As efforts to restart the stalled Doha Development Round negotiations intensify, the policy focus on world trade, and, specifically, its relation to development aid and growth in poorer countries, has become more acute. Trade is a powerful engine for economic growth, as the OECD’s founders argued 50 years ago, and, as such, can contribute to reducing poverty. However, efforts to improve trade in developing countries are often hampered by domestic constraints, particularly a lack of adequate economic infrastructures, as well as institutional and organisational obstacles.

“The government’s top priority is reducing the nation’s deficit and returning Britain to strong and sustainable growth. That means the right economic policies at home and creating the right economic environment abroad.

How can we all learn from a crisis? Today, we find ourselves in a disappointing, if not altogether unexpected, predicament. The very governments who took bold and decisive action in the period of the financial crisis 2008-09 to bail out banks and keep financial markets alive now find themselves on the receiving end of severe punishment from financial markets. How could this be?

A new kitchen can raise the value of any home, but in developing countries it can also save lives. That is why in 2010 the OECD’s very own staff charity, the War on Hunger Group, decided to contribute funding to fitting a new kitchen in the headquarters of AFENA, an NGO dedicated to looking after abandoned women and children, and based in Niger’s second city, Maradi.

©AFP

Microcredit has become a popular way to finance small businesses and local development projects, particularly in poorer countries. Economist, author, founder and first chairman of the European Bank for Reconstruction and Development (EBRD), Jacques Attali is founder of PlaNet Finance, which runs microfinance programmes in over 80 countries. In the run up to the OECD Forum in May 2011 where he is due to speak, Mr Attali talked to the OECD Observer.

A year ago, at the 2010 OECD Ministerial Council Meeting, Israel was formally invited to become a member of the OECD, following three years of accession negotiations. Israel duly became the organisation’s 33rd member country a few months later, in September 2010. The OECD Observer asked the minister of finance, Yuval Steinitz, to outline his views on the country’s economic challenges.

The financial crisis has taken a heavy toll on government finances and taxpayers are still footing the bill. Could private investors do more to help out? Mohamed El-Erian, CEO and co-CIO of PIMCO, believes they should. He explains to the OECD Observer.

The recent financial crisis has left a hole in the public finances of many countries. Yet, with the right preparation, governments may have been better placed to fund that gap. This holds lessons for future crisis resolution strategies.

A floor has now been placed under the banking crisis, albeit at a very high cost to the public purse.

We are celebrating the OECD’s 50th anniversary during the tail-end of the worst financial and economic crisis of our lifetimes. It’s a good moment to take stock and to ask the right questions. Why couldn’t we avoid the crisis? Were the policies and the policy mix we promoted the right ones, and how can we adjust these polices to new realities? What is more, are we doing enough to prevent another crisis? Are our economic theories, our models and our assumptions still appropriate? How should our organisation’s work be adapted so that we continue fulfilling our founding mission of promoting better policies for better lives?

The OECD, a pioneer in the quest to measure the progress and well-being of societies, is launching an exciting new initiative, incorporating Your Better Life Index. The initiative is not only a major step forward in assessing people’s true welfare, but involves people in the process too.

The budget deficit for the OECD area as a whole probably peaked at around 7.5% of GDP in 2010. That’s the equivalent of some US$3.3 trillion. A decrease to around 6.1% of GDP is expected in 2011, which will still be high by historical standards. But while the need to restore public finances is a global challenge, the state of government balance sheets varies widely. Economic starting points, causes of deficits and budgetary strategies also vary. Some countries have started down the road of austerity, others are maintaining stimulus and plan to rein in their deficits from 2011.

In December 2010 we asked finance ministers from a broad selection of countries facing different fiscal challenges–France, Germany, Indonesia, Ireland, Korea, Mexico, New Zealand and South Africa–to answer this question: “What actions is your government taking to bolster public finances, while upholding growth and services?”

World economy: Crisis over?

