Secretary-General

Together We Stand: Inclusive Growth

 

Remarks by Angel Gurría, OECD  Secretary-General, delivered at an OECD Workshop on Inclusive Growth

(as prepared for delivery)

Paris, 3rd April 2013

Ms. Badawi, President Ubiñas, Your Excellencies, Ladies and Gentlemen,

Welcome to the OECD Workshop on Inclusive Growth! We are pleased to see such a diverse turnout at what I hope will be a meaningful discussion. I would like to thank the Ford Foundation, our partner, for their support. Thank you, President Ubiñas and the Ford team.

And, thank you Zeinab, for joining us today.

To set the stage for the workshop, we have prepared a short video, which we will present right now.

To quote the short film, “For inclusive growth, you need inclusive debate,” and that is what we are here to do.


Facing reality

The discussions on Inclusive Growth today couldn’t be more timely. The global community is demanding relief from the suffocating economic crisis and a promise for a more equitable future.  And I don’t blame them, the facts are alarming: 


Unemployment
: Worldwide, there are more than 200 million people who are out of work. The OECD-wide unemployment rate stands at 8% – that’s equivalent to around 48 million people out of work – almost 15 million more than when the financial crisis began at the end of 2007. In countries like Spain and Greece, it exceeds 25%. And regrettably the forecast is grim. Youth unemployment is at least double the national averages in most countries.


Inequalities: Today, the gap between rich and poor is widening almost everywhere. Within OECD countries, it is now the widest in 30 years: the average income of the richest 10% of the population is about 9 times that of the poorest 10%, as opposed to 7 times 30 years ago. In the United States, Israel and Turkey the inequality gap can reach up to 14 to 1, with even more discouraging ratios – 27 to 1 – in Chile and Mexico. Even traditionally egalitarian countries have witnessed growing income inequalities, which are also widening in China, India, South Africa, as well as in many developing countries.


Poverty
: Despite real progress, poverty remains a reality in many countries. In Sub-Saharan Africa, almost half of the population still lives on less than USD 1.25 per day. And India, an emerging, fast-growing economy, is home to one-third of the world’s poor. We just have to look on the streets to see that even prosperous societies are not escaping poverty. It’s on the rise, and makes up to 20% of the population in Israel, Mexico and Turkey, and 15% in the US, Spain, Japan and Korea. There are still a billion people – one seventh of humanity – who go to bed hungry every night.


Looking beyond our traditional economic models

The truth is that our economic growth models have not equitably distribute benefits. Inequalities were brewing under the surface prior to 2007 and increased almost everywhere even during periods of sustained economic growth. We need to reverse this trend.

Inclusive Growth has an important role to play in responding to the pressing needs of today and addressing the underlying trends that pushed our economic and social systems into disequilibrium.

But first, the concept needs be clarified. Presently, it means different things to different people and in different countries – advanced, emerging, and developing. An important part of our job today is to shed more light on how Inclusive Growth can be defined.


Reversing the trend

We have done some thinking about how to change course, in particular about what Inclusive Growth needs to encompass in order to cover new ground. I would like to share with you some of our ideas, which build on recent OECD work on inequalities, well-being, social cohesion, growth and development.


First, Inclusive Growth is a multidimensional concept, meaning that it encompasses different aspects of life. For instance, today, employment in non-standard work arrangements, such as part-time or temporary work represents 40% of total employment in OECD countries! Informal jobs are widespread in emerging and developing countries, which puts workers, especially those holding 3D jobs – dirty, dangerous and demeaning – at a serious disadvantage. Skills and education, health status and social connections are also important dimensions to be considered. And so is one’s capacity to influence politics and institutions – people want to be part of the political process – and to live in a healthy environment.

 

Second, Inclusive Growth is also about distribution. It is about looking at how the benefits and opportunities of growth are shared among social groups. And it is about making growth sustainable for future generations: How can we assure that our children and our youth who now face dire conditions will enjoy a better future?


Third, Inclusive Growth is about putting in place better policies for better lives:this is our primary objective! What we need is a manageable, measurable, comparable concept that can lead to smart policies that are pro-growth and pro-inclusiveness at the same time. This is about understanding the trade-offs among policies, and how they can be reconciled. It is also about taking into account countries’ specific levels of development.


Finally, we need to ensure that this is about making Inclusive Growth reform happen!We cannot design, promote and even less put in place a plan, without consulting all the stakeholders. That’s why we are here today.

Ladies and Gentlemen,

We are now in a period of reflection – and hopefully enlightenment – where we can draw lessons from the crisis and propose solutions for the future and where we can also look at the unintended consequences of our policy choices. New Approaches to Economic Challenges, what we refer to as NAEC here at the OECD, are in demand. And Inclusive Growth is central to NAEC: it is about looking for new approaches, and it is about addressing economic and social challenges. Actually, in our NAEC exercise, we are mandated to develop a comprehensive agenda for sustainable inclusive growth.

To make the Inclusive Growth reform agenda happen, we must continue to refine a policy-oriented conceptual framework and act on it!

Building on our work of today and on subsequent consultations with all stakeholders, we will host a second workshop at the end of the year. I count on your participation and contributions again.

President Ubiñas, let me say again that is a pleasure to collaborate with the Ford Foundation on this important project.

I would like to commend the Ford Foundation for its commitment over the last 70+ years to combatting poverty and improving the lives and well-being of people all over the world. We are very proud to join forces with the Foundation in this and in many other partnerships.

Please Luis, I invite you to share your remarks (Read the speech by Luis Ubinas, President of the Ford Foundation).


>> For more information about OECD work on inclusive growth, please visit: www.oecd.org/inclusive-growth

 

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