Inclusive Growth › Inclusive growth for shared prosperity
Speech by Luis Ubinas, President of the Ford Foundation, delivered at an OECD workshop on inclusive growth
3 April 2013, Paris
Let me start by thanking all of you for taking time out of your schedule to join us for what I expect to be a great discussion.
It’s hard to imagine a better place for a conversation about inclusive growth and shared prosperity than the OECD.
Since this organization was founded, it has been a vital forum for groundbreaking research and transformative policy solutions.
The commitment of the OECD to democracy and sustainable economic growth has contributed to extraordinary social progress – by raising living standards; increasing global trade and promoting greater financial stability.
But as OECD research and date remind us, while much progress has been made, no matter what country we come from – no matter how large or how small – we know much more progress is needed.
We know that for all the gains made, there are still serious challenges to be addressed.
Just as the Secretary-General outlined, rising inequality, endemic unemployment, and crushing poverty remain a stubborn reality in every corner of the globe.
This organization, the OECD, has been at the vanguard of documenting that data. We have all seen the data. I won’t repeat it.
Instead, think of your trip here, your commute here. The path you traveled and the inequality you yourself observed right here in Paris.
Countless people – within just a few miles of this meeting hall and, equally, within just a few miles from the Ford Foundation’s offices in New York – are still excluded from the basic economic and social opportunities that are the basis of a productive life.
And it is important to remember that these people are everywhere.
Yes, in the southern cone, but also here and in New York and in Detroit.
I know you share my firm conviction that we can do better.
With events like this workshop; with the continued leadership of the OECD and with your active involvement, we have a unique opportunity to encourage governments to enact policies that deliver sustainable economic growth and lift those millions out of poverty.
But let’s be clear -- to achieve that goal it means thinking about growth in much broader and, yes, more inclusive terms.
In short, it requires a fundamental mind shift.
For far too long, many of our political leaders have simply assumed that promoting inclusive growth is a trade-off to promoting growth.
That engaging more citizens, especially those on the margins, meant putting an economy at risk;
Prevailing wisdom has been that inclusiveness, while noble, comes at the cost of economic progress.
Increasingly, we know these assumptions are wrong.
In fact, economic growth policies that put a premium on inclusion produce better results, better growth results, than those that do not.
New data-driven research is proving this.
According to a 2011 report by the International Monetary Fund, “countries with more equal income distributions tend to have significantly longer growth spells.” Moreover, “growth and inequality-reducing policies are likely to reinforce one another and help to establish the foundations for a sustainable expansion."
That’s the IMF.
The bottom line?
Inclusiveness is about growth….Inclusiveness is about competitiveness….Inclusiveness is the priority.
Now, much of this research is still in its early stages.
In fact, we at Ford are working with the OECD to build on the research already done to further build the fact based rationale for public policies that view growth and social inclusion as mutually reinforcing.
The work you do today to build a stronger definition of this approach—and a path to measure it—are critical to taking this work to the next level.
But let’s remember that this data will only strengthen what is already a matter of common sense.
Let me cite what is happening in cities – to demonstrate both the promise and urgent need for the more inclusive approach to growth we’ll explore today.
I focus on cities, not only because of Ford’s programmatic focus on building the Just Cities of tomorrow, but because there couldn’t be more at stake.
More than half the world’s people now call cities home. And all of the world’s population growth over the next four decades—some 2.3 billion people—will take place in urban areas.
This astonishing growth—happening right now, as I speak—can be a transformational opportunity. A chance to make unprecedented progress in our collective efforts to reduce poverty, expand economic possibility and promote security.
But the only way we’ll realize that potential is with an inclusive approach.
An approach that views even the poorest and most marginalized people as sources of untapped potential who, if engaged, if afforded the opportunity to participate, can lift up the prospects of an entire metropolitan region.
Why does this matter?
Because we know, from our own work at Ford, that cities, which actively welcome diverse populations, experience faster growth.
We know that the natural density of urban areas boosts creativity, entrepreneurial energy, productivity, and jobs.
And we know that giving residents ownership, whether physical ownership over where they live or decision making ownership over the communities in which they live, unleashes local development, creative energy and entrepreneurship.
I saw this just a few months ago.
I was in Rio de Janeiro for the Rio + 20 Summit.
As you all remember, it used to be that you couldn’t walk the streets of Rio for fear of crime.
It is a transformed place
There is more work to be done, but policies aimed toward rehabilitation and development rather than punishment and removal have created new and exciting opportunities for growth that not long ago would have been unimaginable.
Rio feels today like a completely different city; a place of commerce, culture and not of fear.
This is also happening in my own country. The metropolitan areas that are among the most economically vibrant -- San Francisco, Boston, Seattle, New York -- were all considered dead cities.
There was once a sign in Seattle that said “will the last one to leave please turn off the lights”.
These cities have been reborn as growth engines through policies of diversity, openness and inclusion.
Policies which welcomed immigrants. Policies which welcomed cultural diversity. Policies which welcome our gay and lesbian brothers and sisters.
Those cultural points matter, but physical inclusion, physical infrastructure and planning are pivotal as well.
We know that around the world, it is the poor that too often have the most difficult and treacherous commutes. All over the world we’ve seen people walk miles along highways, hold on to the backs of buses, even sit on the roofs of trains in order to get to work.
So investments in better roads, sidewalks, public transportation, even bicycle lanes not only provide immediate economic dividends, they serve as an effective anti-poverty strategy – often benefiting the most vulnerable and marginalized of populations.
Planning which brings poor people closer to where jobs are is equally important.
Of course, cities cannot make these changes on their own – national policies must support an economic growth agenda which facilitates the growth of urban and regional economies.
Quite simply, sustainable economic growth and inclusivity – inclusive cultural policies, inclusive planning policies and inclusive infrastructure investment policies -- are mutually reinforcing goals -- and the work of the OECD and all of you in this room can ensure that policies oriented around growth and social inclusion become not the exception but the rule.
This is the message and the movement that we need to be promoting to policymakers – and I hope it’s what we will all take away from today’s conference.
So thank you and let’s get started.