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Newsletter 19-26 November
Check out my newsletter for November 19-26 for a snapshot of my recent engagements.
Opening Remarks for the 2018 Sporting Chance Forum
Remarks delivered on 12-12-2018 at UNESCO, Paris.
Ladies and Gentlemen,
I am delighted to be here today for this important event to represent the OECD, which is part of the Advisory Council of the Centre for Sport and Human Rights and is committed to its success.
Sport teaches millions of people about values such as fair play, team spirit, respect for others, but also the importance of playing by the rules and of having a level playing field.
Sport has the potential to elevate us, but many recent examples show that some aspects of sport can have adverse effects, notably on human rights. I am thinking of corruption associated with sporting events. I am thinking of violations of human rights against workers and communities affected by sports-related infrastructure projects.
I am thinking of the recently uncovered abuses suffered by athletes, just to name a few.
These risks are exacerbated by the fact that sport is now a booming industry which by some estimates generates more than 145 billion dollars in annual revenue.[1] In particular, mega-sporting events involve high levels of public expenditure, large-scale investment from sponsors, together with high-value media contracts. This creates a high stakes, high risk environment for sports organisations, whose operations are often subject to little external oversight.
This shows that respect for human rights in the sporting context is a crucial and multifaceted challenge for governments, companies and sport organisations. It must be addressed from different angles, and this is what the OECD is trying to achieve. Let me give you three examples of OECD initiatives which seek to address sport-related human rights impacts.
First: on the anti-corruption front, the OECD, together with other international organisations, sports organisations, governments and stakeholders, has established in 2017 the International Partnership against Corruption in Sport. IPACS works towards better policies which can help pre-empt a number of challenges in those areas where the risk of corruption is particularly high.
Last week in London, IPACS held a high-level meeting where more than 100 Ministers, international sports organisations and experts reaffirmed their commitment to tackling corruption in sport, focusing on three specific areas where sport is particularly prone to corruption risk: public procurement for sport related infrastructure; managing conflict of interest in the selection of major sporting events; and strengthening the application of global governance standards to the world of sport.
These commitments were further strengthened by G20 countries’ recognition of IPACS in the new 2019-2021 G20 Anti-Corruption Action Plan adopted by Leaders in Buenos Aires. Tomorrow morning, the OECD Director for Legal Affairs, Nicola Bonucci, will discuss in more detail the achievements and future plans of this important multi-stakeholder initiative.
Second, on the remedy front, the OECD coordinates a network of non-judicial grievance mechanisms: the National Contact Points for Responsible Business Conduct. The NCPs are national bodies in charge of implementing the OECD Standard for Responsible Business Conduct, the well-known OECD Guidelines for Multinational Enterprises. In that capacity, NCPs can receive cases against companies having allegedly breached the Guidelines.
NCPs provide a platform of dialogue to reach a solution for the issues raised.
As I said, in many instances, sport is a business, and NCPs have provided remedy in sport-related cases. To give just one example, in 2017 the Swiss NCP helped FIFA and the global union federation Building and Wood Workers International reach an agreement regarding the labour rights of workers employed on World Cup stadium construction sites in Qatar.
Third: on the local development front, in May this year the OECD Council, our highest political body, adopted the OECD Recommendation on Global Events and Local Development. This Recommendation applies to sporting events and sets the framework conditions to ensure that such events deliver on the promises they hold for host cities and nations.
It contains concrete guidance for Governments regarding planning, delivery, evaluation, governance and partnerships with other actors.
The Recommendation promotes the respect of human and labour rights throughout the event lifecycle to ensure community benefit and the creation of quality jobs. The OECD has also developed a forward-looking Implementation Strategy to help cities and countries achieve more sustainable global events and build stronger capacities to leverage local benefits for all.
These three examples show the incredible complexity of tackling all possible human rights issues linked to the world of sport, and how this is necessary to ensure the value and benefits of sport to communities and the economy. They also show that international organisations, governments, and private actors can come up with solutions for better respect for human rights through creative multilateral initiatives.
Thank you
[1] Global Corruption Report: Sport, Transparency International, Feb 2016. Changing the Game: Outlook for the Global Sports Market to 2015, PricewaterhouseCoopers.
Opening Remarks at the OECD-Trade Union Advisory Council Liaison Committee Meeting
Remarks delivered on 10-12-2018 in Paris, France.
Dear Pierre, Ambassadors, Ladies and Gentlemen,
It is my pleasure to welcome you to the OECD, and to exchange on the very timely topic “Growth and accountability today, just transition tomorrow”.
This is a time for dialogue. At the OECD, we are proud to have such strong links with Trade Unions. We share the same values, and reading your paper reinforced this for me. We both put people at the core of what is important.
Since we last met, the Council at the ministerial level adopted the OECD Framework for Policy Action on Inclusive Growth to look for ways in which growth can deliver for all. This does not look easy.
As your discussion paper highlights, the global economy is losing steam. Global GDP growth is projected to ease from 3.7% in 2018 to 3.5% by 2020, according to our latest Economic Outlook.
Tariff hikes and uncertainty about further protectionist actions are contributing to a slowdown in trade growth and are affecting investment plans. I just came back from the G20 Summit, and I can tell you that discussions were tough, but there was also confidence that agreements are possible.
Wages have not kept up with productivity growth in several countries and we see rising market concentration. Real wage growth has been a meagre 1.2% in recent years.
The digitalisation of our economies is also providing both opportunities and risks that we must fully understand and be prepared for, particularly regarding the future of work.
