2019 OECD Global Anti-Corruption & Integrity Forum Opening Remarks

Opening remarks delivered at the OECD Global Anti-Corruption and Integrity Forum on 20 March 2019 at the OECD Headquarters in Paris, France.

Ladies and Gentlemen, Ministers:

It is great to see so many of you here from governments, business, civil society organisations and academia to open the 7th OECD Global Anti-Corruption & Integrity Forum. This is the biggest Global Anti-Corruption & Integrity Forum yet.

Let me also thank the UK government for supporting this global dialogue as well as our Forum partners: BIAC, Transparency International, the Open Government Partnership, U4, IDEA, and the Centre for International Private Enterprise.

We know that corruption is a complex problem to fix.

Firstly, it 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!

Alarmingly, our analysis of transnational bribery cases concluded under the OECD Anti-Bribery Convention shows that 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, and this is what will be the focus of much of your discussions here, crimes have become increasingly complex, sophisticated and transnational.

Corruption crimes are complex to track: 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 bribes.

Corruption also fuels poverty and inequality. We have seen a rise of multidimensional inequalities, in income, opportunities, wealth, which accumulate into inequalities in education, health and even life expectancy.

These inequalities hamper social mobility, undermine economic performance and worsen social divisions. Indeed, we’re seeing the effects that skewed distribution is having on the governance of countries.

In some countries, being wealthy can buy you access to political influence and decision-making. Inequalities of income and wealth can translate into political inequalities.

A concentration of wealth, power and influence at the top becomes a vicious cycle; indeed, people are seeing that the super-rich and well-connected may have undue access to power and influence and are able to get their way because they have the means to do so.

This is all having a devastating effect on public trust in governments and business, which is being eroded and people are lashing out against globalisation and the established political and economic order. The recent Edelman Trust Barometer shows that overall, less than half of the general population trust their government.

Indeed the breakdown in trust between citizens and institutions, and even citizens and democracy can be traced back to unequal outcomes, lack of opportunities, and latent corruption.

Anticorruption strategies therefore have to be core to public policy-making, not only to improve economic outcomes, but also to improve societal and political ones.

Think about recent controversies around financing of political campaigns; it’s clear that integrity and transparency are needed in the system. The lack of transparency can undermine democratic outcomes, and cause people to lose faith. This is why corruption is also linked with inequalities, and with a growth model that is not sustainable.

So we need solutions. This is why we’re all here at the OECD, which has been a driving force in international anti-corruption efforts.

Influence of technology on the integrity and anti-corruption agenda

We chose this year’s theme – “Tech for Trust” – carefully. Digital has been the focus of much of our work recently because it is, quite simply, the future.

The OECD is both embracing and driving this transformation. Last week, the OECD Going Digital Summit delivered a new vision for tackling the challenges and opportunities that digitalisation is offering.

We know there are opportunities and uncertainties around the digital revolution, particularly what it could mean for future jobs and inequalities.

Nowhere is this dichotomy between opportunities and challenges more obvious than in the application of new technologies to fight corruption and promote integrity.

The promises of new technologies for integrity and anti-corruption, such as blockchain, algorithms and AI, big data analytics, and civic technologies, are vast. They are helping us solve challenges.

For example, blockchain is being used to mitigate high-risk transactions in areas that are particularly exposed to corruption risks, such as property registration, land titling and public contracting. Likewise, Artificial Intelligence offer new avenues to prevent corruption.

By analysing previously undiscovered relationships between economic factors, such as rising real estate prices and corruption cases, researchers are making it possible for policy-makers to better allocate preventive measures to corruption risk areas.

Big data analytics are helping experts improve delivery of vital services, such as health and unemployment benefits, whilst protecting public funds from corruption, fraud, waste and abuse.

Technology can also help increase information flow between citizens and governments. For instance, online platforms are giving more citizens a voice in the allocation of resources, as well as enhance citizen knowledge and engagement for public integrity, and help to regain trust in public institutions.

Yet with these promises come risks: when we think about the anonymity of digital platforms, and the speed at which transactions can take place, we see that blockchain and other technology could become potential platforms for illicit trade, money laundering and tax evasion. And these crimes are increasingly cross-border, complex and multi-dimensional.

Similarly, the concentration of the development and deployment of such technologies in the hands of a small number of companies raises fundamental questions about whose values are informing some of the most important social, political and economic questions of our time.

Indeed, we know that concertation in the platform economy is high: of the top 15 internet market capitalization leaders in 2017, nine were US companies. The rest were Chinese.

Technology is a means, Planet Integrity is the goal

Today and tomorrow, when we discuss the problems and solutions, let’s keep in mind that technology is a means to an end. And the end goal is clear: Planet Integrity.

We need fair competition, fair revenue collection, where the public interest prevails in policy making, where women and men, girls and boys have equal opportunities. We need values of integrity, fairness and inclusion to drive the actions of governments, businesses and citizens. In short: we need the benefits of globalisation to contribute for everyone.

So how do we get there? First, technology can help us, in particular by strengthening our evidence-base for policies that promote good governance and combat corruption.

We are actively working with our members and stakeholders like you to use technology to design corruption out of the system.  Look at public procurement, for example. By installing electronic procurement systems, we can avoid face-to-face meetings between procurement officials and government suppliers.

These kinds of solutions can mitigate corruption risk in one sector that directly impacts citizens’ lives.

New tech also needs to be integrated into a coherent system, which includes accountability and enforcement measures.

Second, we need stronger and more widespread implementation of global anti-corruption and integrity standards to prevent and prosecute corruption.

At the OECD we have our Anti-Bribery Convention, which is celebrating its 20th Anniversary. This has been fundamental to help countries cooperate on large scale cases, such as the Odebrecht case.

But having the instruments isn’t enough, we also need to ensure that there are sufficient skills and resources to allow effective implementation, which is uneven, and sometimes prevents the best outcomes.

We also need governance frameworks that are accountable and transparent, that identify and address conflicts of interest. The OECD has developed standards and tools to help governments tackle all of these dimensions.

We also have tools to help businesses, such as the OECD Guidelines for Multinational Enterprises and the G20/OECD Principles of Corporate Governance, which provide global benchmarks on transparency, accountability and business integrity.

We update these regularly to move with the times, including the digitization of business.

Third, to fight transnational corruption and complex financial crimes, we need comprehensive international cooperation and strong international instruments.

We also need to use tools offered by technology to follow the money flows and see who they belong to. The OECD is at the heart of global efforts to promote the transparency of beneficial ownership and to strengthen international cooperation against tax evasion and avoidance.

Fourth, we need more and better data on corruption. Numbers speak. But a major problem with documenting corruption is that it relies a lot on self-reporting.

The OECD will continue to work with  Transparency International – and I am pleased to see Delia Ferreira Rubio here – and others to build the evidence-base for policies to promote good governance and combating corruption.

Finally, we need a clear and explicit commitment by global leaders to promote integrity and combat corruption. The OECD has been a driving force in the G20, as well as the 2016 London Anti-Corruption Summit.

Technology will be an important part of all these efforts to create a culture of integrity, as well as dealing with cutting-edge, 21st Century issues such as golden visas and data analytics. This Forum will help explore these challenges with coordinated, multilateral solutions.

Fundamentally, the digital agenda is a vital tool to improve collaboration between government and business, citizens and government, and business and citizens.

But let me leave you with this: we must ensure that we use technology for the greater good, to benefit the lives of all.

We saw the atrocities in New Zealand and the way social media and technology was used. We also see it with young, impressionable people that are drawn into terrorist or extreme ideologies over the internet, which highlights how important it is to ensure that technologies are used for good. At the OECD, we’re proud to have  just approved a set of Principles on Artificial Intelligence, which also covers the issues of transparency, accountability, and ethics.

We need to work with governments and business to ensure the right incentive structures are in place to develop technology with human ethics at the centre. This will be key in regaining the public trust in our institutions.

Count on the OECD to be looking into these issues, and to remain at the forefront of global efforts in the fight against corruption.

Thank you

[1] OECD Foreign Bribery Report, 2014

2019 Global Solutions Summit: Fourth New Paradigm Workshop on the Future of Multilateralism

Remarks delivered at the European Climate Foundation in their “Fourth New Paradigm Workshop on the Future of Multilaterlism” on 19 March 2019 in Berlin, Germany.

Ladies and Gentlemen,

I am delighted to join the European Climate Foundation for this New Paradigm Workshop on the Future of Multilateralism.

What better city than Berlin is there to discuss the future of multilateralism – a city which emerged from Fascism and then Communism to become a global beacon of openness, solidarity, diversity, tolerance and artistic freedom; a city which understands why we need to build bridges and not walls.

However, the post-war multilateral world order that ensured peace and prosperity in Europe, is now facing critical challenges.

The global expansion is losing steam. The OECD’s recent Interim Economic Outlook revealed that economic prospects are weaker in nearly all G20 countries than previously anticipated.

The growth forecast for Germany in 2019 was revised down from 1.6% to just 0.7%. Trade tensions are driving a slowdown in global trade growth to around 4% in 2018 from 5¼ per cent in 2017. China is also slowing, with consequences for our interconnected global economy.

