Regional, rural and urban development

A new role for regional policy: local responses for a global crisis

 

Closing remarks by Angel Gurría, OECD Secretary-General, delivered at the Ministerial meeting of the territorial development policy committee


Paris, 31 March 2009


Dear Ministers, Ladies and Gentlemen, Distinguished Guests:


This has been a day of intense and stimulating debate. I’m grateful that you have joined us at this crucial moment for all our countries. We are facing the gravest and most global crisis of our lifetimes and we can only solve it if we work together.


Regional policy stands at the centre of any solution to this crisis. As you all know by personal experience, the crisis is already testing our regional policies. But at the same time, it is testing the capacity of regions to contribute with local solutions to address a major global problem.


The world economy is contracting, for the first time in 60 years. And this time there is no big country to bail us out. All the major economic engines are “in the repair shops”. This time only enlightened cooperative policies can get us out of this mess. We need to integrate every possible policy tool to revitalise our economies. And regional policy is core to achieving this revival.


1. The Key Role of Regional Policy

This crisis is having a global impact, but it affects different regions in different ways. Some regions are suffering disproportionally from the effects of globalisation and from the impact of the current economic crisis.


As you have discussed here today, the crisis touches the people in their homes, in the place where they live. And it is precisely there where they demand responses. Regional policy is essential to empower these regions, to help them make the most of globalisation and to help them resist the crisis and recover faster.


We must be very careful and make sure that our policies, in these times of contraction, do not appeal to protectionism or to subsidies to offset regional handicaps. Protectionism is one of our greatest risks now. And we must say this loud and clear. Closed markets close factories!


The best way to help regions profit from global exchanges and turn this crisis into an opportunity is by boosting their innovation capacity. This will help them deal with crucial challenges like enterprise failures and job losses, pressure on natural resources and climate change, poverty, inequality and access to economic opportunity, exposure to competitiveness pressures and the need to move up the global value chain.


An effective regional policy promotes the best use of local knowledge, for the alignment of objectives, and this is essential to ensure the consistency of policy interventions. This is especially true for public investment. Regional policy can help focus this investment in a way that helps lagging regions reveal their comparative advantage and make the best of their resources.


It can also help us boost the capacity of our fiscal stimulus packages to address structural challenges like migration and climate change. It can help us set in motion a “green recovery”. In many countries, the responsibility for policy areas related to the environment lies with sub-national authorities. These authorities are responsible for land use, building codes, public transport, or water management, to mention only a few.

Mayors and regional officials have been showing leadership by encouraging public transportation, implementing climate change action plans, and curbing air pollution to make cities more “liveable”, “walkable”, and “breathable”. They can go further in promoting cutting-edge “green” building technologies and clean-tech research and development (R&D).

The issue of how best to leverage public investment is also an essential one in this context. This goes to the heart of what governments can and should do to meet economic, social or environmental goals. For public investments to lead us out of the recession, they must be able to tap capacities at the sub-national level and be based on appropriate governance mechanisms for coordinating central and local actions.


This is why a coherent regional policy is so important: because it gives a strong tool for consistency in development strategies. Regional strategies that allow the participation of a broad spectrum of stakeholders are the best way to design and agree on a roadmap and set the priority investments for reaching its goals.


This is why these Ministerial meetings and Forums are crucial. You effort is making a solid contribution.


2. The TDPC Ministerial: Collective Action for Better Regions

Since our last Ministerial, OECD’s work on regional policy has made important achievements. Together we have shown, for example, how to best integrate investment in hard and soft infrastructure to increase their respective regional impact, foster innovation and generate sustainable productivity gains. This included your work on National Territorial Reviews such as the ones on CanadaJapan and Poland.


We have helped some regions emerge from a culture of dependence by showing how they could best exploit their comparative advantages. You have led the way in showing policy makers how to move away from top-down approaches by using contractual arrangements and performance indicators, and this has improved policy co-ordination across levels of government.


This has had great policy impact. Some rural areas today are thriving, having diversified away from agriculture into services such as tourism and environmental-related industries. Others are working on the policy recommendations you have provided, including China, where rural development policies are especially relevant in a country with 700 million rural citizens (read the report).


Many cities are now better equipped to deal with the negative externalities of agglomeration, such as congestion, pollution and related social problems. This includes metropolitan areas that you have reviewed, such as Montreal, Milan and Stockholm.


Many regional governments are now investing heavily in the quality of life of their citizens and using their local knowledge to better connect with the private sector and academic and research institutions. Your regional innovation reviews of Mexican states, of Piemonte in Italy, of the North of England, all helped policy making in this field.


You have also provided a data base, “Regions at a Glance”, which is the best available tool to compare regional dynamics across countries.

 

And I am happy to confirm that we have no intention to rest on our laurels, nor should you. This Ministerial has given us a roadmap to shape regional policies for years to come. You have identified a number of important issues for further work by the OECD Territorial Development Policy Committee. For example the need to improve public service delivery, which is essential to foster innovation and deal with scarcely populated areas.


Another issue is water management, where multi-level governance mechanisms are needed to deal with fragmented administrative regulations and responsibilities. You also asked us to look more closely at the inter-connection between urban and rural areas and at how to best integrate this in regional development strategies.

 

And you have raised the need to improve policy co-ordination across different administrative boundaries, so regional development policies can approach functional areas across jurisdictions. This is particularly crucial in the case of trans-border regions, or in the case of Metropolitan areas such as the Metropolitan area of Mexico City, which strides across three different States and many municipalities. 


Finally, you have asked us to help regions become more innovative. Not all regions will be able to become science and technology leaders. But, as the nature of innovation changes, with more emphasis being put on open innovation models, on process innovation, on innovation in the services sector, there will be new opportunities.

Dear Ministers, Ladies and Gentlemen:


I want to congratulate you for these achievements. We welcome your mandates and commit to deliver in their objectives.

The experiences, the ideas, the local solutions that we have heard here today will act as catalysts for our work during the coming years. I am sure that today’s discussions will be a major contribution to the upcoming OECD annual Ministerial Council Meeting in June, where we will consider the responses to the crisis.

I hope that you will take some of these experiences and ideas back to your capitals and see to what extent they can be adapted and implemented at home. I hope that your vision has broadened and strengthened even more with the sum of all our perspectives.


I hope each one of you will walk out of this room today with the confidence that you are part of a global community working together.


Thank you very much. 

 

 

 

Countries list

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