OPPORTUNITIES AND CHALLENGES OF GLOBAL ECONOMIC CHANGES

Presentation by Mrs. Gabriela Ramos, Chief of Staff and G20 Sherpa, OECD

Global Summit of Women, June 6 2014, Paris

OECD’s membership and global reach

2

Key Partners: BrazilChinaIndiaIndonesia South Africa

Key Partners: BrazilChinaIndiaIndonesia South Africa

34 member countries34 member countries

New Members: Chile Estonia Israel Slovenia

New Members: Chile Estonia Israel Slovenia

Ongoing membership talks with Russia, Colombia & Latvia

Ongoing membership talks with Russia, Colombia & Latvia

Part I: Resuming Global GrowthGrowth in advanced economies is rebounding

Real GDP growthPer cent

0

2

4

6

8

10

0

2

4

6

8

10

2010 2011 2012 2013 2014 2015

OECD

BRIICS

Source: OECD May 2014 Economic Outlook database.

3

Part I: Resuming Global GrowthThe cylinders of growth are not yet fully activated and some risks continue to exist

Fixed investmentVolume index, 2007 = 100

Trade in goods and servicesVolume, year-on-year percentage change

2012 2013 2014 201570

80

90

100

110

120

70

80

90

100

110

120United StatesJapanEuro area

Pre-crisis

2012 2013 2014 2015-2

0

2

4

6

8

10

-2

0

2

4

6

8

10

World

Average growth of world trade (1990-

Source: OECD May 2014 Economic Outlook database; OECD calculations

OECD Financial Conditions Index (FCI)

-1

0

1

2

3

4

5

6

2011 2012 2013 2014

United StatesJapanEuro area

Easier

cond

itions

Part I: Resuming Global GrowthThe costs of the crisis remain: Output gap

Source: OECD(2014), Economic Outlook5

Estimated effects of the crisis on the potential output per capita of individual OECD countries

Difference in 2014

Part I: Resuming Global Growth The costs of the crisis remain: Increased unemployment and inequality

Long-term trends in inequality of disposable income (Gini coefficient)

Source: OECD Income Distribution Database, www.oecd.org/social/income-distribution-database.htmNote: Income refers to disposable income adjusted for household size.

Part I: Resuming Global Growth The costs of the crisis remain: Increased unemployment and inequality (cont)Long-term trends in inequality of disposable income, cont.

Source: OECD Income Distribution Database, www.oecd.org/social/income-distribution-database.htmNote: Income refers to disposable income adjusted for household size.

Part II: Longer Term ProspectsPossible lower overall growth with rising middle class, and shifting regional wealth

Share of the global economy in PPP terms (2000-2030)

Note: These data apply Maddison’s long-term growth projections to his historical PPP-based estimates for 29 OECD member countries and 129 non-member economies.Source: OECD (2010), Perspectives on Global Development 2010: Shifting Wealth, OECD Publishing

• Projection of overall growth rate at 3% per annum until 2060

• Shifting wealth to developing and emerging economies

8

Part II: Longer Term ProspectsGVCs will continue to increase and shape the production landscape

0%

10%

20%

30%

40%

50%

60%

Foreign value-added content of exports by selected partner

country, 1995 and 2009(as a % of exports)

Foreign value-added content of exportsOECD countries (as a % of exports)

1995 2009

24,6% 29 %

Source: OECD/WTO (2013), OECD-WTO: Statistics in Trade in Value Added, in OECD(2013), InterconnectedEconomies: Benefiting from Global Value Chains. OECD Publishing

9

Part II: Longer Term ProspectsServices are increasingly strategic

10

OECD Services Trade Restrictiveness Index: Mexico

Part III: Future sources of growthFuture growth prospects will be based on productivity-enhancing innovation

Business investment in KBC and tangible capital, United States, 1972-2011

(% of adjusted GDP)

Note: Estimates are for private industries excluding real estate, health and education.Source: Unpublished update on Corrado, C.A. and C.R. Hulten (2010), “How do you Measure a ‘Technological Revolution?”,American Economic Review: Papers & Proceedings 100 (May 2010): 99–104, in OECD(2013), Supporting Innovation in Knowledge Based Gapital, Growth and Innovation, OECD Publishing, p.24 11

Source: OECD (2010), The Invention and Transfer of Environmental Technologies, OECD Publishing.

Part III: Future sources of growthFuture growth opportunities will be green

12

Patenting activity pre- and post-Kyoto Protocol’s adoption (3-year moving average, indexed on 1990=1.0, in Annex 1 ratification countries)

Part III: Future sources of growthWomen’s empowerment and entrepreneurship will be a key driver of growth

Source: World Bank Gender dataset based on ILO Key Indicators of the Labour Market, OECD (2014) Women in Business: Accelerating Entrepreneurship in the Middle East and North Africa Region, preliminary version 13

Male and female labour force participation rates, 2011, selected regions of the world

24

54 58 62 6478 83 84 79 77

0

10

20

30

40

50

60

70

80

90

MENA Low & middleincome

Latin America &Caribbean (allincome levels)

OECD members Sub-Saharan Africa

Female

Male

Part III: Future sources of growthWomen’s empowerment and entrepreneurship will be a key driver of growth Share of women-owned and women-managed

registered businesses in selected regions(firms with 5+ employees, latest available year, percentage)

Source: World Bank Enterprise Survey, in OECD (2014), Women in Business: Accelerating Entrepreneurship in the Middle East and North Africa Region, preliminary version, p.58

0

10

20

30

40

50

60

70

All Countries East Asia &Pacific

EasternEurope &

Central Asia

Latin America& Caribbean

Middle East &North Africa

South Asia Sub-SaharanAfrica

Percentage of firms with female participation in ownership

Percentage of firms with a female top manager

14

Part III: Future sources of growthSustainable growth will need to be inclusive

Drop in inequality in many emerging and developing economies in the past decade

Gini coefficients in selected emerging market economies and developing countries, 2000 and 2010

Source: World Development Indicators, 2012, in OECD(2014), All on Board: Making Inclusive Growth Happen, OECD Publishing.15

Thank you.