Uncertain world…

OECD Forum 2003, Paris, 28-29 April

Making sense ©OECD/Hervè Bacquer 2003

Is the world heading on a path of diverging economic destinies? Could these developments undermine global security and stability? How should we respond to such dangers?

These were just some of the issues debated by the more than 1,000 people gathered at the fourth edition of the OECD Forum, on the theme “Grow, develop and prosper”, and as ever held in conjunction with the OECD Ministerial Council.

One key concern throughout was whether the US economy can be relied on to power future growth for the rest of the world. The answer from Clyde Prestowitz, author and president of the US-based Economic Strategic Institute, was definitely not. The US is a “spend and borrow” economy whose expenditure has got out of hand, Mr Prestowitz said. With the current account deficit at US$500 billion, the question is will the rest of the world be willing to lend to the US indefinitely, and continue to allow Americans to live beyond their means.

Francis Mer, French minister for the economy, finance and industry, emphasised the importance of education for economic growth. To encourage individuals and businesses to see education as a form of investment, we have to introduce incentives, such as tax schemes, he said. Even then, there are no guarantees they will work.

Restoring confidence in markets and governments in the wake of recent scandals was rarely far from the centre of debate. Thierry Desmarest, chairman and CEO of TotalFinaElf, argued that bribery is bad for business anywhere, while transparency and integrity enhance competition and help create a stable path to economic growth. Christian Schricke, secretary-general of the Société Générale Group, said corporate scandals had forced business to reappraise objectives in a bid to regain public confidence.

Mind the gaps

Basic challenges remained between rich and poor in many areas; the first is the digital divide, though for Jean-Philippe Courtois, CEO of Microsoft Europe, Middle East and Africa, the information technology economy is still growing, despite the collapse of the dot.com bubble, and the best is yet to come. But for François Roussely, Chairman and CEO of EDF, the main gap was the “electricity divide”. And for W. Brian Healy of Merck, the “gap in health” would have to be closed.

Japan’s minister of economic and fiscal policy, Heizo Takenaka, said that in the case of his country, there would be no growth without reform. But achieving more open and competitive markets may be more difficult in the context of ageing populations, argued Anatole Kaletsky from The Times. As the electorate ages, it is becoming more cautious about change, he said. And Hamish McRae, an economic commentator at another British newspaper, The Independent, pointed out that political divisions “may no longer be between left and right, but between young and old. The latter will want to protect their pensions, and the young might find that a burden, and leave.”

In any case, governments should not be under the illusion that democracy should be equated with elections, said Kumi Naidoo, CEO of Civicus. Political parties are becoming closed to the average person and access to the political process is becoming increasingly dependent on wealth, he said.

Most participants, including NGOs, agreed that successful completion of the WTO negotiations is critical, and that failure could give rise to real dangers to the multilateral system.

WTO director-general Supachai Panitchpakdi argued that any multilateral process is “an unwieldy, messy and frustrating business”. But missing a deadline “doesn’t in fact mean failure. It means that we are still working on it and that we have to redouble our efforts.”

New Zealand’s prime minister, Helen Clark, said OECD countries have benefited greatly from international trade, and must open their markets to freer trade in agriculture to allow the developing world to enjoy these same benefits. For Chilean finance minister Nicolás Eyzaguirre, the issues were straightforward: “The world pays US$300 billion in agricultural subsidies, and this is five times the amount spent in development assistance. Any progress on multilateral trade and investment must involve immediate reforms in agriculture”.

But reforms should not drive away farmers, “because then we would have to recruit officials to maintain the landscape,” said Hervé Gaymard, France’s minister of agriculture, food, fisheries and rural development.

Against this background, OECD secretary-general, Donald Johnston, reminded participants that trade and investment, together with good governance frameworks, have been the basis of prosperity and social progress in OECD countries.

Gareth Evans, president and CEO of the International Crisis Group, was worried about a growing disregard for multilateralism, particularly in the US, though he felt that multilateral cooperation had to be the way forward: “For all the frustrations of working together, it beats living in a world where there are no rules, and might is always right.”

©OECD Observer No 238, July 2003




Economic data

GDP growth: +0.6% Q2 2018 year-on-year
Consumer price inflation: 2.9% Sept 2018 annual
Trade: +2.7% exp, +3.0% imp, Q4 2017
Unemployment: 5.2% Sept 2018
Last update: 13 Nov 2018

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive paper editions delivered to you directly


Online edition
Previous editions

Don't miss

  • Globalisation will continue and get stronger, and how to harness it is the great challenge, says OECD Secretary-General Gurría on Bloomberg TV. Watch the interview here.
  • OECD Secretary-General Angel Gurría with UN Secretary-General António Guterres at the 73rd Session of the UN General Assembly, in New York City.
  • The new OECD Observer Crossword, with Myles Mellor. Try it online!
  • Watch the webcast of the final press conference of the OECD annual ministerial meeting 2018.
  • Listen to the "Robots are coming for our jobs" episode of The Guardian's "Chips with Everything podcast", in which The Guardian’s economics editor, Larry Elliott, and Jeremy Wyatt, a professor of robotics and artificial intelligence at the University of Birmingham, and Jordan Erica Webber, freelance journalist, discuss the findings of the new OECD report "Automation, skills use and training". Listen here.
  • Do we really know the difference between right and wrong? Alison Taylor of BSR and Susan Hawley of Corruption Watch tell us why it matters to play by the rules. Watch the recording of our Facebook live interview here.
  • Has public decision-making been hijacked by a privileged few? Watch the recording of our Facebook live interview with Stav Shaffir, MK (Zionist Union) Chair of the Knesset Committee on Transparency here.
  • Can a nudge help us make more ethical decisions? Watch the recording of our Facebook live interview with Saugatto Datta, managing director at ideas42 here.
  • The fight against tax evasion is gaining further momentum as Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia signed the BEPS Multilateral Convention on 24 January, bringing the total number of signatories to 78. The Convention strengthens existing tax treaties and reduces opportunities for tax avoidance by multinational enterprises.
  • Rousseau
  • Do you trust your government? The OECD’s How's life 2017 report finds that only 38% of people in OECD countries trust their government. How can we improve our old "Social contract?" Read more.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at www.oecd.org/careers .
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2018