I am glad to see all these issues on today’s agenda. Before we begin, let me set the scene on two of these issues: ensuring business accountability; and the impact of digitalisation on our economies and workers.
Ensuring accountability and a level-playing field for business operating internationally is a priority for the OECD and we are working to extend the reach and impact of our legal and policy instruments.
For example, the fundamental objective of our ground-breaking efforts on Base Erosion and Profit Shifting is to ensure that profits are taxed where value is created. This gets more complicated with the implications that digitalisation has on tax. So we are working to seek a long-term solution, which can benefit all countries, and provide certainty to businesses.
The OECD Anti-Bribery Convention is now ratified by 44 countries including Argentina, Brazil and South Africa, and covers over 70% of world exports[1]. Since ratification, over 600 individuals and entities have been sanctioned for foreign bribery, facilitating a “clean up” of the practices of many companies.
Much progress has been made on Responsible Business Conduct as today 48 countries adhere to OECD Guidelines for Multinational Enterprises, representing 80% of global outward FDI[2]. To help companies implement the Guidelines, we have developed Due Diligence Guidance for a number of specific sectors. And at the MCM in May, Ministers endorsed the general Due Diligence Guidance which can be used by any company in any sector.
In addition, we have put in place a unique peer review mechanism to strengthen the National Contact Point system and a new Action Plan has been developed for 2019-2021.
The OECD/G20 Principles of Corporate Governance were also reviewed and 60 non-members have subsequently joined.
But I agree with the reflections in your paper, that besides strengthening implementation, we should create more synergies between these instruments for more impact on the ground. We are moving in this direction, for example, the DAF/NAEC event on Corporate Governance for Sustainable Prosperity held in April aligned well with your suggestions.
The digital transformation is having significant implications for the labour market. As your paper mentions, we estimate that around 14% of jobs are likely to be automated in the near future. Another 32% will be change significantly. The way we work is already changing too: almost 1 in 3 workers has a non-standard job, with great variance in terms of pay, job security, access to social protection, and collective bargaining coverage.
There is also a growing concern about market concentration as indicated by increasing mark-ups. We are working to better understand the nature of changes in business dynamics, and analysing whether competition tools designed for traditional markets need to be adapted to the digital economy.
Besides ensuring that the digital revolution continues to deliver for productivity and growth, ensuring connectivity and affordable access for all; strengthening skills, fostering new jobs and ensuring social protection; ensuring sound competition and market openness as well as the protection of individual’s privacy and consumer rights, are all key elements of a people-centred approach to digitalisation. It’s essential to close the digital divides, for instance between rural and urban areas, and men and women. Gender divide is staggering, but all in all it is important to enhance policies for people to participate.
Our new Jobs Strategy launched last week puts an increased focus on social dialogue and the need for collective bargaining systems that are inclusive and flexible enough to deliver good jobs and adapt to changing economic conditions. We have also recently taken on the secretariat function for the Global Deal, which will help us supporting workers in the future of work and in the platform economy.
All this does not happen in a vacuum. We should continue to address the increased inequalities of income and opportunities all across the board.
Finally, to promote future welfare and prosperity, we need to transition to a low-carbon economy. OECD research shows that climate-compatible policies can increase economic growth up to 2.8% on average across the G20 countries by 2050. But, while the net effects are likely to be positive, some communities will be negatively affected. We need to make sure that workers receive the support they need through a just transition.
The transition can also be done through the tax system. The OECD publications on Effective Carbon Rates and Taxing Energy Use provide useful data in this regard. It is not easy, as we have seen for France, so the policy packages to move in this direction are really important.
And of course we continue to support the G20 because all of this needs multilateral cooperation. Indeed, I am going to Tokyo next week for a series of discussions on Japan’s presidency. The recommendations and the views that you bring through the L20 are also important to ensure G20 commitments are fit for purpose.
In all these efforts, TUAC is a valued and trusted institutional partner of the OECD. You have been proactive partners in providing a constant reminder that decent jobs and wages need to be part of our compass for the recovery, and stressing that only through addressing inequalities we can rebuild trust.
I look forward to a stimulating and interactive discussion today.
Thank you
[1] DAF calculations
[2] DAF calculations
Panel Remarks: Cultural policies and beyond: Culture as a lever for Inclusive Growth
Remarks delivered in Venice at the OECD Conference on Unleashing the Transformative Power of Culture and Creativity for Local Development
Distinguished Guests, Ladies and Gentlemen
I’m pleased to be able to have this conversation, as I think culture and inequalities are linked, although the link is often overlooked. Indeed, in times of fiscal austerity as we have seen in Europe, cultural activities are often the first to suffer from government cuts.
Let me first introduce the panel. With us today we have:
- Gianluca VACCA, Under State Secretary at the Italian Ministry of Cultural Heritage and Activities
- Caroline NORBURY, CEO of Creative England, and Member of the Board of European Creative Industries Network
- Ambassador Umberto VATTANI, President of the International University of Venice
I am looking forward to hearing your views. But before we do, I would just like to briefly set the scene for the discussion.
Let me start with the big picture: rising inequalities and the persistent lack of inclusive growth is one of the most urgent global challenges we face today.
