The Canadian Press - ONLINE EDITION

High unemployment and income inequalities undermining public trust: OECD head

  • Print

MONTREAL - High unemployment and growing income inequalities have undermined public confidence in global institutions, the head of the one of the world's leading economic think-tanks said Monday.

"Today we have lost the trust in government, we have lost the trust in political everything that we built as a society for 100 years and now there's an enormous degree of cynicism," Angel Gurria told an economic conference in Montreal.

Gurria, secretary-general of the Organization for Economic Co-operation and Development, said voters are turning to strange options, sometimes just because they offer something different.

The situation is particularly acute in Europe where unemployment, especially among young, is high and inequality between rich and poor has grown.

People also see that many large multinational corporations pay little or no taxes.

"Put it all in a cocktail, shake it and of course it blows (up) in your face."

Gurria said international organizations must re-examine their roles in light of the new paradigm and economic situation since the economic crisis.

"We probably forgot that, in the end, this is all about people, we forgot that in the end if it doesn't help people it doesn't really matter that much."

The OECD is calling for a focus on four areas — structural changes, social issues, green initiatives and institutions.

"These are the four legs of the new table that we believe very strongly we have to build and which we hopefully will already have started building given that we ran out of the other options," he told the conference.

Gurria said the global economy is gradually gaining traction as "courageous" steps already taken are starting to pay off. Growth in all major OECD economies is projected to pick up in the coming couple of years.

But he called it "a rather weak, hesitant, uneven recovery" with growth weaker that hoped for in the emerging world while Europe struggles to exit recession.

James Bullard, the head of the Federal Reserve Bank of St. Louis, noted that American employment picture has been improving as consumers increase spending and home construction grows.

The U.S. unemployment rate is expected to drop to 6.5 per cent by year-end as the American economy is projected to advance by two to 2.5 per cent annually.

Gurria said the world always counts on the resilience, flexibility and vibrancy of the American economy. But what's worrying is politics and the difficulty of reaching agreement on any course of action.

Scotiabank chief economist Warren Jestin told the gathering, dubbed the Conference of Montreal, that emerging countries in Asia, Africa and Latin America will soon control half of the world's economy, up from a third currently.

He said growth rates in the developing world will be two to three times the level of the developed world and will be the global economic engine by 2020.

Jestin said Europe, for example, faces economic growth that will at best reach one per cent over the next five years.

The winners will be businesses that are less focused on the United States and Europe, he said.

"It is a different type of competitive environment, but is one that is very exciting and will probably be very positive for Canada going forward," Jestin said.

Barclays chairman David Walker said banks bear a major responsibility for the financial crisis, but that the criticism has been overdone by some.

"Knocking the banks and bankers has become a political and media industry," Walker said.

However, he also decried the short-term thinking by government and by companies focused on quarterly results. "I'm convinced that there's need for much greater awareness of the affliction of an undue short-term focus or myopia in our capitalist democratic societies."

Quebec Premier Pauline Marois hailed her province's efforts to balance its budget next year and as well as efforts to attract foreign investment.

Marois said Quebec opposes protectionism and remains in favour of Canada signing a free-trade agreement with Europe.

However, she later told reporters that her government unconditionally supports the supply management system for agriculture, which is one of the main points of contention in the negotiations.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes


  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.


Make text: Larger | Smaller


Jets fans take Anaheim by storm

View more like this

Photo Store Gallery

  • PHIL.HOSSACK@FREEPRESS.MB.CA 101130-Winnipeg Free Press Columns of light reach skyward to the stars above Sanford Mb Tuesday night. The effect is produced by streetlights refracting through ice crystals suspended in the air on humid winter nights. Stand Up.....

View More Gallery Photos


Do you agree with the sale of the Canadian Wheat Board to foreign companies?

View Results

View Related Story

Ads by Google