Opening remarks by Angel Gurría
OECD, Paris, 9 February 2017
(As prepared for delivery)
Dear Parliamentarians, Ambassadors, Ladies and Gentlemen,
Welcome to the 5th edition of the OECD Parliamentary Days. Let me begin by thanking our network partners: the NATO Parliamentary Assembly and the Women in Parliaments Global Forum. I am delighted to see that we again have a high turnout, with 130 members of parliament from 40 countries.
Your presence is all the more important because we are gathering at a very difficult time. Global growth continues to stumble along at just 3%. Trade growth is even slower. Productivity growth is low. We are seeing the signs of a low growth trap. Meanwhile, poor growth outcomes combined with rising inequality, falling trust and stagnant incomes have contributed to the rise of populist and protectionist politics in a number of OECD countries. We are confronting a very difficult political situation where the outcomes of democratic processes are expressing strong opposition to the international global integration and cooperation. We must break this cycle !
The backlash against globalisation: a clear and present danger
We must begin by acknowledging that many people have indeed lost out. Inequality has been rising steadily for a generation. The richest 10% of the population in the OECD now earn around 10 times more than the poorest 10%. The gap in financial assets is even wider: households in the top wealth quintile have a mean value of financial wealth that is more than 70 times the value of those in the first quintile.
A significant number of people, especially in OECD countries, feel left behind. Many have not experienced gains in their real incomes in more than two decades. Often, they lack the means and skills to adapt and thrive in a digitalised economy.
Today we have an important opportunity to address these issues. We may not have all the answers, but we know the questions and the concerns. We need to take stock of the backlash against globalisation and respond by placing people at the centre of our efforts and policies.
The OECD is leading the global charge to go beyond GDP and embrace more inclusive growth models, through our Inclusive Growth and New Approaches to Economic Challenges (NAEC) initiatives. The OECD has also pioneered work on the interconnections between rising inequality and slowing productivity gains. We called this work which we launched at last year’s MCM, the Productivity-Inclusiveness Nexus, since not all Members agreed to the term “Inclusive Productivity”. But the main message, which has been widely taken up, is that countries can expand the productive assets of their economy by reducing inequality, investing in skills and fostering an environment were are firms have a fair chance to succeed, including in lagging regions.
Channelling all this into making globalisation work for all will be the focus of our Ministerial Council Meeting (MCM) in June. Let me share with you a few examples of what we will be looking at.
Harnessing digitalisation for inclusive growth
Firstly, technological change, and in particular digitalisation, is a fundamental part of globalisation. It has revolutionised our economies and societies. It has brought benefits in health, education, transport and communications, to name just a few, and has spurred new opportunities for innovation and growth.
However, it is also bringing disruption. OECD evidence gathered in the Survey of Adult Skills (PIACC) suggests that on average across 21 OECD countries, 9% of jobs are at high risk of automation and another 25% will likely experience a major retooling because of automation. To thrive in this new and rapidly changing digital age, people need skills. Yet, over half of adults (56%) in OECD countries lack the necessary skills to succeed in a technology rich environment.
To help respond to this challenge, the OECD will focus on identifying policies that ensure that globalisation and digitalisation bring improved well-being to citizens through educational and skills policies, migrants’ integration, and better social safety nets.
Fairer trade and investment
Beyond the digital revolution, we also need to double our efforts to make trade and investment fairer. This will be another pillar of the MCM. We need to move towards a more progressive, more inclusive, more coherent, and more integrated package of trade, investment and domestic policies to ensure open markets work better, and for everyone.
To achieve this, governments must embrace the full range of structural policies. From social protection and flexible labour markets to strategic investments in education, skills, innovation and physical infrastructure; from fostering responsible business conduct to addressing investor-state dispute settlement concerns, the benefits of trade and investment must be more widely and more equally distributed.
This includes working towards fairer competition policies and more productive and inclusive capital allocation, in particular tackling excessive wealth and market concentration. In the course of our MCM we will also be discussing how globalisation and digitalisation might reinforce to some extent a winner-take-all dynamic, leading to increasing market power for certain firms.
We will be looking at the way that the financial sector may have contributed to growing inequality. And we will look at how corporate governance frameworks may have gone too far in just taking into account shareholder interests.These are some broad lines of discussion, which will bring Ministers round the table in June.
Enhancing international co-operation
To deliver in all these areas we must continually enhance and improve international co-operation with rules that are ever stronger, ever fairer, ever more inclusive. Domestic policies are only part of the solution. We also need a multilateral system that delivers.
At the G7 and the G20, the OECD helps to strengthen international regulatory co-operation, while OECD standards and instruments ensure that all relevant actors play by the same rules, with greater consistency. The OECD is a trusted partner of the G20, and we are proud that China has also relied on us for its ambitious innovation and growth agenda. The OECD was also asked by G20 leaders – and after extensive negotiations among Sherpas – to establish a Global Forum on Steel Excess Capacity and to address one of the most difficult features of the international economy. So we will continue not only to provide the G20 with excellent evidence so that members can build consensus, but also to support the platform to discuss delicate issues.
We also continue to lead on the implementation of the international tax agenda. To date, more than 90 countries and jurisdictions have committed to implement the outcomes of the BEPS Project, 137 are implementing the tax transparency standards. Around 100 countries agreed in November to the OECD’s Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS and we will be holding a signing ceremony; including many of your countries, at the MCM.
Finally, better global integration will also require the rapid and effective implementation of the landmark global agreements of 2015 ─ including the 2030 Agenda for Sustainable Development and the Paris COP21 Agreement. These may be uncertain, complex times, but the commitments made cannot be derailed! These goals and targets are an integral part to delivering a better, more inclusive globalisation. We have the roadmap, now we need to walk the talk with implementation; implementation; implementation.
Ladies and Gentlemen,
The Irish statesmen, philosopher, and Member of Parliament, Edmund Burke said almost 250 years ago that “parliament is a deliberate assembly of one nation, with one interest, that of the whole”. You work every day to ensure that public institutions and policies represent the interests of all people. In other words, that no one is left behind.
The OECD is here to support you in this task. You are all fundamental actors in your countries, and we count on working with you. So please also count on us. Take our expertise and draw on our data and recommendations. We hope this can help to provide you with the knowledge and the tools to design, deliver and implement better policies for better lives.