Remarks by Angel Gurría,
8 June 2016
Dear Minister, Ambassador, Ladies and Gentlemen,
It is a great honour to be with you today to celebrate the 20th anniversary of Korea’s accession to our Organisation. The invitation to Korea to join the OECD represented the culmination of 35 years of extraordinary growth that transformed it from one of the poorest nations in the world to a major industrial power with one of the highest levels of R&D expenditure relative to GDP in the OECD and one of the strongest innovation capacities in the world.
This remarkable progress consolidated and strengthened after Korea joined the OECD. In recent years, Korea’s growth trajectory has indeed been impressive, achieving a GDP of 4.3% per year between 2001 and 2011, double the OECD average. This rapid growth has boosted per capita income from 57% of the OECD average in 1996 to 84% in 2014. The convergence in living standards has been powered by increasing integration in global value chains and accompanied by increased emphasis on green growth and social cohesion.
OECD membership: Key benefits
Korea has gained a lot from its OECD membership. From the late 1990s, Korea benefitted from OECD insights on many crucial policy areas through studies such as the Review of National Science and Technology Policy; the Environmental Performance Review and the Review of National Policy for Education among others.
We have also promoted a considerable volume of work in the area of Green Growth by publishing the first ever country-specific case study: “Compact City Policies: Korea”, focusing, among others, on issues such as the implementation of green growth policies in urban areas.
Furthermore, our joint work has produced important studies and recommendations to improve economic performance and foster Korea’s inclusive development. For example, our most recent 2014 and 2016 OECD Economic Surveys have provided detailed recommendations to achieve the government’s plan to foster a “creative economy” as well as promote social cohesion and well-being.
Korea’s contribution to the OECD has been outstanding
In the past 20 years, the contribution of Korea to the work of the OECD has also been important. Just one year after joining the OECD, we established the OECD Korea Policy Centre. The Centre helped us to share best practices and valuable policy experience with partner economies in the Asia-Pacific region in the areas of health and social policy, the tax system and competition policy.
Moreover, in 2004, the OECD opened a Regional Centre for Competition in Seoul in co-operation with the Korea Fair Trade Commission. The Centre has served to promote our work on competition in the Asian region, helping Korea and several of these countries develop and implement effective competition law and policies.
Another key contribution took place in 2009, when Korea Chaired the Ministerial Council Meeting (MCM), focusing on “The Crisis and Beyond: building a stronger, cleaner, fairer world economy”. And last year, Korea was vice-Chair of the MCM and was very much invested in promoting innovation, fostering education and skills and strengthening the multilateral trading system.
In addition, Korea’s 2009 National Strategy for Green Growth inspired the development of the OECD Green Growth Strategy; the reduction in barriers to FDI inflows has been the largest in the OECD, providing lessons for emerging economies.
More recently, in 2014 Korea provided paramount support in the launch the Southeast Asia Regional Programme and to numerous Southeast Asian Economic Outlooks. And in 2015 the OECD’s Scientific and Technological Policy Committee held a Ministerial-level meeting in Daejeon – the first time it has met outside of the OECD headquarters. This reflected Korea’s role as a key player in innovation.
Korea is also a very active member of the Organisation currently Chairing 5 OECD bodies and vice-Chairing 20 bodies.
And we keep enriching this partnership
And we are still enriching this partnership. Today, Korea and the OECD are working very closely to help this country address key challenges, such as the rapid ageing of the Korean population, which is expected to be the most rapid in the OECD area. The short transition from the fourth-youngest country in the OECD today to the third oldest by 2050 creates a number of challenges, notably for public finances. Indeed, public social spending is projected to rise from around 10% of GDP in 2013 to as high as 29% by 2060!
Mitigating the impact of demographic trends will require raising the employment rates of women and youth, and extending the careers of older persons. That is why we are helping Korea improve its skills strategies and policies, develop skills beyond schools and strengthen its vocational system. This work will also contribute to improve Korea’s productivity challenge.
Korea has a dualistic economy, characterised by large productivity gaps between manufacturing and services, and between large and small firms. Overall productivity is only 55% of the top half of OECD countries. We are working together to tackle these challenges, with tools like our latest Economic Survey of Korea, which puts emphasis on promoting labour market reforms to break down labour market dualism for greater inclusive growth and social cohesion.
We are also working to improve the regulatory framework, one of President Park’s top priorities, and we are focusing on transport infrastructure and making concrete recommendations on how it can reduce transport costs and generate greater economic opportunities.
These are just a few examples of a much greater collaboration, but I think they give you the idea of the strength of this association and the mutual benefits of this 20 year Membership.
Minister, Ambassador, Ladies and Gentlemen,
In our 20-year partnership, the OECD and Korea have together overcome many challenges and achieved many goals. It is with his spirit of partnership and reform that we aim to deliver better policies for better lives for the next 20 years and beyond!