Paris Peace Forum Panel: The Challenge of Alignment Towards a Common Framework for SDG-Compatible Finance

On 12 November 2019, I participated in a panel entitled “The Challenge of Alignment Towards a Common Framework for SDG-Compatible Finance” with M. Abdoulaye Mar Dieye, Special advisor, UNDP; M. Mathias Vicherat, Secretary General, Danone ; Mme Aba Esther Eshun, young expert, AU-EU Youth Cooperation Hub and a respresentative from the Secretary of State to the Minister of Europe and Foreign Affairs. See my remarks below:

Ladies and Gentlemen,

Let me get straight to the point: we run the risk of defaulting on our promise to finance the 2030 Agenda. The annual financing gap for the SDGs stands at 2.5 trillion dollars in developing countries alone.

And yet, our Global Outlook on Financing for Sustainable Development concluded that total external support to financing the SDGs in developing countries had actually dropped over the past year, primarily due to a contraction of FDI, which has declined by 20% in the first half of 2019.

At the same time our countries have been struggling to maintain the level of official development assistance (ODA) to a collective $150 billion. We would need 20 times more to fill the gap.

We need to “shift the trillions”, as the French G7 Presidency put it, with the Development Ministers’ Declaration calling for a more comprehensive approach to SDG-compatible finance, based on the work of the OECD and the UN, and other stakeholders. For this, we need a strategy oriented around three key pillars: mobilisation, alignment, and impact.

Mobilisation

The financing is there, if we could only mobilise it. That begins with increasing domestic resource mobilization, which remains the primary source of financing for the SDGs.

We know that increasing the tax to GDP ratios across developing countries by just 1% would provide an extra $250 billion in revenues in developing countries.[1] 

Our joint program with UNDP, Tax Inspectors without Borders (TIWB), creates $100 of tax return to developing countries for each dollar spent, and has already collected around 500 million dollars of additional tax revenue since it was launched 2015.

On the global scale, OECD work on Automatic Exchange of Information has helped raise close to EUR 100 billion of additional tax revenues. Base erosion and profit shifting, which we are tackling through the OECD/G20 Inclusive Framework on BEPS, disproportionately affects developing countries, and costs up to 240 billion USD per year in lost tax revenue.

However, in addition to taxation, we must also increase ODA volumes from 0.3% of GNI in DAC countries to the UN approved target of 0.7%.

We also need to mobilise new forms of financing. The 2.5 trillion USD gap actually represents less than 1% of available global financial assets. But, as the G7 development ministers recognized, we have to find new solutions, like blended finance.

Some progress has been made. DAC members mobilized over $150 billion of private finance for development between 2012 and 2017 through the use of blended finance and other instruments. Impact investment is another example, the estimated total global impact investments stand at approximately USD 502 billion, but it’s still not enough.

Alignment

We are lagging behind in mobilizing, but we are lagging three times behind in alignment.  

The size of the challenge would require to re-think all the budget processes and allocations to align them with the SDGs, but we are not doing it nearly enough. Less than half of OECD countries specifically include SDG reporting in their budgets.

New Zealand is interesting because they moved to Well Being budgeting. This is based on the idea that gauging the long-term impact of policies on the quality of people’s lives should be the focus of the national budget, rather than focusing on short-term output measures, and not taking account of the negative consequences of policies.

And more than anything, we need to stop dedicating resources to the ‘wrongs’. Spending more in fossil fuels (almost 1 trillion) instead of financing renewables, for example.

The OECD is launching a new report on the alignment of development co-operation with the Paris Agreement, to end the practice of using concessional finance for fossil fuels and instead to finance low-carbon alternatives.

Alignment is about incentives, financial markets cannot continue rewarding the same pattern of consumption and production that has led to such social and environmental outcomes.

Mark Carney talked about the “tragedy of horizons”, imposing a cost on future generations that we have no incentive to fix, and pointed out that meaningful action would leave most of our assets “stranded”.

The key will be to reward and encourage good investment decisions and for that we need to change the metrics.

Instead of calling for more FDI without discriminating, we should call for quality FDI.

Just the other day, I launched the OECD FDI Qualities Policy Toolkit, which will advise policymaking to improve alignment of FDI with the SDGs.

The indicators focus on five clusters linked to the SDGs: productivity and innovation; employment and job quality; skills; gender equality, and carbon footprint.

These indicators will be a practical tool to shape the investment policy framework conditions to deliver on the SDGs.  Because this is ultimately about impact, and impact requires measurement.

Impact

We need to change the metrics to overhaul existing financial and development systems. This means incorporating   impact measurement – including both positive and negative outcomes.

I met with Sir Ronald Cohen at the UNGA in September . We discussed that the criteria for business and measurement should not only be risk and return, but include impact. The same for the traditional cost benefit analysis by our governments.

