates the entry to the sector which you have competitive advantages, then you can have job generation quickly. You can be competitive in international markets, even in your land or country with poor institution and poor infrastructure. So I think those should be universal. And then coming to the third comment, the universalities. I think that sometimes we mix ends with the means. I think many goals in the MDG or SDGs, some of them are ends, the end result of the development. Some of them are the means to achieve the end result. But often we do not, you know, we group them all together and sometimes we know which one should be SD levels for us to achieve the end. And secondly, I agree with you. The North can also learn from the South. One example is that in China and some East Asian countries, they use infrastructure investment as a counter-secular measures during the downturns of the economy. And when I was the chief economist of the World Bank, I started to promote the ideas. At the beginning in 2009, most of people in the North institutions, they did not agree with that approach. But I am very happy to see now, you know, to use infrastructure investment as a counter-secular measure which can create jobs, reduce the need for, you know, the unemployment benefit, dividing the downturn of the economy, and that will provide the foundation to have higher productivity growth in the future now has been, you know, accepted even in the North. Thank you. Yes, this is working, yes. Okay, so let me first address Richard's point about the universality of development. I guess by that you mean the importance of including not just developing countries but also the rich countries, right? And I couldn't agree more. And I think that going even beyond countries, I think more and more we're dealing with transnational problems and our frameworks are not adequately adapted to deal with them either analytically or policy-wise. And I think we better get our engines running on that because that's truly universal then, you know, beyond the national states. Now let me respond to a lesson from Latin America to Europe. It could have been zillions. I don't know why they were not tapped more frequently during the recent great recession. Let me address Jose Antonio's point about two things you said. You said that we have evidence that during import substitution industrialization during the structural stage in Latin America growth was better than later, no doubt, and that we didn't mention financial liberalization. I don't have a conclusive view and I'm willing to be proven wrong but I think although it's true that Latin America performed better during one of the periods in which structuralist policies were undertaken they were running out of course. You did have an average growth rate that was higher but you also had recurrent fiscal and balance of payments crisis and runaway inflation during that period. And I did mention, you say no, okay. Well, I mean it depends, maybe I am Argentine. He's Colombian. So that explains everything. But Mexico had the first balance of payments crisis in 1976. Before things became globalized. I think that the financial globalization actually postponed the ability of transforming the policy that was working into making it work better. It was replaced by something that didn't give results which was the market based extremism. But I mentioned that when import substitution was running its course the influx of foreign debt actually helped countries continue with this strategy for quite a few years more until terms of trade reversed and interest rates rose. But again, I'm willing to prove wrong. I think we're strongly influenced by different country experiences and it's going to be very hard to show what would have been the counterfactual but I do think that at some point a set of policies that was followed in Latin America had run its course. And the structures thinkers used to think so too by the way. Thank you chair. First, I think Jose Antonio Campo is quite right. We as a panel are collectively guilty of not thinking about the implications of financial globalization. There are no excuses but there is a plausible explanation that each of us spent 20 minutes choosing a domain focus. But let me say that if we think about development in the past 30 years we should have and we must analyze the implications of the internationalization of finance. Because that is so shaped outcomes. Now, what does it mean for the past? If we look at the diversity amongst the next 14 you would find that those who did better were those that hastened slowly with capital account liberalization and those that did worse and were more vulnerable were those that had integrated into international financial markets. Second, if we think of the future this is certainly going to reduce degrees of freedom in the formulation of policies and strategies of the kind I thought about or reflected on even if there are alternatives. I mean you recognize it. Third, if the financial crisis that surfaced in late 2008 which some of us described as the Great Recession soon after it surfaced is now turning out also to be a long recession. Longer than the Great Depression. So the question we need to ask ourselves is that if finance capital takes precedence over industrial capital in the world economy what does this mean for growth in industrialized countries and what does this mean for the possibilities of growth in developing countries because in many ways I have a feeling the slowdown in industrialized countries has sustained the rising share of the developing world in GDP in manufacturing value added and in merchandise trade but that might not be forever. Second, there was a question about generalizations addressed to Justin's idea of a new structuralism. I think all of us who engage in development are inclined to create our own analytical constructs are inclined to coax stylized facts from experience. The danger is that this leads to generalizations because at least generalization because the transition from diagnosis to analysis to prescription is much simpler it has a much wider appeal. But one sentiment in my argument was that we must resist this temptation. For the simple reason that while it's important to theorize and to generalize we must also recognize the