00:00 [Music] 00:03 00:03 maito buolo welcome to advocat Studio 00:08 00:08 why don't we start by you telling us a 00:10 00:10 little bit about your personal story 00:13 00:13 okay thank you thank you very much for 00:15 00:15 having me very appreciate um okay my 00:18 00:18 personal story I'm Italian uh I come 00:22 00:22 from Torino North West close to to 00:26 00:26 France and um I left I left Italy 00:31 00:31 probably middle of my life to do my 00:33 00:33 postgraduate studies in in the UK uh and 00:37 00:37 then I 00:38 00:38 moved War University War University and 00:42 00:42 I um moved during my PhD 00:47 00:47 I one interesting thing is that I was 00:49 00:49 there during the post toucher period so 00:53 00:53 the whole Midlands where it's very near 00:56 00:56 centry H which was an industrial core of 00:59 00:59 India England it was completely de 01:03 01:03 industrialized so it was desolate was 01:05 01:05 nothing to do really apart from studying 01:08 01:08 but I moved I moved to the OCD in Paris 01:10 01:10 for a summer job and then I stayed a 01:12 01:12 couple of years there then I was kicked 01:14 01:14 out went back to finish my PhD and then 01:19 01:19 I decided to have um a go my PhD was 01:23 01:23 on um on trade agreement it was again 01:28 01:28 the period in which NAFTA was mind 01:30 01:30 between North North America and and or 01:34 01:34 US Canada and Mexico and I did a similar 01:37 01:37 study for um the North Africa and and 01:41 01:41 Europe so uh I wanted an experience in 01:45 01:45 in a developing country so I moved to 01:47 01:47 Colombia after I finished my PhD in 01:49 01:49 South 01:50 01:50 America and there I met my wife and um 01:54 01:54 and we decided to move back to uh to 01:58 01:58 Europe and I went to ODI overseas 02:01 02:01 development Institute in London which in 02:04 02:04 in a period where um Claire short was 02:07 02:07 the first Secretary of Def the 02:10 02:10 department for International Development 02:12 02:12 that now is called differently but um 02:15 02:15 she had an interest in trade and poverty 02:18 02:18 they wrote the first um the first white 02:22 02:22 paper on trade and poverty so I be I 02:24 02:24 began to be interested in in topics 02:27 02:27 related to trade and the impact on 02:29 02:29 income distribution and poverty and 02:33 02:33 after London I we moved to back to Paris 02:36 02:36 I worked a little bit again at the OCD 02:39 02:39 and then 20 years or so ago I uh was um 02:45 02:45 asked to interview for the World Bank 02:47 02:47 and I moved I moved to back to to DC and 02:51 02:51 in so I'm at the World Bank I've been 02:53 02:53 there for a long period of 02:56 02:56 time about 23 years now so what recently 03:01 03:01 one one of my vice president to asked me 03:05 03:05 how many years have you in the bank and 03:07 03:07 I said more than 20 and he said well 03:09 03:09 you're 03:10 03:10 doomed when you when you go beyond 20 03:13 03:13 years you learn you learn a very 03:16 03:16 important skill very useful skill but 03:18 03:18 they become a little less marketable 03:19 03:19 outside anyway the the work at the World 03:22 03:22 Bank is very interesting I've worked in 03:24 03:24 deck the development economics which is 03:28 03:28 the the the center of of knowledge for 03:31 03:31 for for the bank doing doing research 03:33 03:33 then I moved in in Latin America for for 03:36 03:36 a while when I was doing actual 03:39 03:39 operational work during the 2008 n 03:42 03:42 financial crisis so it was a tough time 03:47 03:47 uh so countries needed needed quite a 03:49 03:49 bit of of financial help and then I 03:52 03:52 moved back to the center and then I've 03:54 03:54 been in the in Two Chief Economist in 03:58 03:58 Europe and Central Asia and then last 04:01 04:01 four years in in in in in South Asia uh 04:04 04:04 which is a very interesting region uh 04:08 04:08 very difficult to um say many new things 04:13 04:13 because it's a it's a region perhaps 04:15 04:15 because of the English language and the 04:19 04:19 the richness in in data and the large 04:22 04:22 population of the region is a is a very 04:25 04:25 well studied region uh very good uh 04:29 04:29 economist from the region and outside 04:31 04:31 that are focus on the region so it's um 04:34 04:34 it's been an interesting four years for 04:36 04:36 me I do some um uh teaching I 04:40 04:40 also when I can I have been I've 04:45 04:45 been invited professor in a few 04:48 04:48 University in Italy uh in in France and 04:52 04:52 and the UK so that's that's my story I 04:55 04:55 have two two daughters so I have been 04:57 04:57 also recently partly because of of it's 05:01 05:01 one of the important issue for the 05:02 05:02 region gender inequality is also one 05:04 05:04 thing that I am I'm quite interested in 05:08 05:08 so that's a very rich uh set of 05:11 05:11 experiences that you have and that 05:13 05:13 probably set the foundation basically 05:15 05:15 for uh Richard discussion uh you have 05:18 05:18 just released this report basically and 05:21 05:21 you have given this presentation 05:23 05:23 summarizing some of the key findings in 05:26 05:26 that you say that the growth uh across 05:29 05:29 South Asia 05:30 05:30 slowing um what is the main reason for 05:34 05:34 the 05:36 05:36 Slowdown well it okay so it's um it's a 05:40 05:40 complex complex question that but I 05:43 05:43 would say that there are both cyclical 05:45 05:45 and structural reason behind this this 05:47 05:47 slowdown let's start with maybe with the 05:50 05:50 with the structural and let's take a 05:52 05:52 step back and look at the the overall 05:54 05:54 Global uh growth there's another report 05:58 05:58 done by uh two colleagues of mine ayyan 06:02 06:02 Co and francisa onor and others on 06:06 06:06 growth potential in in in the world and 06:10 06:10 one of the headline of their of 06:12 06:12 their uh large report is that the the 06:18 06:18 the world is uh going to have weak 06:21 06:21 growth for at least another 5 to 10 06:24 06:24 years so we mve from all the factors 06:28 06:28 that have helped in the 90s and early 06:31 06:31 2000 uh and even before to boost growth 06:35 06:35 uh trade liberalization uh increase um 06:39 06:39 globalization in terms of technology and 06:42 06:42 and and exchange of of of capital Etc 06:46 06:46 um are are have been have been sort of 06:49 06:49 exhausted so the the world uh was 06:53 06:53 growing in about the potential growth as 06:57 06:57 the world was 3.6 in the in 07:01 07:01 the last 10 years before the the change 07:05 07:05 of the Millennium then it went to 2.6 07:08 07:08 and the forecast in there according to 07:10 07:10 their um uh um report is going to be 2.2 07:15 07:15 so so these uh these These are secular 07:19 07:19 Trend globalization technology is one 07:21 07:21 another important one is demography so 07:23 07:23 there has been there has been Aging in 07:26 07:26 across the world is not really an 07:28 07:28 important problem for this region 07:30 07:30 but China 07:32 07:32 Europe and other and other countries 07:35 07:35 have have been