But this requires a common framework for impact measurement.

This is why the OECD is working with partners like UNDP and the IMP Structured Network to develop a generally accepted Conceptual Framework that will contribute to impact performance measurement and integration of impact into investment decision-making by using the Financial Accounting conceptual framework (IFRS) as a basis.  

The framework will include a set of principles, with accompanying implementation guidance, regarding how information should be collected and disclosed by organisations to inform a range of decisions, including to decrease negative impact and increase positive impact on people and planet.

This will be critical in delivering on the SDG agenda, and as Betrand Badré would say enabling “finance to save the world.”

Thank you.


[1] Overall, the ratio for the 53 developing countries in the OECD Revenue Statistics is 19.1%, compared to 34% for the OECD. 

Paris Peace Forum Panel: Implementation of the Paris Call for Principles and Values

On 12 November 2019 I participated in a panel entitled “Implementation of the Paris Call for Principles and Values” with Jean-Baptiste Lemoyne, Secretary of State to the Minister for Europe and Foreign Affairs, John frank, Vice President of European and Government Affairs at Microsoft, Eugene Kaspersky, CEO, Kaspersky, moderated by Frederick Douzet, Professor, Institut Francais de Geopolitique, Université Paris 8. See my panel speaking points below:

The digital transformation is rapidly advancing.

  • Almost half of the world’s population is connected to the Internet, up from only 4% in 1995.
  • Recent OECD research has found that around one-half of all people across the OECD have accessed public services or health information online.
  • Every digital device is exposed to security risk: computers, smartphones, servers, but also digital technologies embedded in planes, cars, insulin pumps, factory robots, domestic appliances…
  • Every decision on the design, deployment and use of technologies shapes the digital security risk.

Online crime is common & children are esp affected

  • UK estimates show that you are now 20 times more likely to be robbed online than in the street.
  • Children are particularly affected by cyber risks: PISA found that a quarter of 15-year olds spend more than 6 hours a day online at the weekend.
  • Recent data breaches include 500 million records from Marriott International; 145 million records at the U.S. credit bureau, Equifax, including Social Security numbers; 87 million records at Facebook.
  • Estimates of the cost to the global economy from cybercrime stand at almost $450 billion a year.

France (and NZ) have shown great leadership

  • A year ago today, President Emmanuel Macron launched The Paris Call for Trust and Security.
  • This high-level declaration in favour of the development of common principles for securing cyberspace has already received the backing of almost 70 States, 140 international and civil society organizations, and over 350 businesses.
  • New Zealand also a leader. The Christchurch Call outlines collective, voluntary commitments from Governments and online service providers to address terrorist and violent extremist content online and to prevent the abuse of the internet.

Paris Call addresses role & responsibility private sector

  • Private companies own most of the digital infrastructure and develop most of the products that use it. They have a crucial role in keeping cyberspace trusted and secure.
  • The Call stresses the need for multi-stakeholder collaboration around new cybersecurity standards.
  • Co-operation between governments, private sector, and civil society is necessary to bring forward different perspectives, exchange ideas and good practices, and lend credibility to the process and outcomes.

OECD has an important contribution to make (I)

  • In 1980 OECD set 1st international standard for personal data protection and in 2019 first inter-governmental guidelines for trustworthy AI.
  • 2015 Recommendation on Digital Security Risk Management for Economic & Social Prosperity paved the way in addressing responsibility of private actors and treating digital security as an economic rather than technical issue.
  • It provides principles around shared responsibility on risk assessment, security, transparency, cooperation across borders and human rights, as well as guidance on effective national strategies.

OECD has an important contribution to make (II)

  • In the days after the Paris Call launch, the OECD’s inaugural OECD Global Forum on Digital Security for Prosperity, working in partnership with France, was discussing role of private sector.
  • In addition OECD established this year a working party on digital security policies, to foster shared understanding of actions
  • It will focus on enhancing the digital security of products, managing and disclosing vulnerabilities responsibly, and clarifying the limits on what businesses can and cannot do in response to cyber-attacks – priority areas under the Paris Call. 

OECD engaged on violent content & child protection

  • In response to G7 Leaders’ Summit in Biarritz, OECD is leading work to develop voluntary transparency reporting protocols on detecting, filtering and removing terrorist and violent extremist content (TVEC) on online platforms.
  • This is a concrete step towards meeting the Christchurch Call & G20 statements.
  • Linked to this is update of 2012 Recommendation on the Protection of Children Online with a new typology of risks linked to social media and mental health and new contact risks from cyberbullying, harassment and sextortion. 

