Investing in the future: People, planet, prosperity
Anthony Gooch, Director of the OECD Forum and the Public Affairs & Communications Directorate of OECD
The 2015 OECD Forum comes at key moment in what is proving to be a watershed year. It will be followed by the G7 Summit on 7-8 June, focussing on responsible business conduct and environmental and social conditions along global supply chains. In July, Addis Ababa will play host the third International Conference on Financing for Development which will prepare the ground for the UN Summit in September, where the adoption of the post-2015 development agenda will define a set of Sustainable Development Goals (SDGs). If this were not enough, the G20 Summit in Turkey is set to endorse the biggest overhaul in international tax rules in a century led by OECD. The G20 will build on its commitment to close the gender gap in labour market participation by 25% by 2025 which could bring an extra 100 million women into labour markets. And the year ends with the COP 21 Climate Change Summit, here in Paris in December.
It is in this context that we identified the 2015 OECD Forum theme: Investing in the Future: People, Planet, Prosperity. We need investment that fosters green growth, supports innovation and entrepreneurship, and contributes to closing the inequality gaps that this crisis has widened. But investment has decreased by as much as 25% relative to pre-crisis forecasts in many countries, and moving to a longer-term investment environment requires a transformational change in both government and investor behaviours.
The OECD’s recently released In It Together report shows that the gap between rich and poor is at its highest level in 30 years, with the richest 10% of the population now earning almost 10 times what the poorest 10% earns. That is up from 7 times from the 1980s. Globally, over 200 million people are unemployed, over 42 million in the OECD alone, 9 million more than just before the crisis. More than 35 million young people, aged 16-29, across OECD countries are neither employed nor in education or training.
When people do get jobs, the chances are high that they are on short-term contracts, and lack long-term career prospects or training and development opportunities. The Forum will discuss how to close income and wealth gaps, and how to promote access to more and better quality jobs. It will also examine how governments, the education system, business and civil society can address growing inequality by expanding access to learning and health. We know how important this is thanks to the 6 million people around the world who have tried our Better Life Index. They rank health, life satisfaction and education as their top 3 priorities, whereas income is consistently ranked only 9th out of the 11 indicators covered.
We’ll also look at which skills give people more control of their futures. Predictions suggest that average working lives will evolve to include around 20 different jobs or projects, instead of the seven or eight career changes common at the moment. The entrepreneurial sector provides opportunities for job-seekers of all ages. The Forum features a number of founders of sharing economy initiatives that allow people to share large and small possessions, from apartments to tools, and even skills. These initiatives can strengthen social cohesion within communities and also help us to use resources more rationally and contribute to our environmental objectives. There are also growing opportunities in the area of social enterprise, combining profit with social goals.
Innovation offers promising solutions in areas such as health, ageing, climate change, food security, and will be a significant source of future growth. But we also have to address the concern that only the highly skilled will have access to rewarding professional careers in the future, further increasing inequality. If we are to harness the benefits of technology without excessive costs to certain workers, we need to act imaginatively.
In his contribution to our OECD Yearbook released in advance of the Forum, HRH the Prince of Wales calls for a “Magna Carta for the Earth”, a global contract for the planet and humanity’s relationship to it. The conventional wisdom has shifted significantly to the point that it is now generally accepted that we are not moving quickly enough to avert disastrous and irreversible climate change. Two-thirds of all the greenhouse gas that the planet can take if we want a planet that can sustain human life, have already been emitted. Fiddling at the margins is no longer enough. Global emissions must have peaked by 2030. If international climate goals are to be met, 90% of power plant investments must be in low-carbon technologies by then. The way to make that happen is to put a high price on carbon.
Effective climate action requires coherent policies across our economies, and today this is far from being the case. The OECD and its sister organisations the International Energy Agency, Nuclear Energy Agency and International Transport Forum have analysed the extent to which policies ranging from land use to trade and investment are hampering efforts to fight climate change. The report Aligning Policies for the Transition to a Low Carbon Economy will be unveiled here tomorrow. Fixing policy misalignments could make our low-carbon ambitions much more achievable if acted upon in the run-up to and following COP21.
Cities that already generate 80% of global economic output, and use 70% of global energy, lie at the heart of finding long term solutions. Over half of the world’s population lives in cities today, and this figure is expected to increase to 70% by 2050. We will feature their voice in the Forum by welcoming representatives of major global cities such Amsterdam, Paris, Prague, Seoul and Rotterdam in the shape of Mayor Ahmed Aboutaleb.
2015 was the deadline set to meet the Millennium Development Goals. We succeeded in halving the proportion of people living in extreme poverty five years ahead of schedule. More people are better educated and live longer and healthier lives than ever before. But we need to finish the work and shift towards a more sustainable future. The post-2015 SDGs offer opportunities for ending poverty, protecting our environment, achieving gender equality and realising sustainable development for all. The goals will apply to all countries, signalling a transition away from the North-South dynamic that has defined development policy for decades. In focussing on financing and implementing the Sustainable Development Goals the Forum reflects the major significance for the OECD, its membership, current and future and partners around the world.
Meeting the financing needs to achieve the SDGs will require public, private, international and domestic investment. There is high expectation with regard to the contribution of the private sector through foreign direct investment, as well as from new public-private partnerships. The OECD Policy Framework for Investment helps countries develop the investment policies needed to achieve these aims. The Forum session on Tax – The Price We Pay will bring into sharp focus our work on Base Erosion and Profit Shifting (BEPS) and tax transparency to provide a fairer tax system, ensuring that countries can invest tax revenues in key areas such as health, education and infrastructure. The G20 Summit in Antalya will see the culmination of three years of work on making the international tax system fairer and fit for the 21st century economy. This can result in a qualitative leap forward in countries’ ability to mobilise domestic resources and close inequality gaps.
During OECD Week 2015 we bring together all the actors and factors that help make and shape policies to invest in a future that is more prosperous in the broad sense of the word, for people and the planet we share. To borrow from one of them, Jeffrey Sachs, “Let the future say of our generation that we sent forth mighty currents of hope and that we worked together to heal the world”.