Top incomes continue to rise: the richest 10% now command around ten times the income of the poorest 10% on average across the OECD, up from seven times 25 years ago.[1] The picture in terms of wealth is worse: the top 1% now holds 19% of total wealth across the OECD.[2]
This skewed distribution with concentrations of power, wealth and influence at the top of the income distribution is fuelling a backlash against globalization and the return of populism and protectionism in many countries. Citizen’s trust in governments has plummeted: only 42% of people trust their governments across the OECD, whilst 54% of the general population trust financial service providers to “do the right thing”.[3]
The OECD has responded by advocating to place the person back at the centre of public policy, to move away from overvaluing GDP growth as a means in itself, and rather place greater value on people’s wellbeing.
Our Policy Framework for Inclusive Growth is designed to help countries create fairer, more inclusive and sustainable growth. The Framework has three key pillars: invest in people and places left behind; support business dynamism and inclusive labour markets; and rebuild trust with more efficient and responsive governments.
Art and culture, as the finest expressions of creativity, values and fundamental humanity, play a role in these elements.
Firstly, culture and art can be tools for bridging exclusive social divides and promote social cohesion. As ideological camps are becoming more entrenched, we are losing track of our values of empathy, tolerance, and understanding. Not only are these fundamental human values necessary for strong societies, but it’s these socio-emotional skills that are necessary to create any kind of economic, social, or political progress or consensus.
Communities around the world are therefore using cultural programmes to integrate disadvantaged populations more effectively into economic and social life. This is also important in the integration of migrants as questions of identity and belonging become increasingly complex.
For example, the UN Migration Agency and programmes like Creative Europe are endorsing creative solutions for both adults and children to bring individuals together around art and culture. Art, music, and sport can help us learn and appreciate different cultures, and provides common ground from which to build empathy, understanding, and tolerance.
Second, socio-emotional skills are essential in the context of the future of work and the dawn of digitalisation, where they are becoming increasingly desirable.
Over the past three years the proportion of job adverts requiring “critical thinking” has risen by 158 per cent, “creativity” by 65 per cent and “team work” by 19 per cent. Employers value workers that are well-rounded and can think creatively. Acquiring these skills will be essential for children’s learning. Formal education should cultivate the creativity and critical thinking skills of students to help them succeed in modern, globalised economies based on knowledge and innovation.
For the first time, this year the OECD’s PISA included “Global Competence” among its assessment frameworks. In 2021, PISA will test Creative Thinking for the first time.
Providing wider opportunities to cultural and artistic enrichment programmes can therefore be an effective way of building these socio-emotional skills in students and workers, preparing them for new forms of work.
For example, enhancing access to libraries and cultural centres, museums and cultural services, targeting cultural policies to disadvantaged populations or remote areas, is an example of investment in people and places left behind that can promote greater inclusion in the future of work. Governments should invest in these services, particularly in poorer regions, where people feel left behind.
A lack of cultural activities can contribute to the accumulation of inequalities from a young age. Parents in low socio-economic households might not have the time, nor the means to spend on cultural activities. We can see divides starting to emerge very early on, for example, if families aren’t providing sufficient learning stimuli to their children, it can lead to deficiencies in brain development, which is difficult to make up at a later stage. Research shows that children from low socio-economic status may hear up to 30 million words less than children in wealthier households.[4] So by the age of three, a child’s future learning outcomes could be significantly pre-determined.
What’s more, research has shown that cultural activities can have a positive effect on mental and physical well-being, helping to reduce stress and promote relaxation. Specifically, people often going to concerts, museums, art galleries, or the cinema, can have lower mortality rates compared to people who rarely engage in these activities, even when age, gender, social background, education and income have been controlled for.[5]
Third, there are also economic benefits to using culture as a tool to achieve more inclusive growth. Specifically, the cultural sector can act as a powerful lever for female empowerment and in the inclusion of minorities.[6]
In most European countries the female employment rate in culture exceeds their employment rate overall. In Latvia, for example, the cultural employment rate of women is almost 70% while the country’s overall female employment rate remains at 50%.[7]
Regions can significantly develop by putting the cultural and the creative sectors front and centre of their development strategies, reducing regional and place-based inequalities.[8] As well as providing employment, cultural activities also breathe life into cities, inspiring innovation and engagement in city life while also building social cohesion and strengthening a distinctive shared identity for citizens.[9]
Focusing on cultural preservation and investment can also help communities spur a culture of grassroots innovation, dynamic creation of start-ups and a vibrant social innovation sector, which are key to support business dynamism.
Ultimately, inclusive growth is about providing equal opportunity and access to the benefits of growth in order to promote greater peace and equality. The goal is to promote wellbeing and revitalise the aspects of our world that bring people joy. To allow more people to benefit from the freedom of expression that growth provides. Thus culture is not just a lever for inclusive growth. Rather, it is both a tool to achieve inclusive growth and the ultimate end goal.
[1] OECD (2018), The Policy Framework for Action on Inclusive Growth, OECD Publishing, Paris.
[2] OECD (2017), Bridging the Gap: Inclusive Growth 2017 Update Report, OECD Publishing, Paris.
[3] OECD (2017), Bridging the Gap: Inclusive Growth 2017 Update Report, OECD Publishing, Paris and Edelmann trust Barometer 2018 (reporting on survey results from between October and November 2017).