Concluding comments

  • 1 year since the Paris Call, and we can already attest to the shift in the international discourse on cybersecurity.
  • By emphasising the complementary role of the private sector and the importance of a multi-stakeholder approach, it reminds us that we are all interconnected and therefore inter-dependent – within and across societies and economies, sectors and countries.
  • The cyberspace is shared, and we all carry the responsibility to keep it secure and trusted. Count on the OECD!

Kick-off of the Inclusive Growth Financing Forum at the Paris Peace Forum

At this year’s Paris Peace Forum Gabriela Ramos and the OECD Secretary-General, Angel Gurría launched the Financing Forum for Inclusive Growth in the presence of President Emanuel Macron. Find the Secretary-General’s remarks below:

Monsieur le Président Macron, Mesdames, Messieurs, chers amis,

Dans un contexte de fractures profondes et de pressions sur les économies et les démocraties, l’OCDE a bâti de nombreuses coalitions pour combattre les inégalités. Nous avons commencé avec les gouvernements, nous avons continué avec les maires, puis avec les organisations internationales. La France a été un fer de lance tout au long de ces efforts.

Monsieur le Président, à la veille du Sommet de Biarritz, vous avez accueilli la création d’une coalition d’entreprises propulsée par l’OCDE, « Business for Inclusive Growth » (B4IG), et salué la création  d’un Forum de financement de la croissance inclusive qui permettra l’alignement des investissements et des efforts du secteur privé autour des politiques publiques pour la croissance inclusive : nous vous le livrons aujourd’hui !

Le conseil d’experts qui guide les travaux du Forum s’est réuni hier à l’OCDE pour définir une feuille de route pour les prochains mois. Il a demandé à l’OCDE d’appuyer la définition des principes d’investissement et d’impact qui permettront de transformer le Forum de Financement en un Fonds de Croissance Inclusive. Ce Fonds sera le premier à financer la lutte contre les inégalités dans les pays du G7 et de l’OCDE.

L’investissement à impact est devenu une industrie massive, avec des actifs sous gestion estimés à 500 milliards de dollars. Notre défi commun difficulté consiste désormais à de transformer cet appétit grandissant des investisseurs pour des rendements sociaux et environnementaux en des investissements réels contribuant à la croissance inclusive, ce que ce Fonds devrait nous permettre de faire.

Je vous remercie pour votre confiance.

OECD Forum on Green Finance and Investment Day 2: Opening Remarks

Remarks by Gabriela Ramos on the second day of the OECD Forum on Green Finance and Investment hosted at the OECD Headquarters in Paris, France on 30 October 2019.

Good morning Ladies and Gentlemen,

Welcome to the second day of the 6th OECD Forum on Green Finance and Investment. 

Yesterday, Secretary-General Gurría opened this Forum with a call to action that highlighted not just the scale of the climate emergency, but also the importance of tackling it with policies that also promote inclusion and well-being.

We have seen here in France, but also more recently in Chile, that we have to put people at the centre of all of our policy efforts, including those that are linked to reducing our dependence on fossil fuels and incentivising green growth.

The OECD has made this a priority in the last few years with groundbreaking studies like Investing in Climate, Investing in Growth, and most recently Accelerating Climate Action: Refocusing Policies Through a Well-Being Lens. There is a clear empirical case: policies that work for climate and people, also work for growth.

OECD research undertaken at the request of the German Presidency of the G20 showed that climate-compatible policy packages could increase long-run output by up to 2.8% on average across the G20 by 2050.

Financing is an important part of getting this policy mix right, and not just how we mobilize more climate finance but also how we mobilize it more effectively. We have the power to do more with our investments.

Let me begin with engaging emerging economies, which is a key area for discussion today, and in particular India and  ASEAN countries.

India has set ambitious targets of installing 175 GW of renewables capacity by 2022 and 500GW by 2030. Achieving India’s clean energy goals will require around USD 500-700 billion in investment in the coming decades.

Similarly, ASEAN has set a target of sourcing 23% of its energy from renewable sources by 2025. As a region, ASEAN’s clean energy goal requires USD 290 billion in investment through 2025.

While progress has been made in financing renewables and energy efficiency infrastructure in India and the ASEAN, an investment gap remains. Governments cannot shoulder this burden alone. Catalysing private investment requires an enabling investment environment and a pipeline of investment-grade projects.

Thus, the OECD’s new Clean Energy Finance and Investment Mobilisation Programme, which you will discuss today, aims to support selected emerging economies in Latin America, South and Southeast Asia strengthen their clean energy policies to attract private investment for through clean energy finance reviews, policy development, investor dialogues and regional peer learning.

As these economies continue to grow, we must ensure that any increase in consumption is matched with a  supply from renewable or other low carbon sources, rather than adding to the global demand for fossil fuels. This goal, alongside efforts to promote energy efficiency and energy conservation can significantly advance our progress toward a low-carbon global economy.