importance of diversity so that we can create stylized facts, analytical questions, recognizing this diversity. And this links to the point I made. The reason this tends to happen and it's very difficult to stop it from happening is that ideology does shape ideas much more than outcomes do. So people's priors in thinking, people's ideological perspectives lead them to generalize in a particular way. Third, Richard's point about the University of Development I recognize in one dimension, but there is another dimension. You refer to multilateral compacts such as the Millennium Development Goals which were asymmetrical. It was about the industrialized countries preaching to the developing countries or what they must do and how they could do better. Perhaps the new compact on sustainable development goals will be less asymmetrical but my sense is the agenda is still shaped by that kind of asymmetry. Now even so, university development is important because you're quite right. There are lessons that Western Europe and Southern Europe can both draw from the experience of the developing world in the past 30 years. But we also need to recognize that in that universality there is a set of rules and institutions in the world economy which are asymmetrical. They are unfair rules, they are asymmetrical rules and then they tend to crowd out the possibilities of development in low-income and middle-income countries. So we need to address your idea of universality, not simply in terms of ends but also in terms of means in the international context. Of course, having said that, given any international context there are degrees of freedom for national development strategies. And one last point, I can't resist the temptation because Jose Antonio and Kanpo and I have had this conversation earlier. I think there is a danger in the kind of periodization we have done. We look at 30 years. But if we take a long-term view, say 1870 to 1950, you actually see the decline and fall of Asia which was incredible, attributable to the decline and fall of China and India. But you also see that Latin America is the only continent of what we now call the developing world that actually increased its share of world GDP and a world population and did so in a symmetrical manner for 80 years. And in many ways, 1950 to 1980 was a continuation of that process. Now, we can have sort of linguistic debates but my concern is that sometimes periodization leads to views that may be partial. And certainly we look at Latin America in the long term. Latin America was the success story, certainly until 1950 and even until 1980. Asia was the disaster story and that's what has turned around. I think I will stop with that chair. Thank you. Thank you very much, Deepak. I can take two more questions. There is a lady at the back with the green dress. Please, can you identify yourself and if you can specify to whom you are posing the question? Thank you. Okay, thank you. I have three questions. My name is... I'm sorry, now you have to limit your question into one. I'm sure that we all need to have also some fuel for our systems in the elements of coffee. So I'm sorry, one question. Prioritize the most important one you have in mind. My name is Ita Manatoko. I'm between affiliations right now. I used to work with my last job as Evaluation Office with IMF, but I spent some time with the bank as well. My... Maybe my most important question then is really about since we are looking forward, we are thinking of the future, perhaps the panel could comment on where the world is going and how this folds into what we are doing here. Basically the world is evolving rapidly. The main drivers of the transformation that is undergoing now are science and technology. The world that we live in 20 years from now will probably be very different from what we are living in now. So part of the question is really as development economists, how are we going to fold this into our vision of finding leaps or rapid development modalities? On institutions, the challenge in building institutions, I'm from Botswana, is how do you make institutions leadership proof? Because we know our leaders see a new regime as an opportunity to dismantle what they didn't like before and carry it forward. In mineral rich economies, which is where the country I'm from, the challenge in terms of relative prices that Justin Lin talked about in looking at relative factor prices as your key to how to structure industrialization, the challenge there is that those prices become distorted by the dominance of the mineral resource. And this is a challenge that Botswana is facing now. So you now have a labor force which is overpriced because it has been driven by government wages, which are government revenue comes from the mineral resource, that sort of thing. So you have to have a challenge where you have a consumer society and high income levels, but you have to establish the correct factor prices for an unmineral economy in the long term. Thank you. Thank you very much. Then we have a lady here in front, yes, or in the middle front. Can you identify yourself and as focused question as possible? So I'm Olga Shemeckina, Georgia Institute of Technology. And all of the speakers spoke about an institutional change that is required to adopt a role of a leader, especially a pragmatic one in the development process. And given the problems that developing countries have, in particular with corruption and focus on short term gains and creating these policies, how to overcome that mindset? Thank you. Thank you very much. So very briefly, all the panelists, where are you seeing the world going as lead economic thinkers? And how can we change the mindsets that are prevailing some of the challenges? Maybe Deepak, you would like to start first. Very quickly in response to the two questions. First, if we contemplate futures, I think we must dismiss with as much conviction as we can command the idea that countries, some countries, particularly in Africa, are destined for underdevelopment. There is nothing more unscientific and historical than that view. Who could have possibly imagined in 1960 that the Republic of Korea is where it is in 2015? In some, I believe there are possibilities and it depends very much on what countries do in their respective