[4] Hart and Risley (1995) cited in Educational Opportunities for All, OECD 2017
[5] Impact of Culture on Individual Well-being, PierLuigi Sacco – Professor of Cultural Economics, IULM University (Milan); Enzo Grossi – Advisor Padiglione Italia EXPO 2015
[6] UNESCO, https://en.unesco.org/news/gender-inequality-persists-world-culture-underlines-new-report
[7] https://ec.europa.eu/eurostat/documents/3217494/7551543/KS-04-15-737-EN-N.pdf/648072f3-63c4-47d8-905a-6fdc742b8605
[8] UNESCO, Culture for Sustainable Urban Development
[9] http://unesdoc.unesco.org/images/0024/002459/245999e.pdf
Keynote Address at the Transnationalization of Anti-Corruption Law at Sciences Po
Remarks delivered at the Sciences Po Transnationalization of Anti-Corruption Law.
Distinguished guests, colleagues, it is a pleasure to be here. Let me first thank the Anti-Corruption Law Interest Group of the American Society of International Law, Sciences Po Law School and The Zicklin Center for Business Ethics Research of the Wharton School for their warm welcome and for giving me the opportunity to be part of this important event.
Global context of inequalities
We are all here because we agree that corruption continues to have a destructive effect on societies and economies around the world. But I am sure you will agree that it is a complex problem to fix, for two key reasons.
First, corruption is endemic: a recent study shows that 38% of senior decision makers in some of the world’s largest companies knew that bribery or corruption happened widely in business in their country. This number jumps to 52% – over half – in emerging countries!
OECD analysis also shows that corruption is a global problem, busting the myth that this is confined to developing countries.
Alarmingly, officials were bribed from 15 out of the 19 G20 member countries.[1]
And as we have seen, corruption can reach the highest levels of government, OECD data shows that 11% of the total amount in bribes went to Ministers and Heads of State.
Second, crimes have become increasingly complex, sophisticated and – as this conference attests – transnational.
They are complex to track and find the root of; in 75% of cases, intermediaries were involved, such as local sales and marketing agents, distributors and brokers.
Over a third of intermediaries were corporate vehicles, such as subsidiary companies, local consulting firms, companies located in offshore financial centres or tax havens, or companies established under the beneficial ownership of public officials receiving the bribes.
We know that corruption is more prevalent in some sectors than others, for example, the extractive sector (19% of cases); construction (15%); transportation and storage (15%); and information and communication sectors (10%).
Public procurement can also a hotbed for corruption; in over half of the cases looked at by the OECD, bribes were paid to obtain public procurement contracts. Indeed, scandals like Odebrecht have rocked the world and continues to make headlines.
I don’t have to tell you that corruption fuels poverty and inequality. But I wanted to emphasise the effect on governance.
Being wealthy can often buy you access to political influence and decision-making. Inequalities of income and wealth can translate into political inequalities.
This concentration of wealth, power and influence at the top can breed corrupt practices and self-interest.
All this has a devastating effect on public trust in governments and business.
On average, only 42% of citizens in OECD countries trust their governments. In some countries, trust has collapsed by more than 20 percentage points.
In Latin America, only 25% of citizens trust their government. And can you blame them?
Corruption is being reported as the number one concern by citizens. In 2017, only 15% of people felt the system was working for them, with 69% of those surveyed expressing concerns about ‘corruption’.[2]
This low trust environment feeds populism, nationalism, and protectionism. We are seeing these reactionary movements play out daily in election outcomes, decreased civic engagement, and social unrest.
It is clear that establishing a global level playing field is urgent.
Policy action
So how do we do that? The good news is that hard work does make a difference. The OECD has been a champion and world leader on this issue for decades; as a global integrity standards-setter, we have seen progress, growing awareness and interest in addressing the issue.
However, there is still work to do in key areas. Let me run through three of them:
Firstly, we need stronger and more widespread implementation of global anti-corruption standards. When it comes to foreign bribery, progress has been largely due to the OECD’s Anti-Bribery Convention, which has been in force for over 20 years. Foreign bribery is now illegal in 44 economies – including in non-OECD members such as Argentina, Brazil, and Colombia; bribes are no longer tax deductible; and all countries have either strengthened or created corporate liability laws from scratch.
However, there is a clear enforcement gap as only half of the 44 Parties to the Convention have ever imposed a sanction for foreign bribery.
This therefore means we need stronger, clearer, and more insistent commitments by global leaders to combat corruption. Since 2010, G20 countries have committed to lead by example in the fight against corruption. However, not all G20 countries are living up to this commitment, including by failing to join the OECD Anti-Bribery Convention.
We also need strong standards on public procurement. For example, installing electronic procurement systems, to avoid face-to-face meetings between procurement officials and government suppliers, or ensuring the non-disclosure of bidders’ identities and the terms of their bids to avoid collusion and illegal bid rigging.
Secondly, to fight transnational corruption and complex financial crimes, we need comprehensive international cooperation and strong international instruments.
The Anti-Bribery Convention facilitates this cooperation. For example when Brazil, Switzerland and the United States worked together to sanction Odebrecht in 2016, being members of the Convention enabled the conduct of coordinated parallel investigations, the necessary exchange of valuable information, and brought a swift and comprehensive resolution in the case.
Indeed, the OECD Convention is unique and effective, because it requires signatories to affirm their commitment to fighting transnational corruption, to pass laws to do so, and it also encourages cooperation and a collaborative approach.
To effectively combat corruption and financial crime, we also need to know where the money is. Addressing tax evasion and avoidance also requires strong international cooperation. The G20/OECD Base Erosion and Profit Shifting work has already had great impact, and has the potential to recover 240 billion dollars in lost revenues every year.
The OECD has also worked to make it harder for people to use trusts, companies and partnerships to hide their wealth by setting a global standard for tax transparency and exchange of information, involving almost 150 jurisdictions around the world. Our work on Automatic Exchange of Information has already brought in 93 billion euros in additional tax revenues.
