Remarks by Angel Gurría
Dubai, UAE - Monday 11 February 2019
(As prepared for delivery)
Excellencies Al Muhairi and Adnan Olwan,
Deputy Administrator Kaniewski,
Ladies and Gentlemen,
I am delighted to join you once again at the World Government Summit in Dubai. Through its MENA-OECD Initiative, the OECD has been a strategic partner of the Summit from day one. Every year, through the OECD Global Platform sessions, we look at the critical governance challenges of today and of tomorrow. This year we are looking at “Governing Future Risks”.
Addressing risk goes to the heart of our human condition, it is why, our earliest ancestors evolved to live in groups. It is in part why we formed communities. Providing security and safety to citizens remains the most fundamental role of Government.
However, over the past two decades, the range and complexity of the risks Governments need to manage have increased dramatically. In today’s globalised world, risks are characterised by increasing interconnectedness, social networking, and fast-paced technological change.
This challenging risk landscape includes cyberattacks, pandemics, terrorism, natural disasters and extreme weather events, which climate change is making more intense and more long-lived. Such risks not only endanger lives and property, they can cause major disruptions to crucial global supply chains of food, energy and medicines.
Last year alone, natural disasters such as wildfires, hurricanes, storms and tsunamis claimed over 10,000 lives and inflicted 217 billion US dollars of damage according to reinsurance companies – that’s about the size of Greece’s Gross Domestic Product.
Currently in the headlines is the incredible freeze in the American mid-west, the worst in a generation, which meteorologists explain is actually linked to Arctic warming. What do such events foreshadow for the future of climate refugees when the global system for managing asylum requests is already under heavy stress?
Better risk governance will enable societies to seize opportunities in the inevitable changes that are coming, while minimising the associated risks. The governance of global risks requires cohesion between countries and the inclusion of industry, academia and civil society within the process of government decision-making. How else will we ever resolve trade-offs between diverse, sometimes conflicting, needs and interests? How else will we effectively deal with potential risks from new technologies such as artificial intelligence, the Internet of Things and nanoparticles?
Policymakers are increasingly conscious of the need for meeting public expectations of risk governance. There is much to learn from those countries who have made proactive efforts to get ahead of future risks and adapt to these changes.
A good example comes from Paris, where the OECD is headquartered. Flooding of the Seine River is a high risk in France. A serious flood could mean millions of people without electricity for weeks, no subway service and a sizeable hit on the national economy. The OECD High Level Risk Forum estimates that, in the worst case scenario, GDP in France could drop as much as 3 percentage points, and 400 000 jobs could be lost. Based on this analysis, the Paris region has invested hundreds of millions of euros in flood risk management.
It is vital that all governments act to address our increasing vulnerability to such risks.
No risk can be completely avoided or eliminated. The difficulty for leaders is to take strategic decisions that require investment today, but will only pay dividends tomorrow. It takes political courage to look beyond the short-term.
This is why we have to take notice not just when failures and crises hit hard, but also when governments succeed. Identifying and sharing lessons from both success and failure is critical to increase our capacity to move ahead with shared purpose and common intent in managing risk. Our recent report on Governance of Critical Risks monitors progress made in creating the institutional conditions for effective risk management policies. Let me share three critical messages from this work.
First, a whole-of-government approach is paramount. Working in silos creates blind spots and weakens our ability to react to the unknown. We have seen that when governments establish clear, informed leadership for risk management, they are better at co-ordinating and mapping connections among different threats. Disaster risk and crisis managers need to have sufficient authority to achieve real horizontal co-ordination and policy coherence. They also need to work with the private sector, and especially the operators of critical infrastructure, where disruptions can have the highest economic impact. The OECD’s Toolkit on the Governance of Critical Infrastructure Resilience provides useful guidance in this area.
Second, governments need to articulate ambitious, defined goals and timeframes for strengthening resilience, with clear targets for reducing future damages, set priorities through transparent processes, and hold officials accountable when they fail to make progress. In other words, they need to adopt a mission-oriented approach to policy making.
Finland for example, has set goals in its National Security Strategy to become the safest country in the world. It has been successful, not only in terms of medical risks and road safety, but also for security risks including violence and terrorism. Implementation took deliberate planning and consistent public investments to safeguard internal security, the functioning of the economy and infrastructure, the population’s income security and resilience to crisis. The Finnish Government also monitors closely the implementation of safeguard actions to ensure public funds are being used for intended purposes. This leads me to the third and final message I want to share with you.
Governments manage risks better when they have the evidence to constantly review, revise and reform policies. They need formal structures to learn lessons from their own failures and successes – and from those of others. They also need tools to evaluate where investment can save the most lives and avoid the highest economic costs. Research shows that mitigation investments reduce costs for disaster response and recovery: taxpayers in the United States save an average of six US dollar for every one US dollar the federal government spends on activities like elevating homes, strengthening or retrofitting infrastructure, and purchasing flood-prone properties for removal.
However, little data on sub-national funding for such programmes are publicly available. Systematic reporting on past social and economic losses has only begun in a few countries. The OECD is working closely with the international community to improve this evidence base to better target funding and decide whether new incentives are necessary to encourage mitigation activities.
Ladies and Gentlemen,
I’d like to close with the words of William Shakespeare, who, in Henry IV Part 1, said “out of this nettle, danger, we pluck this flower, safety.” Danger, risks, they cannot be avoided. But greater safety is always within our grasp. It requires effective governance of critical risks and it requires strategic investment and collaborative approaches. We cannot anticipate every risk, but we can learn from every failure and every success.
To do so we need to establish strong partnerships across countries and organisations, which is what this Global Platform is all about. The OECD stands ready to support you in building resilient, competitive economies and inclusive societies.