Remarks by Angel Gurría,
Paris, 24 November 2015
(As prepared for delivery)
Prime Minister Massimov (listening and later on live video), Deputy Prime Minister Zubko,
Ministers, Vice-Ministers, Ambassadors,
Ladies and gentlemen,
It is an honour to welcome you to the second OECD Eurasia Week. Your participation with so many high-level delegations reflects the strength of the co-operation and growing mutual interest between OECD Members and Eurasia countries.
In light of the tragic events that we witnessed here in Paris ten days ago, greater collaboration between OECD countries and all regions of our interconnected and fragile globe becomes more important than ever.
The Eurasia region is key for today’s political stability and for a balanced global growth. Proximity to major markets, significant energy and mineral reserves, and almost universal literacy rates add to the geopolitical relevance of this region.
Overall, the region has been experiencing a long-term positive dynamic, largely attributed to the tripling of commodity export prices since the 2000s. Regional GDP continued to grow by 3.8% per year on average between 2010 and 2014.
Yet, regional disparities in terms of economic growth and economic reforms remain significant, with more than 80% of the region’s output in 2014 being produced by eight countries with large resources endowments. Market reforms such as privatisation, governance restructuring and price liberalisation are also uneven across countries.
More recently, external factors, such as the end of the commodity super cycle and decreasing demand from Russia and China, have negatively impacted the region’s economic development. With few exceptions, 2015 will see substantial drops in GDP growth rates compared to 2014 with the region’s average growth expected to contract by about 0.6%. In addition, inflation is on an upward trend in many countries, while external and fiscal balances are expected to deteriorate.
Despite differences in reform achievements, countries are facing similar challenges mainly related to their reliance on commodity exports and weaknesses in governance, as well as environmental difficulties. In this respect, diversification and moving up the value chain through improved skills, innovation and structural reform should be policy priorities. This will also be important in addressing the changes demanded by the global action on climate.
To strengthen the policy environment for growth, governments of Eurasia countries should focus on reinforcing institutions, interconnectedness and inclusiveness—the three I’s for this region’s development.
Weak institutions remain a key barrier for boosting competitiveness, improving the investment climate and strengthening entrepreneurship in Eurasia. Amid large variations across countries, several Eurasia countries are below the 80th rank on the World Bank’s Doing Business Index and in the bottom quarter on the Transparency International Corruption Index.
Improving regulations and strengthening public administration, anti-corruption policy and transparency remain priorities. We are very much encouraged by the fact that progress has been made by several Eurasia countries through their participation in the OECD Anti-Corruption Network for Eastern Europe and Central Asia.
Regional connectivity has increased in recent years. Kazakhstan’s recent accession to the WTO is a good example. Eurasia countries will also be key players and beneficiaries of the Silk Road Economic Belt. However, further efforts are now needed to increase cross-border trade notably by improving transport and infrastructure as well as the management of customs.
Eurasia countries also need to work on the inclusiveness of their economies. Income inequality is on average comparable to that of the OECD, while wealth disparities are particularly wide in some countries and youth unemployment remains high. In this respect, policies that support in particular skills development, but also job creation and private sector development will be key.
Let me stress that on all these fronts, the OECD has scaled up its efforts to support countries in the region. Last January, we signed a Country Programme with Kazakhstan to promote the country’s further partnerships in OECD bodies and adherence to legal instruments, and carry out policy reviews and technical cooperation programmes.
We also signed an Action Plan with Ukraine in April 2015, following the signature of the OECD-Ukraine Memorandum of Understanding. Our joint Action Plan prioritises actions in the fields of anti-corruption, governance and the rule of law, and business climate.
We have also continued our advice tailored to specific country needs as you can see in the publications that you will be discussing this week.
Ladies and Gentlemen:
We are confident that the OECD’s engagement with Eurasia will continue to expand. The Eurasia week has fast become our annual checkpoint during which we gather to review our mutual priorities, exchange experiences and practices on public policies, and discuss how the OECD can best address your needs and how we can boost our collaboration to support better policies for better lives in the region.
Thank you very much and let me now give the floor on video to the Prime Minister of Kazakhstan, Mr Massimov.