Secrétaire général

From Indignation and Inequality to Inclusion and Integrity

 

Opening Remarks by Angel Gurría, OECD Secretary General
 

22 May, 2012

Your Majesty, Ladies and Gentlemen:

Welcome to the OECD Forum 2012. We are delighted to see so many participants.

This year’s Forum will address a most relevant and pressing global challenge: rebuilding social trust. This is a huge task and we will need many different minds, wide open, to bring in the new ideas. For the OECD, this Forum is essential to keep delivering in our mandate to promote better policies for better lives.

We are entering the 5th year of the crisis. We certainly see some encouraging signs in the global economic horizon, but we are not out of the woods yet, and the social impact is already tragic: since the crisis started, millions have lost their jobs; global unemployment has soared;  and millions more people fell into, or remained trapped in extreme poverty because of the crisis. 


As Diane Coyle puts it in her book The Economics of Enough, this is producing “a dramatic erosion of trust”. Young and old are taking to the streets to voice their concerns and demands: from the initial “flash-point” social movements in the Arab countries, to Los Indignados in Spain, the Occupy Wall Street-London-Davos, labour protests in South-East Asia, student protests in Santiago and Montreal, and political demonstrations across Europe and Russia.

The roots and essence of each movement might be different, but there is no doubt they all share a common concern: social inclusion.

This is not surprising. Inequalities have been increasing at a constant pace. In OECD countries the average income of the richest 10% is now about nine times that of the poorest 10% – a ratio of 9 to 1.  It used to be 7 to 1. In developing countries inequalities are also growing. A recent study by UNICEF in 141 countries suggests that “about two-thirds of all countries have become more unequal over the past two decades.” 

These are shocking trends. But the outlook is even bleaker as growth and employment prospects are dim and many countries don’t have enough space to address these concerns. No wonder people feel betrayed.

How do we move from indignation and inequality to inclusion and integrity?

At the OECD we are convinced that we can achieve this transition by creating a new type of growth; one that is carefully designed to promote social inclusion and sustainability; one where incentives discourage greed and speculation; where effective accountability, transparency and risk assessment guarantee a better functioning of market economies.

How can governments promote this new type of growth while trying to rebalance their public finances?

At the OECD we have been working to help countries find the answer to this question. And we have been advising governments to move forward in three parallel tracks. We say: “Go Structural, Go Social and Go Green”.
We recommend governments to Go Structural because all our countries still have significant space for upgrading their economies with reforms which can deliver growth and employment much faster than it is usually thought. All of them have space to push for reforms in key areas: education, health, labour markets, competition, taxes, green growth, innovation and gender. In fact, only yesterday, in our first Ideas Factory we were saying that perhaps, given the lack of room for monetary and fiscal policies, structural policies may be our best short term response.

We recommend governments to Go Social because the impact of this crisis on families has been devastating; because we see significant room to improve social policy (in taxes, education, health, social security, migration, gender); and because we know that social movements and social networks are becoming the ultimate source of change, progress and enthusiasm.


And we recommend governments to Go Green because we cannot continue to promote an economic growth based on highly polluting energies and overconsumption. But also because the transit to low carbon economies can be in itself an important source of growth and jobs, while reducing resource bottle-necks and natural imbalances.

Simultaneous policy action on these lines, considering the trade-offs and synergies among them, will help countries develop a new type of growth: stronger, cleaner and fairer.

For this we need to develop new thinking. The global crisis exposed serious flaws in the set of ideas supporting mainstream economics. The idea of a self-adjusting growth model with a single general equilibrium has been seriously challenged, as well as those related to uncertainty, rational behaviour and asymmetric knowledge. We need to build together a new economic paradigm and we need to translate this new understanding into effective policies.


To help countries face this challenge, we are asking our Ministers to give their green light for an OECD initiative called New Approaches to Economic Challenges (NAEC), which will be discussed in this Forum and our Ministerial. We want to promote a serious reflection on why we couldn’t stop this crisis from happening and on how we can produce more effective policy recommendations that foster inclusive and sustainable progress going forward.

We know that the only way to do this is by consulting and involving all stakeholders. This is why the G20 was created, and this is the philosophy of the OECD. In fact this is what this Forum is about; about inclusive multilateral cooperation: the only way to build global progress and trust.

In the coming two days, we will be talking about a more inclusive economy, about the trade-offs between voting and protesting, skills for jobs, women’s empowerment, new approaches to economic challenges, the impact of subsidies on this planet and ways to promote growth and restore confidence in our institutions, in our governments, in our political parties, in our economic and financial system.

We will also present our new Better Life Index and carry out three social experiments in our Ideas Factories. As every year, your ideas and proposals will permeate our Ministerial Meeting.


So, this is it! The OECD is saying Go Structural, Go Social, Go Green! This is a call to action, a moment in the life of nations when political will and collective efforts are truly necessary to improve the picture of a future we do not like!

Your Majesty, Ladies and Gentlemen:
In his speech to receive the Principe de Asturias award, Carlos Fuentes, the Mexican writer who has just left us said: “Exclusive ideologies are making room for the inclusive cultures that have been put aside for a long time. We should know what makes us different and should be able to express what makes us one”. That is our challenge!

May you have a most interesting and productive Forum!

 

 

 

 

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