Remarks by Angel Gurría, Secretary-General of the OECD
2 March 2015
(As prepared for delivery)
Mr. President of the Congress of Deputies, Jesús Posada; Mr. José Luis Rodríguez, President of Nueva Economía; Ibero-American Secretary General, Rebeca Grynspan; Ministers Fátima Báñez and José Ignacio Wert; distinguished guests; my dearest Lulu; friends.
Thank you all for being here on this very special occasion. It is an honour to receive this recognition from Nueva Economía Forum, an organisation that is very close to my heart because I have been involved in several of its events during my many visits to Madrid. Dear José Luis, the work your organisation does forum after forum is fundamental to promoting dialogue on the key questions of our time. You do a great service to Spanish society. That is why I am very honoured that you have decided to confer an award upon me that on previous occasions you have bestowed on so many distinguished recipients.
I accept this award as a gesture of acknowledgement for the work of the OECD and the 2 700 and more professionals who work in our Organisation. Our mission is to promote “better policies for better lives” and that, quite simply, is what we do: we work day in, day out, to build a better world through international co‑operation, the pooling of countries’ experiences, and the encouragement of best practices and international standards.
The award particularly recognises the work that the OECD has done over a period of more than 50 years to help open Spain up to the outside world and modernise its economic and social policies. Allow me to share a few thoughts on how the relationship between the OECD and Spain has a significant past, a strong and useful present and, above all, a brilliant, promising future.
Past: Standing alongside Spain as it modernised and opened up
Spain and the OECD have been treading the same path since the founding of the Organisation. The OECD is the successor to the Organisation for European Economic Co‑operation (OEEC) established after the Second World War to run the Marshall Plan. Spain was one of the 19 countries that signed the Convention on the Organisation for Economic Co-operation and Development in December 1960 that led to the establishment of the Organisation one year later. These were times when Spain was beginning to open up to the world, still under the dictatorship, but with the clear intention of internationalising its economy.
The OECD brought much to this process. Access to sectoral committees and other countries’ experiences helped Spain at a very important time in its history, contributing to its economic modernisation. During the second half of the last century, and more particularly with the arrival of democracy, membership of the European Union and expansion in Latin America, the Spanish economy and Spanish society made huge strides forward. The OECD was always there with advice on sectoral policies; with its regular reports on the Spanish economy; with data that Spain could use to measure itself against other countries and find out which experiences and which reforms had worked in other countries and which had not.
I joined the OECD in 2006, but I feel very fortunate to have witnessed Spain’s modernisation from a much earlier date. I first visited this country in 1968 and, in my more than 100 visits since then, I have witnessed a continuous process of change and progress. As Minister for Foreign Affairs and then as Finance Minister under President Zedillo in Mexico in the 1990s, I argued in favour of strengthening the links between Spanish America and Spain, and of promoting Spanish investment and its contribution to vitalising our economies.
We have also been forging closer political and cultural ties since 1991 through the Ibero-American Summits. With its dual European and Latin DNA, Spain has always acted as a bridge spanning the Atlantic, as I saw for myself when we negotiated the Mexico-European Union Association Agreement. Without the support of Spain, the agreement would not have been possible.
Present: Helping Spain emerge from the crisis
From my position at the OECD, I have had the opportunity to help address the significant challenges that Spain has faced in recent years. There are few countries with which we have worked as closely as with Spain, first with Prime Minister Mr. Zapatero, and subsequently with Prime Minister Mr. Rajoy and his Ministers. This was possible thanks to excellent Ambassadors such as H.E. Fernando Ballesteros, Cristina Narbona and Ricardo Díez-Hochleitner. Not only have they been Ambassadors of Spain to the OECD but also Ambassadors of the OECD to Spain, promoting our work in this country.
Until 2008, the Spanish economy was among the most buoyant in the OECD. In the peak years of Spain’s economic boom, tourism and construction contributed one-quarter of GDP and one-fifth of employment.
However, this left the economy particularly vulnerable to the economic downturn that hit the global economy from 2008. While the depth of the recession in terms of real GDP was similar to other advanced countries, it led to a much larger increase in unemployment and a sharper deterioration in government finances in Spain, both to a large extent structural.
Perhaps the analysis of the sheer magnitude of the problem was late in coming and action could have been taken in a more timely fashion, but Spain was lucky to enter the crisis with a surplus and so, despite the striking increase in public debt as a proportion of total GDP – approaching 100% today – the situation is still somewhat better than that in neighbouring countries such as Portugal (125%) or Italy (130%). In fact, the figures for Spain are around the OECD average in this area.
Since the outset, the OECD has supported the important structural reforms that were required to emerge from the crisis. I had the opportunity to meet Prime Minister Mr. Rajoy exactly three years ago, shortly after his mandate commenced, and together we discussed how we at the OECD could support his ambitious reform agenda. This has enabled us to work together closely on specific reforms including those to the labour market and the public administration, and to provide advice on macroeconomic, fiscal and social policy matters.
Labour reform was no easy matter, but it is enabling jobs to be created, albeit with a low growth threshold of just 1%. The number of jobs created rose by 2.5%, meaning that the number of jobs increased by 443 000 between the last quarter of 2013 and the last quarter of 2014. We are currently working closely with Madam Minister Báñez on back-to-work policies, to make them more effective.
