OECD Secretary-General

Achieving responsible, effective and inclusive multilateralism

 

 

Remarks by Angel Gurría

OECD Secretary-General

12 September 2018 - ESSEC, Cergy campus, Paris

(As prepared for delivery)

 

 


Dear President Esposito-Vinzi, Dean Papier, Ladies and Gentlemen,


It is a pleasure to be at the ESSEC Grand Ecole and address the brilliant young minds who will become the business leaders of tomorrow. We live in a world that is in constant evolution and facing new challenges, which is why this class on “Understanding and Changing the world” is of utmost importance. This is what we try to do at the OECD every day. I very much hope our perspective can inspire you.


In this globalised economy, and in this increasingly interdependent world, multilateral cooperation has become one of the most powerful tools to change and improve the reality of our nations, the lives of people, the future where your children will live and dream. After decades of global economic integration, and now by the transformational effects of the digital economy, there is not one single country that can develop and prosper on its own. In a world where our future well-being depends on collaboration over division, and sustainability above short-term gain, increasingly, innovation springs not from individuals thinking and working alone, but through cooperation and collaboration with others to draw on existing knowledge to create new knowledge.

 

Today most ideas, patents, innovations, and technologies are international by nature. The digital era has opened unprecedented opportunities for start-ups, for the civil society and individuals to thrive and reach across borders. In fact, borders are now more virtual than real or tangible. To not fall behind, countries are obliged to cooperate, to build international regulations and standards, to create a supportive policy framework where innovation can thrive, to exchange best practices and learn from each other.

 

How can we address challenges like climate change, global hunger, poverty and tax evasion without the power of effective multilateralism? How can we tackle the disruptive effects of digitalisation, re-emerging protectionism, the global challenge of gender inequality or the impact of global investment on the quality of life of our people without international cooperation?

 

2015 was a great example of such power. It was a remarkable year as the world came together to agree on a number of global blueprints that would guide policy-making for the next decade, such as the SDGs, the Addis Ababa Action Agenda on Financing Development and the Paris Climate Agreement.

 

In 2016, countries reached consensus and signed the New York Declaration for Refugees and Migrants, marking an unprecedented political commitment to share the responsibility for refugees.

 

In 2017, over 70 countries and jurisdictions gathered at the OECD to sign the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, to help governments ensure that transnational corporations pay their fair share of taxes.

 

These are amazing achievements. They prove that multilateralism can be effective in spite of its many challenges and imperfections; it is delivering results. But multilateralism also has to be more inclusive. As we argued in our annual Ministerial Council Meeting in 2017, globalisation has left and is still leaving many people behind. In many countries, a large majority feels that the greatest benefits of globalisation have been reaped by a small minority of well-connected people at the top 1% or 5% of society.


Globalisation has left many behind, and this is fuelling discontent

This is not only a perception, our analysis prove that inequalities have been rising in many OECD and non-OECD countries. The evidence is there.


In the OECD, the richest 10% earn almost 10 times more than the bottom 10%, up from 7 times in the 1980s. The distribution of wealth is even more unequal: the financial wealth of households in the top 20% is around 72 times bigger than that of those in the bottom 20%.


This year’s OECD Employment Outlook highlights that wage gains have been sluggish, with an average annual growth in real wages of 1.2% since 2012, which isone percentage point lower than between 2000 and 2007. Labour market insecurity remains higher than before the crisis and poverty has grown amongst the working-age population.


The digital transformation, while presenting a number of exciting new opportunities in a variety of fields, also brings its share of challenges. According to recent OECD estimates, 14% of jobs are at high risk of automation in the next 15-20 years, with another 31% facing substantial disruptioniv. We also estimate that 65% of kids today will do jobs that have not yet been invented, and it is very likely that you will be amongst those inventing the jobs.

 

These elements have resulted in plummeting trust in governments and institutions, and have fueled the growth of populism, protectionism and exclusive nationalism around the world. In the OECD, only one in three people feel that they have an influence over what their government decidesv.


This fatigue is further mirrored in a low voter turnout, which ranks at 69% on average in OECD countries. There is also an important socioeconomic and demographic dimension to the rates. Voters in the top 20% income bracket have a 13 percentage point higher turnout rate than those in the bottom 20%. Among 18 to 24 year-olds across OECD countries, voter turnout is 17 percentage points lower on average than for adults aged 25 to 50.


We need to address these challenges. We need to reduce inequalities and ensure that economic benefits are shared fairly. We need to equip workers with the necessary skills to succeed in the digital age, and we need to rebuild trust in our institutions. This requires defining a new social contract in a way that empowers citizens to make the most of their potential and gives meaning to their contribution to the economy and society.


And with the growing interconnectedness and spillover effects of domestic policies in other countries, multilateralism and global governance are more important than ever to achieve this.

 

Fostering inclusive growth through multilateralism

The OECD has been making many efforts to promote inclusiveness, harness the benefits of digitalisation, and level the global playing field through multilateral engagement. Let me give you some recent examples.


Firstly, we recently launched the OECD Framework for Policy Action on Inclusive Growth, to guide policymakers in designing policies that distribute the benefits of growth more equally, and give people a fair chance to achieve their full potential. It provides a methodology for designing integrated policy packages that are adapted to specific national circumstances and priorities; and a dashboard of indicators to monitor progress towards inclusive growth objectives.


Secondly, we are intensifying our outreach to civil society and partnering with businesses through our Business for Inclusive Growth Platform. The platform, which we will launch in November, will explore how the private sector can work together with policymakers to tackle structural issues that hinder inclusiveness; as well as promote the adoption of inclusive practices.

 

Thirdly, we have launched an across-the-house project called “Going Digital”, to delve deeper and understand the impacts of digitalisation. Our forthcoming integrated policy framework will help countries to self-assess how prepared they are by taking a hard look at accessibility and security of digital infrastructure and services, as well as how effective it is used for innovation, governance, labour market adaptation and fostering general well-being.

 

Fourthly, over the past 5 years, the OECD has developed an effective mechanism that addresses gaps and mismatches in tax rules. Our Base Erosion and Profit Shifting (BEPS) Package equips governments with domestic and international instruments to address tax avoidance. Our work on international taxation and the new standards on exchange of tax information have helped countries raise more than EUR 93 billion in unplanned additional revenues.

 

Finally, our work on Responsible Business Conduct helps businesses to clean up their supply chains and improve their environmental and social practices. Through our Guidelines for Multinational Enterprises (first adopted in 1976), a National Contact Point supports the settling of any issues of non-compliance in each of the 36 OECD and 12 non-OECD countries that adhere to the Guidelines. And just last May, we launched our due diligence guidance that provides practical support to businesses on how to make their businesses more responsible in all sectors.

 

Dear students, Ladies and Gentlemen,


As author Yuval Noah Harari wrote: “We are all living together on a single planet, which is threatened by our own actions. And if you don’t have some kind of global cooperation, nationalism is just not on the right level to tackle the problems, whether it’s climate change or whether it’s technological disruption.”


We all have a responsibility. Multilateralism is about open, active, lively dialogue. It is not only about national governments or international institutions; it concerns every sector of society, including businesses and academia. It is about sitting together at the table, hashing out the issues and exchanges ideas and lessons learnt.


I therefore look forward to a lively debate with you today and to hearing your ideas – your agreement or violent objections – about these issues and how, together, we can achieve multilateralism that delivers for all. Thank you!

 

 

See also:

OECD work on Economy

OECD work on Tax

 

 

 

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