However, law enforcement agencies in many countries are struggling to keep pace with the increasing complexity of financial crimes and transnational corruption.
As part of the Oslo Dialogue, the OECD’s Task Force on Tax and Other Financial Crimes highlighted the importance of efficient inter-agency and international cooperation in the investigation and prosecution of financial and economic crimes. For example, implementing joint investigation teams and multi-agency intelligence centres, to enable a whole-of-government approach.
Capacity building programmes are also essential, especially to help developing countries.
The OECD has recently expanded its International Academy for Tax and Financial Crime Investigations, with a new centre in Argentina, following successful centres in Italy and Kenya. We have also expanded the OECD/UNDP Tax Inspectors Without Borders initiative to include criminal investigations.
Our hard work is paying off:
OECD data published last year shows that countries appear to be cooperating more on foreign bribery cases. More than 40% of the resolutions in US foreign bribery cases involved co-operation with foreign law enforcement agencies, well up from 10 years ago.
Part of this is also about having the right information. A major problem with documenting corruption is that it relies a lot on self-reporting. We need more and better data on corruption and anti-corruption efforts. Numbers speak. The OECD will continue to work with Transparency International and others to build the evidence-base for policies to promote good governance and combating corruption.
Third, we need to ensure that the multilateral system adapts to a rapidly changing global context.
As our global economy becomes increasingly complex, interconnected, and digitalized, we need to ensure our international standards are modern and relevant.
At the OECD, we have both the OECD Guidelines for Multinational Enterprises and the G20/OECD Principles of Corporate Governance, which provide global benchmarks on transparency, accountability and business integrity.
As these OECD Guidelines are over 40 years old, we regularly update them to ensure they remain the leading international instrument for the promotion of responsible business conduct.
Not only must these be relevant, but they must be well implemented and accessible to everyone: since the year 2000, 82% of the cases of alleged non-observance of the Guidelines have been brought by trade unions and NGOs. 56% of the cases since 2011 were human rights cases.
We also need to provide clear channels for blowing the whistle and effective protections for both public and private sector whistleblowers. The whistleblowing landscape remains patchwork.
Not all OECD and G20 countries have legislated for these protections, indeed, 46% of countries do not have comprehensive protection, and there are significant discrepancies in standards and coverage of these laws, and practical uptake has been slow.
Vulnerable groups require special attention and protection, including women. Corruption systematically hampers women’s ability to improve their economic situation, to stand up to corruption, and to protect themselves from corruption-related abuse.
We are also about to undergo an important exercise to strengthen the Anti-Bribery Convention with a review of the 2009 OECD Anti-Bribery Recommendation. Engaging with all relevant stakeholders during this exercise – including all of you here today – will be essential to ensuring this standard continues to respond to the challenges of fighting modern transnational corruption.
Next steps
While the OECD is a front-runner in this field, we are not resting on our laurels.
We continue to work with our members, non-OECD countries – particularly Brazil, China, South Africa – organisations like the IMF, UN and the World Bank, and business and civil society, to make progress.
We also continue supporting the G20; I was at the summit last week and clearly there are differences between countries, but it is important to maintain dialogue and focus on collective action and interests.
The OECD’s work on corruption is one of these areas, and leaders committed to advance the Anti-Bribery Convention, and we are also going to work with India to look at illicit financial flows, and the repatriation of the assets.
Our annual OECD Global Forum on Anti-Corruption and Integrity in March will help us to strengthen multilateral cooperation, create new partnerships and expand our stakeholder engagement. I hope to see you many of you there.
We are also developing an Anti-Corruption and Integrity Hub to facilitate engagement with the global anti-corruption and integrity community.
The Hub, once launched, will serve as a reference and virtual platform for the global anti-corruption and integrity community.
As you can see, the OECD remains 100% committed to tackling corruption.
Please count on us to keep providing the evidence, data, analysis, experience, and expertise in efforts to fight corruption and promote integrity.
I wish you a rich and fruitful final day of discussions tomorrow.
Thank you
[1] OECD Foreign Bribery Report, 2014
[2] Source: 2017 Edelman Trust Barometer, http://www.edelman.com/trust2017/ cited in2017 OECD Recommendation on Public Integrity
Newsletter 12-15 November
Check out my newsletter for November 12-15 for a snapshot of my recent engagements.
Opening of Eurasia Week 2018: Drawing the lessons, shaping the future
Delivered in Paris at Eurasia Week 2018 on November 19, 2018.
We were pleased to have His Excellency Dr. Abdullah Abdullah, Chief Executive of the Islamic Republic of Afghanistan present.
Chief Executive, Deputy Prime Ministers, Ministers, Ambassadors, colleagues, ladies and gentlemen,
Welcome to the fifth OECD Eurasia Week. Today we bring together representatives of Eurasia countries, OECD members, the European Union, and all the major partners for our work in the region.
For more than 25 years, the OECD has worked with partners in Eurasia countries on issues as diverse as anti-corruption, environmental protection, private-sector development and social policy.
One of the cornerstones of that co-operation, The OECD Eurasia Competitiveness Programme, supports structural reforms to enhance competitiveness and facilitate transitions to inclusive market economies.