have been undergoing this 07:40 07:40 this this change in in demography so all 07:42 07:42 of these uh put pressure on on on future 07:46 07:46 on future growth then you add on top of 07:48 07:48 that you add more cyclical issues and we 07:52 07:52 have had 07:54 07:54 several coming online recently the the 07:59 07:59 covid is obviously still uh very clear 08:02 08:02 in our memory but geopolitical 08:05 08:05 tensions uh Wars in Ukraine um Gaza and 08:11 08:11 Israel and that 08:14 08:14 is enlarging and taking other other 08:18 08:18 other parts of the regions in in in this 08:22 08:22 um are are all the the tightening of the 08:25 08:25 FED uh inflation all related and all 08:29 08:29 these cyclical forces are also uh 08:32 08:32 affecting affecting the more the short 08:34 08:34 term so for these for these these These 08:37 08:37 are the set of reasons that are 08:39 08:39 headwinds that the the countries have 08:43 08:43 have have have to face in in the near 08:46 08:46 future and in some sense for for the 08:48 08:48 longer future there are also 08:50 08:50 opportunities though and and it's not 08:53 08:53 it's not all doom and gloom as I 08:55 08:55 mentioned in the presentation the uh the 08:60 08:60 the energy transition is is can be seen 09:04 09:04 as again a possibility of refurbishing 09:09 09:09 the economy changing the way things are 09:11 09:11 done and people are realizing that is 09:14 09:14 not really an option anymore and that 09:17 09:17 the climate change that I not me I 09:19 09:19 haven't mentioned is also another 09:20 09:20 structural change that is is going to be 09:23 09:23 coming important and potentially a 09:25 09:25 headwind in the future in your 09:27 09:27 presentation you also highlight that uh 09:30 09:30 the slowdown in China which perhaps is 09:34 09:34 structural reasons and then they have 09:36 09:36 had this huge property bubble but it 09:39 09:39 will have an impact on South Asia I was 09:43 09:43 wondering considering that South Asia 09:45 09:45 has very little limited exports to China 09:48 09:48 think the highest I saw was with 09:50 09:50 Pakistan close to about 9% uh India was 09:53 09:53 more like 6% and everybody else was low 09:56 09:56 single digit why is a Slowdown in China 09:59 09:59 going to impact growth in South Asia is 10:02 10:02 it first order effects or second order 10:05 10:05 effects no it's you're right to point 10:07 10:07 out that um uh the first order the 10:11 10:11 direct linkages in terms of trade flows 10:14 10:14 are are are not that High and 10:17 10:17 um in a way that is 10:21 10:21 both an an advantage in the sense that 10:24 10:24 insulates the region from from these 10:26 10:26 shocks but it's also disadvantage 10:28 10:28 because of 10:30 10:30 it insulates the region from flows of uh 10:34 10:34 trade but also capital and therefore 10:37 10:37 also ideas technology Etc so the the the 10:42 10:42 the issue of China is is again probably 10:47 10:47 better observed better discussed in 10:49 10:49 terms of these Global Trends and longer 10:52 10:52 term structural change so the in the 10:56 10:56 '90s again going back to what I was 10:59 10:59 saying the 10:60 10:60 90s uh basically China Russia uh India 11:05 11:05 enter the 11:06 11:06 WTO and among them uh probably a billion 11:12 11:12 or close to a billion workers became 11:15 11:15 connected some more than others to the 11:18 11:18 global system of trade before that there 11:21 11:21 was the some calculation where that the 11:23 11:23 world was again 1 billion Global workers 11:26 11:26 by global means workers that work in 11:28 11:28 tradeable sect 11:30 11:30 so the the global labor market went from 11:33 11:33 1 billion to two billion and that change 11:37 11:37 as created issues of um of um inequality 11:44 11:44 in high income countries because these 11:46 11:46 new billion of workers came with less 11:49 11:49 Capital to work with and less lower 11:52 11:52 education and so they the trade the type 11:55 11:55 of Trades of goods that they were 11:57 11:57 producing were uh of of um of intensive 12:03 12:03 intensive of of of low skills and that 12:05 12:05 has created the pressure in in high 12:08 12:08 income countries because High skill 12:10 12:10 workers in high income countries didn't 12:12 12:12 were didn't have competition but low 12:14 12:14 skill so this has increased inequality 12:16 12:16 in these countries and and one reaction 12:19 12:19 has been to slap tariffs across so there 12:23 12:23 has been all disruption of of trade now 12:26 12:26 the going back to to to China again uh 12:30 12:30 you saw with the you saw with the with 12:33 12:33 with the covid and with near Shoring uh 12:37 12:37 the fact that countries want to have 12:39 12:39 control over certain production so there 12:41 12:41 has been all these reshoring so China 12:43 12:43 going down maybe it's not so important 12:46 12:46 for for for Sri Lanka and and South Asia 12:49 12:49 but all these conversion at the global 12:52 12:52 level have an impact the availability 12:55 12:55 and potentially positive because maybe 12:58 12:58 maybe again um 12:60 12:60 uh in the short term there is there is a 13:02 13:02 little bit downturn but in longer 13:04 13:04 term uh these are considering more 13:07 13:07 friendly places than other places so 13:10 13:10 there is more interest in in in uh 13:13 13:13 intensifying the trade relations and and 13:16 13:16 so it's I would I would agree with you 13:20 13:20 on my long answer I would agree with you 13:22 13:22 that maybe it's not so crucial in terms 13:25 13:25 of longer term there is a bit of of an 13:28 13:28 effect in the short term but these other 13:31 13:31 issues are are more 13:32 13:32 important also South Asia 13:35 13:35 historically does not have a lot of 13:38 13:38 intra regional trade right I remember 13:41 13:41 seeing somewhere like only 5% while in 13:43 13:43 asan it's like 25 30% right you have any 13:47 13:47 comments on that yeah well there is a 13:50 13:50 whole group in in in um in the my vice 13:55 13:55 presidency interested in uh boo in in 13:60 13:60 regional trade and and considering 14:02 14:02 considering trade within the region an 14:05 14:05 important engine of of of development 14:08 14:08 and growth if you again if you look at 14:11 14:11 the uh experience of Europe where I come 14:14 14:14 from uh the the creation of the Common 14:18 14:18 Market was one important tool to create 14:22 14:22 to that was created after the war to to 14:25 14:25 create peace and people that do business 14:27 14:27 together they don't want to fight each 14:29 14:29 other right so so there is there is 14:32 14:32 there is that view also that we hold 14:35 14:35 that we we we we would like the region 14:37 14:37 to to do more of that so there are some 14:41 14:41 some political issue again that keep the 14:43 14:43 country separate there are issues of 14:46 14:46 transport and Logistics that are 14:48 14:48 difficult that they they it's it's 14:50 14:50 easier it's easier to fly uh out of 14:54 14:54 India or Sri Lanka to uh to Dubai then 14:58 14:58 to fly to uh 14:59 14:59 