The crisis and beyond

Building a stronger, cleaner and fairer world economy

This year's OECD Ministerial Council Meeting, the highpoint of the organisation's calendar, took place amid the most severe financial and economic crisis in decades. 

"We are talking about a paradigm shift in policy." Prime Minister Han Seung-soo of Korea and Chair of this year's ministerial meeting could hardly have put it more bluntly. The prime minister was announcing a declaration on green growth that was signed by all 30 OECD countries plus Chile, Estonia, Israel and Slovenia. The declaration tasks the OECD with developing a Green Growth Strategy bringing together economic, environmental, technological, financial and development aspects into a comprehensive framework. A first report will be delivered to the next ministerial meeting in 2010.

Ministers from 40 countries, representing 80% of the world economy, attended the ministerial meeting to discuss policy responses to restore financial stability and sustainable long-term growth.* As well as green growth, the ministerial communiqué covered a range of issues.** Years of unbalanced global growth combined with major failures in the regulation and supervision of the financial sector were fundamental causes of the crisis, ministers agreed, expressing their determination to "implement reforms that will improve effective regulations and help prevent future financial crises".

Governments and international bodies were already taking strong actions to this effect, and ministers emphasised the need for "a balanced and sustainable recovery" to serve people by addressing "the social and human dimensions of the crisis". 

In the meantime, "structural reforms that enhance the flexibility and productivity of our economies...will be essential to address the deterioration of our public budgets and the loss in living standards caused by the crisis" ministers believed, and they would look to the OECD Innovation Strategy, due in 2010, as a "source of policy guidance for boosting productivity, competitiveness and growth".

Ministers underlined the importance of development for making the world economy stronger, more equitable, and of supporting measures to "mitigate the impacts of the current recession on the world's poor and vulnerable". They reaffirmed their commitments on aid volume and effectiveness, policy coherence and financing. 

On trade, ministers urged the OECD, in co-operation with the WTO, tocontinue promoting effective aid for trade for developing countries. They were determined to resist protectionism, since trade and investment are essential for sustainable economic growth particularly for developing countries.

An "ambitious, balanced, comprehensive" conclusion of the Doha trade negotiations is urgently needed, ministers said, and to support trade, they would "ensure the availability of export credits in particular to emerging markets and developing countries".

Ministers firmly committed themselves to "the principles of propriety, integrity and transparency" as keys to rebuilding trust and confi dence in markets, agreeing on the need to develop a set of common standards and processes regarding the conduct of international business and finance.

They called on the OECD to strengthen work on corporate governance and financial literacy and welcomed the current updating of the OECD Guidelines for Multinational Enterprises. They also encouraged strong action in the fight against corruption and bribery, including under the OECD Anti-Bribery Convention.

The near universal endorsement of the principles of transparency and effective exchange of information on tax matters developed by the OECD was echoed by ministers at the MCM, who then saluted the OECD's role in the international arena.

The full communiqué is available online at http://www.oecd.org/mcm2009

*30 OECD member countries plus five candidates for membership, Chile, Estonia, Israel, Russia and Slovenia, and five major economies with which the OECD has a policy of "enhanced engagement"-Brazil, China, India, Indonesia and South Africa. Chair Han Seung-soo was assisted by three vice-Chairs: Denmark representing the forthcoming UN climate change conference in December, the UK as then G20 chair, and Italy as chair of the G8.

Ministers from Argentina and Hong Kong, China joined for the trade and investment discussions. Representatives from the Bank for International Settlements (BIS), the International Labour Organization (ILO), the International Monetary Fund (IMF), the World Bank and the World Trade Organization (WTO) are also invited to attend.

**As well as the OECD members, the five candidates for accession participated in the communiqué. The trade conclusions were endorsed by Argentina and Hong Kong, China.

©OECD Observer No 274, October 2009




Economic data

GDP growth: +0.6% Q4 2017 year-on-year
Consumer price inflation: 2.6% May 2018 annual
Trade: +2.7% exp, +3.0% imp, Q4 2017
Unemployment: 5.4% Mar 2018
Last update: 06 Jul 2018

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