Remarks by Angel Gurría, OECD Secretary-General
Vienna, 11th July 2011
(As prepared for delivery)
Dear State Secretary Ostermayer, Dear Governor Nowotny, Ladies and Gentlemen:
It is a great pleasure to be with you today to celebrate 50 years of cooperation between the OECD and Austria. I am very grateful to the Austrian Central Bank and the Federal Government for hosting this event.
Austria has always been a remarkable ally to the OECD. It was one of the Organisation’s 19 founding members. It has contributed to countless OECD events and studies. It has been a pathfinder in many policy areas and it played a key role in our 50th Anniversary celebrations.
Just last May, Chancellor Faymann joined us in Paris for our 50th Anniversary Ministerial Council Meeting under the title “Better Policies for Better Lives”. 21 Heads of State or Government and Deputy Prime Ministers, and 86 Ministers and State Secretaries from 48 countries honoured us with their presence.
Let me start by giving you a flavour of where the global economy stands today.
Measuring the Pulse of the Global Economy
Our countries are still facing difficult times. Growth and business confidence might be picking up, but the injuries inflicted by the crisis will take time to heal. The crisis is not over: it has only changed its face.
We are experiencing an uneven recovery, mostly based on temporary factors. Many OECD countries are facing unsustainable fiscal deficits, record levels of public debt, low growth and high unemployment. Austria is an outstanding exception with its positive labour market performance and low unemployment rate of around 5%. The government deserves great credit for this place at the top of the league table.
The main drivers of the recovery are the emerging economies. But it’s not plain sailing for them either. Many would face high inflation and increasing inequalities. Developing and least developed economies are being affected by a severe hike in food and energy prices, global warming, diminishing remittances, weakened export markets and development aid efforts in OECD countries.
Reframing our Priorities: Going Structural and Social
All these shifts and challenges call for fresh thinking, greater cooperation and more policy coherence. We need to produce a new economic system, powered by greener and more inclusive economic growth.
In advanced countries, we need to strike the right balance between revitalising growth and consolidating public finances. But our biggest primary task is to put our people back to work and reduce inequalities. We need to go structural, but we also need to go social.
Concretely, this means:
This is also a big-bang moment for development and we just got a new mandate to develop a broad Strategy for Development. We are doubling our efforts to help developing and emerging countries reduce inequalities, fight corruption, improve public services and build competitive business frameworks.
We are searching for new ways to combine policy knowledge and new technologies to address the most basic issues for development, like education, health, formal employment, food security, banking, taxation.
But to be more effective, we need to become more inclusive. This is essential for our continued relevance: the epicentre of economic activity is shifting rapidly and by 2030, developing countries will account for nearly 60% of global GDP.
Austria and the OECD: 50 years of Mutual Enhancement
To press forward, the support of our member countries is essential. And we know we can count on Austria.
The OECD and Austria share a long history of pooling knowledge, experiences and best practices. Our cooperation has always been mutually enhancing. Austria made great use of the Marshall Plan for reconstructing Europe, laying the foundations for a strong, competitive economy, in a consensus minded society.
Austria has been an active OECD member, chairing annual Ministerial Meetings in 1979 and 1996, and acting as Vice-Chair in 1963, 1970, 1986 and 1994. More recently, Austria provided inspirational leadership at the OECD Education Ministerial Meeting in November 2010. The Austrian Chair, Minister Claudia Schmied, voiced Austria’s longstanding commitment to improving education and called on countries to focus on education as a driver of long-term growth.
We also share a remarkable history of co-operation in the fields of science, technology and innovation. In the early years after the Second World War, innovation in Austria was mainly based on imports of new machinery and equipment, and the assimilation of management practices. But Austria turned this around, closing the gap with the most advanced OECD countries by moving from a “smart follower” to a great leader.
The OECD has been very supportive of these efforts. In 1971, it prepared a widely discussed report on Austria’s science policy. In 1988, it conducted a Review of National Science and Technology Policy and in the 1990s, Austrian government officials and experts cooperated with the OECD on advancing Austria’s innovation system further.
From the 1990s onwards, Austria began to boost aggregate expenditure on research and development (R&D) and took many steps to improve its innovation system. Thanks to these efforts, the Austrian innovation paradigm has shifted profoundly, boosting innovation in a relatively short space of time. This is an experience other countries ought to learn from.
Austria is also an amazing pathfinder in labour and social issues. The government’s effective approach to labour practices has helped to preserve wage moderation, while at the same time safeguarding an appropriate degree of employment protection.
An example of Austria’s leadership is the comprehensive reform of the severance-pay system in the 2000s. Rights were made less rigid and more easily transferable. The reform is still bearing fruits today and other OECD countries are using it as a model.
Publications like PISA, Society at a Glance, the Employment Outlook and Babies and Bosses are just a few of the many other areas where Austria and the OECD work together. These studies are important tools for improving equal opportunities, social policy and job creation.
And finally, we provide labour market and social policy courses with the Joint Vienna Institute (JVI), an international training institute launched in 1992 by the Austrian government and five international organisations, including the OECD. Governor Nowotny, who is with us today, gave lectures at the JVI in the late nineties, and I just had the pleasure of delivering the Annual lecture at lunch.
Going Forward: Austria’s Four Key Challenges
Let me just finish with a few words on the Economic Survey of Austria 2011, which we released this morning. The Survey shows that the economy weathered the crisis well on the back of an export led recovery, but it also emphasises the pressing need for Austria to strengthen reforms and maintain high growth by focusing on four policy actions.
First, to maintain living standards in the rapidly restructuring global economy, Austria must continue to strengthen its overall innovative capability. Dynamic entrepreneurs and a high quality labour force are essential.
Second, all sectors, from agriculture to manufacturing and public services, need to maintain a high-quality, high-productivity momentum. There is room for expanding competition dynamics in the service sectors, and reform to promote competition without undermining quality has to be at the top of the policy agenda.
Third, the education system’s performance as a key purveyor of skills on a life-long basis will be decisive. The health system will have to respond to the changing needs of ageing societies, to help individuals maintain their life and work options until an advanced age.
Fourth, public finances must stay on track. In Austria, the public debt and fiscal paths do not seem entirely prepared for future spending pressures. This issue is being discussed intensely at the OECD, and I am confident that Austria will enrich the debates with its experiences in this area.
Ladies and Gentlemen,
Viktor Frankl once said: “When we are no longer able to change a situation, we are challenged to change ourselves.”
The OECD @ 50 is a dynamic Organisation. We are adapting to a fast-changing world; we are upgrading our capacities and renewing our thinking, to meet the economic, social and environmental challenges we face. We look forward to the next 5 decades of cooperation wtith Austria to achieve our goal of “Better Policies for Better Lives”.