We are looking forward to hearing your insights, experiences and ideas on taking this forward.

Linked to this agenda is another key challenge you will be addressing today: biodiversity loss. At the request of the French G7 Presidency, we recently published a new report Biodiversity: Finance and the Economic and Business Case for Action. The picture is worrying, and a lack of sufficient financing and ambitious action is at the heart of the problem.

The OECD estimates that finance flows with the potential to harm biodiversity stand at 500 billion US Dollars per year, ten times larger than global finance flows for biodiversity conservation and sustainable use.[i]

Over the last half century, such toxic finance flows, and the interests that drive them, have helped destroy one tenth of the world’s terrestrial biodiversity and one third of freshwater biodiversity. We are on course to lose another 10% of terrestrial species by 2050.[ii]

And yet protecting biodiversity is not just about surviving, it also about thriving. Ecosystem services delivered by biodiversity, such as crop pollination, water purification, flood protection and carbon sequestration are worth an estimated USD 125-140 trillion per year, more than one and a half times the size of global GDP.

The OECD has identified key priorities to help scale up and align finance for biodiversity from all sources, public and private. For example, we need a global framework to coordinate action; remove harmful subsidies; consistent and comparable finance tracking and reporting frameworks across countries and companies. Last but not least, we need multi-stakeholder engagement to ensure a common approach for measuring and integrating biodiversity in business and investment decisions.

Key to addressing biodiversity is managing rapid urbanisation, which is also on our agenda today.

By 2050, almost 70% of the world’s population is expected to be living in urban areas.[iii] This is already bringing important environmental impacts, when you consider that cities are responsible for two thirds of energy consumption and for 70 percent of global emissions.[iv]

Cities are core for climate action, and many are actually taking the lead. Recent OECD evidence has shown that cities and regions are responsible for 64% of public investment and half of public spending in selected sectors that have a direct implication for climate change.[v]

However, action to date has been far short of the mark. Subnational climate-related spending represented just 1.3% of GDP on average over 2000-2016, while subnational climate-related investment represented around 0.4% of GDP. Public funding will not be sufficient to finance sustainable cities. We must mobilize the private sector to help finance this investment deficit. Today, you will get a chance to discuss the innovative financial instruments available for cities such as green bonds, equity funds, and land-value-capture instruments to outline concrete actions and recommendations to unlock private investment.

As you can see, the question at hand at this forum is not just how we mobilize more finance to fill key investments gaps to climate mitigation and adaptation efforts. We must go a step further, thinking critically about where and how we direct these finance flows towards strategic synergies that accelerate progress towards a low carbon future, and benefit people and planet.

Thank you and enjoy day two of the Forum.


[i] based on fossil-fuel subsidies and government support to agriculture that is potentially environmentally harmful

[ii] https://sustainabledevelopment.un.org/content/documents/227542019_OECD_HLPF_Submission.pdf

[iii] https://www.un.org/development/desa/en/news/population/2018-revision-of-world-urbanization-prospects.html

[iv] https://www.c40.org/why_cities

[v] The average of 30 OECD countries over the period 2000-2016. Financing Climate Futures. Rethinking Infrastructure. Case study on Financing climate objectives in cities and regions to deliver sustainable and inclusive growth

OECD Forum on Green Finance and Investment: Introductory Remarks to Keynote by Professor Mariana Mazzucato, University College London

Remarks as delivered at the OECD Forum on Green Finance and Investment at the OECD Headquarters in Paris, France on 29 October 2019.

Dear Ladies and Gentlemen,

As we come together for this annual Green Finance and Investment Forum, energy related carbon dioxide emissions are rising again, reaching unprecedented levels in 2018.

You do not need me to tell you the consequences of inaction. We need deep and ambitious policy action to mitigate and adapt to climate change, and innovation is a key part of this.

Let there be no doubt: the rate and direction of innovation will help determine our success in transitioning to a low-carbon economy. However, we have a long way to go in getting the innovation policy mix right.

The OECD’s International Energy Agency is tracking the progress of 38 critical energy technologies necessary for a global clean energy transition, including renewable power, onshore wind, solar power, transport biofuels, smart grids, and energy storage. Currently, only 4 out of these 38 technologies are on track for development and deployment.

We urgently need to scale up these efforts, and key to achieving this is to make innovation mission-oriented, and not just motivated by financial gain.

Who better to tell us about how to achieve this than Professor Mariana Mazzucato, who has led the way in putting mission-oriented innovation on the policy agenda.

Her 2013 book, The Entrepreneurial State: Debunking Public vs Private Sector Myths looks at the ‘investor of first resort’ role that the State has played in the history of technological change — from the Internet to biotech— and the lessons for a Green New Deal.