At the same time, there is a resurgence of nationalism and populism, which is making global governance even harder. We are seeing not just a backlash against globalisation and a revival of protectionism, but also an increase in anti-semitism, in racism, in islamophobia, in anti-migration sentiment, and in extremist politics.

These trends send a clear signal that our long-established ideas, our policies, our ways of doing things are failing. We didn’t do enough to address inequalities and global interconnections, and the world is manifesting this failure.

The income gap between the top and the bottom deciles keeps growing: in the OECD it is now almost 10 times, up from 7 times in the 1980s.[i] And social mobility  is stalling. The OECD’s recent ‘Broken Social Elevator’ report found that in an average OECD country it would take around four to five generations for children from the bottom earnings decile to attain the level of mean earnings.[ii] That’s 155 years!

The digital revolution is also generating anxieties for the future of work The OECD estimates that around 14% of jobs in OECD countries are at high risk of automation, and a further 32% of jobs could face substantial disruption, with the low-skilled most at risk.[iii]

People are rightly angry. Trust has plummeted. Only 4 in 10 people in the OECD trust their government, and they are increasingly turning to populist parties. But populism will not provide any answers, only conflict, and blame.

What we need is to ‘recouple economic and social progress’, to quote Dennis Snower. We need to change the growth narrative, putting people at the centre.

The OECD has been reflecting on this since the creation of our New Approaches to Economic Challenges Initiative (NAEC) in 2012. This is an organisational-wide effort to challenge our models and assumptions and upgrade our analytical frameworks to develop a strategic policy agenda for sustainable and inclusive growth. We need to get away from growth first and distribute later, or clean later, and include equity considerations ex-ante, not ex-post.

We are working across many fronts to deliver. Let me share a few examples.

At our Ministerial Council Meeting (MCM) in 2018 on “Reshaping the Foundations of Multilateralism for more Responsible, Effective and Inclusive outcomes” we presented the OECD’s Framework for Policy Action on Inclusive Growth, which provides 24 indicators to help empower the people, places and firms that have been left behind.

Workers need more effective social safety nets, affordable quality healthcare and housing and better education and skills, from early childhood education to in-work training, especially to manage the digital transition. We also need to bridge the digital gender divide because women make up only a quarter of engineering and ICT graduates.[iv]

The OECD is leading the way with new approaches and multilateral tools. We have the OECD PISA Global Competence Framework, the updated OECD Jobs and Skills Strategies as well as the Going Digital Project. Its findings were just presented at the Going Digital Summit and will feed into our 2019 MCM on the challenges and opportunities of digitalisation.

To prosper, the digital economy, like all areas of the economy, requires a global level playing field. People-centred growth can only spring from well-governed markets, which have healthy competition, integrity and responsible business conduct at their heart.

This is why the OECD has tackled tax evasion and avoidance with our OECD/G20 Base Erosion and Profit Shifting project (BEPS) and common reporting standard for the automatic exchange of tax information. That is why we are looking at concentrations of power and wealth at the top and we why we have put eradicating corruption at the heart of our agenda. We have brought instruments like the OECD Anti-Bribery Convention as well as integrity tools such as the Due Diligence Guidance for Responsible Business Conduct.

We are always pushing further to chart common solutions on multilateralism’s most pressing and difficult challenges, like with the G20 through the Global Forum on Steel Excess Capacity, and now, taxing the digital economy and looking at market concentration, data security and privacy and the ethics of AI.

And, last but not least, I could not come here without talking about climate change. Despite international agreements, carbon emissions are rising again. We are even seeing a step back on the progress made in the last decade to demonstrate that climate change is a human made disaster. To accelerate action, we have to make the economic case for low emissions pathways. That is what we are doing with the Investing in Climate, Investing in Growth report, prepared for the German G20 Presidency, and the Financing Climate Futures: Rethinking Infrastructure, which we presented yesterday at the Global Solutions Summit.

In all these areas, the OECD and fora like the G20 have a role to play in pushing countries to move, but we also have to move with them. We have to think about the kind of institution we want to be – open, welcoming, relevant.

This is why we have a global relations strategy to engage emerging economies through our Country and Regional Porgrammes, our Key Partnerships and our Accession programme. We welcomed Colombia and Lithuania, and we are making progress with Costa Rica and discussing the Membership requests of six countries.

Ladies and Gentlemen,

John Ikenberry, the Professor of Politics and International Affairs at Princeton has said “The future of multilateralism will hinge on the ability of states – rising and falling, advanced and developing, Northern and Southern – to redistribute authority, negotiate new bargains, and generate collective leadership”. I look forward to discussing with you how to rethink and relaunch multilateralism.

[i] A Broken Social Elevator? How to promote Social Mobility, OECD, 2018, p3

[ii] A Broken Social Elevator? How to promote Social Mobility, OECD, 2018, p14

[iii] https://www.oecd.org/employment/Automation-policy-brief-2018.pdf

[iv] http://www.oecd.org/internet/bridging-the-digital-gender-divide.pdf

2019 Global Solutions Summit: Session: Regional Contributions in Defense of Multilateralism

Remarks and panel comments delivered at the Bertelsmann Stiftung Session of the 2019 Global Solutions Summit entitled “Regional Contributions in Defence of Multilateralism” on 18 March 2019 in Berlin, Germany.

Opening Remarks: HOW BAD IS MULTILATERALISM REALLY DOING?

I’d like to begin by thanking Bertelsmann Stiftung and Christian, an old friend of the OECD, for the invitation. I feel our focus today should not just be about the state of multilateralism, but also on how to improve it. This was the focus of last year’s OECD Ministerial Council Meeting.

We are witnessing a paradox: multilateralism has never been more important to tackle the challenges brought about by rapid global integration, and, at the same time, multilateralism has never been more under attack.

As a multilateral organisation, the OECD has seen this paradox play out in many different contexts, from our own work to the G20, APEC and the G7.

It is clear that some no longer favour multilateral approaches, citing what they perceive as global imbalances or situations where the playing field is not levelled.

It is true that multilateralism needs improving, especially to better distribute the benefits of global integration and further level the playing field. However, the current retreat from multilateral approaches could weaken the capacity of multilateral fora to function properly and erode their ambition. This comes at a critical moment, as inherently cross-border challenges intensify: climate change, biodiversity loss, migration, data flows, cybercrime.

While I am concerned, I do retain some optimism. So far we haven’t seen a country disengage from multilateral institutions or fora altogether.

We have also seen several instances of regional co-operation come forward (the USMCA, the EU-Japan Economic Partnership Agreement, the APEC Process). There has been disengagement on specific issues, as well as weaker outcomes and processes, but even the hardliners acknowledge that there is value in keeping the multilateral conversations and the regional approaches going.

We have some powerful examples, some very recent: the Bali agreement on trade facilitation; the international tax agenda on BEPS and automatic exchange of information; the OECD/G20 Global Forum on Steel Excess Capacity, where, despite a very complicated context, countries are in dialogue to seek common solutions to overcapacity. Beyond the G20 we saw it with the SDGs and the Climate Agreement. So I think there is progress to build on.

 

Panel Discussion: REACTIONS TO CLIMATE CHANGE

  • I am very worried. Unfortunately we are seeing slippage in progress on convincing people that climate change is a man-made disaster.
  • Climate change is one of the most clear examples of why multilateralism and international cooperation are crucial.
  • Emissions are rising again for the first time in years. The World Meteorological Organisation recently announced that the last four years were the warmest on record.
  • Without bold and urgent climate action, global warming will reach 1.5 degrees above pre-industrial levels as early as 2030.
  • Our economy has become too resource intensive, and this is having disastrous consequences on the environment.
  • In 2015 around 80 billion tonnes of minerals, fossil fuels, and biomass were fed into the global economy and the OECD’s new Material Resources Outlook projects that resource use will more than double by 2060 if no policy action is taken.
  • Consequences of climate change are huge
    • We estimate that climate change impacts could be as much as 1%-3.3% of global GDP by 2060.
    • Air pollution also kills 5 million people a year and costs USD 5.3 trillion, globally.
  • Let me take the example of a key issue from the G20´s agenda: marine plastics.
    • Annual global plastics production reached 407 million tonnes in 2015 and production will increase four-fold by 2050.
    • G20 countries account for more than 70% of global plastics production and global waste generation
    • Yet today only 14–18% of plastics are recycled That’s why last year the OECD produced the Improving Markets for Recycled Plastics report.
  • The G20 has issued the G20 Marine Litter Action Plan, under the German presidency.
  • We now need to look at concrete measures that G20 countries could jointly promote. For example
    • Strengthening environmental standards relating to plastics sorting and recycling
    • Supporting the emergence of innovative plastic designs and sorting and recycling technologies.

