Welcome Address by Angel Gurría, OECD Secretary-General, delivered at the Annual Bank Conference on Development Economics (ABCDE)
May 30, 2011, OECD HQ, France
(As prepared for delivery)
Ladies and gentlemen, distinguished participants, good morning. It is my great pleasure to welcome you to the OECD today, for the Annual Bank Conference on Development Economics (Better known as the ABCDE).
This event could not be timelier for the OECD. For many years we have been working on development issues through the DAC, the Development Centre and many other initiatives. We have also been, along with the World Bank and the United Nations, a partner in the elaboration, and in the implementation of the G20 Seoul Multi-action Plan on Development.
Just last week, our 50th Anniversary Ministerial gave us a very strong mandate to put together a development strategy that will broaden and deepen our development work, that draws on OECD policy experience and evidence based analysis. Secretary of State Clinton, who chaired our meeting, made a very strong call in this sense.
This mandate emerges in the context of a still challenging economic environment. According to our Economic Outlook, we are still in a multi-speed recovery. Advanced economies are facing very deep scars from the crisis, with slow growth, high unemployment, high deficits and high debt. There are also important downside risks to the recovery. The impact of the crisis will stay with us for many years.
Fast growing emerging economies have their own challenges, like keeping their own sustainable pace of growth, avoiding overheating in some of them, addressing massive inflows of capital and dealing with highly volatile commodity prices.
This economic context calls for a renewed effort in the development field. Not only to protect the most vulnerable, but also to enable developing economies to stimulate new sources of international growth.
The right place to start is to challenge conventional wisdom. We learned from the crisis that standard recipes for economic management are not only not enough, but can be inadequate. They can prevent us from understanding the dynamics on the ground.
In the case of the financial crisis, the underlying assumptions in our models did not address the issue of the proper management of the downside risks.
Therefore, with the OECD Strategy for Development, we will take stock of the formidable arsenal of OECD’s broader public policy experience, and assess how it can be useful in a development context. This will require, first and foremost, some fine tuning of our knowledge, as country specific conditions are becoming increasingly important when dealing with development issues. A proven policy or best practice that has served an advanced economy well cannot just be transferred to a developing one. We also need to learn more from successful experiences in developing countries.
Second, we should focus on outcomes and not on inputs. This is not only related to aid (and here I want to recognize Brian Atwood’s leadership to move in this direction), but also to specific policy advice. An example is international trade. It is clear that open international trade and investment regimes are pre-conditions for growth and development. But they are not an end in itself. Results should be measured against improvements in standards of living.
Third, there is a social agenda that is expanding both in developing and emerging, as well as in developed countries. Indeed, the most visible human cost of the crisis is the high level of joblessness, particularly among the youth, as well as the increasing levels of inequality.
Even before the crisis, inequality grew in almost all countries considered. In OECD countries, the richest 10% earn nine times more than the poorest 10%. In Mexico and Chile, the rich have incomes more than 25 higher than the poorest. In Brazil the ratio is 50 to 1 (coming from 79 to 50 thanks to an impressive social effort) and in South Africa it is 147 to 1! Around the world, this level of inequality is not only ethically unacceptable but it is also economically and socially unsustainable.
Fourth, there is the gender aspect. In the OECD Ministerial last week, we were also asked to look deeply at this issue, as gender equality and the economic empowerment of women continue to be a pending task. To start with, we will join forces with the WB and UN to have better data on this field.
Fifth, it is important to review growth strategies vis-à-vis their impact on the environment. The most important conclusion of the OECD Green Growth Strategy released last week, is that green and growth can and must go well together. There are many economic opportunities that green growth can promote. We should tap into them, and create the conducive policy framework that will allow for the structural transformation of our economies.
Finally, we need to better define our targets. They should not be just higher growth rates, but real improvement in people’s lives. In this effort, we are also developing proposals to understand how to improve well-being. We just launched our Better Life Index that involves a multidimensional approach to well being, including access to opportunities, housing, education, health, income and life satisfaction. This is an ambitious goal, but something worth considering when advancing development proposals. So we have quite an agenda that will certainly be enriched by our discussions today.
I would like to close by thanking our co-hosts (the World Bank, the French Ministry of Foreign and European Affairs and the French Ministry of Finance) for their excellent collaboration in preparing this conference. Justin – while the ABCDE has been held in France in the past, I understand that this is the first time the Conference is organised in partnership with another international organisation. We appear to be grasping the importance of new and innovative partnerships among International Organisations.
Ladies and gentlemen: many thanks for being here to share your expertise, your diverse points of view. It is the desire to prompt better policies for better lives that has motivated us at the OECD for the past 50 years, and we will continue to do so in the future.