In 2016 she co-edited the book Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth focused on new economic thinking. I have had the pleasure of engaging with her very closely around these issues through the New Approaches to Economic Challenges initiative, which I oversee, and for which she serves on the Secretary-General’s Advisory Group for a New Growth Narrative.

Most recently, her 2018 book, The Value of Everything: making and taking in the global economy brings the debate about value back to the heart of economics, with analysis on how to ensure we are rewarding value creation over value extraction and destruction.

Mariana currently holds the Chair in the Economics of Innovation and Public Value at University College London (UCL). She is also the Director of the UCL Institute for Innovation & Public Purpose.

Mariana is the recipient of a long and prestigious list of prizes, including the Leontief prize and most recently the inaugural Not the Nobel prize, for fresh thinking in economics.

Ladies and Gentlemen, please join me in giving a very warm welcome to Mariana Mazzucato.

Inauguration of the Expanded OECD Jakarta Office

Excellencies, Ladies and Gentlemen,

It was my pleasure to inaugurate the expanded OECD Jakarta Office on 4 November 2019.

The OECD’s relationship with Indonesia has blossomed in recent years. This reflects first the country’s economic dynamism and its growing role on the world stage. President Widodo has helped deliver annual GDP growth of around 5% a year and per capita income growth of around 4% a year, with living standards continuing to rise.

This deepening engagement between Indonesia and the OECD also points to the efforts of Secretary-General Gurria to build a more inclusive and relevant Organisation.

Back in 2007, we launched the first phase of this relationship (Enhanced Engagement), which we formalised when Indonesia became an OECD Key Partner in 2012, together with Brazil, China, India and South Africa.

That same year, Indonesia and the OECD signed a Framework of Co-operation Agreement – the first such agreement for a Key Partner.

The opening of our OECD representative office in Jakarta in 2015 is a testament to our deepening engagement and friendship.

I am delighted that the office is expanding. This will help us to bring our bilateral co-operation with Indonesia to an even higher level and, we hope, act as a launchpad for our work across the whole Southeast Asian region, particularly through the Southeast Asia Regional Programme (SEARP).

Warm thanks to all those Friends of the OECD who attended the inauguration, and thanks in particular to the New Zealand Embassy for hosting.

ASEAN Business and Investment Summit 2019: Advancing ASEAN 4.0 and Global Value Chains

Heads of States and Governments, Ministers, Excellencies and distinguished guests,

I am delighted to join you for the 2019 ASEAN Business and Investment Summit. Amid growing global trade tensions and uncertainties, that are directly impacting this region, the time is right for this discussion.  

Global value chains (GVCs) and digital technologies are an essential feature of our globalised, interconnected world, and they remain a key lever to improve it.

GVC participation has in many instances been beneficial for ASEAN economies. The OECD 2020 Economic Outlook for Southeast Asia, China and India, released today, estimates that ASEAN countries will grow at a rate of 4.9% over the next five years.

[Let me take this opportunity to thank those among you that made this Outlook possible, the governments of Korea, Japan, Switzerland and more recently the European Commission.]

We are increasingly referring not only to “Factory Asia” but also “Market Asia”, as consumption is booming from a growing middle class.  

GVC integration is a part of this success story. Jobs linked to GVC participation have grown over three times faster than total employment, and firms integrated into GVCs are more productive than other domestic counterparts.

However, global integration through GVCs has also brought downsides, and these must be addressed. Growth cannot come at the expense of people or the planet. We have to ensure that companies and state actors play by the rules and uphold the highest standards.

These include the various OECD due diligence guidance tools and the OECD Guidelines for Multinational Enterprises, which are critical to ensure GVC-related operations deliver safe conditions and quality jobs with adequate wages, social protections and job certainty.

In the digital age, we also have to be more mindful about the level playing field. Trade that works for all means ensuring that firms participating in GVCs are not only the highly innovative “born global” firms, but also local firms and SMEs.

However, the Fourth Industrial Revolution is also bringing challenges. Automation has the capacity to transform global value chains; removing many of the midstream activities, such as parts assembly, that have provided jobs, skills and growing incomes to low- and mid-skilled workers.

The OECD estimates that around 14% of jobs in OECD countries are at high risk of automation and a further third will change significantly in how they are carried out.

It is likely that southeast Asia will be particularly affected. The ILO estimates that almost half of existing jobs in Southeast Asia are at risk from automation.

To benefit from GVC participation in an age of the Fourth Industrial Revolution, policymakers must be forward-thinking and proactive, and they must put people first.

I would like to present three priorities for action.

First, skills development is key, and this is why the Economic Outlook for Southeast Asia, China and India focuses on human capital development.

