01/06/2017 - Urgent action is needed to address the backlash against globalisation. Fundamental and long-overdue policy changes are required to share more broadly the benefits of increasingly open and digitalised economies and empower all citizens to succeed. This is the message of the Key Issues Paper released today ahead of the OECD’s Ministerial Council Meeting to be held in Paris, from 7-8 June 2017.
The paper - which will inform discussions by ministers - outlines how the processes of globalisation and technological change have helped lift hundreds of millions of people out of poverty and brought transformative advances to our societies. However, it also acknowledges their shortcomings, which explain the current discontent: sizeable segments of societies are worse off, many feel left behind, and a majority perceive the system as rigged in favour of the powerful. In some OECD countries real median incomes have failed to grow for 20 years or more. The richest 10% of the population now earn almost 10 times more than the poorest 10%, up from 7 times in 1980. And wealth is even more concentrated: the top 1% richest households in OECD countries own about 18% of total household wealth, while the bottom 60% own only 13%.
The paper argues that globalisation is not responsible for all these problems, but identifies specific mechanisms by which it may have contributed to them, fueling economic and social discontent in many of our countries: from the stagnation and even deterioration of living standards, the fall in labour’s share of national income, and a loss of progressivity in tax systems to local blight and regional inequality, dominance of leading firms in some sectors, and accelerated financialisation of our economies.
Warning of the risk a damaging retreat from economic openness if policies do not change, the OECD paper draws on the work carried out in recent years by the Organisation to advance inclusive and sustainable growth, make people’s well-being a priority and refine metrics and models to go beyond aggregates and consider distributional impacts.
The OECD Ministerial takes place back-to-back with the OECD Forum (6-7 June); this year entitled “Bridging Divides.”
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