other countries within the region so 15:01 15:01 there are those issues that are to 15:02 15:02 consider and um and and no yes so it's 15:07 15:07 it's it's um it's a missed opportunity 15:10 15:10 and there should be more focus on there 15:13 15:13 one thing that I can say is that just 15:15 15:15 before a week ago I was in the 10 no 15:20 15:20 20th edition of the siis the south Asia 15:25 15:25 economic students meet it's something 15:28 15:28 that we call Finance with with others 15:30 15:30 and it's a meet of three four days of 15:34 15:34 students from all over South Asia 15:36 15:36 countries and so you have they present 15:40 15:40 papers they undergraduate they present 15:42 15:42 papers to each other there are 15:44 15:44 competitions Etc and it's amazing to see 15:47 15:47 um Pakistani and 15:49 15:49 Indians working together on something 15:52 15:52 presenting together and and some of the 15:55 15:55 older students that that come back to 15:57 15:57 organize that they they 15:60 15:60 say that their experience they carry it 16:04 16:04 with them and they the hope is that in 16:07 16:07 20 years or maybe less when they are in 16:09 16:09 in position of powers they remember each 16:12 16:12 other and they can collaborate more 16:15 16:15 that's that's the idea that makes a lot 16:17 16:17 of sense um in your presentation you 16:20 16:20 also uh showcased that few countries in 16:24 16:24 South Asia actually are becoming more 16:27 16:27 protectionist there are Capital controls 16:30 16:30 there are trade restrictions on items we 16:33 16:33 have seen that in Sri Lanka itself 16:34 16:34 because of a extreme shortage of dollars 16:38 16:38 uh why do these countries resort to them 16:41 16:41 when they are having balance of payment 16:42 16:42 crisis when it should be a more fiscal 16:45 16:45 or monetary response right well three 16:48 16:48 three quick reason one is speed it's um 16:51 16:51 it's quite effective these these 16:53 16:53 measures are quite effective when you 16:54 16:54 are in in an emergency mode uh you can 16:58 16:58 you can recur you can use these and they 17:00 17:00 have they have an almost immediate 17:02 17:02 effect even if it's not the best way to 17:05 17:05 go about as you as you point out um one 17:09 17:09 other one is 17:10 17:10 that is is a bit more uh politically 17:16 17:16 easier populistic in a way because you 17:18 17:18 are kind of blaming the external forces 17:21 17:21 we isolate the our sales from the from 17:24 17:24 the rest we put we put um a tariff on 17:27 17:27 Imports so thinking that the the the the 17:31 17:31 cost of that is on the external and and 17:33 17:33 you you you protect your your reserves 17:38 17:38 uh and and the third one is perhaps 17:42 17:42 also uh the the 17:45 17:45 the a constraint on on on capacity there 17:49 17:49 is conducting 17:52 17:52 conducting good fiscal and monetary 17:54 17:54 policy requires not only skillful 17:58 17:58 minister or or talented people which you 18:00 18:00 certainly have but it's a whole series 18:03 18:03 of data monitoring uh if you look at how 18:07 18:07 how the FED is is conducting their 18:10 18:10 policy they are fed fed with constant 18:13 18:13 flow of data and the infrastructure of 18:16 18:16 data the transparency of data the 18:18 18:18 reliability of data in in in developing 18:21 18:21 countries is is just not not there so so 18:25 18:25 there are multiple reasons why these 18:27 18:27 These are second or 18:29 18:29 uh politic policy tools but that they 18:32 18:32 tend to be 18:34 18:34 used um I looked at some of the data 18:37 18:37 that the Asian productivity organization 18:40 18:40 puts out uh and they have a clear 18:44 18:44 relationship about the contribution 18:46 18:46 total Factor productivity is making to 18:49 18:49 growth and this looks like a South Asian 18:52 18:52 phenomen that it has a very very low 18:55 18:55 contribution and in the last few years 18:58 18:58 even a negative contribution so it seems 19:01 19:01 like the growth is coming VI Factor 19:05 19:05 accumulation um but as we know that 19:08 19:08 that's not good growth you know ideally 19:10 19:10 you want a larger contribution coming 19:12 19:12 from Total Factor 19:14 19:14 productivity uh have you looked into 19:16 19:16 this issue yeah yeah yes some some of it 19:20 19:20 because I am i' I've worked on another 19:25 19:25 uh publication on informality in the 19:29 19:29 region an edited volume with my 19:31 19:31 colleague sidart Sharma it's called 19:33 19:33 hidden potential by the way so our view 19:36 19:36 of of informality is not so negative but 19:39 19:39 and we look at um we look at U um 19:43 19:43 adoption of of 19:45 19:45 Technology uh from from firms and the 19:49 19:49 differences 19:50 19:50 between informal and formal firms so 19:53 19:53 start start from the the observation 19:56 19:56 that uh uh firm in in South Asia 20:03 20:03 takes twice or or sometimes even five 20:07 20:07 more years or five more times to to 20:11 20:11 double in size Visa a Mexican firm or 20:14 20:14 Vis via US firm so there is firms tend 20:18 20:18 to grow very slowly and we know that 20:21 20:21 small firms have uh liquidity constraint 20:24 20:24 have knowledge constraint and adopting 20:28 20:28 better the Technologies is is difficult 20:30 20:30 and they they they they don't and that 20:33 20:33 is one of the reason why uh tfp is is is 20:38 20:38 not it's not expanding so so strongly 20:41 20:41 but it's not the fault of of of the 20:44 20:44 firms themselves is they operate in a in 20:48 20:48 a fairly 20:49 20:49 distorted economy um with with with many 20:53 20:53 different type of 20:55 20:55 distortions from the fiscal from the tax 20:57 20:57 from the subsidy and so uh so there are 21:01 21:01 there are many different issues that uh 21:04 21:04 slow down the the tfp but let me say one 21:08 21:08 other 21:09 21:09 important issue there which is somehow I 21:15 21:15 and others remain a little bit 21:17 21:17 dissatisfied with the way these growth 21:20 21:20 accounting is done and tfp becomes one 21:24 21:24 uh container of everything we don't know 21:26 21:26 we can't explain very well and so if 21:29 21:29 this goes up or down we say well it's 21:31 21:31 bad but we don't know very well what 21:33 21:33 what is what is happening there and 21:36 21:36 there is an important lesson on this 21:40 21:40 from a recent study done by EA atal in 21:45 21:45 um um in in us they look at the growth 21:50 21:50 rate of the US from the 60s to 2010 15 21:56 21:56 more than 50 years of of growth 21:59 21:59 and they start from this uh point that 22:02 22:02 in in the 60s all uh 96% 93% 94% were 22:10 22:10 white men in professions like the 22:13 22:13 doctors lawyers or managers so white men 22:16 22:16 were dominating all these high level 22:19 22:19 occupations okay and it's impossible 22:22 22:22 that their premises is impossible that 22:24 22:24 all the talent or for for doing this 22:27 22:27 this profession is in white men and so 22:30 22:30 what they do is they prod they create a 22:33 22:33 fairly sophisticated model where they 22:36 