Currently in the OECD, 15% of adults lack basic digital skills, and 13% lack basic digital, numeracy and problem-solving skills.

Digital skills, as well as creativity, adaptability, judgment and communication skills, will have to be embedded from primary education onwards, along with measures to boost STEM, especially for girls.

The OECD is developing new tools like the PISA Global Competence Framework, but as we build these new approaches and curricula, dialogue between policymakers and the private sector on shifting skills demand will become increasingly important.

So will co-operation around the design of lifelong learning and workplace training. OECD countries are exploring incentive schemes that can help shoulder training costs for employers, as well as initiatives to boost workforce skills in recipient FDI countries.

One example is the Sino-German Automotive Vocational Education (SGAVE), which is a partnership between GIZ, German car companies, and  pilot schools based in China to foster a local talent pipeline, particularly in engineering and IT.

The second priority I want to emphasis for harnessing GVCs in the digital age is make them work for SMEs. SMEs account for 95%–99% of businesses and more than half of the total employment in all ASEAN Member States.[i] And yet they only accunt for 10% to 30% of exports. This gap indicates huge potential, but harnessing digital technologies will be key.

Yet, a recent study found that only 10% of micro, small and medium sized enterprsises (MSMEs), used advanced digital tools.[ii]

We need to do better at diffusing technology across the economy. This requires measures to address limited competition, rigid labour markets, barriers to entry and growth for successful firms, as well as restrictions on trade and investment, and a burdensome regulatory environment, all of which may hinder technology diffusion for SMEs,  and favour larger firms.

The OECD has a wide range of tools to support SMEs, from fostering productivity to accessing finance and promoting inclusive entrepreneurship. Working closely with Business at OECD (BIAC), we have also just launched  the OECD Digital for SMEs Global Initiative, to promote knowledge sharing for all stakeholders supporting SME digitalisation.

OECD countries have interesting examples to share, such as the national campaign “Made Smarter” in the UK, the “Small Business Digital Champions” in Australia, or the “SME: Digital” strategy in Denmark, all of which have worked in parternship with the private sector.

And last but not least, my third priority, a well functioning digital eco-system. ASEAN countries are making good progress. We have seen a rapid rise in mobile broadband coverage. The mobile broadband penetration rates (per 100 people) in Singapore and Brunei Darussalam were at over 100% in 2016 and 2018 respectively, and those of Malaysia and Thailand were close to 100%. Meanwhile, Cambodia, Indonesia, the Philippines, Viet Nam, Myanmar, and Lao PDR are fast approaching 50%.[iii]

But more efforts are needed to deliver comprehensive, reliable, safe and affordable high bandwidth telecommunications infrastructure.

This requires regulations and policies that are based on consistent, clear and transparent principles, and that therefore foster competition in telecom markets.

Our recent report, Southeast Asia Going Digital: Connecting SMEs, suggests that more could be done to strengthen market competition in a number of Southeast Asian countries.

Of course it’s not just about facilitating data flows at all costs. Big data solutions and AI bring vast economic and social potential, but we are the creators of these technologies and we have to shape them for good uses. We need robust rules and structures to safeguard data privacy and security and protect citizens from the risk of data theft and misuse.

Ladies and gentlemen

The message is clear: the opportunities brought by global trade and digital technologies are vast.

However, trade integration, like economic growth and like technological progress, are not ends in themselves, but a means to improving people’s lives and opportunities.

This is the lens through which all countries, including ASEAN countries, must focus their policy efforts to harness GVS in the digital age. Count on the OECD.


[i] Study on MSMEs Participation in the Digital Economy in ASEAN, October 2019, https://asean.org/storage/2012/05/Study-on-MSME-Participation-in-the-Digital-Economy-in-ASEAN.pdf, p2

[ii] Study on MSMEs Participation in the Digital Economy in ASEAN, October 2019,  https://asean.org/storage/2012/05/ASEAN-MSME-Full-Report-Final.pdf, p4

[iii] Study on MSMEs Participation in the Digital Economy in ASEAN, October 2019, https://asean.org/storage/2012/05/Study-on-MSME-Participation-in-the-Digital-Economy-in-ASEAN.pdf, p1

Newsletter 3-13 October 2019

Check out my newsletter for a snapshot of my recent engagements.

Opening Remarks: OECD-SRSS Cooperation Signature Ceremony

On 16 October 2019 Gabriela Ramos, OECD Chief of Staff and Sherpa and Martin Verwey, Director General of the European Commission’s Structural Reform Support Service (SRSS), signed a document solidifying the collaboration between the OECD and SRSS at the OECD Headquarters in Paris, France.

