G7 Finance Ministers and Central Bank Governors’ Meeting: Session 4: Economic Growth that Works for Everyone
Remarks by Angel Gurría
Whistler, Canada - 1 June 2018
(As prepared for delivery)
Growth is back. We estimate GDP growth in G7 economies in 2017 to be around 2%, the highest since 2010. The unemployment rate is finally below the pre-crisis level at 6%.
But growth alone is not enough. We need to address the causes of productivity slowdown in the G7, while addressing the inequalities that have been building up in the last decades and that affect the medium-term growth potential.
Inequalities remain high in many G7 countries: differences across the richest 10% and the poorest 10% have increased by more than 1/3 in just a generation lifetime in OECD countries. Median income has stagnated on average in G7 countries since 2007 whereas progress on closing the gender labour income gap has been very slow; the gap being still 43%. Moreover, educational and labour market outcomes remain strongly dependent on socio-economic backgrounds.
This is why our conversation today is so important. Even if there is no “one-size-fits-all” model behind “growth that works for everyone”, there is a unique opportunity for the G7 to take up this agenda collectively.
First, it is crucial to get a solid diagnostic of the challenges we are facing. For doing that we encourage you to build on the OECD Inclusive Growth Dashboard, released earlier this week at the our Ministerial Council Meeting, that includes indicators focusing on the many facets of quality growth, including its drivers, outcomes as well as linkages with opportunities and social mobility. By adopting this wide-ranging set of indicators you will have a comprehensive and accurate GPS to assess the long-term consequences of your choices, notably with respect to your readiness to prepare for the future and with a view to ensuring that the foundations of sustainable growth are broad-based.
Second, these indicators, or a subset of them, could be a first step to identify key policy issues and priorities, and to build a space for exchanging on your successful experiences on these issues. Some of your countries have indeed already been very successful at promoting economic and social mobility, inclusive labour markets, broad-based innovation and vibrant entrepreneurship, the pillars of an economy that works for everyone.
Third, a shared diagnosis can also support the international agenda on key policy issues, including the ongoing efforts to reduce tax avoidance and tax evasion, or the need to level the playing field across investment and trade frameworks and to fight corruption and bribery, critical issues for global value supply chains. While most of the policies required for making growth work for all are domestic in nature, domestic policies do have international spillovers that the G7 can successfully tackle.
Building on the Bari Policy Agenda on Growth and Inequalities adopted last year under Italy’s G7 Presidency, we invite you to continue working together to take this agenda further and send a strong political message about the commitment of G7 countries to boost growth and create opportunities for everyone. The OECD will be honoured to support you in this endeavour. Thank you.