national context. And I think we have considered that. Second, just a simple or well, I'm in danger of oversimplifying. You know, if we take a long term historical view, I think that developing countries defined as Asia, Africa and Latin America together will by 2030 be exactly where they were in 1820 in terms of their relative importance in the world economy. This will be a very unequally distributed outcome in development, but their share in world GDP will be in current prices at market exchange rates, 50% or more. Their share in world manufacturing value added will be close to what it was in terms of Bioroc's estimates in 1820 at about 55, 60% and their share of world trade will be roughly similar. So that I do believe that the world is going to continue the structural transformation uneven or disparate as it might be. Thank you. Thank you, Deepak. I won't venture a prediction of where the world is going, but I think that one area that we as development economies need to think very much about what can be done is the fact that there is increasing evidence that technological change is continually going to be labor saving. So in the future, the generation of income through employment might be quite hard. And therefore, we need, you know, as long as the robots are owned by one group of society and another group of society just as labor to sell, we got a problem. And I think that we haven't thought about what is the paradigm that will deal with the new technological realities in terms of generating inclusive growth with social peace. The second thing about the question about corruption, I think it's very hard to change corruption. But there is hope, and I don't know how many of you recently witnessed what happened in Guatemala, a country that was characterized by tremendous impunity for decades. But one commission that had been set up by the U.N., I think it was, and a very sort of determined head decided to pursue corruption to the end, and the president had to resign, and now he's going to stand trial. In a country that had a 30-year civil war and that spends 10% of its, collects 10% in taxes, that's all it spends, and it has a tremendous duality in terms of the indigenous populations, poverty, and the rest of the non-indigenous population. I think that's a sign of progress. It means that you can generate institutions that may help fight corruption with results. Thank you, Nora. Then, Justin. Well, regarding the role of science and technology, I have to say it has been there since the industrial revolution because since the industrial revolution, we started to have the modern economic growth. And the nature of modern economic growth is a process of continuous technological innovation and industrial upgrading. And those innovation and upgrading have been based on science and technologies. So I think this is not something new. I think something new is that the rate of technological changes and industrial upgrading become accelerated over the time. And we see that in the past century, and we are going to see that in the coming century also. And under this kind of situation, are we going to have divergent or convergent? Well, whether a country will be able to converge to high income or not. I think it very much depends on whether we have a policy framework which can make the country enter into the areas that can be competitive in the international market or not. If they can do that, they will be converging. If they cannot do that, they are going to lose and they are going to diverge. And for that, I think it's very important, as I argue in my framework, to identify areas which you have latent competitive advantages. And to come up with the government facilitation to help the private sectors entering into the sector which you have competitive advantages, and so you can be competitive. And you can also generate more surplus accumulated capital and facilitate you to upgrade your industry and technologies. And then I like to respond to Deepak's comments of the new structuralism. Actually, I do not call it new structuralism. I call it new structural economics. I think that the difference between new structuralism and the new structural economics is that structuralism is a set of ideology, a set of policies that you need to follow. And the new structural economics is a framework analysis. And in this framework, I advise the developing country to look into what they have now. That is their endowment now. And to base on what their endowment now, what they can do well, that is their competitive advantages. And to have a policy framework to scale up what they can do well now in order to be competitive and to capture the new opportunity and so they can converge. So I think it's different between the new structuralism and the new structural economics. Thank you. Thank you, Justin and Ernest. Thank you very much. So to eat us question about where is the world going, clearly as my colleagues on the panel have indicated, the future, it's very difficult for anyone to predict what it's going to be like. But clearly, how science and technology evolve will drive that future. So very important for countries is how they engage with that change that is taking place. I believe that your concern is about where will Africa be as these things evolve. Now Africa's future has to be in the hands of the Africans. Africans have to define for themselves as how they want to face or engage with the rest of the world over the next decade, the next two decades, et cetera. One of the biggest worries I've had is always looking at African governments waiting for some sense of direction to do what to do. That for me has been the biggest worry as an African. I believe that Africa can take its future into its own hands by looking at what's available today, thinking about what it wants, and engaging with the new technology available. So where Africa ends will really be determined largely by the Africans. I'm not at all naive about the fact that there are global activities that impinge on how effective any country can be. But it's important African governments begin to think in a much more proactive manner how they want to engage with the future. How do we change mindsets? I don't believe that it's possible to change mindsets. I believe that people learn from their