Remarks by Angel Gurría,
OECD, Paris, 22 November 2016
(As prepared for delivery)
Deputy Prime Minister Gliński [Poland], Vice Prime Minister Pankratov [Kyrgyzstan], Ministers, Vice-Ministers, Ambassadors, ladies and gentlemen,
It is an honour to welcome you to the third annual OECD Eurasia Week. Your participation, here, among so many high-level delegations, is testimony to the growing co-operation between the OECD and Eurasia countries. The enthusiasm we witness today affirms the OECD’s role as a ‘global policy network’, engaging with members and non-members, on topics that matter for sustainable economic development.
22 November 2016 - OECD Secretary-General Angel Gurría speaking at the opening of OECD Eurasia Week. OECD, Paris, France.
Photo: OECD/Andrew Wheeler
Eurasia has developed strongly since the beginning of the millennium
Since the millennium, Eurasia experienced strong growth and considerable gains in living standards. Between 2000 and 2015, the region’s GDP per capita more than doubled and in terms of reform advancement, many countries are singled out among the star performers in the World Bank’s latest Doing Business report. All the countries in the region have implemented business regulatory reforms this year, while three were among the ten countries having recorded the biggest improvements.
Moreover, despite their considerable diversity, Eurasia countries benefit from important competitive strengths, including proximity to major markets, near universal literacy, and for several of them, a wealth of natural resources.
But sustaining progress has become a challenge
Despite these positive developments, the region has recently faced significant and persistent shocks, including a drop in commodity prices as well as slower growth in Russia and China. Remittance flows, which remain critical to the prosperity of some Eurasia economies, have also dropped sharply, and we have seen currency depreciations, slower investment and falling consumption across much of the region. While some Eurasia economies have continued to grow, the region as a whole contracted last year, for the first time since the global crisis in 2009: its aggregate GDP fell by 0.7% in real terms.
In the face of these challenges, many Eurasia countries need to double their efforts to keep promoting structural reforms and effective and innovative policies in key areas for their development.
Recommendations for more sustainable economies
While there is a great deal of variation in the policy settings and challenges we observe across the region, a number policy areas will be paramount to all of Eurasia, they include connectivity, competitiveness, labour market reform and green growth.
Connectivity lies at the heart of Eurasia’s reform priorities. The region has become much more integrated into the world economy over the last decades, but there is much more to be done. Both “hard” connectivity (infrastructure) and “softer” connectivity (open trade policies and less burdensome border formalities) are needed in order to link the region internally and to the rest of the world. This implies not only co-operating on infrastructure, but also improving policies that support trade facilitation and strengthening policies that regulate information and communications technologies.
Secondly, striving for greater competitiveness will become even more important as the region becomes better connected. The Belt and Road initiative linking China and Europe, for example, will create important new opportunities for Eurasia countries, but it will also expose them to new competitive pressures, as their own markets become more accessible. Meeting this challenge will require them to address a wide range of policies, related to corporate governance, the environment, innovation, entrepreneurship, small and medium enterprise development, and competition. Further progress is also needed with respect to business integrity, finance and the rule of law. Not to mention the imperative of increasing the quality of education.
Thirdly, labour market reform. The productivity of the workforce and resilience of labour markets will be crucial to reducing reliance on exports of raw commodities and cheap labour. Here, carefully designed structural policies and effective institutions can play a major role in helping to make labour markets more inclusive and more resistant to shocks. For example, while it is too soon to make categorical judgements, there is some evidence that labour markets in Eurasia countries with higher skill levels have weathered external shocks better than others. Supporting stronger integration into global value chains (GVCs) is also a way for countries to empower the local economy. As such, the focus should lie on technology transfers and access to richer skill-sets, as well as a means to scope for specialisation and economies of scale.
It is also critical to remember that strong labour markets are difficult to sustain without relevant social policies: education and skills are central to both productivity and labour-market responsiveness. That is why the OECD attaches great importance to work on education policy and youth inclusion, which can benefit a number of Eurasia countries. We are also stepping up our work on healthcare and social protection in the region.
Last but not least, green growth and economic diversification are also part of this reform agenda, particularly where energy and mining still dominate national economies.
Diversification indeed represents an opportunity for Eurasia countries to “green” their economies. This year, the closing session of Eurasia Week will also mark the opening of the Inaugural Meeting of the GREEN Action Programme, which will help countries in the region to strengthen their environmental policies.
The OECD’s commitment to continued and effective support
In many of these areas, the OECD has scaled up its efforts to support countries in the region through the full policy cycle – from insight to impact – and we are determined to preserve this momentum, guided by the Sustainable Development Goals agenda.
Just last month, we renewed the Memorandum of Understanding with Ukraine, including its Action Plan on anti-corruption; governance and the rule of law; investment and the business climate.
Moreover, the Kazakhstan Country Programme, signed in January 2015, continues to deliver timely reviews, and access to OECD tools and bodies. For example, we have just completed a review of Kazakhstan’s investment policies which leads the way to possible adherence to the OECD Declaration on International Investment and Multinationals. We are also currently undertaking a Multi-Dimensional Country Review of Kazakhstan that will help design a comprehensive development strategy.
We hope that our work in the region will support positive spillovers and stimulate regional policy dialogue. Our new collaboration with six countries on fostering financial education will certainly contribute to this dialogue.
Ladies and Gentlemen: The OECD Eurasia Week is a great opportunity to strengthen our collaboration, making the most of the multidisciplinary character of the OECD: to exchange good practices; to take stock of what we have achieved over the past year; and to focus on future co-operation. I encourage you to use the next three days to work together and to advance the reform agenda of this promising region with our shared objective in mind: better policies for better lives.
Thank you for your attention.