OECD chief calls for urgent measures to foster ‘inclusive’ globalisation

By on 02/05/2017
Angel Gurría, Secretary-General of the OECD

The secretary-general of the Organisation for Economic Co-operation and Development (OECD), Angel Gurría, has called for fresh policy action and increased international collaboration to address the negative consequences of globalisation.

In a speech last week Gurría urged governments in the 35-nation economic bloc to take urgent steps to tackle the growing “backlash” against globalisation, which he said threatens to trigger a “damaging retreat from openness” in some advanced economies.

His comments, made in a preparatory session ahead of an OECD ministerial meeting in June, coincided with the publication of an OECD paper, ‘Fixing Globalisation: Time to Make it Work for All’.

The paper said that although globalisation has helped increase global prosperity, there is growing evidence that its benefits have become concentrated in steadily fewer hands.

It highlighted, for example, how across OECD countries the richest 10% of the population now earn almost 10 times more than the poorest 10%, up from 7 times in the 1980s.

Meanwhile, social mobility has fallen, affecting particularly younger generations, with 17% of 20-24-year-olds across OECD countries now not in any employment, education or training.

On top of this, Gurría said rapid digitalisation of the economy is leading to “globalisation on steroids”, with an estimated 9% of OECD jobs now at “high risk” of being automated.

“All this has led many people in advanced countries to feel that globalisation is benefitting others, but not them. Moreover, many feel that some of the processes through which globalisation is advanced are insufficiently transparent and democratic. And citizens have been expressing their discontent in the ballot box,” he said.

But the OECD paper said that in the face of a growing backlash, rather than retreat from globalisation, governments in advanced economies should seek policy responses that address the frustrations that citizens feel they are being left behind.

At a national level this means strengthening policies that enable citizens to share in the benefits of globalisation – for example enhanced education and lifelong learning opportunities for low-income groups.

Gurría also called for “more and better” international cooperation to address problems such as “market-distorting” behaviour – such as subsidies for state-owned enterprises – “aggressive” tax avoidance and “irresponsible” business conduct.

“While in some cases new standards may be needed, in others it is a question of broadening the coverage of existing standards and enforcing their compliance,” he said.

In the case of free-trade agreements (FTAs) between individual countries or trading blocs, Gurría said governments should do more to build standards to underpin conduct on labour, social and environmental issues. “Many modern FTAs have started to address such issues…. This is a welcome trend,” he said.

Concluding, Gurría said globalisation is a “means to an end, not an end in itself”.

“We have to ensure that the growth it fosters is inclusive and sustainable, that globalisation works for all,” he said. “Openness is worth preserving: it is bringing greater prosperity, peace, innovation, diversity and cultural exchange. It is worth defending, but we may only succeed in doing so if we ensure that its benefits are more widely shared.”

The report ‘Fixing Globalisation: Time to Make it Work for All’ can be found here

For up to date government news and international best practice follow us on Twitter @globegov

See also:

Behavioural insights ‘have taken root’ in governments: OECD report

OECD chief of staff calls for bold policies on gender equality

Rolf Alter, Director for Public Governance and Territorial Development, OECD: exclusive interview

About Ben Willis

Ben Willis is a journalist and editor with a varied background reporting on topics including public policy, the environment, renewable energy and international development. His work has appeared in a variety of national newspapers including the Guardian, Daily Telegraph and Times, as well as numerous specialist business, policy and consumer publications.

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