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Mexico

Ceremony for the award of an Honorary Doctorate by the Universidad del Valle de México: Promoting more inclusive growth in Mexico

 

Remarks by Angel Gurría,

Secretary-General, OECD

7 January 2016

Mexico City, Mexico

(As prepared for delivery)

 

 

Luis Durán, Bernardo González Aréchiga, members of the Assessment Board of UVM, distinguished lecturers and students, ladies and gentlemen:

 

It is a great honour to receive this honorary doctorate from the Universidad del Valle de México, an institution that has done so much to train young Mexican professionals for more than five decades. I am grateful to the entire UVM community for the interest it has shown in my career and for having singled me out for this important recognition.

 

I would like to take this opportunity to share with you something of what a public service career has meant for me, and to relate to you some of the experiences that have marked my professional path. I hope that you will discern in these remarks the enthusiasm, the conviction and the faith we need in order to change and improve Mexico.

 

 

Public service as a calling

 

From an early age I knew that I wanted to devote myself to public service. From my high school years and my first modest jobs, through my university studies at UNAM and postgraduate work at the University of Leeds, I discovered that economics was one of the best tools for understanding the challenges facing our societies, for creating wealth through better use of scarce resources, for distributing it fairly, for combating poverty and inequality, and for ensuring that every individual has within reach the opportunities to develop his or her full potential.

 

I set about making my way in the government of Mexico, serving stints in PEMEX, CFE, the Federal District, Nafinsa, Fonafe and Inmecafe, and arriving finally at my true professional home, the Ministry of Finance and Public Credit (SHCP).

 

There I experienced at first hand the enormous challenge of the debt crisis that our country had to contend with during the '70s and '80s. This taught me that there could be no development without macroeconomic order and prudent handling of public finances. Over the course of several years, first with the Baker Plan and then with the Brady Plan, and after countless negotiations and painful adjustments, we were able to pull Mexico out of the mire. The models and procedures that we created at that time have served other over-indebted countries and are still being followed today.

 

When I subsequently became the head of Bancomext and of Nafinsa itself, I was able to familiarise myself even more closely with the manufacturing and financial structure of the country and its enormous challenges and shortcomings.

 

Later, in the 1990s, I had the privilege of serving Mexico as Minister of Foreign Relations and as Minister of Finance and Public Credit in the Government of President Zedillo. Those were the years when Latin America and Mexico enjoyed an extraordinary period of democratic consolidation and of opening to the outside world.

 

In the Foreign Office, between speeches on the non-proliferation of nuclear weapons at the United Nations and our recurring conflicts with United States on trade, migration and drugs, we succeeded in promoting the constitutional change that enshrined the non-surrender of Mexican nationality upon adoption of another citizenship, to the benefit of millions of Mexicans who today lead more decent lives, with full rights, above all in the United States.

 

I remember handing over the Ministry of Finance to the first opposition government in the modern history of Mexico, with an economy growing at 7% and, for the first time in a generation, without a sexennial economic crisis. It was fascinating to witness the consolidation of Mexican democracy in the first transfer of presidential power between different parties in more than 70 years. History is sure to recognise the enormous contribution of Ernesto Zedillo in this fundamental transition of our country toward modernity.

 

After five years of active participation in various non-profit international institutions (CGD, Population Council, CIGI, Inter-American Dialogue etc.) and some gainful employment in the private sector (Cita Samper), mostly abroad, I returned to my true home, which is the public sector.

 

The next big step in my professional development was my arrival at the OECD, which appointed me Secretary-General in 2006. In contrast to other international organisations, the OECD does not provide funding. Our mission is to strengthen public policies in order to improve opportunities for thousands of millions of people, and we do this on the basis of shared experience as to what works and what does not, how, where and in what circumstances, always based on evidence.

