Remarks by Angel Gurría,
Antalya, 15 November 2015
(As prepared for delivery)
President Erdoğan, Distinguished Heads of State and Government,
Let me summarize the OECD perspective on the growth in three key messages:
First, global growth prospects have clouded again this year. Our latest Economic Outlook, released last week, showed a dramatic slowdown in global trade growth this year. This is a real, strong cause for concern! Why? Because world trade growth has usually been the “bellwether” of global output and such weak numbers usually foreshadow a global recession.
Kick-starting investment and accelerating implementation of the Brisbane National Growth Strategies is therefore even more urgent. But our assessment of progress towards the achievement of the additional, cumulative 2% upside growth objective by 2018 has found that less than half of the policy commitments contained in your National Growth Strategies have been fully implemented. These should raise G-20 GDP by only 0.8% by 2018. Not good enough: Implementation must be accelerated!
Second, greater efforts are needed to achieve not only stronger, but also more inclusive growth. The average income of the richest 10% of the population is close to 10 times that of the poorest 10% in the OECD area, up from 7 times in the 1980s. Wealth disparities are even higher – the top 10% hold half of hosueholds wealth against a meagre 3% for the so-called “bottom 40%”. On most emerging countries, inequalities are far wider than in the advanced economies.
The challenge is not only one of income and wealth disparities. It is also about the lack of opportunities for working and lower-middle class households to invest in their own education and skills, as well as their limited access to quality jobs and health care. As our research has shown, this is how inequalities strongly and adversely impact on growth.
The comprehensive “inclusive growth” policy package, crafted by the G20 under the leadership of the Turkish Presidency – including the Skills Strategy and the youth employment target, added to the 25 x 25 goal on women’s participation in the labour markets, agreed in Brisbane, represents real progress in this regard. But there again, implementation will ultimately be the touchstone of G20 credibility.
Stronger and fairer, growth should also be cleaner. We are on a collision course with nature, and the carbon clock is ticking, thus a new type of growth is needed, where systematic alignment of public policies towards a more effective and less costly transition to a low-carbon economy should be at the heart of the policymaking process.
In other words, and more than ever, having run out of room on monetary policy and having used up most of the existing room on fiscal policy, the G20 should go structural, go social and go green to deliver better policies for better lives. Thank you.