Panel Discussion: FREE TRADE AGREEMENTS VS PROTECTIONISM

  • The G20 Trade Ministers Meeting that took place last year under the Presidency of Argentina recognised that international trade and investment continued to be important engines of growth, productivity, innovation, job creation and development.
  • However, the usual pledge for the standstill and rollback of protectionist measures was not reiterated last year, another sign that current trade tensions are having on the G20 and multilateralism more widely.
  • These tensions are starting to take a toll on growth. According to our latest economic outlook the global expansion continues to lose momentum.
    • Growth has been revised downwards in almost all G20 economies, with particularly large revisions in the euro area in both 2019 and 2020.
    • Trade growth has slowed markedly, to around 4% in 2018 from 5¼ per cent in 2017. In Europe, trade growth has stalled. The trade restrictions introduced last year are a drag on growth, investment and living standards, particularly for low-income households.
  • A few concrete examples of the effects of trade tensions:
    • Global container traffic – which constitutes about 80% of global trade in goods by volume – has decreased by half a percent in the second quarter of 2018; in contrast to a 6% increase in 2017.
    • In the United States, prices for washing machines and steel mill products have risen by about 20% since higher tariffs came into force this year.
    • At the same time, US pork and vehicle exports have declined in the face of higher tariffs in China.
  • It is clear that there are avenues to improve the current multilateral trading system, but this requires commitment to multilateralism
  • While much of the attention is on tariffs, many of the real gains come from addressing less visible issues – including trade facilitation, non-tariff measures, subsidies, and services restrictions.
  • Digital trade is another important aspect of the debate:
    • Today, trade and production are heavily dependent on moving, storing and using data, increasingly across borders.
    • The OECD is helping trade policymakers better understand the emerging landscape by mapping the different approaches taken to cross-border data flow regulation.
    • We need “better data on data”. This can build on the Digital Economy Measurement Toolkit developed under the G20´s Digital Economy Taskforce last year.
    • Further international dialogue, including at the G20, will also be crucial to ensure the interoperability of different regulatory regimes.

 

Panel Discussion: RESHAPING THE FOUNDATIONS OF MULTILATERALISM

  • Globalisation and multilateralism are not ends in themselves; they are only worth promoting if they improve people’s lives.
  • We have to strengthen our efforts to put people at the centre of growth.
    • The OECD’s new Framework for Policy Action on Inclusive Growth provides 24 indicators to help empower the people and places that have been left behind.
    • This requires more effective social safety nets, affordable quality healthcare and housing and better education and skills
    • Skills need to be fostered at all stages of life, from early childhood education and in-work training to supporting older workers or displaced workers to manage the digital transition.
  • The OECD estimates that around 14% of jobs in OECD countries are at high risk of automation, and a further 32% of jobs could face substantial disruption, with the low-skilled most at risk.
  • We need new approaches to skills for the future of work: PISA and the Global Competence Framework; the updated OECD Jobs and Skills Strategies; the Going Digital Project, which is helping to equip citizens for today and tomorrow.
  • It’s not just about empowerment, inclusive growth must spring from an open and level playing field and well-governed markets which put healthy competition, integrity, and responsible business conduct at their heart.
    • The OECD/G20 Base Erosion and Profit Shifting package, the G20/OECD Principles of Corporate Governance, the OECD Anti-Bribery Convention and the OECD Guidelines for Multinational Enterprises are examples.
  • We need to be particularly vigilant in emerging and often uncharted sectors like digital technologies, as we saw at our Going Digital Summit.
    • For example, we need to look in depth at the challenges of taxing the digital economy.
  • We also need address market-distorting practices both by the public and private sectors and tackle the “dark side” of global flows, from bribery and corruption, to cyber insecurity, counterfeiting and piracy.
    • We have the Anti-Bribery Convention and the OECD’s new Strategic Approach to Combatting Corruption and Promoting Integrity for example.
  • In these challenging times, the OECD will keep bringing evidence-based analysis to the table. In the end, that continues to be the most compelling argument in favour of international cooperation and the only way to respond to the pressing global challenges of our time.

Meeting on Financing Climate Futures: Rethinking Infrastructure – Investing in Low Emission, Resilient Development

Remarks and panel messages delivered at the Meeting on Financing Climate Futures: Rethinking Infrastructure — Investing in Low Emission, Resilient Development at the Global Solutions Summit on 18 March 2019 in Berlin, Germany.

Remarks:

Distinguished Guests,

Climate change is one of the most pressing global challenges of our time. By its very nature it requires an ambitious and coordinated multilateral response.

We know from last year’s IPCC special report on the impacts of global warming of 1.5°C that we have barely a decade to radically transform our economies and societies. We must slash emissions by 45% by 2030 if we are to have any chance of restricting temperature increases to 1.5°C.[i] This is no simple task, but one that we cannot afford to get wrong.

We also know that our efforts to combat climate change must take into account not environmental concerns but also how climate impacts and climate policies will affect groups of people differently. This is exactly why the concept of “Just Transition” is enshrined in the Paris Agreement.

We need to move away from the grow first and distribute later, and the grow first and clean later. The consequences of policies for equity and the environment should be considered together beforehand.

By putting a focus on a just, equitable, accessible transition when we design policies, we can make sure that the benefits of growth are more evenly distributed. This way all can benefit from clean-tech advancements, good jobs, enough food, clean drinking water, clean air and clean oceans, to name just a few critical examples.

Building on the OECD Frameworks and Dashboards for Policy Action on Inclusive Growth as well as Green Growth, we are now examining the interface between measures for ‘inclusive’ growth and for ‘green’ growth.

Examples are abound, as highlighted by our Roundtable on Sustainable Development: Norway’s first electric ferry shows that public procurement for low-carbon innovation can work; the New German Packaging Law from this year shows that extended producer responsibility schemes can be put in place; and a new venture fund led by the European Commission and Bill Gates Breakthrough Energy Coalition instils confidence that resources can be leveraged for the projects critical to deep decarbonisation.

Governments too often favour incremental tweaks – a tax shift here, some subsidy reform there. These changes made on the margins of our business-as-usual approach are too weak, too gradual, and too insignificant.

They cannot create opportunities for all to benefit from green growth. They also do little tackle the structural barriers within our governments, private sectors, and societies that continue to incentivise fossil fuel emissions. We need immediate, ambitious multilateral action.

The OECD’s report Financing Climate Futures: Rethinking Infrastructure, prepared in partnership with UN Environment and World Bank Group and with the support of the German government, sets out a transformative, innovative agenda for governments to achieve this just transition towards low-emission pathways.

Financing Climate Futures proposes six crucial areas and 20 specific actions that governments can prioritise:

  • First, we must plan infrastructure for the low-emission transition. To date, only 11 of the 197 UNFCCC parties have communicated their long-term, low-emission development strategies.
  • Second, we must unleash and accelerate innovation. Digitalisation, new business models and technologies are opening new pathways, but only 10% of clean-energy technologies are on track for market penetration.
  • Third, governments must ensure fiscal sustainability. On average, rents from fossil fuels account for 8% of government revenue globally. Governments need to reduce reliance on such tax revenues and shift towards a more fiscally – and environmentally – sustainable future. At the same time, this will bring disruptions, and governments need to put policies in place to ensure that these shifts in the economy do not leave behind regions which have been particularly dependent on fossil fuels for jobs and growth.
  • Fourth, we need to re-set our financial systems away from short-termism. There is no doubt that private capital from various sources will be necessary to fill the financing gap, but incentives favouring short-termism and undisclosed climate risks are hampering sustainable financing.
  • Fifth, it is essential to re-think development finance. Multilateral development banks are an increasingly important source of climate finance, committing 35 billion dollars in 2017 alone. Clearer, stronger mandates could amplify their impact.
  • And finally, we must empower cities to become low-emission and resilient. 70% of us will live in cities by 2050, but city governments need the capacity and financing means to invest in sustainable and inclusive urban spaces. They need to make sure that policies to tackle climate change do not exacerbate inequalities, and instead promote synergies between inclusive and sustainable growth.
  • This is an area in which the OECD Champion Mayors for Inclusive Growth are leading by e The Seoul Implementation Agenda, agreed by Champion Mayors in 2017, supports the implementation of the Paris Action Plan to bridge efforts around climate change and inclusive growth with concrete policy measures.

With these priorities in mind, I look forward to hearing your views on how we can rethink our established systems, frameworks, policies, approaches and incentives to find a common path towards a low-emission, resilient future.

Thank you.

 

Panel Discussion:

Focus question: Just transition. You lead the OECD’s initiative aimed at enhancing social and economic inclusiveness. The related concept of “Just Transition” is enshrined in the Paris Agreement. It has become an increasingly pressing issue for governments as they grapple with the political implications of the transition to a low-emission economy on affected regions and people employed in carbon-intensive industries.

What are some of the key principles that governments must consider in steering their transition towards a low-emission economy?

