We, Albanians need inclusive growth!ALTax
The way we think about the industrial revolution, our grandchildren may well look back on the first quarter of the 21st century as the digital revolution.
We could approach an inflection point where autonomous cars and trucks become ubiquitous. Where robots and automation become indispensable in all industries. Where cell phones replace bank branches. Where artificial intelligence and quantum computing turbocharge research, and revolutionize the global economy.
Nobody knows exactly how this future will unfold. But it seems safe to say that this new machine age will lead to further gains for higher-skilled workers, and put further pressure on those who are less well-equipped to compete whether in advanced, emerging, or developing economies.
But, we know for sure that openness and international cooperation are needed more than ever to improve the lives of people everywhere. We also know that they are needed to face the challenges posed by demographic pressures, climate change, and new technology.
Yet, we also know that during major economic transitions, some get left behind, and many suffer. History tells us that education and social safety nets must be retooled to support and enable people to adjust to a fast-changing world.
So, while embracing the coming transition, we must manage it wisely.
We need growth but we need inclusive growth. We need to transition to the digital age but a transition that benefits everyone. And we need to accelerate now.
The first priority for inclusive growth is to escape the new mediocre of low growth, low employment, and low wages.
That means using all policy tools monetary, fiscal, and structural: to maximize the synergies within countries and amplify the impact though coordination across countries.
This three-pronged approach would free up more policy space more room to act than is commonly assumed.
Implementing structural reforms to unleash economic potential is key. Using fiscal tools where available to prepare for the transition is also key.
With interest rates at historic lows, there is no better time for public investment: to expand access to high-speed internet, promote energy-efficient transport, and build climate-friendly infrastructure.
Even where fiscal space is unavailable, governments can reallocate funds into R&D by offering tax credits and supporting public research institutions.
Remember: all the technologies that make our mobile phones smart have benefited from public funding wireless networks, GPS, touch screens.
This shows that good public policies can boost growth for decades to come.
Technological change has the potential to transform the lives of people around the world for the better, but it will be important to get the policies right or the digital divide will grow.
Achieving greater inclusion is actually a tall order. It requires more than macroeconomics. It also involves politics. And social contracts, which must reflect national, regional, and cultural diversity.
Important for inclusive growth is providing everybody with a level playing field. Let present below three examples:
First, increase equality of opportunity. Think of smart education policies, especially for girls. Think of retraining to help workers displaced by outsourcing. Think of minimum wages and tax incentives to give women more opportunities in the labor market.
Second, promote fair burden-sharing. We need an international tax system that minimizes loopholes and guards against the corrosive effects of corruption. And we need to protect low-income countries from the harmful effects of tax base erosion and profit-shifting.
Third, preserve competition and market access. This is especially important for the digital economy, where network effects can lead to increases in market concentration which harms innovation and concentrates wealth at the top. By injecting more and fairer competition, we can ensure that the vast potential of the digital age can be managed for the benefit of all.
So, our task is to manage wisely the economic transition facing us, so that we can achieve greater prosperity not just for the fortunate few, but for all.