As G7 leaders gather in Hiroshima, a geographic symbol of hope and resilience, the city offers a powerful reminder of what can be achieved through dialogue and cooperation
In May 2023, G7 leaders will gather in Hiroshima – a city once decimated by nuclear conflict, war and violence. Today, Hiroshima and its Peace Memorial, the Genbaku Dome, are a symbol of resilience and hope, and a powerful reminder of the importance of multilateral dialogue and international cooperation.
The global economic outlook has been materially affected by Russia’s unprovoked, unjustifiable and illegal war of aggression against Ukraine. That war has imposed a heavy price, tragically first and foremost on the people of Ukraine, but also on the entire world. It has had, and continues to have, deep social and economic repercussions.
Energy supply and security concerns are putting the energy transition and climate change mitigation goals at risk across the world. Economic fragmentation and deepening geopolitical tensions are also challenging the rules-based international order and are continuing to put pressure on the global governance architecture.
To be as globally effective as we can be, and as we need to be to overcome our shared challenges, we need to work closely together. With its capacity to mobilise action by like-minded countries based on common values, the G7 must play a key role.
On economic security
First, it must address questions of economic security, including those related to the supply of critical minerals, which we will need in order to fully realise the social and growth benefits of digitalisation, and which will be an important input for the sustainable transformation of our economies. High degrees of geographical concentration in the extraction and production cycles of these minerals may result in vulnerabilities or export restriction-related disruptions. The Organisation for Economic Co-operation and Development has informed G7 discussions on systemic vulnerabilities to chronic risks and acute supply chain shocks, and is providing policy analysis on promoting the sustainability and resilience of supply chains through national and collective action to anticipate risks, minimise exposure, build public-private trust, and strengthen open markets and rules-based trade.
Second, we need to ensure the digital transformation supports stronger productivity and economic growth, while promoting a fair distribution of its benefits. Digital technologies remain a critical and growing area of global markets. Cross-border data flows alone are expected to contribute $11 trillion to global gross domestic product by 2025, compared to $2.8 trillion in 2014. The OECD is working with the G7 to address the challenges and seize the opportunities of the metaverse and other emerging technologies, as well as designing practical approaches to facilitate trusted data flows across borders, promoting human-centric and rights-oriented policy settings for the digital transformation, and closing digital divides, including gender inequalities.
Third, the G7 needs to support the green energy transition. Coordinated G7 actions can and must tackle the triple challenge of ensuring energy security and affordability while staying the course for transformative environmental policy and achieving carbon neutrality by 2050. The OECD is supporting the G7 on biodiversity-positive economic policies, on behavioural and demand-side measures to reduce emissions, and on decarbonising cities. Moreover, through the new OECD Inclusive Forum on Carbon Mitigation Approaches, the OECD is helping to optimise the combined global impact of emissions reduction efforts around the world – by facilitating better data and information sharing, enabling evidence-based mutual learning and providing a platform for inclusive multilateral dialogue. This will contribute to a globally more coherent and better coordinated approach to carbon mitigation, while ensuring that emissions reduction efforts do not just shift emissions to other parts of the world.
Insights on gender inequities
Finally, we must champion gender equality. At their 2022 Elmau Summit, G7 leaders endorsed the Gender Gaps Dashboard, which has provided new data and insights on gender inequalities. The dashboard shows, for example, that the gender wage gap remains at 14.6% in G7 economies, while the gap in unpaid care and housework stands just shy of two hours every day. The OECD will compile best practice policy examples in areas such as gender pay gaps, entrepreneurship, parental leave and childcare policies for consideration by the G7 in producing an implementation report on selected G7 commitments related to advancing gender equality.
The scale of today’s challenges is significant. Responding to them with sensible, well-considered policy action is the way towards a better and brighter future. As the international organisation bringing together market-based democracies from around the world, the OECD will continue to support our members and the global community with our data and policy analysis, and our best practice policy advice, while facilitating dialogue and evidence-based problem solving.