22:36 look 22:37 22:37 at how Talent uh has become much more 22:42 22:42 equally distributed in these 60 years 22:46 22:46 and they look at the 2010 where these 22:49 22:49 white men in these professions were 22:51 22:51 became 60 61 58 so much more equally and 22:56 22:56 the uh other group that enter the labor 22:60 22:60 market are women so there has been an 23:03 23:03 increase a large amount of of of female 23:07 23:07 labor force participation increase in in 23:09 23:09 in in in the US and um um 23:15 23:15 blacks African-American so the of that 23:21 23:21 growth this better distribution of 23:24 23:24 talent and entry in the labor market of 23:27 23:27 of women and and and africanamerican 23:30 23:30 explain 20 to 40% of the growth rates 23:35 23:35 okay so that one if we were not looking 23:37 23:37 at these kind of things we would have 23:39 23:39 said oh that's total fact productivity 23:41 23:41 but no it's simply women entering the 23:44 23:44 labor market women having Chances with 23:46 23:46 their talent to compete and this is 23:49 23:49 crucial for for for South Asia South 23:52 23:52 Asia labor force participation by women 23:55 23:55 is a quarter it's the lowest in in in in 23:58 23:58 the whole world apart from Mana Middle 24:02 24:02 East and North Africa so yes technology 24:06 24:06 I don't say that technology is not 24:07 24:07 important but you have a lot of talent 24:10 24:10 that is not utilized in women so you you 24:14 24:14 mention I mean for the benefit of our 24:15 24:15 viewers I mean the total Factor 24:18 24:18 productivity is the residual that is not 24:20 24:20 explained by a growth in inputs of 24:22 24:22 either labor or capital and in your 24:25 24:25 introduction you said that uh you are 24:27 24:27 also very interested in gender issues 24:29 24:29 and you mentioned about uh low female 24:32 24:32 labor participation in Sri Lanka it's 24:34 24:34 35% is slightly higher than say India 24:37 24:37 and Pakistan it's even low so what what 24:41 24:41 explains that is this cultural or are 24:43 24:43 there other factors because in East Asia 24:46 24:46 I'm told that it's 60 70 and Vietnam is 24:49 24:49 like close to 80% sure sure yes yes let 24:52 24:52 me say let me say just one one more 24:54 24:54 clarification that may be important that 24:56 24:56 is not the the B boost to growth doesn't 24:59 24:59 come simply from having more women 25:02 25:02 working but it comes from a um a better 25:06 25:06 allocation of talent okay so it's like 25:09 25:09 if every everyone uh starting from the 25:13 25:13 premises that every there is a 25:15 25:15 distribution of talent and that's 25:16 25:16 between men and women is similar if we 25:19 25:19 everything is done by men you are not 25:22 25:22 allocating well the talent of women so 25:24 25:24 there is a productivity impact there not 25:25 25:25 just not just a size okay the do Talent 25:29 25:29 by correct bringing it into the work and 25:31 25:31 increase productivity of everyone of 25:33 25:33 everyone because a talented doctor woman 25:36 25:36 doctor does better at curing others so 25:41 25:41 there is there is an impact for overall 25:43 25:43 productivity okay that's that's just a 25:44 25:44 clarification in terms of why why they 25:47 25:47 don't um they don't participate so much 25:50 25:50 well that's a million dollar question 25:53 25:53 and there are many many studies you 25:56 25:56 start from start from the the the recent 26:00 26:00 uh um Nobel Prize of of of this of this 26:05 26:05 year I have I'm blanking now but 26:07 26:07 it's talented woman Economist that have 26:10 26:10 studied the the 26:13 26:13 the um the the the gender inequality in 26:17 26:17 in in in many um for for many years she 26:23 26:23 and boser in the 70s they they basically 26:26 26:26 look at female forication as as 26:29 26:29 development happens and there is a kind 26:32 26:32 of U curve of that which is at low level 26:36 26:36 of development um um women tend to 26:40 26:40 participate quite intensively because uh 26:44 26:44 a lot of them work in rural areas in in 26:48 26:48 farming and they can basically work from 26:51 26:51 home or or the fact the farm uh is 26:55 26:55 compatible that type of work is 26:56 26:56 compatible with caring for for the 26:58 26:58 children cooking 27:01 27:01 Etc and so on and also there is need to 27:05 27:05 work because they are poor as income 27:09 27:09 increases uh the work is the the economy 27:13 27:13 transformed there there are more Works 27:15 27:15 in in urban areas more work in 27:17 27:17 manufacturing and that type of work is 27:19 27:19 more uh done by men and there is a an 27:23 27:23 income effect which is they need less 27:26 27:26 money and so they can stay at home as uh 27:30 27:30 income grows further there is 27:33 27:33 tertiarization of the economy uh women 27:36 27:36 go out and work in offices which is more 27:39 27:39 permitted seen seen better than working 27:42 27:42 in a factory with other men and so there 27:44 27:44 is again a pickup of of of occupation 27:48 27:48 now if you have this U curve and you 27:51 27:51 place all the countries uh along this 27:54 27:54 curve and you look at you focus on South 27:57 27:57 Asia they all below the curve so uh the 28:02 28:02 level of development is not enough to 28:04 28:04 explain why they are below where you 28:07 28:07 expect to and to explain that Gap there 28:11 28:11 are many different possible things but 28:14 28:14 we have been beginning to look seriously 28:16 28:16 at social norms and and and measuring 28:20 28:20 them is difficult uh because you don't 28:24 28:24 have only to measure um uh what you 28:27 28:27 think 28:28 28:28 is the right thing to do or the the the 28:31 28:31 the expected thing to do but you have to 28:33 28:33 also to measure what you think others 28:36 28:36 think is the good behavior so you have 28:39 28:39 to measure the first order belief and 28:41 28:41 the second order belief and that has 28:43 28:43 been has been done we have we have done 28:45 28:45 so in Nepal in we're on the field in 28:49 28:49 Bangladesh and in Pakistan we may we may 28:51 28:51 have as well do it in Sri Lanka I don't 28:53 28:53 think Sri Lanka has such conservative 28:56 28:56 views but that's that's that's a piece 28:59 28:59 of of the puzzle that we are we are 29:02 29:02 we're trying to to get to get more more 29:05 29:05 evidence let me since this is a very 29:07 29:07 passionate team for me say one thing an 29:10 29:10 experiment has been done in in Saudi 29:12 29:12 Arabia where the experiment was this 29:15 29:15 that the a group of um Saudi Arabian men 29:20 29:20 has been asked what do you think about 29:23 29:23 your wife going to work uh for for pay 29:27 29:27 and most uh interviewed men said well 29:30 29:30 I'm fine with that and then the second 29:32 29:32 question what do you think 10 peers of 29:34 29:34 yours 10 neighbors than colleagues than 29:37 29:37 friends would think of of your wife and 29:41 29:41 the answer is no no no they wouldn't 29:43 29:43 they wouldn't think it's a good thing so 29:44 29:44 there is this Gap but 