Address by Angel Gurría on the occasion of the handover ceremony

NOTES FOR AN ADDRESS BY

SECRETARY-GENERAL DESIGNATE
ANGEL GURRIA

On the occasion of the handover ceremony
at the OECD Council Meeting at Ministerial Level
May 24 2006

Mister Prime Minister, Mister Secretary-General, Ambassadors, dear friends,

I thank you for your warm welcome.

It is a great honour to stand before the representatives of some of the most dynamic market democracies in the world to accept the mandate to lead the OECD following Don Johnston’s great legacy.  I wish to pay homage to him for all that he has done in the past ten years to make this Organisation effective and relevant.

Since my election, I had the opportunity to consult with Presidents, Prime Ministers, Ministers and high-level officials from different Member countries to enrich the proposals which I had put forward during the Secretary-General selection process. I am pleased to see that they are indeed relevant.

They start with the fundamentals: although the economic outlook for this and next year is rather positive, there is no room for complacency. Among the most pressing challenges, let me cite a few:
 
- Current account imbalances have reached unprecedented levels.  Although they have not yet caused great disruptions, it is clear that they can not continue indefinitely.

- Growing demand and limited supply suggest that energy prices are not going to come down drastically any time soon.

- Another pressing challenge is that economic convergence among member countries has halted or even reversed. There are great differences in economic performance throughout the OECD, and we must work together to close these gaps, not only in terms of growth rates, but also in terms of productivity and living standards.

- We are confronted with the ageing of our populations and this in turn raises the importance of pensions and health care infrastructure. Moreover, when coupled with slowing or negative population growth it produces a need for enlightened migration and integration policies.

- We have all seen the emergence of questionable criteria which restrict foreign direct investment even among OECD countries. We have to practice what we preach. Otherwise we will not be credible and we will lose our authority.

-Finally, trade negotiations have made little progress.  We risk missing the opportunity to open our markets further and to reap the benefits of trade. It is also the case that lack of progress may rekindle protectionist pressures.

The OECD is ideally placed to help us find answers to all these challenges. Indeed, we, the OECD, have joined together to share our experiences in order to build strong, resilient economies.  We have all learned from one another.  We can profit from this strong cooperation to move into new areas where I think we can also have a significant impact. 

• Reducing economic disparities and combating poverty is one of them. As established in our founding charter, this is a duty we must address not only for our member countries, but for the rest of the world.  Poverty is the ultimate systemic threat.  We must address it for ethical, moral and also for purely economic reasons.
• Investment in human capital constitutes a strong pillar in this endeavour. Not only through better education and better job opportunities, but also through better quality of life and better health. Health must become one of our new priorities.
• I have witnessed the impact that access to clean water can have on the poorest.  In fact, advancing on the issue of water will help move forward on almost all the Millennium Development Goals. Like poverty, it will require a close collaboration between several of the OECD areas of expertise.
• There is also the very real and very pressing issue of climate change, already rather visible in its consequences.
• Finally, the challenge of dealing with 70 dollar oil barrels, its impact on growth and inflation, its possible alternatives (including nuclear energy) and the better balance between oil supply and demand should be the focus of our attention and that of our sister organisations, the IEA and the NEA.

Our governments are committed to undertaking structural reforms to strengthen growth, employment and public finances. 

Implementing such reforms is not an easy task. There are several elements that inhibit their successful conclusion.  Among them, those affected will make themselves known and become strident, while beneficiaries will be more dispersed and less prone to collective action.

Also, the results of reform usually materialise over the medium to long term, and do not have regard for political calendars.

The OECD should speak convincingly and loudly on behalf of the benefits of reform, while keeping in mind that there should be some compensatory mechanisms for those genuinely affected by reform. The Organisation is certainly well equipped to provide and disseminate such policy alternatives -- adjusted to each country’s specific circumstances -- based on the shared experiences of our 30 democracies.

To achieve all this, we need a clear and strong mandate from you. A mandate to be at the centre of the globalisation process. A mandate to coordinate with the other international organisations to avoid duplication, unnecessary competition and waste of resources.  A mandate for relevance.

In such a pursuit of relevance, the question of non members is key. How to engage them? How to expand the scope of the OECD so that it remains relevant in the years to come?

There have been welcome advances with respect to the governance of the Organisation.  We are now ready to discuss the financial implications of enlargement.  Once that has been achieved, we must determine whether potential members meet the necessary conditions for accession and whether we should start establishing contacts with them leading to accession. 

It is important to deliver a clear message to potential members.  This is the best way to lead them to adopt OECD best practices.  We also have to find ways to engage with other countries which are not necessarily on the accession path.

On a final note, I want to thank all of you for having entrusted me with the future of this exemplary Organisation. With your support, that of the Council and that of the dedicated and talented staff, I will do my utmost to continue its tradition of excellence, and build on its considerable authority and prestige.

Thank you.