Opening Remarks by Angel Gurría
Paris, France, 7 December 2017
(As prepared for delivery)
Ladies and Gentlemen, Mme la Maire de Paris, Distinguished Guests,
Welcome to the OECD! I am delighted to open the first edition of the Conference of Paris.
I would like to thank Gil, Gérard, and Paul for our great collaboration. Bringing the powerhouse of the International Economic Forum of the Americas to Paris is something we have discussed for many years. I am glad that we have finally made it happen!
If the stone walls of the OECD’s Chateau de la Muette could talk, they’d probably be talking about globalisation. Because in 2017, they have heard a lot about globalisation: what’s wrong with it, what’s right with it, and how to make it work for all.
Over the years, these walls have seen us launch policy tools, instruments, standards and programmes to help countries harness the potential of globalisation. We see the OECD as a hub of globalisation. It has contributed to openness and greater international integration. But much remains to be done, especially in a challenging global context in which many question the value of openness, the market system and even the functionality of democracy. We risk losing so much unless we address the roots of this backlash!
Where do we stand today? Just last week I launched the latest OECD Economic Outlook with our Chief Economist Catherine Mann.
The good news is that the global economy is gaining momentum. Global growth is accelerating from 3.1% in 2016 to a projected 3.6% this year and 3.7% next year. For the first time in a decade, the world is growing in sync, with none of the large economies experiencing a recession.
This is better, but it is still not good enough. There are threats to the sustainability of the improved growth rates, especially from high corporate and household debt in both advanced and emerging economies. While employment is rising, there is little sign that real wages and the quality of jobs are improving. And growth also needs to become more inclusive and more sustainable.
In the absence of a clear sign of change in underlying trends, the OECD projects growth to weaken in 2019. Policymakers need to trigger deep changes to catalyse investment and productivity, boost trade and reshape globalisation to improve people’s lives.
Globalisation has brought many benefits: economic growth; productivity gains; the spread of technology, knowledge and culture. It has helped to lift hundreds of millions of people out of poverty.
But it has also left many behind. The average income of the richest 10% of the population is now around 10 times that of the poorest 10% across the OECD, up from 7 times a generation ago. Let’s look at wealth. At the last count, the top 1% wealthiest households in OECD countries owned 18% of total household wealth, compared to only 3% owned by the bottom 40%. And it is becoming increasingly difficult for those worse-off and their children to improve their lot.
Inequalities do not only harm growth, they also erode trust; trust in governments, in institutions, in companies, in capitalism and, even, in democracy. This makes our societies more vulnerable to protectionism, populism and to exclusive nationalism.
We need to rebuild this trust. We need to reverse these trends by shaping a more inclusive, people-centred, rules-based globalisation. This is why our latest OECD Week and Ministerial Council Meeting focused on this: bridging divides in our economies and societies and making globalisation work for all.
To achieve this we need growth that is equitable, people-centred and focused on well-being. We call this “inclusive growth”.
We have put this mantra at the core of our work, together with our New Approaches to Economic Challenges - OLD initiative, now in its fifth year. The OECD has been working at the leading edge of economic and policy thinking, exploring the synergies between productivity and inclusiveness.
Putting people at the centre means creating opportunities for everyone to thrive in life. It means developing creative solutions to ensure universal access to quality healthcare and education, including in early childhood. It means improving social protection so displaced or disadvantaged workers can get back on their feet and reskill or upskill. It means promoting the integration of migrants; boosting female labour force participation; supporting SMEs and strengthening technology diffusion.
None of this must come at the cost of our planet. Tackling climate change is a win-win. The OECD’s report Investing in climate, Investing in growth, commissioned by the German G20 Presidency, shows that a climate-compatible policy package to get to below 2ºC warming can increase long-run GDP by up to 2.8% on average across the G20 by 2050.
And of course, we are also looking at how the digital transformation is impacting our economies, our societies, our lives. Digitalisation and globalisation feed each other, creating unprecedented opportunities but at the same time many challenges. We just had a very productive meeting of the OECD Global Strategy Group in which we discussed how we can harness digitalisation as a driver of inclusive growth and better lives.
The business community, which is well represented here, has a crucial role to play in creating a more inclusive and sustainable globalisation. Firstly, by improving corporate governance and ensuring responsible business conduct. The OECD is on hand to help through standards like the OECD/G20 Principles on Corporate Governance and the OECD Guidelines on Multinational Enterprises.
Secondly, by paying its fair share. In June 2017, 76 countries and jurisdictions signed the OECD’s multilateral convention on Base Erosion and Profit Shifting (BEPS), which is tackling the gaps and mismatches in tax rules that allow certain multinationals to shift profits to low or no-tax locations. OECD standards are helping to level the global playing field and ensure a fairer globalisation. We need more effective implementation and broad adherence to all these key standards.
And thirdly, the business community can and should help improve lives, helping make our societies not only richer, but also fairer. It has a critical role to play in protecting the planet by stepping up its social and environmental responsibility. Companies are part of the solution. That is why we need your full engagement in helping governments and institutions like the OECD to tackle global challenges.
Ladies and Gentlemen,
Let me take you for a moment from Paris to another capital of European culture, Florence; to the Galleria dell’Accademia, which houses four remarkable sculptures by Michelangelo, collectively known as ‘the Prisoners’. These show perfectly carved figures, half emerging half consumed within blocks of unworked, rough stone.
This is firstly symbolic: they are struggling to free themselves from the rock. But it also provides an insight into Michelangelo’s method: he believed that he did not just sculpt figures, he freed them from the stone. The forms were already there, waiting to be liberated.
We should be inspired by these sculptures. We don’t have chisels but we do have the ideas, policies, reforms, standards, instruments and agreements that we will be discussing over the next two days. These are powerful tools to improve lives. We can all re-shape globalisation.
We can all be sculptors, and like the Michelangelo, uncover the beauty and, above all, the potential beneath an imperfect façade. Conferences like this one provide us with the ideas and drive to do so. This is why we are very glad to host you at the OECD and look forward to very productive exchanges. Thank you.