Remarks by Angel Gurría, OECD Secretary-General
Paris, 28 February 2013
(As prepared for delivery)
Secretary-General, Professor Jenny, Ladies and Gentlemen,
I am delighted to see so many of you here once again for the twelfth OECD Global Forum on Competition. I am most grateful to Deputy Secretary-General Boucher for introducing your session today, to Professor Jenny for chairing, and above all to our guest of honour, my counterpart from UNCTAD, Secretary-General Supachai Panitchpakdi.
You have rightly devoted this entire first day to the topic of competition and poverty. Competition policy and poverty are two hugely important topics in themselves, but they are not often connected. And they must be. Competition in markets is indeed a way to provide choice for consumers and raise the quality of goods and services while lowering their prices. It is also a way to drive innovation and growth and to help defeat corruption and waste.
The poor can benefit enormously from this process. In fact, they have the most to gain, and the most to lose if we fail, as many country studies discussed today demonstrate.
Competition matters. And policies make a huge difference.
Take the example of my home country, Mexico. We opened our markets to trade and investment through NAFTA and accession to the OECD. Overall, the economic benefits have been huge. But these benefits need to be better distributed.
As you’ve seen in Mexico’s contribution today, the OECD was involved in a study of the effects of inadequate competition on different social groups. We found that the poorest are often hit the hardest by a lack of competition, because the most overpriced goods – tortillas, basic food and beverages, medicines – account for a large share of their consumption basket. And it is the poorest southern states that lose the most: Chiapas, Oaxaca, Campeche and Tabasco.
I am thus very proud that the OECD is working closely with governments to promote competition, for example through fighting bid rigging in procurement for basic medicines. This is important work for all, and particularly for the poor.
Even in these difficult times, there are some great stories from around the world about how markets can work for poor people. In Kenya, for example, mobile telephone cash transfers have brought the benefits and security of banking to the rural poor, at a fraction of the cost of traditional services. Cheap access to information through low-cost competitive mobile phone networks in India has also revolutionised local agriculture and fisheries markets. I understand you heard today how, in Papua New Guinea, increased competition in transport is bringing new business opportunities for local people to benefit from tourism. These are very telling examples.
No doubt your discussions brought up many more examples of how action to promote competitive markets benefits the poorest consumers, and provides a springboard for the poor to thrive as producers. I look forward to the publication of your proceedings, because I am convinced that this is what the OECD should be doing: bringing people together, challenging them to apply their expertise to new policy areas and enabling them to learn from one another.
Tomorrow, you will go on to share your experiences in dealing with an important set of markets: TV and broadcasting. We have received written contributions from more than 35 countries. That is a remarkable expression of interest in this fast-moving sector. And I am particularly grateful to Mr Chawla, Chairperson of the Competition Commission of India, for agreeing to chair what will certainly be a very lively session indeed.
And then, tomorrow afternoon, you will conclude the Forum with a discussion of international co-operation in competition enforcement. This is a topic of great interest to the OECD. As many of you know, we are indeed engaged in an ambitious exercise to review and revise our economic thinking. We are working hard to understand what has gone wrong in the world economy and how we could develop New Approaches to the Economic Challenges we face today – and those we might face in future.
One of these challenges is the need for joined-up competition law enforcement. Indeed, many of you have to deal with cases spanning national borders. This is a common problem across policy areas. Increased globalisation of markets and of supply chains has not always been matched by improved global economic governance. In fact, in many cases, we do not even have all the tools to measure the economy on a global scale!
The OECD is working to recast international trade data to reflect global value chains. If you don’t recognise this – for example, that over 90% of the value added in an i-phone supposedly made in China in fact goes to other countries – you won’t get the policy right. But whatever the precise numbers, it is clear that in all our policy areas, national authorities need to find ways to work together more effectively.
You will also discuss the findings of the joint work by OECD and the International Competition Network to identify barriers to better cross-border enforcement. I am delighted that we have been able to work with the ICN, under the leadership of my old friend Eduardo Perez-Motta, on this important undertaking. The findings will form the basis for identifying ways in which we can create a truly international system for enforcing competition law. It is a big project, with high ambitions. And I am convinced that it will bring very interesting results.
However, the very scale of this meeting is a testimony to the scale of the challenge that faces us. But the world is changing fast and we cannot be complacent about the need to globalise our governance arrangements to match it. We want you to tell us how the OECD can help you to work better, together.
You have had a long day. The discussions have been rich. So, rather than stand in the way of more informal exchanges, let me thank you, Chairman Jenny, and all of our speakers, as I bring this first session of the Global Forum to a close.