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Opening statement made by the Secretary-General to the OECD Ministerial Council Meeting 2007: OECD, a relevant hub for global issues

 

Opening statement by the OECD Secretary-General, Angel Gurría, to the Ministerial Council meeting, 15 -16 May 2007 - Innovation: Advancing the OECD Agenda for Growth and Equity

OECD, a relevant hub for global issues
Paris, 15 May 2007

1. Over the next two days, we will examine a range of relevant issues, but with one underlying theme: how do we gain the maximum benefits from globalisation while at the same time ensuring that they are fairly shared.

Highlights of current work

2. The overarching goal that has guided my efforts in this first year as Secretary-General has been “the pursuit of relevance”. It is my firm belief that this Organisation, by bringing to the fore the shared experience of our 30 democracies, can make a critical contribution to a better-functioning world economy.

3. The impact of globalisation, however, is neither automatic nor inevitable. Good public policies are needed to take full advantage of the globalisation process. We must increase the resonance of the rigorous analysis and peer learning methodology, which are the hallmarks of the OECD, to contribute more directly to the design and implementation of such good policies. The pursuit of relevance also requires an extra effort to communicate key findings on important policy issues to the general public.

4. Our reputation as a credible and sound source of policy advice and dialogue are widely acknowledged. We are internationally recognised as the main reference of best practices in areas like taxes, labour market reform, evaluation of education outcomes, the implication of ageing in our societies, increasing the effectiveness of development assistance, enhancing the competitiveness of regions, strengthening the framework for private sector development and developing guidelines to promote a more open, transparent and better functioning world economy. Highlights of our ongoing work can be found in the appendix to this document.

Shaping the OECD of tomorrow

5. In this meeting, however, we need to plot the future of the Organisation over the next ten years. Today’s vision is tomorrow’s reality. This is not an academic exercise.

The OECD must be more open

6. This involves new ways of working and a new vision for the OECD. At a time when national governments are losing the monopoly of policy decisions, the OECD needs to reach out to society as a whole. We need to become more sensitive to diversity, more open to different ideas and cultures, more pro-active and flexible in addressing new global challenges, and more understanding of the many different paths that lead to growth and development. All this, while working closely with our member governments and key non-OECD countries.

The OECD must be more representative

7. The OECD's analysis and policy advice has helped shape the social and economic thinking of the world. With many new and large economies emerging in the globalisation process, new challenges arise. The OECD's platform needs to be more inclusive, bringing in new players in the global economy and new policy issues in the OECD agenda. This will strengthen our capacity to find common responses to these global challenges. Discussions on enlarging the OECD have been intense and productive and we are working on a proposal which we will present to you tomorrow and which will hopefully receive your approval. It is in response to the first mandate which you gave us last year.

The OECD must be more supportive of the reform efforts

8. Also, following your second mandate of last year's Ministerial, the OECD is exploring ways to be more proactive and systematically support its member countries with the political economy of reform. We need to move beyond proposing best practices, to helping countries put them into operation. Thus, we must be prepared to explain the implications of inaction or delay, as well as provide options for helping to create the political momentum necessary to reform successfully. Support for reform also includes creating awareness of what other countries are doing in the relevant policy areas and how they make more efficient their public administration. The OECD can make a major contribution in that direction and is increasingly asked to do so. It is a new, bolder, but perhaps more useful way of serving our Member countries, and it involves broadening our range of interlocutors in each country.

9. Let me share with you where I believe the larger challenges lie and how we can discharge your third mandate of becoming "the hub for the dialogue on global issues":

Managing the socio-economic impacts of globalisation

  • The OECD is well-placed to identify the costs and benefits of reform processes and to assist in the design and monitoring of socially cohesive and globally consistent growth strategies.
  • The OECD must help ensure globalisation proceeds in a balanced manner by closely examining the trends in employment, earnings and income inequality and regional imbalances, identifying policy options to enhance the net benefits from freer trade and investment, and achieving a more equitable distribution of the gains from globalisation.
  • The OECD must help countries implement effective policies to ensure immigrants' successful integration and assess policy approaches for the management of migration flows, to ensure that they support growth and sustained development in both home and host countries. This is one of the most pressing and relevant challenges facing the world today.
  • With ageing populations fuelling demand for health and health and long-term care services, the OECD must advise countries on how to improve the performance of their health systems by achieving better value for money, ensuring equitable access to health services and improving the quality of health care.
  • The OECD must advise countries on how to improve the quality, equity and relevance of their educational and vocational training policies. Adult education, higher education and life-long learning are the new challenges we must address.
  • The OECD must develop new methods to measure the progress of societies, integrating the usual economic indicators with other social and environmental measures, working with key non-Member economies and other international organisations to develop a global repository for reliable statistics and data. We have to move towards measuring welfare not just output. It will constitute a major contribution to stability and democracy. Our Conference in Istanbul next June is precisely about that.

