Opening Remarks by Angel Gurría,
Paris, France, 6 June 2017
(As prepared for delivery)
Your Royal Highness, Dear Ministers, Ambassadors, Colleagues, Dear Guests:
Welcome to the OECD Forum 2017. Welcome to the OECD Week.
I am opening this Forum at a very challenging and demanding moment, when our economic systems are weakened by a dysfunctional contradiction between extraordinary gains for a lucky few and the stagnation of income in average households. A moment when many people in many countries feel left behind and demand a better deal. A moment when the divides in our societies question the efficiency of our theories, our policies, our governments. When the erosion of public trust and the persistence of economic uncertainty are opening the door to protectionism, isolationism and exclusive nationalism.
We take these challenges as a call to action. It’s time to make globalisation work for the many. It’s time to empower the people by providing them with the necessary skills. It’s time to resuscitate social mobility. Time to turn the digital economy into a tool for inclusion and sustainability. Today, as we celebrate the 70th Anniversary of the Marshall Plan, we must draw from its vision, its ambition, its sense of mission to build a better world, based on collective action.
Economic globalisation has advanced at lightning speed in the past decades, powering global economic growth, facilitating productivity gains, integrating developing countries to trade and investment flows, lifting millions out of extreme poverty. It has also been a force for the dissemination of information, innovation, science, technology, medicine, art, culture, sports, bringing the world closer in remarkable ways.
There is, however, a growing perception and, unfortunately, also increasing evidence, that such benefits of global economic liberalisation are being reaped mainly by a privileged minority. While many people in the world celebrate and support globalisation, they also worry about a possible hijacking of the system by the powerful elites. We must address this concern.
Many of the dynamics of globalisation are inducing or exacerbating dangerous disequilibria, such as the fall in labour’s share of national income; local blight and regional disparities; the dominance of leading firms in key sectors; the rise of market distortions; the income concentration risks of financialisation; the increasing pressure to shift taxation from wealth and high-income individuals onto labour; or the problem of tax evasion and avoidance.
These and other challenges have opened dangerous gaps in our societies. The numbers are stunning:
We need to rebalance these numbers. We need to ensure that everyone has the opportunity to improve their well-being. We need to empower people and build “social elevators”, enhancers for shared prosperity. We need to bridge the divides. What Pope Francis named a “cooperative globalisation”. If we don't make globalisation work for all, political pressure to unwind its key feautures will mount and lead to more protectionist and nationalist policies at a moment when the fragility of economic recovery and an increasingly polarised world demand exactly the opposite.
Thus, we need a coordinated policy response. That’s what we are trying to develop at the OECD. And we think such a response needs to be framed in a new narrative around the concept of resilient, sustainable and inclusive growth; a new policy action focused on the improvement of multidimensional well-being.
We need to replace the “growth first-distribute later” axiom with a more complex and integrated approach in which the low income groups are better prepared to profit from globalisation, ensuring that they are more closely connected to innovation and global business opportunities. We need to increase social spending to improve social protection and safety nets in light of the changing work environment disrupted by digital technologies.
We need to provide people with the means to succeed ― in line with the Productivity-Inclusiveness Nexus developed at our 2016 OECD Ministerial and our broader Inclusive Growth initiative―, by ensuring universal access to quality education and healthcare, developing better activation and skills policies, reducing the tax burden on labour, supporting SMEs, enhancing technology diffusion and promoting the integration of migrants. We need New Approaches to Economic Challenges that see the economy as a complex human system that is fragile, unstable, and vulnerable to manipulation, and where the only certainty is that of uncertain outcomes.
We need to work more with local communities and governments, supporting innovative, bottom-up development projects, and the incorporation of women into the labour market, with better paid jobs and higher responsibilities, as well as strengthening the synergies between rural and urban areas.
In a globalised world we also need to act at the international level. We need stronger and more effective international standards to combat tax evasion, bribery in international transactions and aggressive lobbying, but also to improve corporate governance, responsible business conduct and competition among transnational corporations. We need to better understand the different components of their global value chains.
And we need to improve global governance, the role of international organisations and multilateral co-operation to make them more effective and more inclusive. That’s the transformation that we are promoting at the OECD, engaging in more horizontal initiatives; boosting our cooperation with emerging and developing economies; increasing our presence and support in the G20, G7, APEC, the Pacific Alliance and others, with whom we are sharing our inclusive growth narrative and other best practices.
Governments also need to be more open to public scrutiny, and further consult with their constituents and stakeholders on trade and investment policies and agreements.
I’m talking about BRIDGING DIVIDES.
This is what we are here for. This is why the OECD was created. This is what we will be doing in this Forum and in this Ministerial Council Meeting.
The Programme we have ahead is exciting. We will be debating the controversial universal basic income, the digital world we want, people-centred health, the world and future of work, exponential disruption, migration-integration, women in STEM. With Idea Factories, Discovery Labs and Meet the Author addressing the post-truth world, artificial intelligence, green citizens, neuroscience, the empathy deficit, the risks of leaving economics to the economists, taxing the rich and empowering women in indigenous communities; to mention but a few.
The failings in our system are structural; they are broad and deep. So we need to go broad and deep to fix them.
Your Royal Highness, Ministers, Dear friends:
The economic system that we built and promoted for decades is leaving many people behind. It’s time to fix it!
Modern capitalism is breeding inequalities and depleting our natural resources. It’s time to fix it!
Globalisation and its benefits are not accessible to all. It’s time to fix it!
These are not uncontrollable forces. They are the result of our decisions, our policies, our agreements, our international standards. They are the product of our conceptions, our misconceptions, of our ideas. And we are here to improve on those ideas. We are here to inspire the new policies, the new agreements and new international standards that will turn market economies and globalisation into catalysts of inclusive and sustainable growth. That is the power of this Forum, of this OECD Week. That is your power. It’s all about your ideas. Because, as John Maynard Keynes once remarked, “the world is ruled by little else”.
Let’s change those ideas!
Let’s improve this world with better policies for better lives!
Let’s bridge those divides!
Enjoy the OECD Week!