This programme also provides a gateway for Eurasia countries to align themselves with OECD legal instruments and benefit from some of the valuable facets of the OECD that drive policy improvement: peer reviews, policy recommendations and frameworks, knowledge sharing, and monitoring of reforms, and, in the case of Afghanistan and Azerbaijan, comprehensive country reviews. I am so pleased that we have His Excellency Dr Abdullah Abdullah, Chief Executive of the Islamic Republic of Afghanistan, with us today.
This year will mark the 10th anniversary of the Programme. And so, under the theme of “Drawing the lessons, shaping the future”, the next three days offer us an opportunity to look back on a decade of challenge and reform, to take stock of the main lessons learned and to reflect together on how these can shape the policy agenda for the years ahead.
Global Context
It has been an eventful decade, punctuated by crises and unexpected turning points, not only the global crisis a decade ago, the consequences of which are still being felt, but also – and of particular importance for Eurasia – the drop in commodity prices in 2012-14.
Overall, growth rates across the region have fallen well below the levels seen before 2008 and convergence with the advanced countries in terms of productivity and incomes has largely stalled. The region seems to be regaining momentum this year – growing at 3%, much better than the average 1.4% for OECD, but that is still less than half the rate recorded before the crisis. So more must be done to re-establish that convergence dynamic.[1]
Despite their specific histories and characteristics, Eurasia countries ultimately face the same great developmental challenge that confronts the rest of the world: re-establishing a strong, stable growth trajectory that can bring greater prosperity to all citizens, while tackling issues such as environmental degradation – notably climate change – and rising inequalities. Our overall agenda – not just this week but in all our co-operation with Eurasia – is to build more resilient, inclusive and sustainable economies in the decade ahead.
And in this regard, Eurasia countries have been making great strides over the past decade to reduce external vulnerabilities and create new opportunities for growth and diversification.
For example, Eurasia countries have continued to deepen their integration into the world economy.
We have seen improved economic co-operation and increased trade within the region and with its neighbours, especially the European Union,[2] as well as growing investment in the infrastructure needed to better connect Eurasia countries to one another and to the rest of the world.[3]
OECD-Eurasia Collaboration Focus for the Future
As the world will never be without turbulence, our goal in future work is to continue building more resilient economies in Eurasia to ensure prosperity for all.
At the OECD we are encouraged by the commitments your countries have shown in driving reforms to do this, which we will discuss over the coming days. The OECD is committed to supporting the region’s work, in particular in the following four areas, amongst others.
Firstly, we are committed to making SMEs a key driver of economic diversification in the region. Most jobs in Eurasian countries are still in very low‑productivity sectors, while the leading sectors – especially resource extraction – are capital‑intensive and create little employment. Increasing productivity and building resilience will require the emergence of new sectors and activities, reducing reliance on primary product exports and migrant remittances. Countries should therefore prioritise strengthening regulatory and institutional environments and improving conditions for entrepreneurship and private sector-led growth. OECD research has found that SMEs in this region remain more credit-constrained than other EU countries.[4] This restricted access to finance is not only an obstacle to entry and doing business in itself, but can also hinder firm performance by creating barriers to innovation and internationalisation.
This is where the OECD can help, and our work with all of you has tackled this through programmes to strengthen entrepreneurship, increase access to finance for SMEs, improving skills, and improving supply chain financing. Fostering dynamic SMEs can lead to more resilient, diversified economies, greater productivity, and greater job opportunities.
Secondly, and this is an issue I am personally very engaged in, we are committed to supporting you unlock the potential of women in the region, who are currently underrepresented in the labour force. Female labour force participation across the region was almost 9 percentage points below the OECD average in 2017. Perhaps because of this, gender wage gaps across the region are also larger than across most of the OECD: in the best–performing Eurasia countries, the gender pay gap exceeds 25% of men’s average wages. The region-wide average stands at 30%, as against just over 14% for the OECD.
Not only is this unjust; it is also a waste of talent and resources, and is a wasted opportunity to boost the economy. To encourage more women into work, it is important to have public policies such as maternity and paternity leave, affordable and accessible childcare facilities, education, as well as employers offering flexible working policies to enable women and men to balance their work with their caring responsibilities. Incentives to encourage female entrepreneurship and facilitating access to digital technologies is also crucial – we’re witnessing an 11% global gap in men and women’s use of the internet; indeed our recent report Bridging the Digital Gender Divide found that women worldwide are being left behind in the digital world. It’s also crucial to enshrine women’s rights into law, and have these rights effectively implemented to protect women and allow them to succeed. Alongside these measures, it is important to ensure equal rights for men and women, and make efforts to change mind-sets and traditional attitudes.
It is these attitudes that are the hardest to turn around – but education, public campaigns, legal frameworks can all help. It is also important to protect women from violence, which is all too prevalent. Here too, there is the question of traditional attitudes and social acceptance from many men and women. Across the world, 28% of women think violence against them is justifiable in certain contexts. In Afghanistan, it is as high as 80%. So it is important to educate men and women and provide women with opportunities to be economically independent and also to build their self-confidence and sense of self-worth.
Progress towards gender equality can make our societies fairer and more inclusive, while also unlocking the talents and productive potential of half the population. We cannot overlook this as we seek to lay the basis for broad-based prosperity.
Fortunately, several Eurasian countries have adopted national gender strategies, including Kazakhstan and Georgia, and they have begun to overhaul legislation restricting women’s economic opportunities. Ukraine recently abolished rules restricting women from pursuing 450 professions. All Eurasia countries are Parties to the Convention on the Elimination of All Forms of Discrimination Against Women.