Balancing energy and environmental concerns

  • The OECD is actively addressing the economics of environmental policy, including the framework and policy instruments for addressing climate change in order to provide a solid economic footing for the post--2012 architecture. The Environment Policy Committee has proposed to address this issue by bringing together Environment Ministers, Finance Ministers and others to meet at a joint session and to be followed eventually by a high-level conference on the economics of climate change in late-2008.
  • The OECD/IEA/NEA must help countries optimise the use of energy by combining their expertise to consider resource availability and security, supply and demand factors, renewable alternatives, economic impacts, scientific and technological innovation, safety and regulatory requirements, etc. The IEA Ministerial addressed some of these challenges only yesterday, and I would draw your attention to their Communiqué.
  • The OECD must help countries achieve a sustainable provision of water and sanitation services by identifying good practices and providing guidance to governments, private investors and the donor community in the financing, management and maintenance of essential water services and infrastructure.

Promoting the private sector and innovation

  • OECD should also help strengthen domestic and international laws, codes and guidelines that govern how markets function – both for purposes of efficiency as well as to maintain the confidence of market participants. The private sector is responsible for generating wealth, employment, productivity, innovation and taxes. It is also a significant partner in global investment in infrastructure of all kinds and has a growing role in providing essential services such as water, health or education. Governments therefore need to provide the right incentives so that business and other parts of society can make its most positive contribution to economic, social and environmental goals.
  • Innovation has a crucial impact on growth. The OECD needs to improve its capacity to understand, measure and advise on the new dynamics of innovation to help meet global challenges. This is why we propose to embark on the design of an ambitious “Innovation Strategy” at the OECD, which we hope will be the equivalent to our Jobs Strategy in the labour markets.
  • The OECD will develop policies to ensure that the Internet contributes to social welfare and economic growth and plays its role as a global infrastructure for improving dialogue and communication. A Ministerial meeting on the Future of the Internet Economy in 2008 is already scheduled.

Helping achieve the Millennium Development Goals

  • These internationally agreed goals, which were first given shape by the OECD in the mid-1990s, are set for 2015, just eight years away. It is not clear today that we will be able to deliver on these shared targets, but the OECD/DAC has a central role to play in making sure that we continue to focus on achieving them.
  • Although globalisation has helped lift hundreds of millions out of poverty, still over one billion people remain in extreme poverty. The OECD will deepen and broaden its policy analysis to reach this "bottom billion" by monitoring the implementation of donor commitments on aid volume and effectiveness; addressing acute problems of governance, capacity, state fragility and conflict; working with the WTO on monitoring aid for trade and enhancing the role of the private sector within the Monterrey Consensus at the 2008 UN Financing for Development Meeting. The most important, long lasting contribution that we can make to the least developed countries, however, is to help them build institutions and capacity for good governance.

The OECD must be better connected

10. Over the past year, I had the opportunity to take the OECD policy messages to dozens of Member and non-Member countries, Parliamentarians; international seminars and conferences; private sector organisations; trade unions; academic circles; Mayors and elected officials, the media and other international organisations. I heard much praise for our contributions but mostly I was encouraged to further strengthen our ability to help countries design good policies and support the implementation of reform. We matter. We must continue to matter.

11. The OECD will continue to strengthen its dialogue with a widening circle of interlocutors to help countries better deal with the challenges posed by globalisation. No institution alone can supply all the answers. We will reach out to other international organisations to ensure that we complement each other. We need to create partnerships to make the most out of globalisation.

