OECD Annual Meeting with the Economics and Security Committee of the NATO Parliamentary Assembly


Remarks by Angel Gurría, OECD Secretary-General

Paris, 10 February 2012

(As prepared for delivery)
Ladies and Gentlemen,
It is a great pleasure to welcome you to the OECD. This is my sixth meeting with the NATO Parliamentary Assembly and I am delighted to see so many familiar faces in the room.

Unfortunately, the outlook for the global economy is more uncertain than what it was when we met a year ago. Last November, our latest Economic Outlook presented a scenario where OECD output was projected to grow by 1.6% in 2012 and 2.3% in 2013. This was already a significant downward revision from previous forecasts. Since then, however, the global economic environment has deteriorated even further.

Unemployment in the OECD area remains exceedingly high, at just over 44 million – more than 13 million higher than before the crisis. On top of that, our societies have grown more unequal: the gap between rich and poor in OECD countries has reached its highest level for over 30 years.

So what can we do? Let me highlight what we consider to be the main areas for policy action ahead.

Solving the euro crisis

Solving the euro area crisis once and for all is, of course, at the top of the priority list. This requires concerted policy action on several fronts, not least to put in place robust firewalls to prevent contagion among countries and financial institutions. Measures also need to be taken to boost the long-term growth potential of the euro area economies, to make them more competitive, and to improve the euro area’s overall governance.

Our two forthcoming Economic Surveys, of the European Union and of the Euro Area will provide further recommendations: they will emphasise the need for reforms to restore growth and argue for progress towards an effective Single Market and more integrated European economy.

We are providing tailor-made policy advice to specific euro zone countries. We are actively engaged in the EU Task Force for Greece to share our expertise and accumulated experience with our Greek colleagues. Just this Monday, I met with Prime Minister Monti to discuss how the OECD can help Italy. We are also working with Portugal, and stand ready to collaborate with all our members in support of their reform efforts.

A central element of our policy advice is to restore confidence, thanks to a clear medium and long-term strategy. This is why we say: “Go Structural”, “Go Green” and “Go Social”.

“Go Structural”

Going structural means that we need to lay the groundwork now for strong, sustainable and inclusive growth in the future. Structural reforms are essential to boost growth and they can at the same time help achieve other important goals, such as boosting jobs and fostering competitiveness.

For example, OECD analysis shows that reducing taxes on labour to the lowest level among G20 countries would increase average employment rates by 3.5 percentage points. Further opening markets for trade and investment would boost business confidence, income and employment at no fiscal cost. And reforms of education systems to boost human capital and skills can offer even larger payoffs.

“Go Green”

Second, if we want sustainable growth, we need to go green. There is simply no way around it. Green growth policies are about fostering economic growth while ensuring that our natural assets continue to provide the resources needed to improve our wellbeing.

With our Green Growth Strategy we are providing practical policy tools to secure a shift to a greener economy. Our Strategy covers many policy areas, including fiscal, innovation, trade, labour and social policies. Pursuing green growth is ultimately a necessary prerequisite for lasting growth.

“Go Social”

And third, we must go social. We need to focus on concrete employment policies, investment in education and skills, and targeted policies to help the most vulnerable.

A priority must be tackling joblessness, in particular among youth. While the OECD unemployment rate is about 8.2%, youth unemployment is running at 20% or above in many countries; it is close to 50% in Spain. To avoid a lost generation, governments should consider policies like net hiring subsidies, public work schemes, income support conditioned on effective job searching, and effective training programmes to the under skilled.

This is why we are also focused on improving skills. We will deliver an OECD Skills Strategy at our Ministerial Council Meeting (MCM) in May. Our strategy will identify the skills needed to ensure a shift from lifetime employment to lifetime employability and examine policies to achieve it.

At the MCM, we will also be presenting our report on the OECD Gender Initiative. It will identify policy options for more gender equality in education, employment and entrepreneurship. Indeed, no economy can reach its full potential if it fails to include the contribution of women.

And finally, we will present our OECD Strategy for Development. It will reflect the Busan paradigm shift from aid to development effectiveness and focus on mobilising domestic resources, new sources of growth and effective governance systems.

I could mention many other policy priorities which we are working on, including the G20 process, the global trade agenda, and our efforts to support reform in the MENA region. You will look at some of these topics later today.

And all these issues will also be on the agenda for our annual OECD Week on 22-24 May in Paris. Let me take this opportunity to invite you to join us - your contributions will be greatly appreciated.
And while we are on the subject of invitations, please also join us at our High-level Parliamentary Seminar in Chile on 8-9 March, which will discuss best practices in governance and the role of Parliaments.

Finally, I would like to remind you of the growing OECD Parliamentary Network which helps giving Parliamentarians a voice in the discussions on societal models for tomorrow. Involving Parliamentarians is a key OECD priority because you help us reflect citizens’ needs and concerns in our work and policy dialogue. Equally, you can use the OECD as a powerful resource for your own parliamentary work. Your involvement benefits us all.

Ladies and Gentlemen,
Let me just finish with the words of Benjamin Franklin: “A house is not a home unless it contains food and fire for the mind as well as the body”. Today we have both – food for thought and food for lunch. We hope you feel at home in our house. We are certainly delighted to have you with us and wish you highly fruitful and successful discussions here at the OECD, in the pursuit of better policies for better lives.


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