Towards a new departure

Secretary-General of the OECD

Two decades ago, when the first Rio Earth Summit took place in 1992, the most advanced economies were in an economic downturn. It was not as severe as the crisis many countries have endured since 2008, but asset bubbles had burst, unemployment had risen and recovery seemed a remote prospect.

Then, within two years a corner was turned, and 15 years of nearly uninterrupted expansion followed, driven by structural reforms, the spread of markets, booming global trade and investment, information technology and confidence. World GDP rose by 75%, and a billion people were lifted out of poverty. That period of growth ended abruptly for many countries in 2008 with a financial crisis that turned into an economic and employment crisis, causing suffering for millions of citizens.

Today policymakers are still wrestling with the pressing problems of reducing debt, restoring growth and boosting jobs and skills. At the same time they must confront the sustainability challenges, which have intensified since the first Rio summit. How can policymakers square the circle?

The economic situation is hardly favourable. The OECD Economic Outlook issued in May suggests modest growth in the US and Japan, but sees risks coming from the ongoing euro crisis and a slowdown in China. Uncertainty prevails and the world economy is not yet in the clear. That means unemployment, with dire prospects and poverty for millions of people.

A new departure is needed. This summed up the public mood at the G20 Leaders Summit in Los Cabos, Mexico and also at the OECD Ministerial Council Meeting (MCM) and Forum in Paris in May.

Political summits are not just about major breakthroughs, and steady progress was made at the G20 in consolidating joint efforts towards a lasting recovery. In Los Cabos, leaders strengthened their policy commitments and actions with a new accountability framework, the Los Cabos Growth and Jobs Action Plan. The summit was also a further positive step for the G20 as a forum where key global economic issues like the euro crisis can be discussed in an open and constructive manner. The OECD will continue to play its part by contributing to the Los Cabos Growth and Jobs Action Plan, and to ongoing work on trade, governance, tax and development, as well as on financial education and incorporating green growth into reform agendas.

While decisive action to overcome the crisis is on the top of the policy agenda in many countries, we are still on a collision course with nature. At the Rio+20 Summit, some agreements were struck between business and civil society groups, reflecting a shared conviction of the need for greener growth, though this time there were no major political steps on climate change or biodiversity. This may in part reflect uncertainty about reforms and how they might affect growth and well-being. We need to overcome this deadlock.

In this context, the recently launched OECD initiative on New Approaches to Economic, Social and Environmental Challenges (NAEC) aims at strengthening the synergies between the different policy objectives and looking at the trade-offs. At the OECD MCM in May, inspired by the theme of “All on Board: Policies for Inclusive Growth and Jobs”, ministers expressed strong support for this NAEC initiative, and encouraged us to continue analysing the causes of the crisis and adjust our analysis and practical recommendations. The goal is to enrich our analytical framework, while identifying pillars for a strategic OECD policy agenda for inclusive growth. This means examining issues such as under-pricing risk, trade-offs between growth and inequality, and pro-growth policies and the environment. Ministers also welcomed a report on knowledge-based capital as a source of growth, and committed to support OECD strategies on green growth, innovation, skills, gender and global development.

Small wonder then that the NAEC initiative resonates so loudly with the public. For the 1,300 people from government, business and civil society who came together for the OECD Forum on 22–23 May, there was a clear common message: improve governance and structures for better policies, tackle inequality within societies and between men and women, address the causes of indignation, invest in new sources of growth and new jobs and skills, promote integrity, unleash people’s creativity and put well-being first. Fittingly, the second edition of the OECD Better Life Index, which incorporates more environmental indicators and adds Brazil and Russia to the countries covered, was successfully launched at the event.

Today, as 20 years ago, good policymaking can be the ultimate game-changer for unblocking progress. And it is important to consider the long-term trends that will influence policy decisions and action. The OECD’s aim is to help countries move towards inclusive growth, and ensure that the next upturn can be sustained by reducing social, economic and environmental imbalances, and by improving governance and confidence. It is up to governments to get their policies right and the OECD stands ready to help. Change may not come overnight, but as Tolstoy wrote, “time and patience are the strongest warriors”.