  • We are not on track to meet our climate goals: Projections reflecting current national emission efforts and ambitions imply that if nothing changes, the world will see global warming of about 3°C by 2100, with warming continuing afterwards.
  • If the emissions gap is not closed by 2030, it is very plausible that the goal of a well-below 2°C temperature increase will not be reached.[1]
  • Climate policy can be good for economic growth. In 2017, our OECD Investing in Climate, Investing in Growth report showed that with the right policies and incentives in place – notably strong fiscal and structural reform combined with coherent climate policy – governments can generate growth that will significantly reduce the risks of climate change, while also providing near-term economic, employment and health benefits.
  • Such a climate-compatible policy package can increase long-run GDP by up to 2.8% on average across the G20 in 2050 relative to a continuation of current policies, across developed and emerging economies. If the positive impacts of avoiding climate damage are also taken into account, the net effect on GDP in 2050 rises to nearly 5%!
  • There are also political economy barriers the need to be considered. Despite these benefits, governments worldwide are facing some degree of resistance in implementing core climate policies – just look, for example, at the gilets jaunes who took to the streets of France to protest fuel hikes.
  • And one can understand why. Across the OECD, the top 10% of the income distribution earn around 10 times more than the bottom 10%, up from just 7 times 30 years ago.[2]
  • This points to a central consideration governments must seek to address: The push for greater climate action is accompanied by a need for policies that address inequalities and provide the same opportunities for all.
  • We must put people at the centre of climate policy!
  • Our Financing Climate Futures: Rethinking Infrastructure report does just that – it encourages governments to anticipate and address the social consequences of the low-emission transition.
  • But governments are faced with barriers to climate policy: we find that globally on average, nearly 8% of government revenues come from the extraction of oil, natural gas and coal resources.[3] And this figure can be much higher for for fossil fuel rich countries, making it even harder to wean governments off fossil fuels.
  • Cities – particularly in developing countries – are more vulnerable to climate impacts, and they also often have higher levels of inequality. In 2014, 89% of cities – home to 2.1 billion people – were located in areas that are highly vulnerable to economic losses from natural disasters.[4]
  • This makes putting social considerations at the centre of climate policy in cities an even more acute priority: this means we must seize the development benefits of low-emission, resilient planning in cities.

 

What about the policies for inclusiveness? Do you know of any best practices, or countries we can look to for guidance?

  • An inclusive approach to the low-emission transition needs to be managed at two levels.
  • First, it is essential that the transition benefits everyone, and does not impact the poor disproportionately.In the absence of compensation policies, core climate policies have the potential to affect household spending and the affordability of energy, transport services, and housing, particularly for low-income households.
  • Second, it is also necessary to support and manage the transition for those individuals and communities that may be particularly affected as economies shift away from fossil fuels, such as those in heavy industrial regions and energy-intensive activities facing unemployment like coal workers.
  • From historic examples like the coal mine closures of the 1980s in the United Kingdom, we know the risks for certain communities.
  • There are also lessons to be learnt from recent transitions in sectors such as coal mining, where much of the transition has been driven by economic realities as much as by environmental considerations.
  • For many industrial regions, managing a just transition requires developing strategies to support the reorientation of existing industries in order to increase their efficiency and lessen dependence on fossil fuels.
  • Targeted support is needed to compensate for economic loss. Structural reforms such as ensuring flexible labour markets and strengthening social protection schemes could also be instrumental in facilitating the transition, and overcoming political economy issues.
  • The report gives a series of examples, including the Flemish chemical and construction sector federation, which has set up a wide range of activities to address the sustainable skills shortage. These include accessible information on career perspectives, and collaboration with universities for developing curricula. Or in another example, the region of Alberta in Canada has announced a “modern transition” strategy of CAD 40 million to fund affected workers and communities.

[1] UN Environment 2018 Emissions Gap Report– Key Messages: http://wedocs.unep.org/bitstream/handle/20.500.11822/26896/EGR-KEYMESSAGES_2018.pdf?sequence=1&isAllowed=y

[2] OECD/The World Bank/UN Environment (2018), Financing Climate Futures: Rethinking Infrastructure, OECD Publishing, Paris, https://doi.org/10.1787/9789264308114-en.

[3] OECD/The World Bank/UN Environment (2018), Financing Climate Futures: Rethinking Infrastructure, OECD Publishing, Paris, https://doi.org/10.1787/9789264308114-en.

[4] UNDESA, 2018

[i] “In model pathways with no or limited overshoot of 1.5°C, global net anthropogenic CO2 emissions decline by about 45% from 2010 levels by 2030 (40–60% interquartile range), reaching net zero around 2050 (2045–2055 interquartile range).” From https://www.ipcc.ch/site/assets/uploads/sites/2/2018/07/SR15_SPM_version_stand_alone_LR.pdf

2019 Global Solutions Summit: Opening Plenary: Recoupling Social and Economic Progress – Towards Global Paradigm Change

Gruppenfoto_Panorama-1 (002)

Speaking points delivered at the Opening Plenary of the 2019 Global Solutions Summit entitled “Recoupling Social and Economic Progress – Towards Global Paradigm Change” on 18 March 2019 in Berlin, Germany.

I AM DELIGHTED TO PARTICIPATE IN THIS OPENING PLENARY OF THE GLOBAL SOLUTIONS SUMMIT ON RECOUPLING SOCIAL AND ECONOMIC PROGRESS – TOWARDS A NEW INTERNATIONAL PARADIGM

  • Recoupling social and economic progress is aligned with the focus of the OECD on people-centred growth, which we call inclusive growth.
  • Inclusive growth has been a paradigm shift for the OECD, since the launch of the New Approaches to Economic Challenges initiative (NAEC) in 2012. Dennis Snower has been a brilliant friend of NAEC.

A DECADE SINCE THE CRISIS AND OUR ECONOMIES ARE STILL EXPERIENCING A CHALLENGING MOMENT:

  • The global expansion is losing steam: the OECD has revised down its growth projections for almost all G20 economies. For Germany in 2019, we revised down our projection for this year by almost one percentage point since November to 0.7%. Growth in China is moderating to around 6% by 2020.
  • Trade tensions are escalating: global trade growth last year dropped to 4% from 5¼ % in 2017. Business and consumer confidence are badly hit, with Brexit adding to uncertainty.

 

AT THE SAME TIME AS THE ECONOMIC SLOWDOWN, WE HAVE A GROWING SOCIAL CRISIS. PEOPLE HAVE BEEN LEFT BEHIND:

  • The income gap in the OECD between the top and bottom deciles keeps growing – it is now ten times, up from seven times in the 1980s.
  • Inequality of wealth is even more pronounced: the top 10% holds half of total wealth while the bottom 40% holds only 3%.
  • Social mobility is stalling. The OECD’s Broken Social Elevator report shows that in an average OECD country, it would take four to five generations for children from the bottom earnings decile to reach the level of mean earnings.
  • Precarity is a huge concern: Based on evidence from 25 OECD countries, more than one-third of people would fall into poverty if they had to forgo three months of their income. Next month we’ll launch the middle class report.
  • Economic inequalities translate into social divides, with compounded effects: The OECD Equality in Education report, released last October, shows that by the age of 15 disadvantaged pupils have fallen on average two-and-a-half years behind their more affluent peers.
  • People don’t feel protected by the state: The OECD’s “Risks that Matter” study found that 70% of respondents believe that government should be doing more to ensure their economic and social security.
  • The digital revolution is bringing additional anxieties: The OECD estimates 14% of jobs are at high risk of automation, and a third face changes, with the low-skilled most at risk. At last week’s Going Digital Summit, we put inclusiveness at the heart of digital policy.

 

INEQUALITIES ARE FUELLING DISTRUST, POPULISM, NATIONALISM AND EXTREMISM ON THE STREETS, ON SOCIAL MEDIA, AND IN BALLOT BOXES:

  • Trust has plummeted: only 4 in 10 people in the OECD trust their government.
  • We are witnessing a backlash against globalisation and growing support for protectionism.
  • Alarmingly, intolerance also seems on the rise, with terrible consequences.
  • France just reported a 74% increase in the number of offences against Jews last year and in Germany the number of violent anti-semitic attacks has surged by more than 60%.[i]
  • Populism brings no answers, only blame and even violence. It tears the social fabric, producing fear, worrisome democratic outcomes and making governance even more difficult.
  • Economic growth and social cohesion are not competing objectives, but mutually reinforcing engines that need to be recoupled.

 

WE HAVE PUT PEOPLE, THEIR WELL-BEING, THEIR NEEDS AND ASPIRATIONS AT THE CENTRE OF OUR APPROACH. WE NEED INCLUSIVE GROWTH.

  • The OECD has made Going Beyond GDP and promoting inclusiveness the ultimate goal of all its policy recommendations.
  • The OECD produced last year the Framework for Policy Action on Inclusive Growth, including detailed recommendations and a dashboard of 24 inclusive growth indicators to monitor progress over time. We are now applying this in national inclusive growth reviews.
  • Other tools like the Well-Being Framework have pioneered a multidimensional approach, including along a wide range of social and environmental dimensions.
  • Our PISA assessment for 15 year olds is moving into new areas like well-being and socio-emotional skills and we are increasing our focus on early childhood education and care.
  • We are working to tackle stereotypes and close gender gaps, not just in pay and career progression, but also in skills and access to entrepreneurial opportunities and STEM careers.
  • We are looking also at housing, infrastructure, migration, healthcare and urban policy, all through an inclusive growth lens.
  • But we need business on side, which is why we recently developed our Business for Inclusive Growth Platform (B4IG) to unite businesses and governments behind a common agenda for inclusive growth.
  • Business has to act responsibly and pay their fair share in tax. This is an area where the OECD has been a world leader, with BEPS and Automatic Exchange of Information.

