The global economy is showing important signs of progress. But it is not enough. It is still not enough to bring the 202 million unemployed back to a decent job. This is not enough, when we have 73 million youngsters out of work. This is not enough, when inequalities in many countries are now growing faster than before the crisis. And this is certainly not enough, when trust in leaders, governments, parliaments, corporations, banks, rating agencies, regulators and media, is eroding and reaching record lows.
This crisis should be a game-changer. We cannot go back to business as usual, to the same active inertia where high net worth individuals and multinationals don’t contribute their fair share to society; where the vulnerabilities of financial systems are camouflaged; where speculation and leverage keep flying high; and where some policymakers and economists are still clinging to economic models that have been proven obsolete, wrong or unsustainable.
It is time to imagine a new type of growth that is focused on the well-being of people, on the benefits of equitable societies, on the trade-offs and complementarities of different policies in favour of human progress. I am talking about what we at the OECD call inclusive growth, one of the three main topics of this year’s OECD Forum and a central discussion in our 2014 Ministerial Council Meeting.
The OECD’s Inclusive Growth Initiative takes up the challenge. It aims to enhance policymakers’ understanding of the adverse effects of rising inequality on growth, and turn inclusiveness into a driver of stronger economic performance.
The second topic of this Forum is jobs. This is still the centre of gravity of the crisis. The crisis destroyed nearly 14 million jobs across OECD countries. In spite of recent progress, many of our countries are still facing unacceptably high levels of unemployment. A large segment of the unemployed are under 25. A worrying number has been out of work for more than a year. Fixing this deplorable situation implies some of the most complex policy challenges: the OECD is helping governments tackle weak labour market adaptability and inadequate skills development. We are monitoring labour markets, training policy responses and migration trends. And we are accelerating our work to deal with youth unemployment with the OECD’s “Giving Youth a Better Start”.
If education and training don’t improve the lives of our youth, because at the end of these efforts they face the unemployment cliff, we will be undermining the most important value for any democracy and any market economy: trust!
This is the third topic that we will address in this Forum. One of the heaviest legacies of the crisis is the erosion of public trust to historically low levels. The 2014 Edelman Trust Barometer puts global trust in governments at 44%, with record lows in places like France (with 32%), Mexico (28%) and Poland (19%). These are alarming numbers. The “evaporation of trust” in key institutions weakens our democracies, erodes social cohesion, makes reform more difficult and damages economic growth.
The OECD has a duty and a responsibility in reinvigorating trust. As Diane Coyle wrote in the OECD Yearbook: “we will only be able to make the necessary difficult decisions if there is enough trust in those whose job is to lead us.”
So we will have to challenge conventional knowledge. We will need new economic thinking and acting. This is why the OECD has launched its New Approaches to Economic Challenges Initiative (NAEC), to revise our economics, to question the established models and improve our policy advice.
After all, what is the point of economics if not to improve people’s lives? What is the point of economic policy if not to build more inclusive and harmonious societies? What is the value of international co-operation if not to share our knowledge to raise the living standards of the most vulnerable? Let’s prove Garcia Marquez wrong: let’s make wisdom count!
Extract from opening remarks by Angel Gurría, OECD Secretary-General, delivered at the OECD Forum, “Resilient Economies for Inclusive Societies”, Paris, 5 May 2014. The complete address can be read www.oecd.org/about/secretary-general/publicationsdocuments/speeches/
For more information see www.oecd.org/yearbook and www.oecdforum.org
© OECD Observer No 299, Q2 2014