Ambassador Didier Lenoir, Director General Maarten Verwey, Ambassadors, Directors, Colleagues,

I am delighted to welcome you at this ceremony to seal in and celebrate our collaboration with the European Commission’s Structural Reform Support Service (SRSS). Let me in particular thank Maarten Verwey, the Director General of the SRSS and his team, Daniele Dotto, Sébastien Renaud and Ana Lope-Garcia for being with us today. We have certainly come a long way together since we met in Brussels at the end of last year to structure this cooperation. Today, we are very happy to officially join forces with the SRSS and support the European efforts to help advance a strong agenda on structural reforms.

This is a timely gathering as we witness the launch of the new Presidency of the European Commission. On that note let me mention that we are particularly proud to see the EU lead the way be electing a woman for President for the very first time, and a woman to govern the European Central Bank. The EU is walking the talk on gender equality!

The goals of the new European Commission resonate well with OECD objectives; that is to ensure that our growth models deliver for people, and for the planet. Combating climate change, achieving social justice, and dealing with the digital transformation, are objectives that bring us together.

It is my pleasure to recall that the OECD has been collaborating closely with the European Union since 1960. Our co-operation with the SRSS is in fact an extension of this collaboration and the extension of this work could not come at a better time. Joining our efforts in this way makes us stronger in a particularly complex moment. As highlighted in the OECD’s Interim Economic Outlook released in September, we must start investing more in structural reforms if we are to prevent a deeper slowdown of global growth. It is clear that, beyond macroeconomic objectives, the plan for further growth requires a strong component of structural reforms. This is also the main lesson from the financial crisis that led to the European Semester, and the OECD has been an active partner since the very beginning of the crisis, notably by working closely to support Greece. It is by working on structural reforms, which are the DNA of the OECD, that we can lay the foundations for more productive, innovative, inclusive and dynamic economies.

We are grateful for the excellent opportunity, provided by the SRSS, to have greater policy impact and to ensure more effectiveness in advancing structural reforms directly with governments on the ground. I am convinced that this co-operation is a win-win for both the EU and the OECD. It takes advantage of the support the EU has provided the OECD with for so many years, in advancing important policy agendas, most notably through its generous provision of Voluntary Contributions. This partnership leverages the investment made by the EU in the OECD until now, which should ensure a high rate of return for our European Members!

It is with great pleasure that I announce that the grant agreement we are sealing in today comprises 34 projects in 18 EU countries! These projects will lead to improved labour markets, education systems, innovation, governance, environmental protection and you name it. To mention only a few of these ambitious projects, we will for example be supporting the Czech authorities with the preparation of a new national circular economy strategic framework, developing a new National Basic Skill Strategy in the Netherlands and improving the provision of labour market services in Estonia and Slovenia.

I am delighted to tell you that we have received much positive feedback on this co-operation, both from our partners in national administrations and from our counterparts at the SRSS. This feedback confirms the quality and relevance of OECD support to delivering on government reform priorities.

Let me take this opportunity to thank our Ambassadors for their positive reception of this co-operation. Each project contributes to advancing national reform programmes by capitalizing on the cutting-edge skills and human capital developed in this house. The OECD is contributing with the best of our talent, as represented also by our experts present here today. Therefore, I extend my gratitude to Directors, counsellors, project managers, experts and corporate services staff for contributing to the success of this initiative.

Ladies and Gentlemen,

In a geopolitical environment where we are witnessing an ever-weakening commitment to multilateralism, collective efforts such as those fostered by the OECD-SRSS partnership are our best response. I believe that by delivering on this co-operation, we can prove that even the most important national priority can benefit immensely from international cooperation. Together we must aim to ensure multilateralism’s survival and success and I can assure you that the OECD, as a results oriented do-tank, remains committed to these goals!

Finally, we support and encourage the ambitions of the new European Commission to further reinforce its reform support programme and we will do our best to continue delivering as a constructive, trustful and engaging partner.

Dear Maarten, SRSS colleagues and Ambassadors please count on us, count on the OECD!  Thank you!

Closing Remarks: State-Owned Enterprise Anti-Corruption Day

Closing remarks delivered at the State-Owned Enterprise Anti-Corruption Day hosted at the OECD headquarters in Paris, France on 16 October 2019.

Ambassadors, Committee Chairs, distinguished guests,

I would like to begin by thanking you for joining us for the OECD State-Owned Enterprises Anti-Corruption day. The Recommendation of the Council on Guidelines on Anti-Corruption and Integrity in State-Owned Enterprises (or ‘ACI Guidelines’ as we call them) was adopted by Ministers in May. We are here to advance the all-important process of ensuring successful implementation.

Now is when the work really begins, because as our Secretary-General likes to say, agreements make the headlines, but implementation is what changes people’s lives.