29:47 29:47 actually they ask all the peers and all 29:50 29:50 the peers have the same opinion as the 29:52 29:52 first one so this the experiment is that 29:55 29:55 a group has been told no you know you 29:57 29:57 you're wrong your peers think like you 30:00 30:00 think there is no problem and another 30:02 30:02 group has not the control has not been 30:04 30:04 told in in uh the the the next step 30:09 30:09 was after receiving this information 30:12 30:12 they were asked would you like to enroll 30:14 30:14 your wife in a a job portal to get a job 30:19 30:19 and there is a a a difference between 30:22 30:22 the two group the control didn't see any 30:24 30:24 difference and the um treated group the 30:27 30:27 one that received information there is a 30:28 30:28 difference so this to say that when you 30:32 30:32 manipulate social norms they have a caal 30:35 30:35 effect so it's not just uh something 30:38 30:38 that has a correlation in this case 30:40 30:40 there is a caal effect so you change the 30:42 30:42 norms and there is increase in 30:46 30:46 participation okay so that's a very good 30:48 30:48 example of randomized control trials 30:51 30:51 correct cor um by Leo Bernstein in 30:54 30:54 Chicago Professor Chicago there was also 30:57 30:57 poverty lab right but AET uh yeah they 30:60 30:60 do they do a lot they do a well they won 31:02 31:02 the Nobel Prize with with a stu FL and 31:05 31:05 have you use that in your work well we 31:08 31:08 are we have we have used it yes we have 31:12 31:12 um we are running experiments in um 31:15 31:15 Bangladesh and Pakistan uh in Pakistan 31:19 31:19 we're running experiment of providing a 31:21 31:21 subsid to firm that we nudge them 31:25 31:25 towards hiding women uh because there is 31:28 31:28 not only the supply side 31:32 31:32 um um difficulty of of participating the 31:36 31:36 family the your your husband yourself 31:39 31:39 not willing to go the supply side but 31:41 31:41 also firms discrimination firms believe 31:43 31:43 that women basically are coming then 31:46 31:46 they're leaving because they want babies 31:48 31:48 so there are other issues and so we try 31:51 31:51 on the supply side on the demand side on 31:53 31:53 the firms to to nudge that and we have 31:56 31:56 positive results there especially firms 31:58 31:58 that I only men fully fully male we we 32:03 32:03 have some impact and they they they hire 32:07 32:07 they hire women and we we're trying to 32:10 32:10 measure also if they change opinion 32:11 32:11 about women once they have experienced 32:13 32:13 that and in 32:15 32:15 Bangladesh we do something different we 32:17 32:17 do we look at one of these um job portal 32:21 32:21 for um uh domestic workers so it's like 32:25 32:25 a uber of Dom domestic workers and we 32:29 32:29 try to see that whe which are all women 32:32 32:32 in in Dhaka and we try to see whether 32:35 32:35 being exposed to um this type of job 32:39 32:39 portal which guarantees a bit better 32:41 32:41 treatment salaries from from the 32:44 32:44 employer from um improves improves their 32:47 32:47 conditions so again there we have a 32:50 32:50 treated and and a control group and 32:52 32:52 things are positive there as 32:54 32:54 well on on staying on the same subject I 32:57 32:57 mean if you look at a country like India 32:59 32:59 which is pretty large geographically and 33:02 33:02 population oh in Sri Lanka sorry to 33:04 33:04 interrupt in Sri Lanka we have another 33:05 33:05 one on on with pikme on on 33:09 33:09 tukk and again there is there is some 33:12 33:12 POs to have female drivers there is some 33:14 33:14 positive results done by the IFC my 33:16 33:16 colleague at IFC that increased the 33:19 33:19 mobility of women because of to female 33:22 33:22 drivers yes yes I think anecdotally we 33:25 33:25 can agree with that yes that for sure 33:27 33:27 has been and also another observation 33:30 33:30 actually advoca is looking into this 33:31 33:31 about mobility and the two wheelers 33:35 33:35 because it was a very Southeast Asian 33:37 33:37 phenomenon where you have females 33:39 33:39 driving two- wheelers but now it is 33:41 33:41 getting established in Sri Lanka and you 33:44 33:44 see that more women are moving around on 33:47 33:47 two wheelers and that has increased the 33:50 33:50 opportunity um coming back to my 33:53 33:53 question about India being such a large 33:56 33:56 country uh have you seen differences in 34:00 34:00 female labor participation across the 34:03 34:03 countries and is there a differential 34:05 34:05 between urban households and Rural 34:09 34:09 households yes yes um yes we have um we 34:14 34:14 have looked into that uh starting from 34:18 34:18 the national level India is is is one 34:23 34:23 country which is show has shown 34:25 34:25 decreasing female labor for Association 34:27 34:27 during a period of sustained growth so 34:30 34:30 really going the wrong direction and a 34:33 34:33 period during which fertility has been 34:36 34:36 coming down uh fairly fairly strongly so 34:41 34:41 there are there are many many many 34:43 34:43 Papers written on this what I can say 34:47 34:47 that I have been involved more directly 34:50 34:50 is that we have 34:53 34:53 seen uh an increase in 34:57 34:57 uh female labor foration on urban areas 34:60 34:60 or at least let let me put it this way 35:03 35:03 we have seen a premium on 35:07 35:07 intergenerational Mobility for girls uh 35:11 35:11 versus boys in urban areas versus rural 35:14 35:14 areas that means 35:17 35:17 that uh women have improve their ranking 35:22 35:22 in the 35:24 35:24 distribution 35:25 35:25 uh in General more in urban areas than 35:29 35:29 in rural areas but in urban areas there 35:31 35:31 is a 35:32 35:32 premiumav um men boys and now that's a 35:38 35:38 fact that we have measured I don't know 35:41 35:41 if you are familiar with the work done 35:43 35:43 by chy in intergenerational in the US 35:46 35:46 the American dream Etc so that's the 35:48 35:48 kind of the same measurement see whether 35:51 35:51 chy right Raj chett whether whether you 35:54 35:54 you move you're you're coming from uh 35:57 35:57 your parents are in the bottom 50% of 35:60 35:60 Education whether you come out higher 36:02 36:02 education so that's the the measure that 36:05 36:05 the output that we're looking at and we 36:08 36:08 observe that there is a premium for for 36:10 36:10 women in India in in urban areas and the 36:14 36:14 now we are figuring out what what is 36:16 36:16 behind it well one is demand side there 36:19 36:19 are more jobs than in rural areas for 36:22 36:22 women uh the other one could be Norms 36:25 36:25 they are a little bit less conservative 36:28 36:28 in urban areas and then than rural areas 36:31 36:31 marriage Market is could be another one 36:33 36:33 what we observe that the this is ongoing 36:36 36:36 work so I I I I I 36:39 36:39 cannot be completely certain yet but 36:42 36:42 what we observe is that the education 36:45 36:45 premium is higher for for women in uh 36:49 36:49 urban areas so there there 36:51 36:51 is the fact