Meeting of the OECD Council at Ministerial Level (MCM), Introductory Remarks by Mathias Cormann, 1 June 2021

 

Introductory Remarks by Mathias Cormann,

Secretary-General, OECD

Paris, Tuesday 1st June 2021

Before starting my remarks, may I thank my predecessor Ángel Gurría for his work leading this organisation for the past 15 years.

Angel has served the OECD with great passion, commitment and dedication.

He has increased its influence, relevance and impact. He has expanded its membership and strengthened its engagement with other multilateral and regional organisations. I wish him well.

Allow me also to congratulate Costa Rica on becoming the 38th Member of the OECD last week.

Introduction

Thank you for the trust and confidence you have placed in me to serve you as your Secretary-General.

You are the owners of this organisation and it will be my honour and privilege to serve you.

The OECD is a force for good in the world.

All of us have a collective responsibility to use it to its full potential.

Our core purpose, under our Convention, is to preserve individual liberty and to increase the economic and social well-being of our people.

We share a commitment to democracy, to human rights, the rule of law, market-based economic principles, a global level playing field and a rules-based international order as the best way to maximise sustainable growth, prosperity and general well-being.

Over the past 60 years, we have become the key global institutional custodian of these values and principles, which have stood the test of time.

They are values and principles, which we must never stop protecting, promoting and advancing.

Policy Agenda

As your Organisation for Economic Co-operation and Development, our focus needs to be on where we can add most value to you.

Having engaged with you over the past several months, allow me to touch on five key priority areas.

1. Optimise the strength of the economic recovery in the wake of COVID-19, through stronger, sustainable, cleaner, more inclusive growth.

Many countries around the world continue to face serious challenges as a result of the most significant pandemic in more than a century.

The recovery remains uneven, though the outlook continues to improve.

As we seek the best way forward, our essential mission of the past – to promote stronger, cleaner, fairer economic growth and to raise employment and living standards – remains the critically important mission for the future.

To optimise the strength of a sustained recovery we need to continue to overcome the immediate health challenge, including by pursuing an all-out effort to reach the entire world population with vaccines.

This is not just an act of benevolence from advanced economies. It is about sustained protection from this virus for all of us.

We also need to learn the lessons of this pandemic to ensure we are better prepared next time.

This includes a rigorous and detailed evidence-based assessment of how to minimise the economic and social cost of our necessary public health measures in response to the pandemic.

What works best in terms of re-opening our economies safely?

What else can we do to facilitate further COVID-safe re-opening in relation to international travel and mobility more generally? The new OECD Blueprint for Safe Mobility, involving extensive consultations across OECD members and other international bodies is already an important contribution to help achieve this.

We need to map the transition from crisis settings to the recovery and beyond.

This also means mapping out the journey from crisis level emergency fiscal support, to the recovery, to a forward-looking agenda to help drive stronger, sustainable growth, offering opportunities to all to participate and benefit.

We must turn our mind to the time and the circumstances in which we commence the effort to rebuild our fiscal resilience.

We always need to remember what makes us strong and resilient.

Market based economic principles work.

Global competition at its best is a powerful engine for progress, innovation and an improvement in living standards.

Yes, competition can also be uncomfortable.

It can lead to social disruption, which collectively, we need to better manage.

We need effective rules to protect our values and ensure a level playing field.

We need to ensure access to high quality education, upskilling and reskilling to ensure everyone can participate and benefit.

We need the necessary social supports for those who struggle.

But as uncomfortable as it can be, competition is – and should be – unavoidable.

Protecting ourselves from competition and innovation does not stop it from happening elsewhere – it just means that, over time, those who find themselves behind those protective walls fall further and further behind.

That is a key lesson of history and is not what we want for people across the OECD and beyond.

Overall, our global supply chains turned out to be more resilient throughout the COVID crisis than first thought. In some cases, they now have more depth than before the crisis.

But our rules-based international trading system remains under pressure. We need to ensure that markets remain open to the greatest extent possible. There is an opportunity for OECD countries to speak with one voice, for example within the WTO and to push back against the forces of mercantilism, economic nationalism and protectionism.

