Opening Remarks by Angel Gurría

OECD Secretary-General

Tokyo, Japan - 12 April 2018

(As prepared for delivery) 

 

 

 

Vice-Minister Horii, Minister of State Field, Ladies and Gentlemen,

Let me to begin by thanking the Government of Japan, in particular, Mr. Iwao Horii, Parliamentary Vice-Minister for Foreign Affairs, for co-hosting today’s seminar. We are here with the United Kingdom’s Minister of State for Asia and the Pacific, Mark Field, to discuss “Promoting Quality Infrastructure”.

 

Where better to discuss this challenge than Japan, which made this a priority under its G7 Presidency, with the Ise-Shima Principles for Promoting Quality Infrastructure Investment. Japan has also been working closely with the OECD Development Centre on establishing an international dialogue on quality infrastructure from a development angle.
 

Quality infrastructure is essential for inclusive and sustainable growth

Infrastructure makes up the veins, arteries, joints and nervous system of our economies and societies. Quality infrastructure is a pre-condition for economic and societal good health. Success stories are built on this effort. The high speed trains between Madrid and Seville; between Paris and Lyon; between Wuhan and Nanjing have been transformative investments. In Western Scandinavia, the cities of Oslo, Gothenburg and Malmö have engaged in an infrastructural network to get the benefits of an agglomeration economy while minimising the costs associated with large cities such as pollution, rising house prices and inequalities. In Mexico City we are building a new international airport, which is one of the largest airport infrastructure projects in the world, and which will quadruple the city’s current capacity. The OECD and several emerging and developing economies are full of examples such as these.

 

On the other hand, poor quality infrastructure brings high costs for our growth potential. In Latin America, low quality transport infrastructure leads to a ratio of transport costs to tariffs that is more than 3 times higher than in OECD economies.

 

Low quality infrastructure also affects health. For example, more than 700 million people in African countries rely on biomass and fuelwood for cooking. As a result, every year thousands, especially women and children, die from indoor smoke.

 

Low quality infrastructure also makes countries more vulnerable to climate change. The Asian region needs an investment of USD 1.7 trillion per year until 2030 to build infrastructure of sufficient quality and resilience to withstand the impacts of climate change.

 

All countries must rise to this challenge. Quality infrastructure requires effective governance; all projects need to be built safely and be disaster resilient. It must also take into account social and environmental impacts and it must be aligned with economic and development strategies. That is why we are here today; to chart a common path to ensure all infrastructure is quality infrastructure.

 

OECD is taking an integrated, strategic approach to promote quality infrastructure

This is why we are here. We have got to work together to learn from each other’s experiences and best practices to improve the quality of our infrastructure. Mandated by the OECD Ministers at our Ministerial Council Meeting in 2017, the OECD is developing an integrated approach to quality infrastructure through a horizontal project involving 19 OECD directorates and agencies.

Let me highlight four examples of this work:

 

• First, our Framework for the Governance of Infrastructure is helping improve how governments plan and prioritise investments; manage private-public partnerships and procurement; design effective regulatory environments and manage integrity risks.
  
  
• Second, considering that investment in quality infrastructure takes place mostly at the sub-national level (69% here in Japan), the OECD’s Recommendation on Effective Public Investment Across Levels of Government is helping strengthen capacity. 
  
  
• Third, our work with national and local governments through OECD Territorial Reviews and Public Governance Reviews, including on promoting integrity and best practices in public procurement is helping governments optimise resources and avoid corruption in big infrastructure projects. The New International Airport of Mexico City is a recent example. 
  
  
• Finally, OECD initiatives like the Champion Mayors for Inclusive Growth are helping cities bridge strategies and identify synergies to address climate change and promote social inclusion. The OECD Centre on Green Finance and Investment is also bringing together policy makers, regulators and market participants to catalyse investment in the transition to a clean, low-emission, and climate-resilient global economy, looking at tools including green bonds and green banks. Here in Asia, the OECD is actively promoting sustainable cities through our Urban Green Growth in Dynamic Asia project, working with Indonesia, Thailand, Viet Nam, Malaysia and the Philippines.

 

As the first step to bring all this work together, the OECD will be delivering a set of integrated multidisciplinary guidelines promoting quality infrastructure in 2019. These will build on a whole-of-OECD approach and the OECD will continue to engage closely with the G7, G20, APEC and other global for a in this effort. 

 

OECD is working with G20 and G7 to promote quality infrastructure

We must work together to chart common paths to promote high quality infrastructure, through tools like the G7 Ise-Shima Principles. More recently, the Argentinian G20 Presidency has advanced this agenda, through “The G20 Roadmap to Infrastructure as an Asset Class” endorsed by Finance Ministers and Central Banks Governors in March.

 

The OECD is currently working with the Argentinian G20 Presidency to strengthen the role of climate-resilient infrastructure. This builds on the OECD’s Investment in Climate, Investment in Growth report, prepared for the German G20 Presidency, which estimated that USD 6.3 trillion of investment in infrastructure is required annually on average between 2016 and 2030 to meet global development needs. An additional USD 0.6 trillion a year over the same period will make these investments climate compatible.

 

The OECD is working with the G20 to develop standards and tools to support this effort, such as the G20/OECD Principles on long-term investment financing, to give just one example. We are making progress but a lot remains to be done, which is why this seminar is so vital.

 

Ladies and Gentlemen,

The great British engineer, Sir Henry Royce, said “Strive for perfection in everything you do. Take the best that exists and make it better. When it does not exist, design it”. This spirit is why Isaac Asimov said that “engineering changes the world”.

 

I look forward to hearing how we can work together, harnessing the power of multilateral partnership and action, to design, deliver and implement a better, more inclusive, more sustainable world, one quality infrastructure project at a time.  Thank you.

 

 

See also

OECD work on Development

OECD work with G20

OECD work with Japan