Remarks by Angel Gurría
21 May 2019 - Paris, France
(As prepared for delivery)
Ministers, Excellencies, Ladies and Gentlemen,
Welcome to the OECD fifth High-Level Meeting of our Development Centre Governing Board, under the leadership of the, soon to be designated, co-chairs China, Côte d’Ivoire, Uruguay and Spain.
Today, we have reason to celebrate! Five new members join the Centre: El Salvador, Guatemala, Ecuador, Togo and Rwanda. They recognise the Development Centre’s value, as much as the Centre recognises the value of their diverse insights. I am also pleased that your High-Level Meeting is held right before the OECD’s Ministerial Meeting. And I am proud to see a large number of international organisations represented. What an excellent opportunity to engage on our shared goal of sustainable development for all. Let me also thank Mario Pezzini, the director of the Development Centre and my special advisor on development, for his leadership and efforts.
In recent years, we have witnessed a period of unprecedented development progress. One that has lifted millions out of poverty, has moved families into the global middle class, and has expanded health and education for children worldwide. But there is still a lot to do to foster “development for all”, the central focus of this meeting. Today, the richest 1% own about half of the world’s wealth, whereas the entire bottom half of the world’s population own no more than 1%.
Our report “Under Pressure: The Squeezed Middle Class”, shows that the middle class has shrunk in most OECD countries. While almost 70% of baby boomers were part of middle-income households in their twenties, only 60% of millennials are today. We also estimate that more than one-third of people in 25 OECD countries would fall into poverty if they had to forgo three months of their income.
Your theme highlights what is at the heart of Development in Transition: that all countries are in continuous development. And as they move further up the income ladder they meet new challenges in fostering development for all. For example, growth often hides inequalities and few countries manage to truly achieve growth that is both inclusive and sustainable. In the case of Colombia, which experienced socio-economic progress over the past decade, the poverty rate in the city of Chocó has remained close to 60%, while it is 12% in Bogota. But inequality is not a inevitable consequence of the growth process: it can be addressed and it can also be averted if policies place inclusive growth at their core.
Governments work on many fronts to achieve inclusive development paths. Investments in education, skills and infrastructure – amongst other factors -- certainly matter, as governments seek to broaden the economic gains for society as a whole. Another front, is the contribution of social policies to inclusive growth, namely your focus today on the role of social protection.
Indeed, our findings suggest that investing in social protection is an important step towards achieving inclusive growth and makes good economic sense. This is what the two Development Centre’s reports launched today - Tackling Vulnerability in the Informal Economy and Can Social Protection be an Engine for Inclusive Growth? – tell us. However, a number of challenges arise when building sustainable social protection systems.
These can range from financing, especially when tax-to-GDP ratios are low and informality is widespread, to preparing for the future of work, including non-standard forms of work.
Improving social protection must be at the core of national efforts to foster greater national resilience, fight poverty and promote development for all.
Multilateral co-operation can support these efforts. Let me highlight a few examples of how we can move forward on this important agenda:
First, we need to forge a coalition of the willing to respond to SDG 1.3 - on implementing nationally appropriate social protection systems. In this sense, I welcome the Development Centre’s participation in the Global Partnership for Universal Social Protection and its Call to Action.
Second, we must exchange knowledge, expertise and best practices on how to design and implement social protection systems. We have a lot to share from the OECD’s own experience, but also a lot to learn from developing countries. Indonesia, for example, is leading the global effort to establish social protection systems that maximise both coverage and impact.
Thirdly, we need to mobilise resources for social protection. Our Revenue Statistics initiative helps partner countries analyse their revenues, and the implications this has for public spending. Using harmonised data for over 90 countries, we show that countries in Africa, Latin America and Asia have grown their tax revenues as a proportion of GDP at a much faster rate than OECD countries since 2000, but these revenues still fall far short of OECD levels. As a result, they cannot afford the universal social protection systems that play such an important role in combatting poverty and reducing inequality in many OECD member states.
Last but not least, it means facilitating access to social protection for migrant workers.
The Global Compact on Safe, Orderly and Regular Migration, for example, explores options to assist migrant workers of all skills levels.
Ladies and Gentlemen,
The unparalleled benefits of achieving ‘Development For All’ have been clearly demonstrated. This remains one of our key goals, particularly in a world that is rapidly changing and shifting. This is not an easy task, but I hope that today’s meeting provides us with the inspiration to push the boundaries on some of the main challenges we encounter. The OECD and our Development Centre will continue to work with and for you, as we design, develop and deliver better policies for better lives. I wish you a fruitful meeting, and I look forward to the outcomes of your deliberations. Thank you.