News brief - July 2010

Health spending rises; Round up; Soundbites; Benvenuto!; Economy; Food speculation question; Chinese flexibility welcomed; Slovenia joins the OECD; Plus ça change...

Health spending rises 
Round up
Benvenuto !
Food speculation question
Chinese flexibility welcomed
Slovenia joins the OECD
Plus ça change...

Health spending rises

Spending on healthcare is rising faster than economic growth in all OECD countries, the latest Health Data report says. Health spending rose from 7.8% of GDP in 2000 to 9% in 2008, according to the OECD Health Data 2010, the most comprehensive source of comparable statistics on health and health systems across OECD countries. Population ageing, technological advances and demand for ever better healthcare will continue to drive costs higher in the future. In some countries the sharp rise in the ratio of health spending to GDP reflects the economic downturn, since healthcare costs did not fall with declining GDP. In Ireland, the percentage of GDP devoted to health increased from 7.5% in 2007 to 8.7% in 2008. In Spain, it rose from 8.4% to 9%. The United States spent $7,538 per person on health in 2008, well over double the $3,000 average of all OECD countries. The next biggest spenders, Norway and Switzerland, spent much less than the U.S. per capita but still some 50% more than the OECD average. The share of overall government spending devoted to healthcare rose from an average of 12% in 1990 to 16% by 2008. The OECD warns that many governments will have to curb the growth in public spending on health if they want to maintain their current healthcare systems during the crisis and prepare for such challenges as ageing. Order OECD Health Data 2010 at 

Round up

Ending fossil fuel subsidies could cut global greenhouse gas emissions by 10% from the levels they would otherwise reach in 2050 under a “business as usual” scenario, according to new OECD analyses based on data from the International Energy Agency.

Emerging markets are likely to account for nearly 60% of world GDP by 2030, according to analysis based on work by late economic historian, Angus Maddison, which also suggests that the aggregate economic weight of developing and emerging economies is set to surpass that of the so-called developed world. The world produces enough to feed its growing population, but recent price spikes and the economic crisis have contributed to a rise in hunger and food insecurity, the latest annual joint report from the OECD and the UN Food and Agriculture Organization (FAO) says.

Meanwhile, government support to farmers in OECD countries rose by a percentage point to 22% of total farm receipts in 2009, reversing a declining trend in state support since 2004, according to a recent report. The producer support estimate (PSE) rose to around $252.5 billion. One country to buck this trend is Israel, where government support to farmers fell from 24% of total farm receipts in the mid 1990s to 17% in 2008. Israel has recently been invited to join the OECD. See 

The OECD’s Development Assistance Committee gave high marks to the UK’s development effort in a recent review. Top political support and strong co-operation between government departments over the last decade have helped the UK to promote its international development agenda, the DAC review said. UK aid was $11.5 billion in 2009, representing 0.52% of its gross national income (GNI). For more, see 

Brazil and Indonesia have substantially implemented the OECD’s internationally agreed tax standard, according the Global Forum on Transparency and Exchange of Information for Tax Purposes. The two countries joined the Global Forum in September 2009. See 

Visit the newsroom at 


Fact and fiction

“You have to distinguish between those markets associated with real activity, such as trading commodities, and fictitious markets, such as derivatives, which are just casinos.”

Jacques Attali, economist and economic advisor, in Le Monde, 22 May 2010.

Land of the rising precariat

“The precariat–the “precarious proletariat”, or workers without job security–have mushroomed in recent years.”

Machiko Osawa and Jeff Kingston, writing about Japan’s labour market, in Financial Times, 2 July 2010.

Economic tectonics

“The crisis has revealed deep faults within western economies and the global economy as a whole. We may be unable to avoid further earthquakes.”

Martin Wolf, Financial Times, 14 July 2010

Benvenuto !

Silvio Berlusconi, prime minister of Italy and chair of the 2010 OECD Ministerial Council Meeting, greets Felipe Larraín, finance minister of Chile, one of the OECD’s newest members (see and last edition). A public ceremony to invite Estonia, Israel and Slovenia to join the organisation was held in the context of this year’s ministerial meeting. See 


An easing in the pace of expansion in most OECD countries may be in store, according to latest leading indicators. The indicators, which include order books, building permits and long-term interest rates, increased by 0.1 points in May 2010, slightly lower than the outturn for April, making it the tenth consecutive month of deceleration.

There are tentative signs of a peak in Brazil, with stronger evidence of a peak emerging in France and Italy. Leading indicators for Japan, the US and Germany reveal that the ongoing expansion in activity is likely to be maintained, but possibly at a slower pace. In China, OECD leading indicators have pointed to the possibility of a slowdown since December 2009.

GDP in the OECD area grew for the fourth consecutive quarter, with an increase of 0.6% in the first quarter of 2010 compared with the previous period, driven mainly by stockbuilding. GDP grew strongly in the US and Japan, by 0.7% and 1.2% respectively, but slowed in the euro area to 0.2%. Italy returned to positive GDP growth with an increase of 0.5% in the first quarter after a small decline in the previous quarter, while the pace of the recovery eased in both France and the UK, and was unchanged in Germany.

Unemployment in the OECD area slid in May 2010 to 8.6%, a percentage point lower than in April.

Consumer prices in the OECD area rose by 2% in the year to May 2010, slightly down from 2.1% in April. This trend reflected the dip in energy inflation, which increased by 11% in May, compared with 12.1% in April. Food prices rose by 0.5% in the year to May 2010, the third consecutive monthly increase.

Exports from G7 countries grew 3.9% quarter-on-quarter, and imports were up 3.1% in the fourth quarter of 2009.