We need to restore public trust in the value of global economic relations and in multilateral approaches to tackle shared challenges.

Domestically, we will need to let our economies adjust, and if necessary remove obstacles to the reallocation of capital and labour.

Core to our economic mission and that of all governments is the preservation, restoration and creation of as many new jobs as possible.

Most jobs will be created by the private sector, by viable, successful and growing businesses.

SMEs in particular will be key to the jobs growth our economies need. The OECD has a critical role to play in identifying policy incentives and support measures that will allow SMEs to serve as engines for such growth.

We need to ensure our policy settings facilitate, encourage and incentivise that post-COVID recovery and investment.

We need policies that seek to provide the appropriate competitive environment and level playing field, avoiding inefficient market concentration and distortions and reducing barriers to new market entrants.

We need effective policies aimed at developing the skills required to help match job seekers with employment opportunities in a growing 21st century economy, today and tomorrow.

Our efforts to facilitate the COVID-recovery provide a remarkable opportunity to reset policies and practices in favour of more sustainable growth, in particular in terms of our climate and inclusive growth objectives.

Politics at its best is always about building a better future.

We must always be mindful of the issue of intergenerational equity and fairness. Across all of our policy areas, we must focus on how we can build a better world with better opportunities for our children and young people of today and of tomorrow.

The recovery also offers the opportunity to ensure that the gender dimensions of policy measures are fully considered in all our work. Building on the good past work of the OECD and members in this area, I look forward to consulting further on how we can best progress this further.

2. Drive and promote global leadership on ambitious and effective action on climate change to achieve global net-zero emissions by 2050.

Addressing climate change effectively and efficiently is a truly global challenge, which requires global leadership and co-operation.

It is good to see that more and more countries are committing to net-zero emissions as soon as possible and by no later than 2050.

The challenge is how to turn those commitments into outcomes and to achieve our objective in a cost-effective, economically responsible and publicly supported way that will not leave people behind.

As your Secretary-General, working with you and our partner organisations, I will use every policy and analytical capability right across the OECD to ensure we play a leadership role in helping to achieve that objective.

Our respected and valued expertise at the OECD is to provide comparative data analysis, best practice policy advice and a platform for multilateral discussion and collaboration.

Working across our committees and within our OECD family, with the International Energy Agency, the Nuclear Energy Agency, the International Transport Forum and others, we can help map out what needs to be done, benchmark climate outcomes – not just commitments – as well as indicators and policies.

Over the next 100 days, we need to operationalise the OECD’s International Programme for Action on Climate (IPAC) so that we are in a position to see first results by the time of our second Ministerial Council Meeting for this year and by COP26 in November.

3. Seize the opportunities and better manage the risks linked to the digital transformation of our economies.

The digital transformation of our economies has accelerated during the COVID pandemic.

That transformation brings many benefits and opportunities but also a series of new and growing risks and challenges.

To ensure everyone has the opportunity to participate and benefit, those risks and challenges will need to be well managed - from the transitional supports and skills development requirements related to the future of work, to cyber security, privacy and the tax policy implications of the digitalisation of an increasingly globalised economy.

Comparative data and policy analysis and policy best practice regarding effective values based digital regulatory frameworks will be very important. The OECD has a key role to play here.

4. Finalise a multilateral approach to taxation/digital taxation.

Governments around the world need to be able to raise the necessary revenue to fund the essential public services and supports they provide to their populations in a way that is efficient, least-distorting and which is also fair and equitable.

It is very important we continue to lead the global fight against tax evasion and multinational tax avoidance and to ensure that digital businesses and all large businesses pay their fair share.

The OECD has been highly successful in helping secure a multilaterally agreed and globally fair and consistent approach to the fight against Base Erosion and Profit Shifting.

We need to complete this work, including by facilitating agreement on an appropriate minimum level of global taxation and by minimising the profit shifting that has accompanied the digitalisation of our globalised economy.

To achieve a viable consensus we must be careful to strike the right balance.

