Panel on “Economic Outlooks”
Speaking Points by Angel Gurría
7 October 2020 - Paris, France
(As prepared for delivery)
Executive Secretary Bárcena, Secretary-General Grynspan, President José Galicot, Ladies and Gentlemen,
I want to thank Tijuana Innovadora for inviting me to this conference and to congratulate them on both the 10th anniversary of this event and on the quality of the participants.
The COVID-19 pandemic has caused enormous damage around the world. Over 33 million infections have already been recorded, and more than one million lives have already been lost.
The economic repercussions are stark. Global GDP will decline by 4.5% this year, and while we estimate that the global economy will pick up by an average rate of around 5% in 2021, many OECD countries will not return to their pre-crisis growth rates until the end of 2021 or in 2022. The Latin American OECD countries (Mexico, Chile, Colombia and Costa Rica) are among the most affected.
In Mexico, the economy was in a weak situation when the virus broke out, and our latest projections indicate that Mexican GDP will contract by around 10% this year before recovering in 2021 by around 3% annually.
In order to respond to this crisis and enable a speedy and solid recovery, Mexico and all of Latin America will have to apply a three-pronged strategy: 1) Use their full fiscal and monetary capacity to control the virus and support affected businesses and employees, (proving that the dilemma between saving lives and saving the economy is a false problem); 2) Support the most vulnerable by increasing social spending; and 3) Step up the pace of structural reform processes (in health, education, finance, digital, anti-corruption) to build back better by focusing on inclusion and sustainability.
It will also be essential to use this transition period to strengthen territorial development strategies by reducing regional disparities and promoting new business and export hubs throughout the national territory.
Border cities and bi-national mega-regions, like Tijuana and Cali-Baja, will have a key role to play.
Borders should not be seen as dividers. On the contrary, borders should be seen as meeting points, places where communication and innovation thrive.
Look at what happened with Tijuana. A city in a region far from the traditional business centres, with a largely tourism-based economy, decided to take advantage of its border position and reinvent itself as a hub for manufacturing, export and innovation.
This led to a broader strategic alliance between Baja California and the counties of San Diego and Imperial Valley in California, and consequently to the creation of the bi-national Cali-Baja mega-region, which is what I would call the techno-industrial heart of the USMCA.
With a combined population of around 7 million, annual regional exports reaching 24 billion dollars, around 420,000 workers employed in the manufacturing sector and over 80 research institutes, the bi-national Cali-Baja mega-region is one of the most important productive and innovative platforms in the world.
But most importantly, the dynamism of these mega-regions should be used to provide opportunities for the most vulnerable, and reduce the social inequalities that characterise our countries. Especially now that the COVID-19 crisis is primarily affecting low-income families and informal workers.
That is why we are happy to work with this innovation platform, which is transforming the lives of its residents by promoting opportunities and fostering cohesion and social inclusion.
The impressive transformation of Tijuana and the dynamism of Cali-Baja must be a driving force for inclusion and sustainability. This is probably already happening, but we have had a hard time finding the data. That is another key challenge. There are few recent and reliable indicators on the experience of this mega-region. It is crucial to produce that evidence, to advertise this success story and to attract more investment.
The OECD has published Territorial Reviews on several mega- and metro-regions, such as Western Scandinavia and the Chicago Tri-State Metropolitan Area, as well as studies on the rise of mega-regions, and we are ready to support Cali-Baja in developing its data and telling its history.
I will stop here, and make way for the panel conversation. Thank you.