getting an education pays 36:55 36:55 off slightly more women than men in 36:58 36:58 urban areas so that's one reason but 37:00 37:00 there is no demand side so there is no 37:03 37:03 you when you observe employment is not 37:06 37:06 so much better the opportunity of 37:07 37:07 employment is not so much better for 37:09 37:09 women than men in urban areas Visa 37:12 37:12 relatively to to Rural and so why are 37:15 37:15 they getting this education if they 37:17 37:17 cannot use it and one other area that 37:19 37:19 we're looking at is the marriage 37:22 37:22 Market there has been an increase in the 37:24 37:24 premium of the marriage market so now we 37:27 37:27 to get a husband that earned better has 37:30 37:30 to have more education that's the L one 37:33 37:33 other part we are we I don't have yet 37:35 37:35 that result but that's one area we're 37:37 37:37 looking at so it's fascinating stuff yes 37:42 37:42 fascinating um so moving on um you know 37:46 37:46 you talked about climate 37:48 37:48 risk um and I think the World Bank also 37:52 37:52 bought out a report and said Sri Lanka 37:54 37:54 is highly vulnerable to climate risk and 37:57 37:57 in your presentation you talked about 37:58 37:58 South Asia why is south Asia 38:01 38:01 specifically more exposed to climate 38:04 38:04 risk 38:05 38:05 well okay so let let's let's think about 38:08 38:08 two things one is the the 38:10 38:10 exposure I basically think is um it's 38:15 38:15 just a geography situation so there are 38:18 38:18 there are many areas in in in South Asia 38:22 38:22 that are 38:24 38:24 U um exposed to uh flooding from both 38:28 38:28 the sea rise or Rivers so that's that's 38:33 38:33 that just geography think of the mives a 38:35 38:35 country that existentially is is menaced 38:39 38:39 by that think of I think last time I was 38:43 38:43 in Sri Lanka was in 2005 after the 38:46 38:46 tsunami and you didn't expect that to to 38:49 38:49 arrive from so it's just it's just uh 38:53 38:53 geography and and and and not no no 38:58 38:58 great uh fortune in in that sense there 39:02 39:02 are other advantages obviously but 39:04 39:04 that's that exposes the with with the 39:07 39:07 greenhouse with a increas in temperature 39:11 39:11 flooding is is a big risk and and this 39:13 39:13 region is exposed but there is also 39:16 39:16 another more it's also man-made the 39:19 39:19 first one but another one where perhaps 39:21 39:21 the region could do more which is uh the 39:24 39:24 the infrastructure the protecting 39:26 39:26 infrastructure and the ad adaptation to 39:28 39:28 climate change that depends on 39:32 39:32 on actual behavior and decision taken by 39:35 39:35 by the country and the population the 39:37 39:37 fact that uh if you see this the natural 39:42 39:42 disaster not only affect more these 39:45 39:45 countries but affect more poorer people 39:47 39:47 in in these countries and so because 39:50 39:50 poorer people have less opportunity to 39:52 39:52 protect themselves to to move to migrate 39:56 39:56 is is also Al one other one other 39:58 39:58 adaptation way of of avoiding avoiding 40:02 40:02 problems so there are two two things one 40:04 40:04 that is more difficult to do anything 40:07 40:07 unless we talk about the global level 40:09 40:09 reducing reducing um increase in 40:12 40:12 temperature but the region could 40:16 40:16 mitigate the bad impact by adaptation 40:20 40:20 and so that's is more under control of 40:23 40:23 the region and and and it tends to be uh 40:26 40:26 um 40:27 40:27 distributionally not neutral the impact 40:30 40:30 so the poorer pay a higher 40:33 40:33 price you so you also highlight about 40:37 40:37 the investment Trends and uh you are 40:40 40:40 showing that uh this is not uniform 40:43 40:43 across South Asia that certainly in 40:45 40:45 India there's a significant growth in 40:47 40:47 public investment and we see in the 40:50 40:50 media about the large scale 40:52 40:52 infrastructure projects that are being 40:54 40:54 done in India but in some countries 40:57 40:57 uh public investment is falling like in 40:59 40:59 Sri Lanka because of the fiscal 41:02 41:02 constraints and then you have very 41:04 41:04 different behavior for private 41:07 41:07 investment so uh is there a causal link 41:10 41:10 uh between these two or do they operate 41:14 41:14 independently 41:16 41:16 well I'm not sure not I I'm not aware of 41:23 41:23 on the top of my head of of any EXA 41:27 41:27 study that looks into that but for 41:30 41:30 sure uh and in in general economics 41:35 41:35 terms uh government public investment 41:38 41:38 should be focused on uh providing public 41:41 41:41 goods and once once you have uh more 41:47 41:47 public goods which which are uh 41:51 41:51 infrastructure most of the time uh 41:53 41:53 Transportation education um Health 41:57 41:57 System Etc that uh has attracts private 42:03 42:03 investment in in in the long in the 42:05 42:05 longer term so that that is the link 42:08 42:08 that I I can see at the cyclical level 42:12 42:12 um I am I am not I'm not sure of of any 42:17 42:17 specific relationship that links the two 42:18 42:18 it's possible that uh you you you 42:23 42:23 have unfortunately during during crisis 42:27 42:27 uh the the the public investment is the 42:30 42:30 first to go and but that has has 42:33 42:33 potentially impact two three four five 42:36 42:36 years later on on on the private 42:38 42:38 investment so there may be also Links at 42:40 42:40 the cyclical level but I I'm I'm I 42:44 42:44 wouldn't dare to say more for now on 42:48 42:48 this if if you're familiar with the 42:50 42:50 growth diagnostic framework and the 42:53 42:53 concept of a binding constraint is in 42:56 42:56 infrastructure binding constraint 42:58 42:58 generally in South Asia to growth well 43:02 43:02 it's um it's um potentially uh we we 43:08 43:08 have to we have to see because 43:11 43:11 infrastructure is so so large a concept 43:14 43:14 that we have to we should we should 43:16 43:16 distinguish that a little bit so if you 43:19 43:19 if you think let's think for a moment 43:21 43:21 about the the a trendy one digital 43:25 43:25 infrastructure right so so 43:28 43:28 um is there is a lot of hype in in the 43:32 43:32 region and outside the region that this 43:34 43:34 is a uh a game changer uh now again we 43:38 43:38 have looked at into this and it's true 43:41 43:41 we have done several studies about 43:45 43:45 e-commerce platform um the when and 43:50 43:50 whether firms that um enter e platforms 43:55 43:55 enter the Dig digital 43:57 43:57 Marketplace um improve their own 44:01 44:01 business in terms of expanding 44:04 44:04 themselves in terms of size products and 44:08 44:08 um and um uh reach in the market and 44:13 44:13 indeed what What You observe is that yes 44:15 44:15 it is it is the case and small and large 44:19 44:19 firm take advantage of this so digital 44:23 44:23 digital e-commerce can be can be a a a a 44:27 44:27 good 44:29 44:29 uh boost for for for for the economy in 44:33 44:33 this in this region now when you talk 44:35 44:35 