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Economy

New World Forum 2015 Keynote Address

 

Keynote by Angel Gurría,

Secretary-General, OECD

New World Forum 2015

Paris, 9 November 2015

(As prepared for delivery)

 

 

Monsieur Fitoussi, Monsieur Mestrallet, Mesdames et Messieurs,

 

Je vous souhaite la bienvenue à l’OCDE. C’est pour nous un grand plaisir d’accueillir une nouvelle année ce Forum Nouveau Monde. Le Forum est un lieu de débat, de réflexion, d’échange… et même de provocation! Nous sommes heureux d’ouvrir nos portes et vous offrir, ici à l’OCDE, cette espace pour réfléchir sur les grands défis de notre époque et pour trouver ensemble des nouvelles solutions.

 

When we met a year ago, I underscored that the global economy was still struggling to find a path to a confident recovery and stronger growth, six years after the onset of the crisis. Unfortunately, one year later the picture is not any better, and we are growing accustomed to talking about “secular stagnation” as the “new normal”. What can we do to reverse this?

 

The reality is that we are facing a very complex scenario clouded with uncertainties. I will not go in detail into the global macroeconomic analysis given that we will be presenting our updated Economic Outlook in just a few minutes, but let me stress a key message that I have been reiterating: until we fully jump-start the four cylinders of the world economic engine — investment, credit, trade and growth in emerging markets — we will not be out of the woods!

 

A few days ago, hosting a meeting of our Economic Policy Committee, I used a quote by the recently deceased New York Yankees baseball player Yogi Berra to characterise the moment we are witnessing: “it’s like déjà vu all over again”. Since the crisis, we have become used to a familiar pattern: spring-time optimism followed by downgrades in growth forecasts as the year progresses. 2015 is no different, as we will be commenting at the Outlook presentation: OECD economies have not fully taken off and, unfortunately, the continued slowdown in emerging economies – and China in particular – is weighing on global demand.

 

Against this background, I am very encouraged by the fact that the New World Forum has chosen “exploring the long-term” as this year’s main theme. It precisely points in the right direction: we will only tackle short-term concerns if we put in place right away the policies that chart the path to a sustained and sustainable recovery. The long-term always starts today!

 

The choice of topics for the Forum could not be more pertinent. They definitely put us on long-term “thinking mode”. I am also glad to say that the OECD is actively working on all these areas. For instance, you will be looking at the role of labour in tomorrow’s societies. This is something that we are examining very closely at the OECD, and indeed our forthcoming Employment and Labour Ministerial next January will be focusing on the future of work, discussing aspects such as the impact of digitalisation in labour markets and the implications in terms of skills and public policies. With 42 million unemployed in the OECD area (still over 9 million more than before the crisis) we have plenty to do in the short-term, but that should not take us away from anticipating how tomorrow’s labour markets will look like and the opportunities they may bring.

 

I also welcome the attention that this edition pays to the role of women. Through our OECD Gender Initiative, aimed at strengthening gender equality in education, employment and entrepreneurship (the “three Es” that represent the three key dimensions of economic and social opportunities) we have reiterated that closing the gender gap is not only a moral imperative, but also makes economic sense. We are also proud of having put gender equality at the core of the G20 agenda, with the establishment of a target to reduce the gender gap in labour market participation rates by 25% by 2025. This will mean incorporating 100 million more women into the labour force in the next 10 years!

 

The Forum will also have a session on how to combat the rise in inequality, a phenomenon that we have been documenting during many years through landmark reports like “Growing Unequal?”, “Divided We Stand” and “In It Together”. The trends are frightening: the average income of the richest 10% of the population is close to 10 times that of the poorest 10% across the OECD.  This ratio is up from 7:1 in the 1980s, 8:1 in the 1990s and 9:1 in the 2000s. And the situation is even worse with wealth: in 18 OECD countries the top 10% households own half of all total household wealth, compared to a mere 3% owned by the bottom 40%.

 

Conscious that we have reached a tipping point, we have gone a step further with our OECD Inclusive Growth initiative, which underlines that inequality considerations cannot be just an afterthought, but must be incorporated upfront to our policies to promote growth and productivity. In this spirit, we just launched a new Centre for Opportunity and Equality, with the goal of creating a global, cross-cutting and comprehensive research platform on inequality.

 

Finally – and it could not be otherwise as we are just three weeks away from the COP21 — the New World Forum will very pertinently look at the challenge of climate change through different angles, including sessions on the management of public global goods as well as on the access of energy for all to support inclusive growth.

 

We hosted UN Secretary-General Ban Ki Moon last April, and he stated firmly that 2015 was the most important year in UN history: a once-in-a-lifetime opportunity to put us on a path for sustainable and inclusive development. The Addis Ababa and New York Summits, already behind us, launched the new Sustainable Development Goals and put development at the top of our agenda. Now we have to make it happen, and the OECD is ready to provide a GPS for effective implementation and monitoring. Likewise, we are supporting the forthcoming COP21 here in Paris and ensuring that it achieves a meaningful agreement to keep global warming below 2°C.

 

We are on a collision course with nature! The COP21 may be our last opportunity to put our planet on track towards a green future. There is no choice or alternative! We just provided, at the request of the Peruvian and French Presidencies, an up-to-date estimate on the public and private finance mobilised by developed countries towards their commitment of jointly reaching USD 100 billion a year by 2020 for climate action in developing countries. But beyond analysing and quantifying, the OECD is actively involved in promoting concrete policies —pricing emissions, ending fossil fuel subsidies, channelling long-term investment into clean energy and efficiency, fostering green innovation, etc.— that can facilitate the transition to low carbon economies. The stakes are high for Paris – but we can make it!

 

Monsieur Fitoussi, Monsieur Mestrallet, Ladies and Gentlemen:

 

Your invitation to project ourselves beyond the current upheavals and think long-term is not only pertinent, but necessary. For us at the OECD, it epitomizes what we call a “NAEC state of mind” (NAEC being our New Approaches to Economic Challenges - OLD initiative, an organisation-wide reflection process on the roots and lessons from the crisis with the aim of improving the OECD’s analytical framework and policy advice). 

 

Albert Einstein once said: “Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.” This is why we appreciate so much this partnership, which grows year after year: we learn from the past and deal with the present, but always with the future in sight. Your questioning, and the fresh thinking that you are bringing to this house, are of great value to us as we pursue better policies for a better new world. Many thanks, and have a great Forum!

 

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