News brief– December 2003 edition

OECD Observer

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Stronger recovery 

The OECD area is headed for strong to moderate recovery, according to the latest composite leading indicators (CLI). September figures signal continued accelerating performance in the US and Japanese economies, and an improved performance in the Euro area, although more so in Germany than in France.

The CLI for the OECD area rose by 1.3 points in September 2003 to 125.4 from 124.1 in August, while the six-month rate of change has also risen significantly since April, following a decline that had lasted almost a year.

The CLI for the US rose 1.1 points in September, while its six-month rate of change improved for the sixth month in a row. Japan showed an even steeper increase, up 1.5 points from a month earlier and with its six-month rate of change higher for the fifth consecutive month. For the Euro area, the CLI rose 1.4 points in September from August and the six-month rate of change was up for the fifth month in a row. But while Germany’s CLI rose 1.5 points in September from the previous month, and that of Italy was up 1.9 points, France’s indicator rose more slowly, gaining 0.7 points over the August level.

The CLIs cover a wide range of key short-term economic indicators and are designed to provide early signals of turning points (peaks and troughs) in economic activity.

More information on OECD composite leading indicators can be found at

Russia moves on governance 

Russia and the OECD have launched a new phase of work as part of an ongoing drive to strengthen corporate governance in Russia. It will focus on implementation and enforcement of corporate governance, and will be carried out under the auspices of the Russian Corporate Governance Roundtable.

Roundtable participants met in Moscow in early October to review corporate governance developments in the EU, US and Russia, compare notes on disclosure practices and discuss policy approaches to issues including the implementation of international financial reporting standards.

The roundtable, co-organised by the OECD and the World Bank, is part of a larger effort to include Russia in the OECD-led global dialogue on corporate governance practices. It provides a forum where Russian decision-makers can exchange notes with their international counterparts to take international circumstances into account in designing national policies.


Jobless rate higher 

The jobless rate in the OECD rose to 7.2% in September, from 7.0% a year earlier and from 7.1% in August. The standardised unemployment rate in the Euro area rose 0.3% from a year earlier to 8.8%, unchanged from the previous month, with the French jobless rate rising to 9.5% from 8.9% a year earlier and that in Germany rising to 9.4% from 8.7%.

The US jobless rate rose 0.4% in September from a year earlier to 6.1%, unchanged from the August level, while in Japan the unemployment rate fell 0.3% from a year earlier to 5.1%, unchanged from the previous month.

Jobless rates for all OECD countries are available at

Mixed trading picture 

Imports into G7 countries rose 1.7% in the second quarter of 2003 from the previous three months and were 3.2% higher than a year earlier, the latest OECD international trade statistics show. G7 exports in volume terms were little changed from the previous quarter, but fell 0.3% from a year earlier.

US imports in volume terms were markedly higher, rising 3.2% from the first quarter, while export volume shrank by 0.5%. Japanese imports also rose markedly, up 2.0% from the previous quarter, while exports grew 0.4%, and Germany saw its imports rise 0.4% while exports grew 0.9%. But France’s merchandise trade import volume fell 0.2% in the second quarter of 2003 from the first quarter, while exports dropped 1.7%. The fall was steeper when compared with the same quarter a year earlier, with imports down 2.0% and exports shrinking 4.4%.

High energy bill 

The world will need to invest some US$16 trillion – or US$550 billion a year – in energy in the next three decades to meet rising energy demand, the International Energy Agency says. World energy demand is expected to rise by two thirds, or 1.7% a year, between now and 2030, according to the IEA’s World Energy Investment Outlook.

This is a much steeper rise than that of the past 30 years, but there are plenty of energy resources available to meet the challenge. The problem is finding the money to exploit them, to install new energy production capacity to meet the demand and to replace existing facilities that become obsolete during the period.

The sums involved represent around 1% of global gross domestic product, but some countries, particularly in the developing world, face a far steeper burden. China alone will need to invest US$2.3 trillion, or 14% of the world total. But at just over 2% of GDP this is a smaller burden on the national economy than that of Russia, which will need to devote the equivalent of more than 5% of its GDP to energy investment to meet demand between 2001 and 2030. Other transition economies, and Africa, will need to commit 4% of their GDP, while the figure for OECD countries is just 0.5%.

“The world economy will falter if these energy supplies are not made available,” said IEA executive director Claude Mandil, presenting the report at a conference in London.

OECD countries face challenges in financing electricity investments for the first time, the report says, as the transition to competitive markets has introduced different financial risks. There are also obstacles, such as public resistance to expansions in transmission networks, which lag behind investment in generation capacity in some OECD countries. Recent power failures in the United States and some European countries have driven home the importance of this issue.

The report is the fruit of an unprecedented collaborative effort involving experts and organisations, including OPEC, the World Bank and major energy companies and financial institutions. It quantifies in detail, by fuel sector and by region, energy investment needs and identifies the obstacles to mobilizing capital on the required scale. “To the best of my knowledge, no previous attempt has been made to build such a comprehensive picture of future energy investment, worldwide, in all parts of the energy supply chain,” Mr Mandil said.

FATF intensifies campaign against terrorist financing 

The Financial Action Task Force (FATF) has stepped up its campaign against terrorist financing, notably by deciding to make the obligation to freeze terrorist-related assets more detailed and by elaborating best practices to stem the flow of terrorist funds through the formal financial system.

The FATF has placed a high priority on fostering concrete action to dry up the flow of funds to terrorists,” FATF president Claes Norgren said of the decision at an FATF plenary meeting in Stockholm in October.

The FATF is also working to assess the needs of countries for technical assistance to enable them to combat terrorist financing.

The Stockholm meeting also imposed new counter-measures against Myanmar for failing to address major deficiencies in its anti-money laundering regime since being named as a non-cooperative country in the fight against money laundering in June 2001. The FATF cited particularly Myanmar’s failure to introduce the implementing regulations necessary to enforce its anti-money laundering law.

The new counter-measures include stringent requirements for financial institutions to identify clients before establishing business relationships with individuals or companies in Myanmar. Previously, members were asked to pay special attention to business relationships and transactions with Myanmar.

The other countries on the list of non-cooperative countries or territories are: Cook Islands, Egypt, Guatemala, Indonesia, Nauru, Nigeria, Philippines and Ukraine. The FATF said Indonesia has taken important steps since June 2003, and hoped it would ensure rapid implementation so that it may be taken off the list at the earliest possible time.

The FATF is an independent international body whose secretariat is housed at the OECD.


Forum takes form 

“Health of Nations” will be the theme debated at the OECD Forum 2004, to be held at the Centre de Conférences Internationales in Paris on 12 and 13 May, 2004. As in every public forum since the inaugural 2000 event, leaders from business, government, labour and civil society will gather at the OECD to tackle key issues on the international policy agenda, from the health of the global economy and multilateral co-operation to the current state and future of health care systems.

The Forum takes place at the same time as the OECD’s annual ministerial summit and will feed into the ministerial discussions. Previous speakers have included prime ministers from several OECD countries, Nobel prizewinning academics and senior public figures.

For more details on Forum 2004, visit

©OECD Observer No 240/241, December 2003 

Economic data

GDP growth: +0.6% Q1 2019 year-on-year
Consumer price inflation: 2.3% May 2019 annual
Trade: +0.4% exp, -1.2% imp, Q1 2019
Unemployment: 5.2% July 2019
Last update: 8 July 2019

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