Visit www.oecd.org/mcm

www.oecdobserver.org/angelgurria

www.oecd.org/secretarygeneral

©OECD Observer No 292, Q3 2012




Economic data

GDP : +0.50%, Q4 2014
Employment rate: 65.7%, Q3 2014
Annual inflation : 0.51% Jan 2015
Trade : -3.0% exp, -3.7 imp, Q4 2014
Unemployment : 7.045% Q4 2014
Recovery ahead? Composite leading indicators
Updated: 24 Mar 2015

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Don't miss

  • Events at the OECD: Click on the image to get the full calendar.
  • Asia to maintain a strong 6.3% growth rate in 2015 and 2016, according to the Asian Development Bank
  • Greece should tackle not only domestic corruption but also foreign bribery warns the OECD Working Group on Bribery.
  • After three decades of extraordinary economic development, China is shifting to a slower and more sustainable growth path, according to the OECD's latest Economic Survey of China.
  • In pursuit of the American Dream
  • The OECD turned green to mark Saint Patrick's Day, the first international organisation to do so. Click photo for more global iconic landmarks.
  • Iceland's strong recovery stems from the good use of its natural resources, the energy sector and tourism according to Peter Dohlman, IMF Mission Chief for Iceland.
  • cyclone
  • Government representatives and experts from around the world are gathering in Japan this week to develop a post-2015 framework for global disaster risk reduction. The World Bank and the Global Facility for Disaster Reduction and Recovery (GFDRR) will share expertise at the conference.
  • Switzerland’s recent moves towards greater tax transparency were welcomed by the Global Forum on Transparency and Exchange of Information for Tax Purposes, based at the OECD, as a boost to international efforts to end tax evasion. Work will continue with Switzerland, notably on implementation, in 2015.
  • Help bridge the gap between business integrity policies & practices:participate in this new OECD survey by clicking on the image.
  • The Power of Social and Emotional Skills (The Huffington Post)
  • pisa
  • Secretary General Angel Gurría describes the Programme for International Student Assessment (PISA) as a useful tool to enhance educational systems but states that improving a country's ranking should not be a goal per se. Article in Spanish by El País.
  • [VIDEO] In spite of economic improvements, the OECD recommends that austerity measures remain unchanged in the UK.
  • [VIDEO] Although many countries have made great progress in narrowing gender gaps in education, new challenges are looming.
  • 5 things you might not know about the state of Amazonas. The World Bank identifies the main colossal challenges Brazil's biggest state is facing.
  • Gender mainstreaming: young French lady working in an engine assembly plant. Women and men in the same boat when it comes to job insecurity. © Raphaël Helle / Signatures / La France VUE D'ICI
  • The Asian Development Bank together with the International Labour Organization challenge the concept of women's work in Asia and the Pacific.
  • Gender wage gap
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.
  • World Water Day: 22 March 2015 For World Water Day, UN-Water identifies upcoming challenges and sets the theme for the years to come. In 2015, the theme for World Water Day is Water and Sustainable Development.
  • 2015, a year full of dangers? Laurent Bossard, director of the Sahel and West Africa Club, acknowledges that the situation in the region is complex and unstable but refuses to give in to fatalism.
  • The 5th Anti-corruption conference for G20 governments and business in Istanbul on 6 March will address how all businesses can play their part in contributing to growth and investment, and can operate with clean hands in a safe environment.
  • Success story. Discover the story of this young Ethiopian woman who launched a successful business in the footwear industry and became a UN Goodwill Ambassador for Entrepreneurship.
  • Transports in Asia. The Asian Development Bank advocates sustainable transport in a continent where vehicle ownership is perceived as a sign of social success.
  • Vote for your favourite photograph! This World Bank #EachDayISee photo contest aims to display visual stories from all over the world through which people express what they would like to see changed and improved.
  • Why is investment so low in the euro area? This short IMF blog post gives you an insight into the causes of the euro-zone's drastic decline in investment.
  • Have your say! The UN wants to know what matters most to you: pick six global issues in the list and send it to the United Nations.
  • Tim Harcourt Video
  • G20 and Australia: Bestselling economist Tim Harcourt speaks to the BBC about how Australia has gone from "Down Under to Down Wonder".
  • Clear air and healthy lungs: how to better tackle air pollution. From New Delhi to Accra, millions of people breathe polluted air. A new report examines the World Bank’s experience working to improve air quality.
  • The boring secret of great cities. Plenty of things make a city great but what really makes a difference originates in the structure of municipal government according to the OECD's report "The Metropolitan Century".
  • Guinea gets $37.7 million in extra IMF financing to help combat Ebola

Most Popular Articles

Subscribe Now

<b>Subscribe now!</b>

To receive your exclusive print editions delivered to you directly


Online edition
Previous editions

Poll

What issue are you most concerned about in 2015?

Euro crisis
Unemployment
Global warming
International conflict
Other

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 2015