Thirdly, Eurasia’s increased integration into global value chains is of great importance. OECD estimates of the connectivity gap facing Central Asian countries, in particular, suggests that these countries’ access to the centres of global demand is currently about half that of Germany or the United States.[1] The OECD aims to support Eurasia countries in leveraging better transport policies and infrastructure to facilitate greater integration. In addition to this focus on improving “hard” infrastructure, subsequent work should focus on promoting ethical and efficient trade facilitation and infrastructure governance, to ensure that countries really do reap the potential economic benefits of enhanced connectivity.
Lastly, governance remains a central issue, not only for infrastructure, but in all our work in Eurasia. Our Anti-Corruption Network works with countries across the region on prevention, detection and enforcement of corruption. This is something we are very proud of – the OECD’s Anti-Bribery Convention is now over 20 years old, and has done much to help countries implement laws and best practices to tackle corruption. Moreover, anti-corruption is mainstreamed into our work on economic reforms, much of which seeks to reduce corruption potential while improving state effectiveness, by streamlining regulations and promoting digital solutions.
At the OECD, we are proud to be working with all of you and I am thrilled that you are all here taking the opportunity to reflect together, learn from one another, and discuss how best to shape our future co-operation. Let’s continue to work together on creating more inclusive, just, and equitable economies for all.
Thank you.
[1] The region’s aggregate GDP has grown by just under 3% a year in the last 10 years. This is faster than OECD economies (1.4%), the EU (0.9%) or Russia (1.1%), but still less than half the rate recorded over the decade to 2008.
[2] Within Central Asia, there has been a rapid increase in trade co-operation since late 2016. As regards the EU, Georgia, Moldova and Ukraine now have Deep and Comprehensive Free Trade Agreements with the EU, while Kazakhstan has concluded an Enhanced Partnership and Co-operation Agreement with the Union, and both Kyrgyzstan and Armenia are negotiating new agreements of their own. The Union has also undertaken to negotiate such an agreement with Uzbekistan.
[3] Estimated total cost of the BRI more than $1tn, estimated Chinese investment as of 2017 more than $210bn (Morgan Stanley, www.morganstanley.com/ideas/china-belt-and-road and The Guardian, www.theguardian.com/cities/ng-interactive/2018/jul/30/what-china-belt-road-initiative-silk-road-explainer )
[4] https://www.oecd.org/eurasia/competitiveness-programme/eastern-partners/Enterprise-Performance-and-SME-Policies-in-Eastern-Partner-Countries-and-Peer-Regions.pdf
[1] From forthcoming ITF report as part of the OECD-ITF project “Enhancing Connectivity in Central Asia”. The ITF’s connectivity indicator is based on time and cost required to acces markets accounting for shares of global GDP.
Newsletter October 23-31
Check out my latest newsletter for a snapshot of my recent engagements.
Opening Remarks at the 30th Annual Meeting of DevCom
Remarks delivered in Paris on November 21, 2018.
Ladies and gentlemen,
I am delighted to welcome you to the 2018 Annual Meeting of the OECD Development Communication Network – DevCom. It’s great to see such an experienced group of campaigners and communicators here today.
This meeting marks the 30th anniversary of the first DevCom meeting held in Ottawa, Canada, in 1988. This “birthday” is a much-needed testament to the value of multilateralism, of mutual learning– all of which form the backbone of the OECD.
And this reminder comes at a critical time as multilateralism is under intense pressure. We’re feeling it at the OECD as other IOs and multilateral fora are struggling to make concrete progress as we might once have done.
We’re seeing countries opting for isolationist rhetoric and intolerance, rather than international co-operation.
With rising global inequalities, we’re also seeing citizens losing trust in institutions because they do not believe status quo forms of governance can deliver for them.
Our world is becoming multi-polar and multi-actor, but many of the new players do not feel included in global processes.
All of this has provoked deep reflections at the OECD:
We have been advocating the need to rethink the growth model and move away from grow-first-distribute-later attitudes: growth must be more inclusive and focused on wellbeing, not just income. We must ensure that the benefits of globalisation are more widely shared.
Our Inclusive Growth Initiatives and New Approaches to Economic Challenges offer alternative models and solutions.
But it would be a mistake to only rethink what we communicate—we must also adapt how we communicate in a more modern world characterized by digitalization.
Digital communication provides us with around-the-clock access to unprecedented amounts of information. One quick search or click and we are inundated with stories, opinions, thoughts about any topic of interest. When researching a subject for a school report, children anecdotally report anxiety as they do not know where to finish their research, they can just keep clicking on more links that provide a never-ending stream of information.
However, digital communication also plays a role in facilitating the isolationist and distrustful sentiments I just mentioned. Today, there is little oversight of what is read and communicated digitally, often leading to misinformation and confirmation of specific biases. At best, fact-checking is often skipped in the interests of time, or at worst, is purposefully left out to manipulate messages or spread untruths.
Social networks produce echo-chambers where individuals can surround themselves with like-minded others, filtering out information or facts that may prove contradictory to their world views or come from the particular “experts” they feel have left them behind. It is not that people do not what to listen to what it is “true’”, it is often that the lines between fact and fiction become blurred.
These echo-chambers provide comfort for those who feel left out, face inequality of income and opportunities, and generally do not trust institutions that are meant to be providing for them. If we are honest, we are all members of certain echo-chambers.
But they also create fertile ground for populism and extreme messages, as these messages can often be packaged in overly-simplistic, bite-size pieces easy to understand and share.
This can create barriers to international cooperation, social cohesion, and political stability.
