Corporate governance

The OECD and the G20 – An evolving relationship


Remarks by Angel Gurría, OECD Secretary-General, delivered at the Institute of International and European Affairs

Dublin, 4 November 2009

Ladies and Gentlemen,
It is a great pleasure to be here, in Ireland’s leading European and international affairs policy institute, to share with you these views on the evolving relationship between the OECD and the G20.

Among its distinguished speakers, the Institute have invited many high-level global decision makers and national leaders. Thank you for the opportunity to contribute to such an important series of events.

The G20 is fast becoming the centrepiece of today’s international economic, social and environmental governance architecture.

Yes, it is a very heterogeneous group. Yes, the progress achieved so far is incomplete. However, its capacity to deliver has been outstanding. At a moment when we were facing critical challenges, the G20 came up with a coordinated response to the decline in global activity and to stabilise markets. It is now focusing on the very important issue of exit strategies from the massive public interventions, and among other medium and long-term issues on how to address climate change financing.


OECD Secretary-General speaking at the Institute of International and European Affairs (Dublin, 4 November 2009)

OECD has been supporting the G20 Summit since its inception. Our substantive contribution includes work on new sources of growth; on the human and social dimension of the crisis; on innovation; open markets for trade and investment and on the exchange of information for tax purposes.

It is quite significant that leaders felt they had to call on relevant international organisations to address the worst economic crisis ever. Leaders identify key issues in the global agenda and call on us to provide advice to address them.

Through evidence-based analytical inputs, we ensure that Countries that do not participate directly at the G20 stay connected to the discussions. The OECD is strongly committed to the notion that countries such as Ireland can have, through the OECD, an additional channel by which your voice can be heard. This role will remain central to our efforts.

In Pittsburgh we reported on areas where, based on OECD work, the world has achieved important breakthroughs. Such is the case of exchange of information for tax purposes, where, since November 2008 we made more progress than in the last 10 years. We have just established the most ambitious peer review process, that includes almost 90 countries ready to measure compliance based on OECD standards.

We also worked to keep markets open to trade and investment; and we contributed to a new approach to the regulation and supervision of the financial sector through our participation in the FSB. We will also establish a peer review process to evaluate compliance with the OECD principles of corporate governance. Failure to implement them produced the massive breakdown we have experienced.

The most dramatic expression of the crisis is the level of unemployment, on which we have also worked in the context of the G20. Our mandate is to monitor labour developments and the impact of certain policies. There is a need to continue supporting workers through the stimulus packages, but in a long-term perspective it is also important to invest in skills development and re-training. Thus, the OECD was asked to contribute to the Labor Ministerial that the US will host in early 2010,  building on the results of the OECD’s own Employment, Labour and Social Affairs Ministerial Meeting held last September and where non-OECD countries like Brasil, South Africa and India were represented at Ministerial level. 

In Pittsburgh, OECD work on these areas was welcome, and we are asked to continue working on them.
But we were also asked to continue our work on energy subsidies, and the impact of their removal in demand, prices, and GHG emissions. This was a very important area where the joint work of the OECD and the IEA was the basis for an agreement among participating countries.

Our estimates on GHG reduction resulting from the removal of these subsidies (as much as 10% in 2050) were extensively quoted, including by U.S. Treasury Secretary Geithner and President Obama himself, who recently wrote to ask that we continue this work, together with the IEA.

Additionally, and based on OECD work, Leaders:

  • called for the adoption and enforcement of laws against transnational bribery, such as the OECD Anti-Bribery Convention.
  • agreed to continue to work on the Charter for Sustainable Economic Activity, the process initiated by Chancellor Merkel to which the OECD has contributed since the very beginning, and on the “Lecce Framework” on the need to introduce ethics, transparency integrity and propriety in economic governance.

On the way forward, the G20 is also paving the way to build a stronger, more balanced and sustainable growth process. This is one of the major achievements in Pittsburgh that will be discussed at the next G20 Finance Ministers and Central Bank Governors in Saint Andrews this week-end.

The Framework can be seen as a compact that commits countries to work together to assess the coherence of national policies and their consistency with the common objectives agreed at the G20-level. The OECD has for many decades been assessing and monitoring national policies through a peer review or mutual assessment process and we are ready to contribute to this excellent initiative.

OECD has made several very concrete proposals to the G20 on the Framework and on how we could adapt our ongoing work programs to support its implementation. One way would be through the establishment of the “Observatory for Policy Coherence”, or policy assessment network, among key international organisations specialising in economic issues to provide the best possible joint input into G20 processes.

While taking into account the comparative advantage of each International Organisation, the Observatory would allow for different perspectives. It is not about duplicating efforts. It is about being complementary. The messages of the international organisations would become reciprocally reinforcing if they were better shared and more effectively coordinated.

Ladies and Gentlemen:
The crisis has accelerated the speed at which the global governance architecture has to be updated and revamped. The G20 is an important step forward in such process. The OECD is ready to contribute to its success.

Thank you very much.