Remarks by Angel Gurría
22 February 2020 - Riyadh, Saudi Arabia
(as prepared for delivery)
Ministers, Central Bank Governors,
The overarching theme of this year’s G20 Presidency – Realising Opportunities of the 21st Century for All – captures one of the most pressing structural challenges facing the global economy: inequalities, in particular in access to opportunities.
Inequalities and the lack of opportunities are problematic, not only in ethical and societal terms, but also as they are undermining productivity and growth. Back in 2015 already, our In It Together report was showing that the rise of income inequality between 1985 and 2005 was estimated to have knocked 4.7 percentage points off cumulative growth between 1990 and 2010, on average, across OECD countries. Put simply: rising inequality is bad for growth.
For instance, high inequality and lack of opportunities constrain the ability of low-income groups to invest in quality education and skills throughout their lives and that of their children.
Joblessness of the young is a particular challenge. The OECD has estimated that in G20 countries 218 million young people aged 15 to 29 are neither in employment nor in education or training. This perpetuates a vicious cycle of exclusion resulting in wasted talent, lower aggregate productivity growth and even greater inequalities.
Ministers of Finance have their role to play in breaking these self-reinforcing dynamics. It is less costly to act ex-ante, reducing the scope and need for ex-post costly redistribution mechanisms.
In the context of tight public budgets, much can be done to enhance the effectiveness and targeting of key policies by undertaking comprehensive spending reviews and deepening the whole-of-government approach to public policy objectives and solutions – with one overarching objective in mind: promoting access to opportunities.
Access to education and training, all along the life-cycle, is key in that regard.
At a time when countries are looking for ways to improve the efficiency of public spending, early childhood education offers the highest return on investment. When everyone is given a strong start, the costs of addressing poor results are lower later on and children are set on a trajectory to stay in school and achieve their learning potential. The results of our flagship Programme for International Students Assessment – PISA – indeed show that those school systems that perform the best and provide equitable learning opportunities to all students are also those that provide more inclusive access to quality pre-primary education.
But access to opportunities obviously matter beyond education and schooling. In OECD countries 14% of jobs are highly automatable and another 32% subject to radical transformation by technological progress – making the case for tackling barriers to training and encourage the upskilling or reskilling of the young and low-skill workers. Adult learning systems require adequate and sustainable financing to function well. In the context of mounting budgetary pressures, there is an urgent need to further engage employers and employees in sharing the burden of adult learning financing, but also to better target the latter on those that need it most – the low-skilled - and whose access is often most limited!
These are only examples. In many other areas, gender, territorial development, housing policy, integration of migrants, health, the economic benefits of enhanced and enlarged access to opportunities, are indisputable. The OECD is supporting the development of a G20 menu of policy options to enhance opportunities for all. This will be an important step towards providing, collectively, better opportunities for better lives. Thank you!