 

Over the course of these years, I have laboured intensely to transform the OECD into a more relevant and more inclusive international organisation with greater impact and influence. We have been able to speed up the OECD's responsiveness in supporting its Member countries in their efforts to cope with the crisis. At the same time, we have developed our capacity for analysis and technical assistance to help governments address long-term structural challenges. One of my highest priorities has been to make the OECD more sensitive to the challenges facing developing countries.

 

I have also had the chance to launch initiatives to modernise economic thinking at the OECD, such as the New Approaches to Economic Challenges (NAEC) and the Inclusive Growth strategy.

 

We have succeeded in boosting the OECD’s presence in the major forums of international governance, such as the G-7 and the G-20, and enhancing its collaboration with other international agencies. We have also increased the political relevance of the OECD as a place where dozens of leaders can come together to share experiences and receive support for their efforts at structural reform. I shall mention only a few of the most recent examples: Presidents Santos of Colombia, Hollande of France, Obama of the United States, Boubacar Keïta of Mali, Chancellor Merkel of Germany, and Prime Ministers Tsipras of Greece, Gunnlaugsson of Iceland, Abe of Japan, among others. The growing collaboration between the OECD and Mexico is a perfect example of this.

 

 

OECD-Mexico collaboration: stronger than ever, and growing

 

Mexico has become one of the most active members of the OECD. From the outset, we worked with the government of President Calderón to undertake a full diagnosis of the education system, to promote regulatory improvement in states and municipalities, to foster innovation, to strengthen competition and public procurement processes, and to combat obesity, to mention just a few examples.

 

That work gave us the knowledge, the experience and the opportunity to support Mexico, in this new phase, in the design and implementation of the most ambitious package of structural reforms in its recent history.

 

President Peña Nieto understood the nature and capacity of the OECD very well, and he launched a strategic partnership with our Organisation to design the reforms that Mexico needed so urgently. The process began after he was declared President-elect in September 2012. We immediately got to work to support Mexico in its reforms in the areas of labour, education, taxation, energy, finance, telecommunications and competition. At the same time we have continued working with Mexico on regulatory improvement, public procurement, health, open government, green growth, territorial development, and the measurement of well‑being, to mention just a few key areas.

 

It has been a wonderful experience to be able to help Mexico, using the best international practices, with the world's best experts, at a crucial point in history. Today we are helping with the implementation of some of these reforms and we are working ever more closely with the state and municipal authorities, who are on the front line of efforts to promote growth that is more solid, inclusive and sustainable.

 

Right now we are supporting the government in a second wave of reforms to boost productivity, reinforce the rule of law, promote integrity and transparency in government affairs, combat corruption, reduce informality, and attenuate the enormous existing inequalities, one of our country's greatest challenges.

 

Mexico still has the worst inequalities among OECD countries, and it is one of the most unequal countries in the world. In Mexico, the average income of the wealthiest 10% of the population is 30 times that of the poorest 10%, compared with an average of 10 times in the rest of the OECD. What is particularly alarming is that in our previous Review (in 2011) the difference was 27 times, meaning that inequalities are growing.

 

This is an unsustainable situation. Inequalities have become an obstacle to growth itself, and yet without robust growth we will not be able to resolve them. This is a vicious circle. Mexico will have to align all its policies with the objective of combating inequalities. The OECD is committed to supporting that effort. But you, the academic community and the students, will have much to contribute.

 

Ladies and gentlemen, dear friends,

 

Yes, we can change the world. Yes, we can improve our current situation. I can bear witness to that. I have been lucky enough to make a modest contribution over the course of my career, and I continue to do so at the OECD. Good public policies and international cooperation can work magic. I hope that these remarks have served to stimulate and motivate some of the students who are here with us today. We may not always succeed, but we must always be ready to try again. We must persevere.

 

Let me express my thanks once again to all of you here today for your hospitality and your good wishes. This honorary doctorate that is being bestowed upon me is not only a personal tribute, but also recognition of all the persons and institutions with whom I have had the privilege of working over the years – all those who have allowed me to realise the dream of that young man who wanted to devote his life to improving the lives of others. Thank you!