Agenda for growth

“Agenda for growth and development” was the theme of this year’s annual OECD Ministerial Council. The meeting was chaired by New Zealand’s prime minister, Helen Clark.

Here are some key points from the chair’s summary, issued after the meeting.

Economic outlook: Expectations overall are of modest growth this year, picking up somewhat next year. While geopolitical uncertainty over recent years has not been helpful to recovery, pre-existing macroeconomic imbalances and deep-seated structural problems have played a large part in producing the current economic downturn. Short-term and long-term issues need to be addressed, but the best short-term policies are also good long-term policies.

Policies to maintain confidence and enhance growth: Under current policies, the divergence of growth rates in the OECD during the 1990s looks set to continue. At a minimum, this means lost opportunities, lower world growth and lower wellbeing than could otherwise be the case. It could also impact on the relationships between our economies.

Many ministers spoke of the need to reinforce multilateral co-operation on economic and trade issues, to bolster confidence and help support growth, and to help redress this divergence. The OECD can play a strong role.

There was a large measure of agreement on the nature of the challenges to maintaining and enhancing growth in the longer run, including the impact of demographic change, increasing productivity and achieving appropriate labour market flexibility.

Education and training, the removal of barriers to entry into the workforce, and measures to encourage older people to stay in work were identified as common policy prescriptions. In labour market reform, the right balance must be struck between removing rigidities, protecting vulnerable workers, making work financially worthwhile and providing an adequate level of social security.

Many ministers noted that demographic changes were bringing into question the sustainability of existing state pension regimes.

Ministers underscored the need for governments to translate the political will to tackle the issue of confidence and trust in institutions of governance and the marketplace into concrete action.

Ministers also received a report from the dialogue with BIAC (Business and Industry Advisory Committee to the OECD) and TUAC (Trade Union Advisory Committee to the OECD) which had stressed the importance of good corporate governance. The chair indicated that further consideration should be given to allowing BIAC and TUAC observer status at future ministerial meetings.

Promoting growth and investment in developing countries: Invited ministers from developing countries took part in these discussions. Ministers agreed there was scope to do more to help developing countries, particularly in Africa, to gain from globalisation. There was wide support for the OECD Council to look at a proposal from Japan for additional work on a strategy to promote investment in developing countries.

Ministers stressed that access to markets and technology is an essential ingredient for growth. OECD members’ policies are important to this end, particularly in the way those policies impact on developing countries’ export prospects.

Business must also be partners in the development process. The OECD Guidelines for Multinational Enterprises have encouraged businesses to take into account the development, social and environmental implications of their undertakings.

International trade: Ministers are committed to making the WTO (trade) negotiations successful. There was frank acknowledgment that important deadlines have been missed. And there remain real divergences of views. But there was a willingness to tackle them and to get the job done by January 2005, while achieving a balanced outcome for all, with development being central to the negotiations.

There is no great mystery about the sorts of decisions needed now – on access issues like agriculture, industrial products and services – so that substantive negotiations beyond Cancún can commence.

Ministers emphasised the analytical capacity of the OECD to support negotiations. Its intellectual and practical capacity is needed on such issues.

OECD reform: Ministers were pleased to note the secretary-general’s report on progress in reforming the OECD, and the road map for further measures recently adopted by the Council. Ministers will look to making decisions on key reform issues at their 2004 meeting.

©OECD Observer No 238, July 2003

Economic data

GDP growth: +0.6% Q3 2017 year-on-year
Consumer price inflation: 2.3% Dec 2017 annual
Trade: +4.3% exp, +4.3% imp, Q3 2017
Unemployment: 5.5% Dec 2017
Last update: 12 Feb 2018


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