about to the e-commerce uh provider the 44:40 44:40 platform themselves they have they have 44:43 44:43 issue 44:44 44:44 of as as I mentioned of power outages 44:47 44:47 they have issues 44:49 44:49 about um uh reaching 44:53 44:53 reaching broad Broadband uh speed across 44:57 44:57 so there are stumbling block on the 45:01 45:01 digital infrastructure and the the 45:02 45:02 governments are doing investment there 45:06 45:06 uh so so that's one on transport I 45:10 45:10 mentioned transport there is there is 45:12 45:12 still more more work to that to do in 45:15 45:15 terms of management of um of waterways 45:18 45:18 Rivers I was with my colleagues from 45:22 45:22 from water that they have they they try 45:26 45:26 to do uh investment and landing in that 45:30 45:30 sector is very complicated a lot of big 45:33 45:33 rivers in the region cross across 45:35 45:35 multiple countries so a lot of these one 45:38 45:38 last thing I say is that these 45:41 45:41 infrastructure uh in the region is also 45:44 45:44 hampered by 45:46 45:46 this uh not intensive integration at the 45:50 45:50 region level so the we talked about low 45:54 45:54 intra region trade similarly for big 45:57 45:57 energy 45:59 45:59 transport um irrigation water all of 46:03 46:03 these are much better tackled at a w 46:07 46:07 wide scale and that's one limitation in 46:11 46:11 the region that you also touched on a on 46:14 46:14 a on a point that uh is very U sensitive 46:18 46:18 to Sri Lanka because we have experienc 46:21 46:21 the debt default and the debt crisis but 46:24 46:24 you also if you keep Sri Lanka aside 46:26 46:26 because we know how the story ended and 46:30 46:30 I'm afraid that it's yet not over 46:32 46:32 because uh external credit private 46:34 46:34 external credit uh negotiations are 46:37 46:37 still not finalized and it's dragging on 46:40 46:40 uh but you say this is a problem in 46:42 46:42 other countries in South Asia also that 46:44 46:44 the debt is rising and are they coming 46:47 46:47 to a point where the debt is rising 46:50 46:50 faster than the capacity to sustain the 46:53 46:53 debt well again it depends which country 46:56 46:56 you look at um Punam Gupta from India 47:02 47:02 has came a month ago to present that 47:06 47:06 sustainability paper that she did on 47:08 47:08 India and um pointed out that yes it's 47:12 47:12 it has been increasing it has has 47:16 47:16 received reached a certain level that 47:18 47:18 are potentially alarming but there are a 47:20 47:20 lot of um details about that that that 47:26 47:26 are important for its sustainability is 47:28 47:28 mostly in groupies is mostly very long 47:32 47:32 term the maturity are long and it's and 47:36 47:36 it's it's all mostly domestic and so uh 47:40 47:40 I would say that the sustainability 47:43 47:43 depends on the the details the structure 47:46 47:46 of of the debt uh and the the growth 47:49 47:49 environment overall growth environment 47:51 47:51 so once you you so saying uh a blanket 47:56 47:56 statement that the that is not 47:58 47:58 sustainable in the region is not really 47:60 47:60 possible you have to look at Case by 48:02 48:02 case um um category of that by category 48:05 48:05 of that and the and and the growth 48:08 48:08 environment in which in which they are 48:10 48:10 looked at so that's that's my 48:14 48:14 assessment you know the way we overcame 48:16 48:16 our debt issues which has 48:19 48:19 been there in Sri Lanka for a while for 48:22 48:22 a few decades we inflated away right but 48:25 48:25 recently we have uh bought in a new law 48:28 48:28 for the central bank that explicitly 48:30 48:30 prohibits monetary financing because 48:33 48:33 they were given a transition period but 48:35 48:35 since we are in IMF program there's a 48:37 48:37 continuous monitoring criteria do you 48:39 48:39 know how many other uh central banks in 48:43 48:43 South Asia have explicit prohibitions 48:45 48:45 against monary 48:47 48:47 financing yeah I I think I I'm not sure 48:52 48:52 I don't have the exact data on that but 48:55 48:55 I I do believe that most country 48:58 48:58 have fairly strong independent central 49:02 49:02 banks that are uh most likely against 49:06 49:06 this this uh 49:08 49:08 this monetization of of the fiscal 49:11 49:11 deficit so and it's a it's it's well 49:13 49:13 known that that is a problem but it 49:17 49:17 becomes again as I was showing in terms 49:19 49:19 of the fiscal rule you can even have the 49:22 49:22 rule but then you have to have the 49:23 49:23 political will and capacity and and and 49:27 49:27 and counterbalancing weight that even if 49:30 49:30 the Ministry of Finance wants to 49:33 49:33 monetize that the the Central Bank 49:35 49:35 Governor want and the president doesn't 49:38 49:38 allow that or or depends on the 49:40 49:40 structure of power because you can you 49:42 49:42 can put this in writing but then if 49:45 49:45 there is no political will we have I 49:47 49:47 showed some graph that the the fiscal 49:49 49:49 rule are are broken and so and I I you 49:53 49:53 shouldn't take advice from an Italian 49:54 49:54 because in the 70s and 80s we we 49:57 49:57 inflated our way out of of that and we 49:59 49:59 are the one of the countries with the 50:01 50:01 highest Deb level in in Europe so anyway 50:05 50:05 I is was uh South Asia's growth was 50:11 50:11 there a fiscal impulse going on was it 50:13 50:13 getting stimulated fiscally in the 50:16 50:16 besides the covid era where you know 50:19 50:19 there was stimulus but previously was 50:22 50:22 there a lot of fiscal stimulus going on 50:24 50:24 in in uh in South Asia in general 50:27 50:27 General 50:28 50:28 yeah because what I saw in some of your 50:31 50:31 graphs is there's a lot of um uh 50:34 50:34 transfer payments going on even in India 50:37 50:37 I think there was a recent IMF article 50:39 50:39 on this I'm sorry Economist article on 50:41 50:41 this okay uh that there was a lot of 50:43 50:43 subsidies being transferred they were 50:45 50:45 looking at different governments in 50:47 50:47 India right um right 50:51 50:51 well the there has been a a a strong 50:56 50:56 accommod accommodative stance of fiscal 50:58 50:58 policy during the covid and postco 51:01 51:01 clearly but your question was before 51:04 51:04 covid what is yeah they although I I 51:07 51:07 think there there is there has been 51:10 51:10 there has been some of that 51:14 51:14 uh in terms of um well you you mention 51:18 51:18 transfers for antipoverty transfer 51:21 51:21 Etc but I doubt that 51:24 51:24 um a lot of the growth that we have 51:27 51:27 observed comes from fiscal stimulus the 51:31 51:31 the the the size of the government in 51:35 51:35 terms of both revenues and expenditure 51:38 51:38 is very it's relatively contained in 51:41 51:41 this in this region so you have you have 51:43 51:43 the extreme case of of Revenue being 51:46 51:46 being below 7% in Sri Lanka because of 51:49 51:49 the crisis but they don't go beyond 10 51:53 51:53 15% the the size of of Revenue in in any 51:56 51:56 of these countries and so with that