Remarks by Angel Gurría
OECD, Paris, Thursday 8 February 2018
(As prepared for delivery)
Dear Parliamentarians, Ambassadors, Ladies and Gentlemen,
Welcome to the 6th edition of the OECD Parliamentary Days. Let me thank our network partners: the NATO Parliamentary Assembly and the Women Political Leaders Global Forum.
International co-operation between Parliamentarians is vital in these challenging times. Many citizens are questioning the value of openness, the multilateral system and even the functionality of our political institutions and democracy itself. The recent Freedom in the World 2018 found that for the 12th consecutive year, countries that suffered democratic setbacks outnumbered those that registered gains. This is dangerous. We risk losing so much unless we address these concerns and reverse these trends.
To a great extent it is a matter of opportunities, of fairness, of inclusion. We need to reset our systems, regulations and frameworks to foster inclusive and sustainable growth. Especially now, as the global economy regains momentum: the latest OECD Economic Outlook has shown that global growth is accelerating from 3.1% in 2016 to a projected 3.6% in 2017 and 3.7% this year. But we cannot assume that the benefits of growth will trickle down automatically. We cannot assume that growth will fix everything.
We have to look beyond GDP at the quality of growth, ensuring it is sustainable and inclusive. This is what the OECD has been promoting through our New Approaches to Economic Challenges - OLD (NAEC) project and our initiative. Last year at our Ministerial Council Meeting we focussed on making globalisation work for all.
Globalisation has brought many benefits: economic growth; productivity gains; and the spread of technology and culture. It has helped to lift hundreds of millions of people out of poverty.
But it has left many behind. The average income of the richest 10% of the population is now around 10 times that of the poorest 10% across the OECD, up from 7 times a generation ago. Wealth is even more alarming. According to the Credit Suisse Global Wealth Report 2017, the bottom half of adults collectively own less than 1% of total wealth, while the richest decile, the top 10%, owns 88% of global assets.
And of course, the combination of technological change and globalisation has put at risk many jobs involving routine tasks, contributing to the polarisation of labour markets. We estimate that 9% of jobs in the OECD are at high risk of being automated, while for an additional 25%, tasks will change significantly because of automation.
We need to move beyond the mantra of growing the pie first and then redistributing it. We need growth that is inclusive and focused on well-being. We need to address the key challenges – such as job quality, lifelong training, housing and infrastructure – to ensure greater inclusiveness in the future. For that we need to bridge divides with integrated and progressive policies. For that we need more – and more effective – multilateralism. For that we need strong, open and plural legislatures. We need leadership. We need enthusiasm.
In a globalised economy, in an interdependent world, multilateralism is vital. Because no nation can thrive on its own. Because cross-border challenges like digitalisation, taxation, migration, inequality, and tackling corruption and climate change require global solutions. Multilateral co-operation is vital to meet international targets like the Sustainable Development Goals and the Paris Agreement. Yet just when we need it most, people seem to be losing faith in multilateral approaches.
It is time to defend multilateralism. That is the task of 2018. We defend it by reforming it, improving it, by making it more inclusive, open, transparent and adaptable. By making it work for the many. The OECD effort will crystallise at the 2018 MCM on “La refondation du Multilateralisme”. We are working closely with our Chair, France, and our Vice Chairs, Latvia and New Zealand, on an ambitious agenda. I call on you to help build the political will for more international co-operation.
The OECD is already working across many fronts to promote multilateral partnership. Our global standards, coupled with our ongoing work on the standard-setting review, are helping level the global playing field for a fair and inclusive globalisation. This work will be paramount to address new global challenges as they arise, for example for competition, trade, taxation and data flows.
Take taxation. In June 2017 more than 70 countries and jurisdictions signed the OECD’s multilateral convention on Base Erosion and Profit Shifting (BEPS). Revenue losses from BEPS are conservatively estimated at 100-240 billion US dollars annually. In September 2017, the first automatic exchanges of tax information (AEOI) also began, which has played a key role in helping raise 85 billion euros so far in increased revenues for your countries.
International trade is another example. Last year the OECD published a study on Making Trade Work for All which sets out an integrated approach to make the whole system work better for more people, by improving domestic policies, supporting lagging regions and ensuring everyone plays by the same rules.
On specific challenges like excess steel capacity, the OECD has made a substantial contribution. The Global Forum on Steel Excess Capacity created by G20 Leaders in Hangzhou and facilitated by the OECD may have helped to prevent a trade war.
And when it comes to our planet, looking beyond national horizons is the only option. Emissions are growing. Concentrations of CO2 are now 145% of pre-industrial levels, the highest in 800,000 years. Implementing the Paris Agreement requires bold, collective and decisive action, including major adjustments in energy production, buildings, transportation, land use, carbon pricing, water and energy.
This does not come at the cost of growth. The OECD’s Investing in Climate, Investing in Growth report, prepared for the G20, shows that a climate-friendly policy package can increase long-run output by up to 2.8% on average across the G20 by 2050. The OECD is working with countries to help embed climate and environmental commitments into policies and financial flows, for example through the Paris Collaborative on Green Budgeting which the OECD launched with France and Mexico in December at the One Planet Summit.
We are also working directly to support structural reform efforts in countries such as Greece and Mexico and we are helping Slovenia and the Slovak Republic to achieve the Sustainable Development Goals through forward-looking and integrated development strategies.
Finally, the OECD will also defend multilateralism by advancing with our enlargement process, our standard-setting review and intensifying our support to the Argentinian and Canadian G20 and G7 Presidencies. We are also scaling up our work with APEC, ASEAN and the Pacific Alliance. And all this will gain traction at our 2018 OECD Forum and MCM on “La refondation du Multilateralisme”.
Ladies and Gentlemen,
Alexis de Tocqueville, the nineteenth-century French parliamentarian, diplomat and writer once said that, “The most natural privilege of man, next to the right of acting for himself, is that of combining his exertions with those of his fellow-creatures, and of acting in common with them.”
This is the essence of multilateralism, the spirit of co-operation. It is our only way forward. Our only way out. Let’s gather our strengths to make multilateralism work for all. To make globalisation work for the many. To design, develop and deliver better policies for better lives.