Marking economic growth and social progress

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Workers ©Toshifumi Kitamura/AFP

Japan’s accession to the OECD was an event that marked Japan’s entry to the club of developed nations. In 1964, Japan was in the midst of high-speed economic growth, and the national policy was to catch up with and overtake the US and Europe. In October of that year, Tokyo hosted the first Olympic Games to take place in Asia, and four years later, in 1968, the country’s GNP passed West Germany’s and Japan became a major economic power second only to the US.

However, economic scale is not the only criterion by which to gauge a developed country. To become a developed country both in name and substance, not just the government but also workers and employers, as social partners, need to understand and perform their social responsibilities as members of this wider international society.

As well as economic policies for growth, the OECD sets out environmental policies and various other standards and guidelines, such as Towards Green Growth (2011) or the work of the Development Assistance Committee (DAC), which contributes to the sound development of poorer countries. In particular, the OECD Guidelines for Multinational Enterprises, which were first adopted in 1976 and revised several times subsequently, have put certain brakes on an excessive “race to the bottom” by calling on multinational enterprises–the main actors in globalisation–to protect the environment, combat bribery and establish sound labour-management relations based on the respect of core labour standards, not just to uphold shareholder rights.

The Japanese government has mentioned strengthening the partnership between the OECD and Asian countries as a key topic for the 2014 OECD Ministerial Council Meeting in May, which Japan is chairing. This “partnership” is not just about encouraging economic growth in the respective countries, but must also act as a framework for the OECD to ensure compliance with agreed standards and achieve social progress at the same time as economic growth.

Among the OECD’s policies, the 1994 OECD Jobs Strategy has made the strongest mark. Out of the nine recommendations of the strategy, we, trade unions, have remained resolutely opposed to relaxation of the rules protecting workers, which has entailed greater flexibility in working hours as well as wages and other labour costs, and a re-examination of the provisions for job security.

It may create misunderstandings by saying this, but some policies tend to come in and out of fashion. From the 1990s to the 2000s, most countries around the world leaned towards pro-market liberalism, and the OECD was no exception to this. Thinking about the creation of a single global marketplace prompted by the fall of the Berlin Wall in 1989, the increased burden on governments and the way this subsequently inhibited growth, undoubtedly one option for policy planners was to put the priority on maximising business freedom.

But having experienced the worldwide recession triggered by the fall of Lehman Bros, we realised how entrusting everything to the market led neither to growth nor to people’s happiness. All around the world, at all levels of society, we are seeing a comprehensive re-evaluation of previous policies and the search for a new approach. The goal of “inclusive growth” was highlighted within the OECD’s Growing Unequal and Divided We Stand reports, and are now encapsulated in the “New Approaches to Economic Challenges” (NAEC) initiative, which is gathering specific recommendations for achieving a policy shift. It is hoped that NAEC will generate solid momentum for change.

The Trade Union Advisory Committee (TUAC) to the OECD and its counterpart, the Business and Industry Advisory Committee (BIAC) to the OECD, are the source of far-sighted and balanced policy input to the OECD work programme. This social partnership may occasionally spark conflicting labour and management interests, and the consensual process may seem inefficient. However, it is needed in order to create policies that are broadly acceptable to society as a whole. From the perspective of long-term policy enforceability, it is the most efficient process.

As we celebrate Japan’s 50th anniversary at the OECD, RENGO aims to realise a secure society based on “work”. Through TUAC, we intend to continue playing an active role in the OECD’s activities.

RENGO is a member of the Trade Union Advisory Committee (TUAC) to the OECD.

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©OECD Observer No 298, Q1 2014

Economic data

GDP growth: +0.6% Q1 2019 year-on-year
Consumer price inflation: 2.3% May 2019 annual
Trade: +0.4% exp, -1.2% imp, Q1 2019
Unemployment: 5.2% July 2019
Last update: 8 July 2019

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