 

SIMPLISTIC NEOLIBERAL ECONOMIC MODELS DO NOT CAPTURE REALITY OR REFLECT THE IMPORTANCE OF INCLUSIVENESS AND MULTIDIMENSIONAL WELL-BEING

  • As the economic profession became highly quantitative, the non-measurable features of the economy were just ignored.
  • Traditional models failed to predict the crisis and make too many assumptions that are at odds with the facts.
  • At the same time, these traditional models wrap themselves in claims to objectivity and scientific rigour, which make them very difficult to contest.
  • The name of these models, general equilibrium, shows that they assume that the economy is basically in balance until an outside shock upsets it. In fact, the system itself produces shocks that destabilise it.
  • These models assume that you can understand the economy by studying a representative agent whose expectations and decisions are purely rational. This is not real life!
  • Traditional models do not integrate important dimensions such as fairness, trust or social cohesion and fail to capture distributional consequences of policies.
  • They also fail to capture natural depletion, or incorporate environmental damage as liabilities. They assume that the trickle-down effect will work, and they assume that you can always clean up after you grow.

 

WE NEED TO BREAK OUT OF ECONOMIC SILOS TO RETHINK HOW WE EVALUATE PROGRESS

  • We need to concentrate on defining what is valuable and how to assess it, rather than promoting market value as the main criterion for everything.
  • As Dennis says, people don’t want a job, people want meaningful lives and a sense of purpose. And this is more difficult to capture.
  • We need different, more granular information, data and analysis, and definitely, better metrics. We have to be able to check how policies will impact different income groups, communities, regions and firms.
  • We need to get away from growth first and distribute later, or clean later. The unintended consequences of policies should be considered beforehand, and so should equity.
  • To this end, we have to refine and retool the metrics we already have, for example to measure income concentration.
  • We just set up the NAEC Innovation Lab to encourage the adoption of new and innovative analytical methods across the Organisation, to address new policy questions and bring new policy insights.
  • We are re-engineering the institutional settings in OECD economies, getting rid of silos and having a holistic approach for the well-being of people, that is multidimensional.

 

THE OECD’S DIFFERENT INSTRUMENTS AND INITIATIVES ARE ALL ALIGNED TOWARDS A SINGLE GOAL: TO PUT PEOPLE BACK AT THE CENTRE OF POLICY-MAKING AND DELIVER BETTER LIVES FOR ALL. IN DOING SO, THEY PROMOTE A RICHER, MORE COMPLEX AND MORE INCLUSIVE VISION OF PROGRESS – ONE IN WHICH THE ECONOMIC, THE SOCIAL AND THE ENVIRONMENTAL ARE ENTIRELY RECOUPLED.

[i] https://www.theguardian.com/news/2019/feb/15/antisemitism-rising-sharply-across-europe-latest-figures-show

Opening Remarks at the TUAC Roundtable on Wage and Employment Gender Gaps

Remarks delivered at the Trade Union Advisory Council Roundtable on Wage and Employment Gender Gaps on 12 March 2019 at the OECD Headquarters in Paris, France.

Ladies and Gentlemen,

I am both pleased to open this Roundtable Discussion, and saddened. Saddened because it is frustrating that we still need discussions like this one focused on gender gaps in employment and wages!

Global context

The OECD has been working on these issues for decades, and yes there has been some progress towards closing gender gaps in labour markets, it is snail-paced.

In 2017, the employment gap was 11 percentage points on average in OECD countries, only slightly down from 12 percentage points in 2012.[1]

And while we have seen an increase in policies to encourage more women into the workforce, we all know what happens: employment gaps widen especially when men and women start families.

The employment rate gap between childless men and women remains relatively small: 5 percentage points, on average, across the OECD.

But the gender gap more than quadruples, to 23 percentage points, when comparing men and women who have at least one child aged 0-14.

Women are also much more likely to work part-time. On average across the OECD in 2017, almost 1 in 4 of employed women worked part-time[2], compared to under one in ten employed men[3].

Working part-time is particularly pronounced for recent mothers – while it can help keeping women attached to the labour market, it also has drawbacks: women working part-time earn less than full-time workers, often miss out on opportunities to advance in their careers, and – over time – contribute less to pension savings.

Women also earn less generally. On average in 2016, there was a nearly 14% gender pay gap between the median monthly earnings of women and men working full-time,[4] only 1 percentage point lower than in 2010.

This means that a full-time working woman still earns about 86 cents to every euro earned by a full-time working man, on average, in the OECD. Occupation and industry segregation play an important role here as does having children: the gender pay gap increases during parenthood.

We also know that men are more likely to work very long hours in the labour market. In many countries, expectations of long hours in the workforce combine with women’s disproportionate responsibility for unpaid work produce gendered effects in the labour market: women face difficulties combining long hours of unpaid work with the long time commitment expected in many full-time jobs.

This is particularly true in countries with traditionally long full-time work hours, such as Germany, where mothers tend to work part-time, and in Mexico, where mothers are more likely to opt out of the labour market entirely. We also see gendered sectors, with women overrepresented in areas such as retail, health and social work: 84% of employed women worked in the services sector in 2015 (60.7% of men), 11.6% in industry (32.6% of men); and 4% in agriculture (6.3% of men). Related to this, women experience higher levels of occupational segregation than men, and are restricted in the jobs they “choose” to go into by a variety of factors, including educational background and gendered socialisation.

Policy Solutions

So what can we do? First, our evidence shows that, too often, having children makes it hard for women to fully commit to a paid job.

Given that women do most of the unpaid childcare,[5] they need access to accessible, affordable childcare.

I was speaking to the Swedish Minister for Social Security last Friday, and she told me that in Sweden, childcare costs equate to roughly 4% of the average salary. However, in the US, it equates to almost 25% of the average salary. You can see how this might become a barrier to entering the workforce.

Second, just as importantly, paid parental leave and flexible working need to be real options for fathers. We need to ensure that fathers are doing an equal share of unpaid work, starting as soon as children enter the home.

Providing father-specific leave helps increase men’s uptake – in Iceland and Sweden, it has led to a doubling in the number of parental leave days taken by men.

Yet, simply introducing a right to parental leave for fathers is often not enough: fathers account for less than one in five of those taking parental leave in many countries, and even then often take just a few days. Korea and Japan have the most generous paternity leave at 12 months, but no one takes it!

Iceland and Sweden have introduced “use it or lose it” schemes for parental leave where a parent will lose a set of weeks of leave if they do not take it, and it is seen negatively when people don’t take their leave.

Third, the OECD is also monitoring the introduction of pay transparency rules in a considerable number of countries. These rules are a promising tool for shining a light on pay inequality, but since they are new, it will be important to evaluate whether they are being enforced and their long-term impact.

Some factors behind gender inequality, like gender stereotypes and discrimination in the workplace, are harder to measure.

Yet tackling them is crucial nevertheless, and implies getting men more involved in conversations on how – consciously or not – men perpetuate gender inequality and how men can help resolve it.

We have seen a number of interesting approaches to engage more men in this debate, for example through initiatives in the private sector that engage male executives in standing up for gender equality. But it is clear that we still have a long way to go.

OECD actions

The OECD is doing a lot in this space: we just launched on International Women’s Day our latest Social Institutions and Gender Index, which highlights the latent discrimination, bias and obstacles that lie within legal and social frameworks, which prevent female empowerment. We also launched the follow up report to our 2015 Recommendations on Gender in Public Life, which shows what more is needed.

But more fundamentally, tackling gender inequality is deeply rooted in the OECD’s Inclusive Growth agenda.

All the main instruments that contribute to this agenda – most notably the Framework for Policy Action on Inclusive Growth, the new Jobs Strategy and the Global Deal partnership – are aligned with the aims of SDG 8 and SDG 10 to help countries promote sustainable economic growth, more and better quality jobs and higher living standards for all.

They also make strong connections to SDG 5 on gender equality as a lever for achieving these aims. Because as we have seen, policies and tools to advance gender equality and respect women’s dignity are the same as those to build coherent, respectful societies.

Indeed, since the financial crisis, the OECD has changed the growth narrative to focus more on people.

Gender and equality are part of this, and TUAC is also a strong advocate for this approach.

Our forthcoming Jobs Strategy, for example, provides a framework for policymakers to identify areas of policy reform to promote not only job quantity, but also job quality; and to make labour markets more adaptable, resilient and inclusive. That includes assessing how inclusive labour markets are for women, using the gender labour income gap as an indicator. Of course, this also has an impact on the Future of Work and digtialisation, where our findings also show that women are lagging far behind;

Bill and I were on a panel yesterday to discuss exactly this.

We also have the Global Deal initiative, and we will work with TUAC and others to strengthen social dialogue to foster quality jobs and inclusive growth.

The Global Deal also highlights the important contribution that social dialogue can make for promoting gender equality in the workplace. Several of the commitments made by Global Deal partners, for example by the Swedish and Dutch governments, focus on promoting a gender-based approach to social dialogue.

Women account for 44% of European Trade Union Conference members but only 17% of leadership positions.

Similarly, only 8% of employers’ organizations have gender-balanced boards.

We therefore see that one of the primary tools we have to stand up for the rights of workers does not adequately incorporate the views of women. Social partners can therefore do more to ensure that women have an equal opportunity to make their voices heard and shape both the workplace and labour market.

We’re also taking the fight to the international stage, and gender inequality in the labour market is high on the agendas of the French G7 and Japanese G20 presidencies.