“The outlook for growth today looks significantly better than it looked a few months back,” OECD Chief Economist Pier Carlo Padoan says. Growth in the G7 economies outside Japan appears to be stronger than previously projected, with accelerating private sector investment and trade boosting recovery, his analysis showed. Read on here

OECD countries need growth if they are to emerge from the crisis and create jobs. But where will that growth come from? Also, with challenges such as climate change and global development, how can cleaner, smarter economic activity be unleashed? Answering these questions may help us plot a path out of the crisis and build a safer future.

For more than two decades, the world’s economic growth and development was largely fuelled by globalisation–the opening up of financial and product markets, and the integration into the world economy of the emergence of economies such as China, India and Brazil. This process was hit by an earthquake with the global financial crisis of 2008, an event which some have dubbed the “first crisis of globalisation”.

A heated debate between Princeton University economist Paul Krugman and Harvard economic historian Niall Ferguson was a highlight of the 11th World Knowledge Forum*–held in Seoul, Korea from 12-14 October–and among the conference’s most attended sessions.

Public debt in the OECD area is fast approaching 100% of GDP, as the financial and economic crisis badly deteriorated government budgets. A concerted move towards more balanced budgets is needed, while preparing the ground for economic growth.

How can governments restore public finances and promote sound economic growth at the same time? With budget deficits stretched and public debt at historical highs, it will not be easy. But the OECD believes that with the right mix of policies much progress can be made.

© Sebastián Piñera

Chile and Latin America are at a historic crossroads. For Chile’s president, Sebastián Piñera, today’s new revolution in knowledge, technology and information will benefit only those countries that embrace it, but could be cruel to those who let it pass them by.

What is the state of world economy as we enter 2011? Have we made progress over the past 12 to 18 months in putting an end to the worst economic crisis in our lifetimes and laying the foundations for a stronger, cleaner and fairer world?

Governments and central banks managed to avoid a global economic catastrophe, but the crisis has left a legacy of nearly bankrupt governments. A quick return to solvency is required.

An update of the OECD’s Guidelines for Multinational Enterprises is due in 2011. The changes will include stronger guidance for businesses on preventing human rights abuses, both in their own operations and in those of suppliers.

Hey you, stop wurfing and read about the 26 billion buck haircut!

Pensions are a major component of public expenditure, and a target for governments looking to streamline budgets. What are countries doing to manage costs at a time when populations are ageing at an accelerated pace?

©Hannibal Hanschke/Reuters

Can a durable recovery come from greener growth? That largely depends on the policies. In 2011 the OECD will deliver its Green Growth Strategy. Here are some early pointers.

Anyone who doubts that policy can spur innovation should look at the Kyoto Protocol. After it was adopted in 1997, the number of patents for certain technologies used to mitigate climate change climbed worldwide. In fact, just six years later, the number of patents on wind technologies had grown more than five-fold, and those on solar photovoltaic and hydro/marine technologies had more than doubled. The number of new patents for other climate change mitigation technologies, such as carbon capture, biofuels and geothermal energy also rose, though at a rate that was not much faster than the increase for patents in general over the same period.

Innovation in organisation and management will be needed if sectors are to adjust to new, oil-challenged realities. Supply chains will evolve as a result, notably in transport.

If the transport sector is to make deep cuts in carbon emissions, the carbonintensity of travel must be reduced. For that, policy analysis has to be based on how world markets actually function, and that means understanding what consumers look for when deciding to buy a vehicle, and what drives manufacturers’ decisions too.

European businesses were disappointed with the climate change agreement hammered out in Copenhagen. Here’s one way forward.

©OECD

The current crisis is an opportunity to launch a new economic model, in which the environment, as a pillar of human welfare, must be central.

Economic data

GDP growth: +0.6% Q3 2017 year-on-year
Consumer price inflation: 2.3% Sept 2017 annual
Trade: +4.3% exp, +4.3% imp, Q3 2017
Unemployment: 5.7% Sept 2017
Last update: 14 Nov 2017

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