I welcome recent US efforts aimed at facilitating a sensible multilateral consensus.

5. Redefine our global engagement, including by strengthening OECD outreach in the Asia-Pacific.

Great power competition will shape the world order in the coming decades. The OECD must work together to demonstrate how our democratic and market based economic values make us politically, socially and economically stronger.

The purpose of our global engagement is to facilitate policy dialogue and knowledge exchange and to contribute multilateral solutions to the global challenges of our time.

This is also why the OECD’s engagement through the G7, the G20, APEC and other international fora is so important.

The historical evidence shows how the values and principles underpinning the OECD, and the resulting norms and standards, offer the best possible opportunities for people in our Member countries and beyond to enjoy the best possible quality of life.

OECD membership is ultimately the most direct and effective way for us to ensure the widest possible application of those values and standards.

We currently have six active applications for membership.

We need to find a way forward in relation to those.

I propose to set up an informal process with members to explore how this can best be achieved, with a view to presenting a proposed way forward to Council at the appropriate time.

We must also explore together how to best engage with the OECD’s Key Partner countries, both bilaterally and in multilateral fora.

Our global relations strategy moving forward must include a renewed focus on our engagement with the Asia-Pacific region, including the ASEAN countries and China. Given the central role of this region in driving global economic and population growth, energy demand, innovation and more, it is a critical part of seeking effective solutions to global challenges.

The OECD Council recently welcomed an important framework to guide our engagement with China. I look forward to working with you to give effect to that strategy and to finalising the new Global Relations Strategy.

We should build on that strategy to better define the framework for the OECD’s future engagement with other Partner regions, including Africa.

We must also continue to strengthen our development co-operation.

Low-income countries need our co-operation more than ever – to ensure access to vaccinations, to trade, to financing to help them deal with the climate challenge.

It will be important to maintain and strengthen where necessary, our engagement with all our other stakeholders.

Working hand in hand with other international and regional organisations on joint projects, expanding the presence of the private sector and civil society in our discussions, building on the excellent, decades-long collaboration with BIAC and TUAC, and developing longer-term partnerships where they can help us deliver valued outcomes to Members.

Management Agenda

Our products will only be as good as they can be if our people, our institutional and governance structures and our processes are as good as they can be.

Over the past seven months, I have had many conversations with governments and ambassadors from across the OECD membership.

I sense a strong appetite to modernise some of the ways we do business.

Our internal processes need to be world’s best practice.

Importantly, we must ourselves practice what we preach in terms of good governance and public sector management, integrity and resource efficiency.

We as the Secretariat must be transparent and accountable to our members, and ultimately to our public.

Together with members, directors and indeed all staff, I will seek to drive a modernisation agenda with improvements in several key areas. These will include:

  • pursuing management excellence and rigour, overseen by fit for purpose governance structures and supported by modern processes;
  • seeking the long-term financial stability of the Organisation, including better defining the role of Voluntary Contributions in the funding mix;
  • ensuring staff professionalism, integrity and diversity, including better gender balance;
  • fostering and valuing collaboration across all parts of the Organisation;
  • enhancing dialogue and communications with Members; and
  • ensuring a smooth and safe return to the workplace as we move out of the pandemic.

I have established a Management Transition Taskforce to assist me in pursuing some of the more immediate reforms, while helping me map out further reform opportunities to be developed in close co-operation with members.

While some reform opportunities will be relatively straight forward, others will require more thought and conversations, including based on a formal external evaluation. I will take a proposal to Council for its consideration to help us determine how best to proceed.

Close

In pursuing these priorities, both substantive and managerial, I will work hard to engage with the entire Team OECD.

We are all in this together, and together we can continue to be stronger than the sum of our parts.

I will work hard to help build a culture of trust, transparency and accountability across all levels of the Organisation.

We need all parts of the Organisation working together in pursuit of our common purpose.

I will give the Organisation, its members and staff my absolute best, and I will strive to make the OECD a place that inspires collaboration and action in support of a sustainable and inclusive future.

 

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