5th UCLG World Congress: The path to inclusive growth in cities
5th UCLG World Congress: World Summit of Local and Regional Leaders
Keynote address by Angel Gurría
Bogota, Colombia, 13 October 2016
Secretary-General, Mayors, Ladies and Gentlemen,
Welcome to this joint session organised by the OECD, the Ford Foundation, and United Cities and Local Governments (UCLG). Let me begin by thanking Josep Roig for his leadership and support of our work, as well as Ana Marie Argilagos and the Ford Foundation, who have been our steadfast partners since 2012.
Inequalities are a global, national, and local concern
For years, the OECD has been ringing the alarm around the issue of rising inequality. Across OECD countries, the average income of the richest 10% is almost 10 times that of the poorest 10%, up from just 7 times 25 years ago. That’s an increase of around 40% in a generation! In emerging market economies, income inequality can be much higher still. In Brazil, the ratio between the richest 10% and the poorest 10% stands at approximately 50 to 1. In South Africa it is now over 100 to 1!
But inequalities are even more staggering in cities!
Our new report – which I’m pleased to launch here today in Bogota – Making Cities Work for All, finds that the gap between the rich and the poor is higher in cities, compared to the national average. Income inequality also tends to be higher in larger cities: across the OECD, cities like Copenhagen, Brussels, Paris and Santiago all record the highest Gini coefficients in their respective countries.
The challenge looms especially large in developing and emerging economies, which face unprecedented urbanisation rates and persistently high poverty rates:
- Latin America is one of the most urbanised regions in the world, with around 80% of the population living in cities. And while more than a third of the population has now joined the middle class – an increase of 14 percentage points in the last decade – over 60% of young people still live in poor or vulnerable households.
- In Africa, the number of people living in cities has nearly doubled in 20 years, and is expected to double again in the next two decades. Our newly released African Economic Outlookshows that two-thirds of the expected investments in urban infrastructure in Africa until 2050 have yet to be made. This means that there is a window of opportunity to transform African cities and towns into engines of sustainable and inclusive growth for the continent – but only if we invest wisely in our cities!
The OECD Inclusive Growth in Cities initiative
This is why in New York earlier this year, together with the Ford Foundation, UCLG and a range of other partner institutions, we launched the OECD Inclusive Growth in Cities initiative. The work builds on the All on Board for Inclusive Growth initiative, launched by the OECD in 2012. The premise of this work is that we need growth that puts people at the centre of our economies!
Since Mayor Bill de Blasio and twenty mayors from around the world joined us in New York, this global coalition of Champion Mayors for Inclusive Growth that has grown to include 50 mayors worldwide. And I’d like to warmly recognise those who have joined us today: Mayor Coderre, Mayor Gutierrez and Mayor Carmena.
In New York, Champion Mayors made a powerful commitment to fight inequalities, by signing on to the New York Proposal for Inclusive Growth in Cities. Next month, leaders from around the world will join Mayor Anne Hidalgo to deliver the Paris Action Plan, committing tospecific actions to build more inclusive cities and societies – like investments in affordable housing, public transport, skills development, and education.
An inclusive built environment is essential for inclusive growth
Today’s session will focus on just one of these policy pillars for more inclusive growth in cities: fostering a built environment that works for everyone.
This is because inequality has a clear spatial footprint! Our report shows that the most income segregated cities in the Netherlands and France are at comparable levels to the least segregated cities in the US! And across the OECD and beyond, where you live can have a dramatic influence on how long you live or your chances of getting a job! For instance, life expectancy differs by a staggering 20 years across neighbourhoods in cities like Baltimore and London!
What does this mean for policy? Let me highlight a few key lessons from our work:
- First, we cannot treat housing, transport and urban development in isolation from one another. From the U.S. to France, from Chile to South Africa, we’ve seen the consequences of concentrating low-income populations in neighborhoods that are poorly connected to the main city and centres of employment.
- Second, as our recent work on the Productivity-Inclusiveness Nexus shows, we must identify the “win-wins” that will both foster inclusion and empower people, places and countries to fulfil their productive potential. For cities, this means addressing residential segregation and poor public transport that lock people and firms into low-productivity traps, exacerbating inequalities.
- Finally, we need to better align national, regional and local policies to ensure they work in tandem, rather than at cross-purposes. For instance, our work suggests that national housing policies often favour home ownership, with property tax systems that incentivise single family homes and owner-occupied housing. This can trigger urban sprawl and undermine labour mobility in cities – the exact challenges that many local leaders are trying to remediate!
The OECD stands ready to support cities and local leaders
The OECD has a long track record of providing governments at all levels with data and policy guidance in areas like affordable housing, transport and local economic development.
With our coalition of Champion Mayors, we are taking this work even further!
We will continue to refine measurement tools, identify policies that work, and help governments in the implementation process. We will help cities share ideas and work together to overcome common challenges in the policy domains that matter for Inclusive Growth. And we will continue to elevate their voices on the global stage to ensure that their efforts inform national priorities and advance global agendas – starting right here in Bogota and next week in Quito!
Ladies and Gentlemen, if we are to build economies and societies in which everyone has a shot at success, cities must be at the heart of that fight! Count on the OECD to support you in this endeavour.