experiences. So mindsets evolve in any society as a result of the experiences that people have. From past experiences. So if we're going to see corruption come down, it would depend on what institutions we have and how they deal with corruption. So if there are sanctions for corrupt behavior, of course with time, you see people move increasingly away from corrupt behavior. So it's not simply a matter of governments or preachers preaching to people to be less corrupt. It's more a matter of what experiences they go through as a result of being corrupt. I come from a country where in the last week somebody has provided evidence of 22 judges taking bribes. It's become a huge scandal for the whole nation. It's become a major embarrassment for the judiciary and for the legal profession. Now everybody is watching to see how lawyers in general will come out of it. Everybody is watching to see how they respond. And I believe the way they respond to this new embarrassment will define how lawyers are trained in the future, will define the profession for the future, and will define how the nation engages with the judiciary. So these experiences are what would change people in their mindsets. It's not how much preaching that you do. Thank you. Thank you very much, Ernest. We are coming to the end of the opening panel. I would like to thank the panelists for setting a very wide scene for the coming discussions and days. I think that like particularly the last questions we're pointing out, while we are analyzing the past, our perspective has to be in the future. I hope you all feel inspired and maybe also a little bit provoked because these elements will serve as an excellent fuel for the coming discussions and sessions. Now if you want to come back to what has been said in the opening panel, you can always visit the UNU wider website. The video off the opening panel will be available there. If you want to see a little bit more on similar issues also addressed by the panelists, you can visit the wider YouTube where you have several interesting interviews and discussions on global development challenges. With these words, I will close the opening panel and I will give floor to Fin. Thank you very much Christina, Ernest, Justin, Nora and Deepak. My sincere thanks for getting us started. Now I'm afraid that I have been asked to give a few housekeeping hints and I'm going to try to do that very very briefly but just to avoid that everybody is going to ask the same question outside. The conference program is available on the web. It is updated. The plenary panels will take place in this room, a repair. The parallel sessions will take place here in two rooms at this floor. Nautica in the press room. In two rooms at the second floor. Fennige 1 and Nordia and then also across the street in one room in the hotel in what's called the compass. The coffee breaks, the conference lunches, as well as the closing dinner on Saturday will take place in the Opia foyer just outside here. When we say first floor here, that is the same as the ground floor. The opening dinner at 7.30 tonight will be just about 100 meters that way. So when you're outside the hotel, you stand looking towards the hotel like this and look back to the conference center. Turn right and then turn immediately left and you're there. There's a network café outside in the Opia foyer on this floor. Coffee and ideas can flow freely there. Please help the Finland to retain its world championship in coffee drinking. The café will also provide newspapers, computers and a comfortable place to sit and discuss. And for us, importantly, a soft version of Wider's new website. We would very much appreciate your feedback so we can improve it before it's formally launched in mid-November. And do note that not only the World Income Inequality Database, the WID is now on that site. Also, two additional databases, the ICTD, UNU Wider Government Revenue Data Set and a database on social assistance, politics and institutions. We refer to it as SAPI. I apologize for the glitch on the mics in the beginning. We have no intention of shutting anybody off, but when you do use the roving mics, you should not turn them off. They should be on at all times. There'll be a poster session tonight between 6 and 7. It will be held in the foyer outside. A total of 20 posters will be presented by young career, early career researchers. Do join in. Do engage. Get the ideas flowing. Help them. And subsequently, the posters will be replaced in the network café. Advice on those who need to have per diem and so on, you can get just outside. We do have the funds available in the building, but I'm advised by security not to tell you in public where it is. Also, this is a non-smoking facility, and then to put it in a friendly way, you are allowed to smoke on the second floor at the balcony. And please, if we can request that everybody puts these things on silent mode during sessions. If you require any assistance at any one point in time, look for somebody who has a blue name tag. This is the UniWider staff. And also, there is Wi-Fi. There's free access. Scandic underscore easy. It should be easy. And let me say that on the social side, there will be music tonight at the opening dinner. We are also organizing a Helsinki bus tour on Friday evening. And there are facilities booked. A special pop has been booked for Friday evening. The Key West pop will be available for social interaction. And then you will get an email on Monday, 21 September, where we are asking for your feedback. May I request that you do spend just one minute to provide that feedback. For those of you who have ever worked with donors, you know that they require that, and they are paying part of the party. So please. Last, I'd like to highlight that on the Wi-Fi website, you can find the announcement for our internship program and our visiting scholars program and the deadline for applications is 30 September. And anniversary, as Deepak said, is time for celebration. It's also time for reflection. I hope you will have lots of both of these things over the next three days. Enjoy, and if I can say it's probably acceptable, and I was suggesting that we agree all of us, that the sessions will start 22 rather than at 11.30. So 20 to 12. Okay? Thank you, everybody.