Food speculation question

The popular view that financial market speculation caused a price bubble in agricultural futures markets in 2007-08 has been questioned by findings in a preliminary study prepared by two US academics for the OECD. Professors Scott Irwin, of the University of Illinois, and Dwight Sanders, of the University of Southern Illinois, found an increase in the amount of money flowing into commodity index funds in 2006-2008. Although this reflected a shift, as index fund investors entered agricultural commodities futures, there was no direct statistical link between their involvement and price volatility, the study argues. OECD experts are anxious that regulators do not unintentionally deprive futures markets of liquidity by tightening up rules on futures funds. They cite a range of market factors and policy actions to explain the food price spikes in 2007-08, including supply shortfalls, depleted global stocks and an upswing in demand for food, feed and biofuels, alongside relatively high oil prices. Policies such as export restrictions also played a role. But some business analysts and civil society groups maintain that speculation helped cause the food price bubble. For more on this issue, see 

Chinese flexibility welcomed

China’s announcement in June that it would introduce more flexibility into its exchange rate policy was welcomed by OECD Secretary-General Angel Gurría, who said that, together with sustained fiscal expansion structural reform, exchange rate flexibility should contribute to achieving strong, sustained and balanced growth in the world economy. Some experts contend that China’s currency, the renminbi, has been undervalued, fuelling exports but keeping imports expensive. See 

Slovenia joins the OECD

Slovenia became the 32nd member of the OECD on 21 July 2010. The country’s accession continues the OECD’s enlargement process. Slovenia was one of three candidate countries invited to join the organisation this spring, the other two being Estonia and Israel, both have which have now signed accession agreements. Talks continue with Russia, another candidate. In a recent interview with the OECD Observer, Slovenia’s finance minister, Franc Križanič looked forward to membership, saying that, though a small country, Slovenia had strong institutions and values, and would enrich the OECD’s development and reform agendas. For more information, visit and See also 

Plus ça change...

“The current economic and social state of many young people falls far short of what is desirable. It is not just a “youth problem”. As long as total unemployment remains high, it is unrealistic to expect a significant improvement in youth job prospects.”

Extract from the “OECD Employment Outlook”, No 202, October/November 1996

©OECD Observer No 280 July 2010

Economic data


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 print editions delivered to you directly

Online edition
Previous editions

Don't miss

  • Africa's cities at the forefront of progress: Africa is urbanising at a historically rapid pace coupled with an unprecedented demographic boom. By 2050, about 56% of Africans are expected to live in cities. This poses major policy challenges, but make no mistake: Africa’s cities and towns are engines of progress that, if harnessed correctly, can fuel the entire continent’s sustainable development.
  • “Nizip” refugee camp visit
    July 2016: OECD Secretary-General Angel Gurría visits the “Nizip” refugee camp, situated between Gaziantep and the Turkish-Syrian border, accompanied by Turkey’s Deputy Prime Minister Mehmet Şimşek. The camp accommodates a small number of the 2.75 million Syrians currently registered in Turkey, mostly outside the camps. In his tour of the camp, Mr Gurría visits a school, speaks with refugees and gives a short interview.
  • OECD Observer i-Sheet Series: OECD Observer i-Sheets are smart contents pages on major issues and events. Use them to find current or recent articles, video, books and working papers. To browse on paper and read on line, or simply download.
  • Queen Maxima of the Netherlands gives a speech next to Mexico's President Enrique Pena Nieto (not pictured) during the International Forum of Financial Inclusion at the National Palace in Mexico City, Mexico June 21, 2016.
  • How sustainable is the ocean as a source of economic development? The Ocean Economy in 2030 examines the risks and uncertainties surrounding the future development of ocean industries, the innovations required in science and technology to support their progress, their potential contribution to green growth and some of the implications for ocean management.
  • OECD Environment Director Simon Upton presented a talk at Imperial College London on 21 April 2016. With the world awash in surplus oil and prices languishing around US$40 per barrel, how can governments step up efforts to transform the world’s energy systems in line with the Paris Agreement?
  • Happy 10th birthday to Twitter. This 2008 OECD Observer interview with Henry Copeland said you’d do well.
  • 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.
  • Once migrants reach Europe, countries face integration challenge: OECD's Thomas Liebig speaks to NPR's Audie Cornish.

  • Message from the International Space Station to COP21

  • The carbon clock is ticking: OECD’s Gurría on CNBC

  • If we want to reach zero net emissions by the end of the century, we must align our policies for a low-carbon economy, put a price on carbon everywhere, spend less subsidising fossil fuels and invest more in clean energy. OECD at #COP21 – OECD statement for #COP21
  • They are green and local --It’s a new generation of entrepreneurs in Kenya with big dreams of sustainable energy and the drive to see their innovative technologies throughout Africa.
  • Pole to Paris Project
  • In order to face global warming, Asia needs at least $40 billion per year, derived from both the public and private sector. Read how to bridge the climate financing gap on the Asian Bank of Development's website.
  • How can cities fight climate change?
    Discover projects in Denmark, Canada, Australia, Japan and Mexico.
  • Climate: What's changed, what hasn't, what we can do about it.
    Lecture by OECD Secretary-General Angel Gurría, hosted by the London School of Economics and Aviva Investors in association with ClimateWise, London, UK, 3 July 2015.
  • Is technological progress slowing down? Is it speeding up? At the OECD, we believe the research from our Future of ‪Productivity‬ project helps to resolve this paradox.
  • Is inequality bad for growth? That redistribution boosts economies is not established by the evidence says FT economics editor Chris Giles. Read more on
  • 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 .

Most Popular Articles


What issue are you most concerned about in 2016?

Euro crisis
International conflict
Global warming

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 2016