Conclusion

12. As it approaches its 50th anniversary, the OECD stands at a crossroads. We must take the path which expands the Organisation’s role in addressing the world’s next set of challenges. This is why it is timely to discuss “Innovation: Advancing the OECD Agenda for Growth and Equity” and we welcome the participation of important non-Member countries to this discussion. It is an integral part of such new challenges.

13. Through the pursuit of excellence in our analysis, intensified dialogue, information-sharing and co-operation, we can achieve the highest degree of relevance and contribute to shaping an equitable, innovative and prosperous tomorrow.

14. We are counting on your support and guidance to successfully address this ambitious agenda.


APPENDIX: HIGHLIGHTS OF CURRENT OECD WORK

Towards better employment and social policies

  • OECD leads the global debate on employment initiatives. Since its adoption in 1994, and its reassessment last year, the OECD Jobs Strategy has generated increasing consensus about the reforms needed to ensure strong labour market performance and social progress.
  • OECD has paid special attention to human capital, developing internationally standardised tools for the assessment of educational systems. The Programme for International Student Assessment (PISA) has become a key reference when exchanging data and analysis on the subject.
  • OECD offers extensive international comparisons of performance measurement and analysis of health systems. The OECD expertise in the development of guidelines for international reporting of health expenditures is a unique tool, which is rapidly becoming the global standard.
  • OECD work addresses the key challenges underlying the ageing of our societies. Cross-country benchmarking focuses on the fiscal, financial, labour market and international migration implications of ageing, as well as the consequences for pensions, social benefits and health and long-term care systems.

Focusing on support for development

  • The OECD Development Assistance Committee leads the debate on the coherence of development assistance policies to support the poorest countries to achieve the Millennium Development Goals. The Paris Declaration on Aid Effectiveness is increasing mutual accountability between donor and recipient countries for achieving the development results committed by members.
  • >OECD provides extensive capacity building support to Non Members in Africa, Latin America, Asia and the Black Sea regions by sharing the results of its country experiences, offering policy options for reforms and hands-on advice or training to help build sound market institutions, good governance and strengthen regional and international partnerships. The Initiative on Governance and Investment for Development, led by countries in the Middle East and North Africa (MENA) and supported by the OECD, is a good example of these efforts.

Increasing economic efficiency

  • OECD's 2007 Going for Growth makes policy recommendations about best practices to boost economic performance and follows up from one year to the next, on their implementation. It has already become a "classic", although it is only in its third year.
  • The OECD has advanced the international debate on trade liberalisation, supporting WTO with technical analysis on issues under negotiation and the allocation of the benefits of a successful DDA round.
  • OECD statistics are a fundamental tool to support policy analysis and reforms. Work in this area is underpinned by a significant effort to compile increasingly relevant and reliable statistics and indicators and disseminate them as widely as possible.

A stronger framework for private sector and public investment

  • OECD is the leading forum on international investment policy. Several new policy tools have recently been developed: the Policy Framework for Investment to assist national policy reform, the Risk Awareness Tool for companies to use in weak governance zones and the Principles for International Investor Participation in Infrastructure to encourage private investment flows into major projects.
  • OECD is at the centre of the international dialogue on taxation. It is a well-established forum to discuss and adopt global tax rules in economies which are increasingly dominated by services, know-how and intangibles. OECD has established twenty-five Best Practices for the resolution of international tax disputes and put in place a framework for mandatory arbitration. Ninety Member and non-Member economies now participate in the OECD's Global Forum on Taxation.
  • The OECD plays a leading role in fighting against corruption by using its monitoring procedure to improve enforcement of the OECD Anti-Bribery Convention.
  • The OECD Principles of Corporate Governance are central to the health of our economies. They have become an international benchmark for policy makers, investors, corporations and other stakeholders worldwide.
  • The OECD new Competition Assessment Toolkit provides a general method for identifying unnecessary restraints on competition and developing alternative, less restrictive policies that will unleash productivity gains and help achieve other government objectives.
  • The OECD plays a leading role in promoting entrepreneurship by developing policy tools such as the OECD Brasilia Action Statement for SME and Entrepreneurship Financing and the Athens Action Plan for Removing Barriers to SME Access to international markets.
  • The OECD has developed policy instruments for regions and cities. They aim to mobilise economic and social development of local communities, which are increasingly relevant for countries' economic growth and societal progress.

 

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