Opening Remarks by Angel Gurría
10 June 2020 - OECD, France
(as prepared for delivery)
Deputy Prime Ministers, Ministers, Ambassadors, Colleagues,
Welcome to this Ministerial Council Roundtable. This is the first in a series of events that will lead up to our Ministerial Council Meeting in the fall. We are fortunate to have Spain this year as Chair, together with Chile, Japan and New Zealand as Vice Chairs. Together, they will lead our conversation through this session, and further roundtables, with the next one in July focusing on inclusion and employment.
An unprecedented crisis
We are living in unprecedented times. The COVID-19 pandemic has unleashed the worst health, economic and social crisis since the Second World War.
The OECD Economic Outlook which we released earlier today paints a grim picture. Our central scenario, assuming no resurgence of the virus in the coming months, forecasts a 6% decline in global GDP in 2020 – the largest annual decline in the OECD’s 60-year history.
The recovery is expected to be slow with long-lasting effects. We estimate that more than 40 million additional people could be unemployed in OECD economies by the end of this year. And the necessary countercyclical fiscal response will increase government debt levels substantially in most OECD countries.
The OECD’s response to the crisis
The OECD has been actively supporting our members and partners throughout the crisis. We launched a Digital Hub on Tackling the Coronavirus, providing a single entry point to the OECD’s analysis on the economic and social impacts of COVID-19, with almost 100 policy briefs published.
In addition, we have also provided policy advice to global fora such as the G20; we have liaised closely with other multilateral organisations to ensure a co-ordinated response; and we have organised targeted COVID-19 Ministerial briefings for a number of our Members, an option I would like to offer to all of you.
A strong, resilient, inclusive and sustainable recovery requires concerted action on all fronts. Let me focus on key three priorities.
Three overarching priorities
First and foremost, we need to bring the pandemic under control. There is no choice between protecting our health and protecting our economy. This is a false dilemma. Thanks to the decisive action of your governments, the peak of the pandemic seems to be behind us in most OECD countries. But we should remain vigilant and continue to use “test, track and trace” approaches and distancing strategies until a vaccine is found and – crucially – produced and distributed.
Second, as we move from the immediate response to the shock, to preparing for the recovery, it will be crucial to adapt our support measures to the new phase. We need to put the economy back on track. Three priorities stand out: (1) supporting workers’ transit to new jobs, (2) ensuring rapid firm restructuring, and (3) putting people at the centre, by providing social protection for the most vulnerable.
And third, as we emerge from the crisis, we have an opportunity to “build back better”. COVID-19 has exposed a number of vulnerabilities in our economies and is expected to intensify a number of pre-existing challenges. These include: a long-term decline in growth and productivity; increasing inequalities; and the need to transition towards a digital and low-carbon economy.
Policies for a strong recovery
The policies we put in place today will shape our economies for decades to come. Public and private investment, for example, should help accelerate the transition to a low-carbon future. We should also eliminate unconditional subsidies to polluting activities as well as fossil fuel support, which increased by 10% last year to USD 178 billion in OECD and G20 economies.
A long-lasting recovery also hinges upon stronger international co-operation. Among the many areas where this is needed, international taxation is one that stands out. The OECD tax transparency standards continue to help deter tax evasion and strengthen the fairness of tax systems. Last year, there was a massive increase in the amount of information that your authorities exchanged under the OECD standard.
We must also reach agreement on a multilateral solution to the issue of tax avoidance by multinationals and the tax challenges which emerge from the digitalisation of the economy. We at the OECD are working hard to deliver a solution by the end of this year. Your involvement will be crucial to reach a political deal in October.
The crisis has also brought to the fore the need to ensure the resilience of supply-chains of essential goods. This requires that both governments and firms carefully re-assess the strengths and fragilities of key supply chains, ensuring internationally diversified production, both in terms of location and producers. We need to preserve the benefits of open trade and avoid protectionist shortcuts by upgrading international collaboration and international rules.
Deputy Prime Ministers, Ministers, colleagues,
The COVID-19 crisis is an unprecedented global challenge, and a unique chance for us to act and shape the economies and societies of tomorrow. Important efforts have already taken place, on the local, national and international fronts. Let’s now capitalise on this momentum, let’s work together to end the crisis and build back better. Thank you.