The OECD is already supporting these efforts, for example by continuing to monitor progress on the 25×25 target of the G20: reducing the gender gap in labour market participation rates by 25% by 2025.

The OECD is pushing for change on many fronts, but of course, there is still a long way for us to go; gender inequality in the labour market clearly remains a persisting issue in OECD countries.

It’s great to have excellent speakers with us today to thrash a lot of this out. I look forward to hearing about the outcomes.

Thank you.

 

[1] OECD (forthcoming), “Part-time and partly equal? Gender inequality and part-time work in the Netherlands”

[2] Part-time = fewer than thirty hours per week in the main job

[3] Part-time employment rates are 23.5% for women and 8.7% for men (part-time employment as percentage of totalemployment, all ages). From OECD (forthcoming), “Part-time and partly equal? Gender inequality and part-time work in the Netherlands”

 

[4] OECD Gender Data Portal

[5] OECD (2017), The Pursuit of Gender Equality

2019 Going Digital Summit session: The Global Agenda for Digital Transformation

Remarks, including panel questions, as delivered at the 2019 Going Digital Summit session on “The Global Agenda for Digital Transformation” on 12 March 2019 at the OECD Headquarters in Paris, France.

Opening Remarks:

Digital transformation is a global phenomenon. It generates common opportunities but also common challenges – such as dealing with changing jobs, skills needs and therefore ensuring that it does not exacerbate inequalities. Digital is also linking countries more closely together, with many interactions spanning national borders, which also generate issues that need multilateral solutions.

Think about trade and production, for instance, cross-border data flows enable the co-ordination of global value chains, help small firms reach global markets and offer a means for delivering services.

Digitally-delivered services already account for a quarter of services trade across the OECD.

At the same time, cross-border data flows raise questions about how to reap the benefits from digital trade while dealing with the protection of privacy, security and intellectual property rights.

Digital technologies and data are also transforming how firms compete and invest.

In some instances, competition is intensifying; in others, we see a tilt towards greater concentration. Cross-border acquisitions of digital-intensive firms grew 20 percentage points more than in other sectors between 2007 and 2015.

The digitalisation of the economy also raises challenges for international taxation. We are making good progress towards a global common solution.

These are just some examples, and they underscore the need for the G20, G7, APEC and huge blocs like the EU to include digital on their agendas.

With the exception of some areas within the EU, most policy instruments address issues within national borders, making them often relatively ineffective in addressing challenges globally.

At the OECD, we’ve provided data and analysis to help countries find policy solutions to address common challenges and ensure digital works for everyone.

We have our “Key Issues for Digital Transformation” for the German G20 Presidency in 2017 and on a “Toolkit for Measuring the Digital Economy” for the Argentinian G20 Presidency last year, for example.

We have contributed to the debate on how to ensure women do not lose out in the digital transformation with the report on “Bridging the Digital Gender Divide”, and have recently worked on trade and cross-border data flows for the Japanese G20 Presidency.

We’ve supported the G7 debate on transformative technologies, including artificial intelligence. In APEC, we are supporting Chile, as APEC’s 2019 host economy, to develop a work plan that maximises the potential of the digital economy. For example, we are leveraging our work at the OECD and in G20 to better measure the digital economy, to identify policy options for facilitating digital trade, and seeking to ensure that the digital transformation of APEC economies is inclusive—particularly for women and SMEs.

And we partner with the EU on many issues related to the digital economy.

Which is why I am encouraged to see the EU for example, has integrated a Digital Agenda as one of the seven pillars of their Europe 2020 Strategy.

This digital agenda seeks to develop a Digital Single Market; enhance interoperability and standards of devices, apps, data repositories, networks; strengthen online trust and security; promote widespread access to high-speed internet; among other goals.

I think a strength of multilateral discussions is the opportunity to set ambitious agendas to “move the dial” on hard issues. We are currently trying to do this here at the OECD, on artificial intelligence.

Later this week our Committee on Digital Economy Policy will be discussing draft principles for the responsible stewardship of trustworthy AI. This effort aims to set a global reference point, allowing us to move forward together on AI-related technical, ethical and legal issues. The fact that AI is on the agenda across multiple fora shows it is urgently-needed work.

Panel Questions:

Minister Alexandru Petrescu: Romania currently holds the Presidency of the EU. I understand that one of the main objectives of the Romanian EU Presidency is promoting research and innovation, digitalization, and greater connectivity. Could you outline, more concretely, the features of the digital agenda in the EU, from the regional perspective?

Vice-Minister Katsuya Watanabe: Japan holds the Presidency of the G20 in 2019 and is continuing the strong G20 focus on digital issues. What are the main features of the digital agenda at the G20 this year?

Dr Rebecca Sta Maria:  In your new role as Executive Director of the APEC Secretariat, your forum represents a very diverse set of economies. What would you say are the main features of the digital agenda at APEC?

Antoine Kasel:  as EU G20 Sherpa you wear two hats here. As I mentioned earlier, the EU is promoting a Digital Single Market as part of the Europe 2020 Strategy; perhaps you could tell us how you see the key features of the EU digital agenda in the G20 context?

Laurent Bili:  France has the G7 Presidency this year – what are the main features of the digital agenda under your leadership?

Minister Alexandru, Petrescu:  coming from the EU presidency perspective, what digital policy issues need more attention at the international level? What do we have to do to make more progress?

Vice-Minister Katsuya Watanabe: Japan has an ambitious agenda this year on digital issues, with PM Abe’s statement in Davos pointing to the promise of “Society 5.0” for greater inclusiveness. How can the G20 play a leadership role in achieving digital transformation that works for all?

Dr Rebecca Sta Maria:  you are just back from the first APEC meeting under Chile’s presidency, where one of the priorities is to streamline and strengthen APEC’s approach to the digital economy. What do you see as the key challenges in making progress on the digital agenda at the international level? What are the key achievements thus far for APEC?

Antoine Kasel:  From where you sit, what are the key challenges in making progress on the digital agenda at the international level and what have been the key achievements so far?

Laurent Bili:  having heard President Macron at the Internet Governance Forum last year, we know there is great energy in France for harnessing the potential of digital technologies, but also a sense that we are at a turning point. From your perspective, what digital policy issues require greater attention at the international level? How can further progress be made?

One last question: the OECD is passionate about helping countries seize the benefits of digital transformation for all. What is your view on how the OECD can best support the international agenda?

Going Digital: Stakeholder Session

As part of the 2019 Going Digital Summit at the OECD Headquarters in Paris, France, Gabriela Ramos moderated a Stakeholder Session.

Ministers, Distinguished guests, Ladies and Gentlemen,

I am delighted to be moderating this very special session with stakeholders at the Going Digital Summit.

I am a big believer that the OECD’s approach of broad stakeholder consultation enriches the debate, sheds new light on complex issues, and ultimately enables better policies.

Digital policy has been an area of particularly close stakeholder engagement since the OECD Ministerial Meeting on the Digital Economy in 2008 in Seoul, where both the Civil Society Information Society Advisory Council and the Internet Technical Advisory Committee were formally recognised in the work of the Committee on Digital Economy Policy.

This has created a unified, inclusive multistakeholder model that has served so well since.

The two year OECD Going Digital Project, and its Integrated Policy Framework have benefitted from intense multi-stakeholder engagement. The Integrated Policy Framework is the first time that a holistic policy approach to the digital transformation has been formulated.

Shaping an inclusive digital economy and society is not easy, but it is vital. The OECD Going Digital project makes the case for a flexible, forward-looking and integrated approach to policy making in the digital era. The Integrated Policy Framework has benefitted from intense multi-stakeholder engagement, and is the first time that a holistic policy approach to the digital transformation has been formulated.

It includes 7 building blocks including increasing access to and use of digital technologies, data and related infrastructures; fostering digital innovation, market openness and good jobs for all; and strengthening trust and social prosperity.

Each of these integrated policy dimensions brings together multiple policy areas that do not stand in isolation, but are interrelated. This underscores that leveraging the benefits and addressing the challenges of digital transformation requires identifying policy areas that are jointly affected and that need to be co-ordinated. It also highlights that all policy dimensions are essential to making digital transformation work for prosperity.

We have to discuss these issues a distinguished panel of speakers:

  • Jane Coffin, Senior Adviser to the CEO at the Internet Society; her work focuses on coordination of collaborative strategies for expanding Internet infrastructure, access, and related capacities in emerging economies.
  • Marc Rotenberg, is President and founder of the Electronic Privacy Information Center (EPIC), which helped establish the Civil Society Information Society Advisory Counsel, the voice of civil society at the OECD. He is also a distinguished law professor and author.
  • Russel Mills, Secretary-General of Business at OECD. He is a guru in market development, technology exploitation and global business management, and our resident pillar of the business community.
  • Paul Nowak on behalf of TUAC, who is Deputy General-Secretary at the Trade Union Congress in the UK, a long-standing trade unionist leading on a number of key policy areas including public services, transport and industrial policy.

Our panellists have all helped develop the OECD Going Digital Integrated Policy Framework. I’d like to know what you see as the priorities for implementing it and what actions are stakeholders taking to realise digital opportunities and enhance trust in the digital age?