kind 51:58 51:58 of 52:00 52:00 revenues uh you you can't stimulate too 52:03 52:03 much the economy so there's there's a 52:06 52:06 structural and that is also a problem in 52:08 52:08 raising more revenues because there is 52:10 52:10 no the public doesn't see what what do I 52:14 52:14 get for the taxation the inform the 52:16 52:16 large informality is also related to low 52:20 52:20 uh low revenues to GDP ratios so I uh 52:26 52:26 I don't think that there there is a 52:28 52:28 large fiscal maneuver to stimulate the 52:31 52:31 growth the growth comes more from as as 52:33 52:33 I said before demographic integration 52:36 52:36 technological change and these these 52:38 52:38 kind of things in the long in the long 52:40 52:40 term for the region lastly uh 52:44 52:44 about the environmental issues and the 52:47 52:47 green transition it was interesting you 52:49 52:49 mentioned about this experiment that you 52:51 52:51 did in Bangladesh with the motor so what 52:53 52:53 what you're basically saying is the 52:56 52:56 perceived benefits are a lot lower than 52:59 52:59 the actual benefits that the actual 53:01 53:01 benefits so what what you basically 53:03 53:03 telling policy makers is that there has 53:06 53:06 to be a greater effort in bridging that 53:09 53:09 gap between perception and what you can 53:12 53:12 really gain right do you think part of 53:15 53:15 that is uh incentives that maybe energy 53:19 53:19 is pric too cheaply and that you know 53:22 53:22 many businesses are not trying hard 53:24 53:24 enough basically yes indeed no of course 53:27 53:27 of course the price signal is one of the 53:28 53:28 things that I also mentioned and it's uh 53:32 53:32 it's it's it's wrong in in in most of 53:34 53:34 the region the subsidy one part of the 53:37 53:37 stimulus that we were discussing a 53:38 53:38 moment ago is that it's it's a wrong a 53:41 53:41 wrong stimulous to to use too much 53:43 53:43 energy to and though indeed that that is 53:46 53:46 that is wrong but there is also 53:49 53:49 another another reason behind this that 53:51 53:51 is we we we begin to study a bit better 53:55 53:55 what how 53:56 53:56 why they do make these mistakes in the 53:58 53:58 perception of the benefit what is the 53:60 53:60 formation of this perception of this 54:01 54:01 belief come from where from where are 54:04 54:04 they just are they just not reading the 54:06 54:06 newspaper or not being educated or are 54:09 54:09 they operating in especially smaller 54:11 54:11 firm are operating in a in a highly uh 54:15 54:15 difficult environment with a lot of 54:17 54:17 shocks and and very little buffer so for 54:20 54:20 them even even buying a motor that 54:23 54:23 electric motor that is efficient can be 54:27 54:27 for small firms can be a fairly large 54:29 54:29 investment and they don't have that 54:32 54:32 buffer and so and and they face risk 54:35 54:35 constant risk so there are other reasons 54:38 54:38 be so information as you pointed out and 54:41 54:41 as I pointed out is is certainly 54:42 54:42 important giving giving demonstration 54:45 54:45 and and it's cheap to to do to do this 54:47 54:47 information campaign and they work uh 54:51 54:51 but there are other issues as well that 54:53 54:53 that are Environmental microeconomic 54:56 54:56 risk Etc that are important to take into 54:59 54:59 account when they form these wrong 55:01 55:01 perceptions about the advantages so if 55:04 55:04 you were a classic question is if you 55:07 55:07 were if you were government and you 55:09 55:09 given the option between subsidizing the 55:12 55:12 cost of electricity or subsidizing the 55:14 55:14 motor which one should they 55:17 55:17 do uh no they should they 55:21 55:21 should they should find a way to improve 55:25 55:25 their ad option of efficient Motors yes 55:28 55:28 which subsidy could be could be one way 55:31 55:31 as as we as we show in this in this 55:33 55:33 experiment it works uh there may be 55:36 55:36 other ways uh but probably that that 55:39 55:39 adoption adoption of of of better 55:43 55:43 technology is is the way to go rather 55:46 55:46 than what you say the existing price 55:47 55:47 signals are sufficient incentive to do 55:50 55:50 it but it's just the ignorance or the 55:54 55:54 gap between the perception that actual 55:55 55:55 that is holding back yeah it's I I I 55:59 55:59 don't know if I would call it ignorance 56:01 56:01 but is is um the access to Capital to do 56:06 56:06 access to Capital could be could be one 56:09 56:09 uh 56:10 56:10 [Music] 56:11 56:11 the the the the reduction of risk one 56:16 56:16 being rather than making them pay less 56:19 56:19 electricity give them electricity 56:21 56:21 constant uh the the the the re 56:24 56:24 reliability of the power grid so so so 56:27 56:27 that would be another one when when they 56:30 56:30 they don't rely on that they buy a 56:33 56:33 technology that is inefficient generator 56:35 56:35 right and so they can't use the the the 56:38 56:38 the mo this motor in the case of 56:39 56:39 Pakistan of Bangladesh experiment so uh 56:43 56:43 yes I would I wouldn't I would move away 56:46 56:46 from 56:47 56:47 subsidizing uh energy and 56:51 56:51 um sending signals price signals toward 56:58 56:58 adopting better technology that is 56:59 56:59 saving energy finally very interesting 57:03 57:03 point you came about green jobs yes and 57:06 57:06 you said that uh you know firms where 57:10 57:10 where there is greater Energy Efficiency 57:13 57:13 and where there is more green jobs there 57:15 57:15 is a higher labor intensity right um 57:19 57:19 right can you elaborate a little bit on 57:21 57:21 that well yeah um I um I have I haven't 57:27 57:27 been participated directly in that study 57:29 57:29 but what I I'm not sure there was a 57:33 57:33 clear cut mechanism explaining this but 57:38 57:38 um uh I would dare to say that so so 57:42 57:42 this this was an observation that when 57:45 57:45 you when you follow 57:47 57:47 firms uh and um and you distinguish them 57:51 57:51 between firms that adopt uh energy 57:53 57:53 saving technology versus those don't the 57:56 57:56 second the first one that 57:59 57:59 adopt expands their level of employment 58:02 58:02 so maybe they're more competitive so the 58:04 58:04 the yes I was going there so there are 58:06 58:06 more compet they the fact that they 58:09 58:09 adopt a better technology is that they 58:12 58:12 are they 58:14 58:14 are um growth forecast for themselves is 58:18 58:18 is is positive they are venturing they 58:21 58:21 have potentially a better managerial 58:24 58:24 Capac to foresee the future and and the 58:28 58:28 path towards that and therefore become 58:30 58:30 more competitive and more and expand and 58:32 58:32 therefore employment is is the natural 58:35 58:35 consequences of expanding right so but I 58:38 58:38 I I should I should go and check exactly 58:40 58:40 the mechanism that that makes a lot of 58:43 58:43 sense to me marito buo thank you very 58:46 58:46 much for this fascinating conversation 58:49 58:49 thank you very much for having 58:54 58:54 me