Let’s take one of the most heated policy debates as an example: migration. Earlier this year, I launched a network of organisations seeking to communicate better about migration. According to a 2017 Ipsos poll, only 21% of citizens think immigration has a positive effect on their country.
38% believe their country should close its borders to refugees entirely. [1]All this despite OECD data and analysis showing that when effectively managed, migration can have a very positive effect on societies and economies.
Another example where we see the power of misinformation and manipulation of non-facts is Brexit. As a Mexican I can clearly see the benefits of the European Union, but it was clear that the communication in the run up to the UK Referendum was complex for people to understand, and only overly-simplistic arguments were able to cut through.
In both cases clearer communication about the benefits of migration and the European Union could have been used to speak to people, succinctly and with respect for their perspectives.
In a broader sense, we need to build narratives that people can buy into, and find better ways to reach and engage with citizens.
We need to convince citizens of the value added of global efforts, and to reassure them that we are working in their best interests. Today we will be discussing two areas in which improved communication can play a pivotal role in creating impact:
First, this morning, you will explore how communications can empower women and help close gender gaps. Better communication is part of the essential measures to change attitudes and influence behaviours.
It is true that more countries are making political commitments to eliminate gender inequality, for example, passing laws to abolish discrimination and protect women from gender-based violence.
However, our latest analysis – which is still under embargo, so please don’t tweet out just yet – in our new Social Institutions and Gender Index (SIGI) found that new laws do not always translate into real changes for women and girls.
For example, SIGI tells us that, since 2014, 15 countries have strengthened their laws on early child marriage yet the statistic of 1 in 6 girls aged 15-19 having been married or in an informal union has remained the same.
Young women often leave school with better qualifications than young men, but are less likely to join the work force, find a job and earn the same salaries.
We also have documented a global digital gender divide. Women worldwide are 26% less likely than men to have a smartphone and access mobile internet.
This mismatch between legal progress and actual impact for women can largely be attributed to persistent cultural views and attitudes. Luckily, we do see evidence that perceptions and gender norms can be changed.
For example, SIGI tells us that attitudes about domestic violence are changing among women. Can you believe that, in 2018, 27% of women globally declared that it was justified for a man to beat his wife? Although a shocking figure, but it is actually down from 37% in 2014.
But, if we really want change, we have to work harder to change the cultural attitudes that drive the gender disparities. We have to look at the way women are portrayed in the mass media, the perpetual images of traditional roles and stereotypes in adverts, soap-operas, music videos, etc.
We need public campaigns and better measures to promote positive images of women to change attitudes in both men and women.
We also need to be aware that negative images about women and femininity are not just internalized through interactions with media. But rather these views are reinforced in families, at work, and at school. Thus understanding and combatting these biases, by checking in with our own thoughts, is crucial in order to increase the appeal of positive attitudes towards women.
Then this afternoon, you will discuss how to engage businesses as SDG advocates.
The business case for all of the global goals is strong.
The OECD Emerging Markets Network (EMNet) finds that engaging with the SDGs can help businesses access new markets, increase technological innovation and attract talent.
Indeed, businesses with high environmental, social and governance standards tend to outperform the market in the long term.[2]
We also know that today’s consumers have high expectations from businesses.
We know that 66% of consumers – and 73% of millennials – are willing to pay a premium for sustainable products. And consumers in emerging markets are more willing to pay a premium than in developed economies.[3]
Almost two-thirds (64%) of citizens think that CEOs should take the lead on change, rather than waiting for governments to impose it.[4]
We should leverage market instruments to incentivize businesses to act for the common good.
Businesses should respond to consumer demands and recognise the importance of more sustainable practices. Indeed, many are, last week at the Paris Peace Forum, I launched a new platform with Danone called Business4Inclusive Growth, where the OECD will partner with business to achieve more sustainable outcomes.
And I am encouraged when I hear that in a survey of CEOs in 83 countries, 25% said their company had changed its sense of purpose to take into account its broader impact on society. 60% said that top talent wants to work with organisations that share their social values.[5] So things are changing, but we need to harness this, better communicate it and embed it into public policies to effect real change.
This afternoon, you will be joined by business representatives who are working to put the SDGs at the core of their companies’ strategies. It will be important to discuss with them how they are communicating about the SDGs with the outside world, and how are companies reporting on their SDG performance. Specifically, what are they doing to help customers become more aware of sustainability?
We should not underestimate the complexity of the SDG’s. The robustness and complexity of the SDGs are great strengths of the framework, however they make it difficult to create effective messaging about them. We need to advance them separately in our communications to streamline processes and drive more efficient change through business.
To conclude, as multilateral cooperation is being highly contested today, it is important to reflect on what brings us together.
Isolationist and protectionist sentiment is in fact a consequence of dissatisfaction with the state of the world, a feeling that society does not benefit everyone equally.
So, as communicators, we need to create narratives that people are inspired by, that they can believe in, to empower people to contribute to a better world, rather than giving up.
DevCom is your community to find better ways to do just that. Here at the OECD, we stand ready to support you in any way we can. I wish you very productive discussions and a happy birthday to this important network!
Thank you
[1] Ipsos. “Global Views on Immigration and the Refugee Crisis.” September 2017.
[2] McKinsey & Company. “Profits with purpose: How organizing for sustainability can benefit the bottom line.” July 2014.
[3] Nielsen survey conducted in 2015
[4] According to the 2018 Edelman Trust Barometer
[5] PricewaterhouseCoopers study, 2016
