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 growth: +0.6% Q2 2018 year-on-year
Consumer price inflation: 2.9% Sept 2018 annual
Trade: +2.7% exp, +3.0% imp, Q4 2017
Unemployment: 5.2% Sept 2018
Last update: 13 Nov 2018

E-Newsletter

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 paper editions delivered to you directly


Online edition
Previous editions

Don't miss

  • Globalisation will continue and get stronger, and how to harness it is the great challenge, says OECD Secretary-General Gurría on Bloomberg TV. Watch the interview here.
  • OECD Secretary-General Angel Gurría with UN Secretary-General António Guterres at the 73rd Session of the UN General Assembly, in New York City.
  • The new OECD Observer Crossword, with Myles Mellor. Try it online!
  • Watch the webcast of the final press conference of the OECD annual ministerial meeting 2018.
  • Listen to the "Robots are coming for our jobs" episode of The Guardian's "Chips with Everything podcast", in which The Guardian’s economics editor, Larry Elliott, and Jeremy Wyatt, a professor of robotics and artificial intelligence at the University of Birmingham, and Jordan Erica Webber, freelance journalist, discuss the findings of the new OECD report "Automation, skills use and training". Listen here.
  • Do we really know the difference between right and wrong? Alison Taylor of BSR and Susan Hawley of Corruption Watch tell us why it matters to play by the rules. Watch the recording of our Facebook live interview here.
  • Has public decision-making been hijacked by a privileged few? Watch the recording of our Facebook live interview with Stav Shaffir, MK (Zionist Union) Chair of the Knesset Committee on Transparency here.
  • Can a nudge help us make more ethical decisions? Watch the recording of our Facebook live interview with Saugatto Datta, managing director at ideas42 here.
  • The fight against tax evasion is gaining further momentum as Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia signed the BEPS Multilateral Convention on 24 January, bringing the total number of signatories to 78. The Convention strengthens existing tax treaties and reduces opportunities for tax avoidance by multinational enterprises.
  • Rousseau
  • Do you trust your government? The OECD’s How's life 2017 report finds that only 38% of people in OECD countries trust their government. How can we improve our old "Social contract?" Read more.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • 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.
  • 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 www.oecd.org/careers .
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.

Most Popular Articles

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 2018