Discussion:

Russel (Mills), let’s start with you as BIAC was very active in developing the framework, especially in the early stages. What are your views?

Paul (Nowak), we know that much of the anxiety around digital transformation stems from worries about jobs. From a trade union perspective, what do you see as the priorities for implementing the framework and enhancing trust?  

Marc (Rotenberg), I know issues of trust are near and dear to your heart. What are your views on how stakeholders can realise the opportunities of digital transformation while fostering trust? What should our priorities be with respect to the framework?

Jane (Coffin), you have a unique perspective from the Internet technical community. What are your priorities for implementing the framework and strengthening trust?

Thank you for those insights – let’s now turn to a topic close to home. What do stakeholders expect from governments and multilateral institutions such as the OECD with respect to digital policymaking?

 

Closing remarks

I’d like to thank our panel and all of you for a very interesting discussion. We will of course continue this conversation with stakeholders throughout the Summit and beyond. Thank you.

Welcome Remarks at 2019 Forum of the Southeast Asia Programme: Connecting Southeast Asia

Remarks delivered at the OECD Headquarters in Paris, France on 11 March 2019.

Ministers, Excellencies and distinguished guests,

I am delighted to welcome you to the annual Forum of the OECD Southeast Asia Regional Programme hosted for the first time here at the OECD headquarters. Let me first start by thanking the co-chairs of the Programme, the representatives from Korea and Thailand, for having initiated this milestone event on the important topic of ‘Connecting Southeast Asia.’

Connectivity was identified by Ministers at last year’s Ministerial Conference in Tokyo as a critical pillar for inclusiveness in the region.

So we felt this week was an excellent time to bring you to Paris: After International Women’s Day on Friday, we are in the midst of our March on Gender, focusing on digital inclusion and connectivity.

And, of course, today in parallel to this Forum we are hosting the “Going Digital Summit”, a milestone event in the global effort to harness the digital transformation for more inclusive and sustainable growth.

This shows the extent of our shared priorities, it underlines what the OECD can offer to Southeast Asia, and what Southeast Asia can bring to the OECD, drawing from its own regional context and experiences.

Southeast Asia has important lessons to share. It has made remarkable progress over the past decade in raising income levels and integrating into the world economy. The ASEAN region is second only to China in employment of workers participating in Global Value Chains (GVCs).[i] The prevalence of extreme poverty is falling – the estimated share of the ASEAN population living on less than USD 1.90 per day dropped from almost a fifth (17%) in 2005 to less than a tenth (7%) in 2013.[ii]

Growth remains solid.  In 2018, the region’s GDP grew by 5.3%, and over the next five years, it is projected to grow by 5.2% on average.[1]

However, the OECD’s recent Interim Economic Outlook warned that the global economy is slowing and trade tensions are running high, bringing implications for the region. Trade growth, a key artery in the global economy, has also slowed markedly, to around 4% in 2018 from 5¼ per cent in 2017.

Despite rising protectionism in some areas of the world and a challenging geopolitical climate, Southeast Asia continues to lead by example, taking steps to lower barriers to greater trade and investment and to support its domestic enterprises to ‘go global’. Enhancing its physical, digital, institutional and people-to-people connectivity will be essential in its continued success.

The region is making important progress. We have seen the completion of the ASEAN Highway network, and progress in the ASEAN Power Grid , the Trans-ASEAN Gas Pipeline and the ASEAN Broadband Corridor.

The OECD’s Southeast Asia Regional Programme is playing its part to support this effort. For example, the Programme has worked with ASEAN to promote the use of risk mitigation tools to generate higher rates of private investment in infrastructure.

This year, the OECD Economic Outlook for Southeast Asia, China and India also focused on developing smart urban transportation. And the OECD also just published an assessment of Disaster Risk Management Policies in Southeast Asia called Building Resilient Cities.

And we will keep working with the region through the SEARP and our partners in APEC, ADB, AMRO, ERIA and UNESCAP and in the private sector to help Southeast Asia overcome a wide range of challenges to greater connectivity. Let me highlight just a few of these, which you will be discussing today.

Firstly financing infrastructure: According to a 2017 estimate by the ADB,[iii] ASEAN would need to generate USD 2.8 trillion in infrastructure investment by 2030 to maintain economic momentum. To effectively mitigate climate change it would need even USD 3.1 trillion by 2030.[iv]

This is important for the region, which remains particularly vulnerable to climate threats. Between 1980 and 2017, Asia as a whole accounted for 70% of fatalities due to global weather-related loss events (like storms, floods, heat waves, for example). Some cities such as Bangkok, which is less than 2 metres above sea level, are particularly prone to floods.[v]

This points to the challenge that it is not just about the quantity of infrastructure, but the quality. To forsake quality would risk higher lifecycle costs, lower durability, inequitable distributive effects, vulnerability to climate change and negative environmental impacts.

This is why the OECD is working so closely with Japan to support its high quality infrastructure agenda within the G20 framework, building on Japan’s successful track record of developing the G7 Ise-Shima Principles for Promoting Quality Investment Infrastructure and also on Argentina’s recent Presidency of the G20.

Unfortunately, while there is progress underway in Southeast Asian infrastructure, an important gap still remains between the availability of funds and quality, bankable, sustainable infrastructure projects.

All too often, perceived risks can prevent private investors engaging in infrastructure financing altogether. Moreover, even in the presence of adequate funding, the absorption capacity to design and implement infrastructure projects can also be a bottleneck.

For physical infrastructure there is the issue of border crossing procedures, administrative barriers, as well as legal, regulatory and even technical differences that stand in the way of improving connectivity.

More work is also needed to improve institutional connectivity.  Non-tariff barriers, conformity of standards, enhanced trade facilitation and predictability of customs procedures are major issues restricting intra-ASEAN connectivity, as they are in many regions of the world.

However, if these challenges can be successfully overcome, the opportunities are endless. A great many countries and regions are keen to trade with and invest in Southeast Asia. And the OECD is ready to help.

This Forum will delve deep into how this can be achieved, exploring the topic from three angles: i) regional (ASEAN-level) connectivity; ii) sub-regional connectivity; and iii) inter-regional connectivity. We will seek to identify where existing initiatives overlap and have synergies, the common challenges they face, and how to address these challenges.

Our discussion today will also guide our Steering Group meeting tomorrow.

Thus, I invite you to engage in open and lively discussion, citing your own experiences and priorities, and to highlight where you believe our collaboration has been strongest, and where the OECD can best support your objectives.

I look forward to hearing your views on how, together, we can achieve a more ‘connected Southeast Asia’!

[1] Economic Outlook for Southeast Asia, China and India 2019

[i] http://www.oecd.org/about/secretary-general/opportunities-and-policy-challenges-of-digital-transformation-in-sea.htm

[ii] OECD 2019 Economic Outlook for Southeast Asia, China and India, p259

[iii] Meeting  ASIA’s infrastructure needs, ADB, 2017

[iv] Estimate includes mitigation and adaptation costs.

[v] Building Resilient Cities: AN ASSESSMENT OF DISASTER RISK MANAGEMENT POLICIES IN SOUTHEAST ASIA, p32

Opening remarks and panel moderation at the launch of the OECD Baseline Report of the 2015 OECD Recommendation on Gender Equality in Public Life “Fast forward to gender equality: Mainstreaming, implementation and leadership”

Remarks delivered at the OECD Headquarters in Paris, France on International Women’s Day, 8 March 2019 for the launch of the 2019 Baseline Report for the 2015 OECD Recommendation on Gender Equality in Public Life. Following my remarks, I moderated a panel with guest speakers:

  • Linda Lanzilotta, Former Vice President of Senate, Italy
  • Bobbie Cheema-Grubb, Judge of the High Court of Justice
    of England and Wales, United Kingdom
  • Annika Strandhäll, Swedish Minister for Social Security
  • Auðunn Atlason, Nordic Secretariat, Nordic Committee for
    Co-operation
  • Josée Touchette, Director, Executive Directorate

Minister, Ambassadors, Mrs Justice, Ladies and Gentlemen,

I am delighted to welcome you to this session on “Fast forward to gender equality: Mainstreaming, implementation and leadership” to launch The Baseline Report for the 2015 OECD Recommendation on Gender Equality in Public Life.

The 2015 Recommendation was a landmark tool, but to remain effective and relevant we need to know where we stand and constantly refresh and update our approaches.

In just a few years, we have seen significant changes in the discourses, the attitudes and the campaigns around gender issues. We have witnessed the growth of vocal movements such as #MeToo, Time’s Up, or in France #BalanceTonPorc. Incidents of sexism, misogyny, violence and sexual abuse and harassment have attracted widespread attention and condemnation.

Gender equality has become a pressing global priority at the national and the international level, in fora such as the G20. And yet, progress in closing gender gaps, including in public life, has been too slow. This Report [hold up publication] tells us clearly where we are and where we need to get to.

It is not all bad news. It highlights a number of examples of positive change: In Latvia, following the 2018 general elections, the number of women elected nearly doubled (now representing 31%).

In France, we saw a 13 percentage-point increase in women’s participation with almost 40% women in the parliament after the 2017 elections. The number of women in the Irish parliament rose from 16% to 22% after the elections in 2016. Similar progress was recorded in Italy and Mexico following their recent elections.