SOEs are critical for our economies and societies – they are the main channel for states to exercise their roles as economic actors, and in many instances they help deliver essential services to the public.

They are often concentrated in sectors of strategic importance for government and society, like energy, water and transport.

Today SOEs account for over a fifth of the world’s largest companies and many are increasingly being operated like private firms. Their role as global competitors is growing as the boundaries of markets extend beyond geographic borders.

Unfortunately, the presence of SOEs in the global marketplace has also been marked by certain high-profile scandals and some instances of corruption. As we heard earlier today, the majority of bribes promised or given to foreign public officials between 1999 and 2014 were destined for SOE officials.

But it’s not only an issue of cross-border activity. The challenge is also at the regional, national and local levels.

A recent report by Transparency International shows that almost a fifth of citizens in 18 Latin American counties had to pay a bribe to utility services in the last year (second only to the police force).[1]  And we know that SOEs are big players in utilities sectors.

When mismanagement, abuse or corruption occurs in SOEs, the costs to society and to trust in both the private and public sectors can be great.  We have seen how some SOE-related scandals can lead to democratic unrest and slides in the corruption perceptions’ index.

Today marks the latest stock-take in years of exploration on what makes SOEs susceptible to corruption and how policy makers can act to raise their integrity.

The Guidelines will help address this challenge. For example, to help insulate SOEs from undue influence in their operations, the Guidelines recommend safeguards for the autonomy of boards and merit-based appointment of SOE decision-makers (including CEOs). To avoid impunity of SOEs and bring accountability, the Guidelines expect SOEs to have annual external audits and that auditors report on any irregularities.

Integrity is an ethical imperative and a key driver of trust, but it is also an economic case, since integrity is vital to ensure high performing productivity and returns on public investments.

The Guidelines, which complement the OECD Guidelines on Corporate Governance of State-Owned Enterprises, are rooted in the idea that no state owner or company can fully succeed in improving SOE integrity by ‘going it alone’. A broad range of actors need to be on board, and their incentives aligned.

This is why the ACI Guidelines were developed by three Working Parties: the Working Party on State Ownership and Privatisation Practices in collaboration with the Working Group on Bribery in International Business Transactions and the Working Party of Senior Public Integrity Officials.

All three are represented here today, in addition to a broad range of participants from private firms, from governments, including OECD national delegations, from academia, from civil society, and of course from TUAC and BIAC.

This meeting is all about ‘kicking-off’ the implementation process, and you have brought very good insights and examples to nourish the discussion and chart the path forward:

  • We have heard this morning directly from various branches of government on how owners can and should lead by example on integrity;
  • We have shared our challenges, our best practices and reforms on getting ownership and governance arrangements right;
  • We have learnt from both private firms and SOEs which company-internal structures and mechanisms best promote integrity and prevent corruption;
  • We have explored how accountability is maintained and what to do if things go wrong;
  • We have taken a deep dive into the particular challenges of high-risk areas like the extractives sector; and;
  • Last but not least, we have  gathered new partners to help put into practice all of what we have shared, with exciting new initiatives like the piloting of an expert secondment programme: Compliance Without Borders [the idea was born in the B20].

The most important thing is that we continue to advance together in the collaborative and multilateral spirit in which the Guidelines were conceived.

As the OECD’s Sherpa to the G20, I am proud that the ACI Guidelines were elaborated from a G20 consensus. Under last year’s Argentinian Presidency, the G20 Anti-Corruption Working Group adopted a set of High-Level Principles on Preventing Corruption and Ensuring Integrity in State-Owned Enterprises, to which the OECD was a key contributor.

We are there to work together with states to identify quick wins but also to accompany you for the long road ahead.  We invite you to tap into our regional networks where governments identify common challenges and good practices in promoting corporate governance and integrity in the companies they own.

Today was an important gathering to take stock and strengthen implementation capacity, but we will continue providing opportunities to exchange on these important topics.

I ask you to pencil in the next key data – the OECD’s Global Anti-Corruption and Integrity Forum on 25-26 March. The subject is “Public, private and beyond”, which is the perfect platform to take this work forward.

Ladies and gentlemen,

Your presence here demonstrates that we have the commitments necessary to drive progress. And thanks to today’s meeting, we have a host of good practices and consultation partners that can help feed into an accompanying ‘Implementation Guide’ planned for 2021.

So let’s keep up the momentum and the commitment as together we embark on the implementation phase of this critical tool for integrity and for the public good.

Thank you.


[1] See Transparency International’s Global Corruption Barometer survey of over 17,000 people across 18 countries, conducted between January and March 2019. Available at:  https://www.transparency.org/files/content/pages/2019_GCB_LatinAmerica_Caribbean_Full_Report.pdf.