The reform of the public administration that we have been working on with Deputy Prime Minister Ms. Soraya Sáenz de Santamaría and the team from CORA is laying the foundations for a more modern, efficient public sector that is better tailored to society’s demands.
We have, of course, also been supporting Spain with our economic reports and regular sectoral surveys. A good example of this is the Environmental Performance Review of Spain, a series started in 1997, that I launched only this morning with Madam Minister Tejerina and that aims to take stock of what Spain has been doing well and where it could improve to achieve greener, more sustainable growth.
Since the start of the crisis, we have also delivered three reports on the Spanish economy to the Government containing immediate recommendations on how to restore the sustainability of the public finances, consolidate stability in the financial sector and improve the competitiveness of the Spanish economy while making it more inclusive. This has been accompanied by a longer-term vision to ensure that the actions being taken lay the foundations for a new model for growth and well-being for the country.
Future: Laying the foundations for the Spanish economy for the coming decades
This leads me to the final point I wanted to share with you today: our future relationship.
Spain’s macroeconomic environment has improved significantly with six consecutive quarters of growth and an upturn in domestic demand, particularly private consumption. This will place Spain among the fastest-growing euro area economies in 2015 with a rate of around 2%. Our forecast is that this recovery will gradually accelerate as the Spanish economy once again generates confidence in the markets and society.
However, with unemployment at 23.7% and many families finding it hard to make ends meet, there is still much to be done. For us, the future relationship between the OECD and Spain consists in helping to redefine the model upon which this country bases its economy and development in order to address those challenges. This is the shift from bricks to brains that I have been talking about for some time.
The OECD can help Spain move towards a knowledge-based economy and sustainability, but this will be possible only if the country adopts fiscal and regulatory frameworks that favour entrepreneurship and attract investment. We also have to promote a comprehensive system of innovation that bridges the gap between businesses and universities and appropriately and consistently harnesses public and private resources for research and development.
Refocusing the economy towards activities that incorporate greater value added, more technology and more human capital is key to competitiveness: by ensuring that the enormous potential of this country’s service sector is maximised, and that advantage is taken of the opportunities offered by smart re-industrialisation. Only by achieving this will we continue to improve productivity and be able to take advantage of the enormous opportunities offered by the new global value chains.
To that end, we are working with a number of ministries on a new Skills Strategy for Spain that will enable Spanish youngsters to receive the training and practical experience necessary to come out on top in an increasingly globalised, competitive and exacting environment. We owe it to our young people to provide them not only with special support to overcome the difficulties they face, but also with a new window of opportunity and hope.
We also owe future generations a fairer, cleaner world. Accordingly, we at the OECD will also continue to work for Spain from the global perspective. Although we will not clip the wings of the transformative potential inherent in the new global dynamics, we will continue to forge international standards that ensure that the benefits of globalisation are enjoyed by all and do not jeopardise our planet’s future.
We shall also continue to drive forward an ambitious agenda for co‑operation on matters such as tax havens, the quality of education, climate change or development co‑operation. The OECD has been a pioneer in all these fields and remains at the forefront with BEPS and AEOI on fiscal matters; PISA and PIAAC in education and skills; carbon taxes and tradeable emissions permits in the environmental field; and DAC and official development assistance, an item that we have been measuring for years to improve its effectiveness and consistency.
One thing that we at the OECD have reported in particular over the past few years is the loss of public confidence in institutions including governments, political parties, businesses, trade unions and international bodies. Corruption, growing inequality and the perception that things are going well only for a few and that institutions have been taken over by private interests that are out of kilter with the collective interest generate mistrust, despondency, disenchantment and social division. Moreover, citizens do not feel that public policies are helping them to solve their problems, improve the quality of their lives, or ensure that their children enjoy more opportunities than they did.
The OECD is launching a new horizontal effort to try and rebuild that trust. How? By promoting practices and tools that make headway in good public and corporate governance; in social responsibility; in ensuring that public policy is transparent and efficient and that it serves the people. Similarly, through our BLI (Better Life Index) and NAEC (New Approaches to Economic Challenges) initiatives, we are helping to rethink economic activity to ensure that policies focus on progress for people and societies.
We need to regenerate our societies, revitalise the social contract and refocus economic activity on the well-being of our citizens. It is therefore our aspiration to continue to be the benchmark Organisation for improvements in all areas of public policy, working closely with our members, the G7 and the G20, and with many emerging economies and international and regional organisations in the search for solutions to the challenges of our time.
In short, we shall continue to work for a better Spain in a better world.
Albert Einstein once said that he preferred never to think of the future because it comes soon enough. In fact, the future is already here.
I would like to thank you today for this honour that recognises not only what the OECD and one of its servants have been able to do for Spain in the past, or what we are doing in the present, but also the enormous task we must undertake to deliver, for all Spaniards, the fantastic future of opportunities that lies ahead for us.
The road we have travelled thus far has not been easy, especially in recent years. But we can be satisfied with what we have achieved; it can serve only as a source of inspiration as we look forward with optimism to tackle the huge challenges that remain.
The OECD stands alongside you and will continue to do so as we move forward in honour of the very name of this award, because our very motivation is the desire to deliver a new economy that serves the people.
Thank you very much.