Innovation: Advancing the OECD Agenda for Growth and Equity

OECD Council at Ministerial Level, Paris, 15-16 May 2007
OECD Observer

Announcements about enlarging the OECD’s membership and strengthening co-operation with other countries took much of the limelight at this year’s annual ministerial meeting. Below is an extract on enlargement from the Chair’s summary, followed by some selected highlights of the meeting.

"Recognising the need to further expand the OECD’s global reach, policy impact and relevance, ministers welcomed the report on Enlargement and Enhanced Engagement. They underlined the importance of Brazil, India, Indonesia, China and South Africa in the world economy, noting how their policies and activities have global impact and affect the issues addressed by the OECD. They also considered that the OECD experience of good policy practices could be of interest to these countries. They invited the secretary-general to strengthen OECD’s co-operation with these major players through a process of enhanced engagement or as full members.Ministers decided to open accession discussions with Chile, Estonia, Israel, the Russian Federation and Slovenia. Russia was regarded as a special case because of its historical relationship with the OECD. They considered that the accession process would help foster their reform agenda and ensure its implementation and sustainability. Chile, Estonia, Israel and Slovenia have been actively engaged in OECD work for some time and benefited from OECD good practices. They have confirmed their wish to become members.Ministers supported a strengthening of OECD’s engagement with other selected countries and regions of strategic interest to the organisation. Countries of South-East Asia were regarded as having highly dynamic and influential economies, and therefore deserving further attention with a view to identifying possible members.Ministers stressed the importance of a financing reform to take into account the implications of an enlarged organisation. Council shall reach an agreement on this reform, which will ensure that the organisation has a strong and sustainable financial foundation, before the Ministerial Council Meeting in 2008.Ministers recognised that the OECD’s agenda is full of opportunities to advance its fundamental mission of promoting peace, stability, prosperity, and democratic values through sound economic policies and good governance. They invited the organisation to remain true to its founding vision and high standards–confident that real partnership will achieve real success–around the globe.During the discussions of an enlarged membership, and therefore of a stronger institution, additional avenues to increase OECD’s relevance through an enhanced relationship with the G8, or by supporting developing countries on service delivery were suggested. Mention was also made of the support of the OECD to the Chair of the G8, in particular regarding its relationship with the larger emerging economies.Ministers commended the secretary-general’s leadership in delivering the first mandate of the 2006 Ministerial Council Meeting.”
Beyond enlargement and enhanced engagement, there were several other discussion points at the 2007 ministerial meeting. As the complete Chair’s summary points out, the OECD secretary-general outlined a strategic vision for “a more inclusive organisation that can play a role as a hub for dialogue on global economic issues”. The OECD must be “more proactive, open and representative” if it is to strengthen its capacity to “develop concerted responses to global challenges”, the summary says. Moreover, the organisation “must be increasingly sensitive to diversity, and display greater understanding for the many different paths that lead to growth and development.” Ministers also recognised that “many countries continue to be bystanders in the process of globalisation and the benefits it brings” and called on the OECD “to play a greater role in identifying policies which can help ensure that the benefits of globalisation are shared more widely, and in communicating its benefits.”Ministers agreed that “innovation performance is a crucial determinant of competitiveness, productivity and national progress”, and a key to addressing global challenges, including climate changeMinisters also welcomed plans for an OECD Innovation Strategy as an important contribution to policymaking and best practices in all countries. They also welcomed plans by Korea to hold a ministerial meeting on the Future of the Internet Economy in June 2008.The Chair’s summary also reports that in discussing the current economic situation, ministers welcomed the recovery in Europe in particular, but voiced some concerns with respect to energy prices, the role of hedge funds and the evolution of current account imbalances. On inflation ministers noted it was “close to or even somewhat above comfort levels in some OECD countries”.Ministers called on the OECD to intensify its work on the political economy of reform and increase its support to governments in their reform efforts.On trade, ministers expressed their determination to achieve results in talks under the Doha Development Agenda, “in particular to improve economic prospects for developing countries.” Beyond Doha lay other challenges, on services, domestic policy goals, multilateralism and other trading arrangements, etc. The OECD would be looked to for analysis and advice on these challenges and opportunities.Climate change was described in the Chair’s summary as a “huge challenge” for all countries, demanding “urgent policy action”. Ministers looked forward to help from the OECD and the IEA in building an “efficient framework” to address the problem. Ministers also welcomed the suggestion from Sweden and the Netherlands for the OECD and the IEA to carry out a study on biofuels to be presented before the 2008 OECD Ministerial Council.~©OECD Observer No. 262, July 2007

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