Investing to boost growth
This Dutch presidency is in particular worthwhile because its timing is remarkable. From July 1st the Netherlands wil be part of the troika of three nations that consecutively presides over the EU-councils and will itself preside the EU during the first half of 2016. The major policy-orientations Rutte and his colleagues will therefore formulate and implement at a global level via and with the OECD, willl also be guiding the EU and its course.
Large amounts of cash
One issue Rutte stressed in his Paris-speech should vertainly be noted: “Big companies, especially, are holding large amounts of cash and hesitating to make new investments. The question we face today is: how do we unlock those resources to create new and sustainable economic growth that generates the new jobs we so badly need?”
“We can’t just wave a magic wand, but there are several things that government and business can do to help. One is to expand public-private partnerships, which are enjoying more and more success in various countries.” This is particularly interesting for initiatives in R&D, STEM, and universities and other higher education.
You can read PM Rutte’s full speechtext here:
“Today it is my honour to welcome you all to Paris and, as prime minister of the Netherlands, to chair this annual OECD Ministerial Council Meeting. I’d like to offer a special word of welcome to my esteemed colleagues and vice-chairs from the Czech Republic, France and Korea. And let me thank you, Secretary-General Gurría, for your hospitality and your presence here today. Under your leadership the OECD plays a vital role in giving governments and businesses the knowledge and statistics they need to develop policies and take decisions that benefit us all.
The Netherlands first chaired the MCM in 1964, in a bipolar world at the height of the Cold War. It was a time when the global market place was little more than national economies competing with each other. Our second time was in 1991, a few years after Perestroika and the fall of the Berlin Wall. In Europe, the key priority at that time was warp-speed economic integration. But big emerging economies like China and India were slowly entering the world market too. Integration changed the world’s production and trade patterns forever. We know that all too well now, after a global crisis that underscored how interconnected the global economy has become. And it is the magnitude of these changes, and all the opportunities and risks they bring, that we are dealing with today.
As the emerging economies’ significance and integration into the world economy grows, so the OECD’s importance grows too. After all, in today’s world, well-functioning markets and free-flowing international trade and investment determine the prosperity and wellbeing of more and more people.
The good news is that we are finally recovering from the crisis. And I hope that the OECD Economic Outlook that is being presented here today will show other encouraging signs of recovery. But to speed things up and pave the way for new growth and jobs, it’s essential to raise investment at all levels. I’m glad this Ministerial Council Meeting is focusing on that problem, because investment was hit hard by the crisis, and its recovery has been sluggish. In advanced economies, investment has declined by 20 per cent, on average, compared with pre-crisis forecasts. That’s a serious amount, and it raises serious questions that need serious answers.
On the positive side, investment conditions are quite favourable. Interest rates are at an all-time low in many countries. Big companies, especially, are holding large amounts of cash and hesitating to make new investments. The question we face today is: how do we unlock those resources to create new and sustainable economic growth that generates the new jobs we so badly need? We can’t just wave a magic wand, but there are several things that government and business can do to help. One is to expand public-private partnerships, which are enjoying more and more success in various countries and have led to more investment across a wide range of sectors.
To fuel the discussion even further, let me highlight two other issues that I believe are key to today’s topics.
First: Investment, whether domestic or foreign, financed privately or publicly, will only pay off in an enabling environment. That means all countries need to pay attention to good governance, the rule of law, legal certainty, anti-corruption measures, a level playing field and a well functioning market, without too much red tape. All these elements help foster a climate in which everyone can confidently participate in the economy: investors at home and abroad, consumers and savers, local companies and foreign enterprises.
Second, we must have a keen eye for sustainability and innovation as we work to boost investment. Not only because it’s a clear necessity, but also because it provides many promising business opportunities. Take climate change and the need for renewable energy. Take demographic ageing, the fast-growing digital economy or the challenge of how to feed nine billion people by 2050. These are just a few examples that illustrate the need for new, innovative and future-proof solutions. Sustainability and responsible business conduct are not simply optional extras anymore – they’re a business case we can’t ignore.
Ladies and gentlemen, we have a lot of work ahead of us. But it will be worth it. Because at global level this meeting provides an excellent opportunity to have an interactive, fact-based discussion. We need to consider how best to unlock new investment for sustainable growth and jobs. I’m sure that will motivate all of us to make this Ministerial Council Meeting a success. I wish you many useful discussions and an inspiring conference.”