Small progress has also been recorded in women’s access to Supreme Court judgeships and top management positions in the civil service. The latter has risen from an average of 29% of top management employees in 2010 to 33% in 2016.

These stories are encouraging but we still have a very long way to go. When we take a step back and look at the big picture, we see a clear call for action.

As shown by our 2017 Report The Pursuit of Gender Equality, inequality persists across all countries – to varying degrees – in education, employment, entrepreneurship and public life. These gaps also tend to be compounded by inequalities related to age, sexual orientation, religion, and socio-economic background.

The average gender pay gap is still almost 13.8% on average in OECD countries.[i] Slow progress when you consider a decade ago it was around 15%.

Within public administration, women continue to be over-represented in both low-level job categories and part-time work. Women make up a staggering 75% of part-time workers in the public sector. Women still represent on average less than one third of senior positions in the civil service and supreme court judgeships. Similarly, women made up, on average, only 29% of parliamentarians in OECD countries in 2018 and occupied 28% of Ministerial posts in 2017.[ii] Progress is too slow! In legislatures and senior roles in the public service, there has only been a marginal increase (around 2%) since 2012 in the proportion of women in these jobs.

These persistent gaps suggest that we not only need to do more, but we also need to be smarter and more effective in the ways we execute gender equality policies. We need to be more accountable. And we need more equal access to leadership for better decisions.

That is what this report that we are launching today is for. It tells us where we are and offers guidance and insights on how governments can be smarter in their gender policies so we can truly “fast forward” our equality efforts by mainstreaming a gender perspective into all policies, regulations, budgets and structural reforms. Let me run through 5 key points:

First, the report highlights the value of new approaches such as behavioural insights in responding to the underlying norms and attitudes that influence gender inequalities in the workplace. Countries like the UK, Australia and Canada are increasingly using behavioural approaches to ‘nudge’ people towards more gender sensitive practices.

For example, in Australia, a recent trial by the New South Wales government’s Behavioural Insights Unit used behavioural economics to try to nudge people to shift the norms and unwritten rules of workplaces. By changing the default setting on outlook calendars, by using entry card data to show to managers how their teams mimicked their starting and leaving behavior and by organizing an inter-team competition to promote uptake of flexible working, the initative had a measurable impact which were sustained over time.

Second, the report promotes the use of key governance tools, such as regulations, budgets and procurement, to promote gender balance. Gender budgeting, for example, is now used by 17 OECD countries to help track spending that supports gender equality. A number of countries are stepping up their use of the gender budgeting lens.

Spain, for example, is the first country to start implementing gender budgeting in terms of the judiciary. This helps Spain identify gender differentials in certain areas, which prevent women’s access to judicial positions and design solutions.

We need to strive for similar ambition in the regulatory cycle and procurement processes. Public procurement represents 12% of GDP in OECD countries. Without a systematic reflection on the gender impacts of this huge expenditure, we are missing a major opportunity.

Third, to drive progress, the report underlines the importance of political leadership. Leaders lead by example, in the actions that they take and the ambitious national gender equality strategies that they put in place. For example in Canada, gender based analysis requirement has been in place since the early 90s but it gained much more traction only after the government committed to pursue “a feminist agenda”. Or in Sweden, when the newly elected Swedish government in 2014 declared itself a “Feminist Government”, this translated into an official “Feminist Foreign Policy”.

In terms of public leadership, countries have to walk the talk. Here at the OECD we are against ‘manels’, but when it comes to events like the Global Strategy Group (GSG) Meeting or the Ministerial Council Meeting (MCM), it is nearly impossible to avoid manels because the Ministers or delegates sent from capitals are most often men. [Show slide] This has to change!

Equal access to political power and leadership should be a key priority for all governments. The report highlights a range of strategies, initiatives and mechanisms including legislated or voluntary quotas, gender focal points and greater transparency in recruitment and appointment processes that can help crack and break the glass ceiling in politics. There is strong evidence that quota requirements that are supported by effective implementation mechanisms, safeguards and sound accountability structures have helped boost the representation of women in recent years. We have seen the impacts of quotas in my own country, Mexico.

Fourth, the Report highlights options for better implementation of gender equality objectives, and stronger accountability mechanisms. For example, in Iceland gender equality was moved under the auspices of the Prime Minister’s Office in January 2019 from the Ministry of Welfare. And of course, Iceland made history in terms of enforcement in 2017, by becoming the first country to legally enforce equal pay between women and men.

And the UK has also made an important breakthrough in enforcement by requiring all employers to disclose gender pay gap data. These are inspiring examples, and every country stands to gain from exploring what might work well in their own contexts.

Last but not least, we also need the appropriate workplace culture that tackles discrimination and harassment and promotes equality, while freeing women and men from the burden of gender stereotyping.

Countering harassment is an area where we have seen some progress. For example, in 2018, the UK parliament carried an internal audit to examine its  place culture and to eliminate incidences of bullying and sexual harassment. The Swedish parliament established its Gender Equality Group after a seminar on sexual abuse. Australia announced a historic national inquiry into sexual harassment in workplaces in 2018.

Creating a workplace culture that respects the needs of all and ensures equal access to opportunities also requires greater use of work-life balance measures and improved parental leave policies. In most OECD countries, with a few exceptions, men make up only around one in five of those parents using paid parental leave. In a handful of countries this falls to no more than one in fifty.[iii] It is essential to put in place the provision and the incentives for fathers to take parental leave.

Ladies and Gentlemen, I am optimistic, and I believe that, step by step, we are moving in the right direction. It is an uphill battle, as we put it in our key report from 2017. But with incredible people like those gathered here at our OECD March on Gender, and with valuable evidence and tools like this report, we will only become stronger, faster and more impactful as we work together for a gender equal world. Thank you.

V. Introduce panel (5 mins):

So now let’s hear from our panellists. Please join me on stage.

We are privileged to have with us:

Minister Annika Strandhäll, Sweden’s Minister for Social Security. She was previously Minister for Health and Social Affairs (2017-2019) and for Social Security from 2014 to 2017. She was a member of the Government appointed Delegation for Gender Equality in Working Life between 2011-2014 and has a long history as a trade unionist with both national and international assignments.

Linda Lanzillotta is the former Vice-President of the Italian Senate, from March 2013 to 2018. She was also a member of the Italian Chamber of Deputies for the Alliance for Italy as well as a Minister for Regional Affairs and Local Communities. Between 2000 and 2001, she served as the Secretary-General to the Prime Minister’s office.

Mrs Justice Cheema-Grubb is Judge of the High Court of Justice of England and Wales. She was appointed in 2015 and is the first Asian woman to serve as a high court judge in the United Kingdom. She became a Queen’s Counsel in 2013.

We also welcome Ambassador Auðunn Atlason, who is Director, Nordic Secretariat, at the Ministry for Foreign Affairs of Iceland. He was previously Deputy Director General in the Ministry of Foreign Affairs in Iceland and from 2013 to 2016 he was an Ambassador of Iceland in Europe and the Balkans. In 2015, he gained the OSCE White Ribbon Award for Achievements in the Field of Gender Equality.

And finally, the OECD’s own Josée Touchette, our Executive Director since 2017. Previously, she served in the Public Service of Canada, including as Chief Operating Officer at the National Energy Board, and Senior Assistant Deputy Minister, Policy and Strategic Direction at Indigenous and Northern Affairs Canada.

VI. Discussion with Panel (50 mins):

I’d like to get the ball rolling with the first question:

  • Can you tell us what are the most recent initiatives your country implemented to advance gender equality goals? And what are the measures to ensure the effectiveness and sound implementation of such initiatives?
  • Our second round of questions for discussion is how can gender mainstreaming be effectively implemented in public institutions? What tools can help? How to ensure that gender mainstreaming remains on the political agenda in view of competing priorities?

I’d like to close with a third and final line of questioning:

  • Which key OECD policy messages in the Report will or should be prioritised by your country in the near future? How could the OECD support the advancement of these measures?
  • What can be done by your respective institutions representing different branches to close the gender gap, to establish more gender family workplaces or integrate gender lens into decision making?

VII. Wrap-up and Closing Remarks by Moderator (3 mins)

Thank you so much to our panelists who have mentioned some examples from their countries and beyond [give a few examples].

Overall we take away that the key for success is to adopt a whole-of-government approach and to embed a gender lens in all policy, in all policy decision-making processes, in all ministries and at all levels of government in order to eliminate gender biases and tackle deeply-rooted stereotypes. We need ambitious national strategies, we need gender budgeting, we need better use of procurement processes, we need leadership!

Count on the OECD’s continued engagement, as together we “fast forward to gender equality”.

Please let’s continue the conversation at the Women’s Network Cocktail Reception at 17h30 in the Salon du Parc, kindly sponsored by the Canadian Delegation in honour of the Baseline report!

[i] OECD gender database

[ii] FAST FORWARD TO GENDER EQUALITY: MAINSTREAMING, IMPLEMENTATION AND LEADERSHIP

The Baseline Report for the 2015 OECD Recommendation on Gender Equality in Public Life, 2019, p10

[iii] https://www.oecd.org/els/family/Backgrounder-fathers-use-of-leave.pdf