Like many of you, I was privileged to pay tribute to the victims of these terrible attacks by walking alongside President François Hollande, the French government, world leaders, the victims’ families and 1.5 million French citizens on the Unity March through the streets of Paris on 11 January. It gathered a rich mosaic of people from different religions, cultures and backgrounds. Similar marches took place elsewhere in France and around the world, in an uplifting demonstration of faith in our democratic values.
The OECD stands firmly behind our host country France and all our member and partner countries, in responding to these inhuman, barbaric acts. These events touch us deeply by their proximity, but we do not forget that day after day many people throughout the world see how their freedom and rights are attacked.
After the horror of the attacks it is difficult to turn to the subject of the global economy. But it is important: the OECD was forged by its members to promote peace and harmony among the world’s people through sustainable, inclusive economic growth, jobs, education, health, trade, integrity and trust. These are not just worthy goals, but the necessary conditions of a safer world.
However, the strength of our economies is being tested. Many of our member countries have yet to turn the page on the global economic crisis that began seven years ago and whose legacies have had a profoundly detrimental effect on people’s well-being and their trust in governments and institutions.
True, US activity is expected to firm to over 3% in 2015, but the EU’s economy remains sluggish, and faces a deflationary risk; indeed, with euro area growth of just 1.1% in 2015 and 1.7% in 2016, a solid recovery looks some way off. Yet resuming a dynamic growth path is indispensable to ensure that the region can address its high unemployment rate, which stood at 11.5% at the end of the year. The euro area’s weakness could also act as a drag on the relatively buoyant UK economy. The outlook for China is also less dynamic than in recent years.
On the bright side, Indonesia, India and South Africa could return to steady growth, while in Europe, Ireland and Spain, countries that felt the brunt of the crisis, have recorded impressive turnarounds (see article by Irish Taoiseach, Enda Kenny). Their efforts show that reforms do work.
Given the limited fiscal and monetary policy room available, the OECD continues to place emphasis on the importance of structural reforms, without which OECD area growth could remain sluggish for decades. In 2015 policymakers must do all they can to pursue the ambitious and feasible structural agenda they agreed to at Brisbane in November. The Australian G20 presidency successfully refocused minds on growth, and the OECD will work alongside Turkey, the G20 president in 2015, to help sustain momentum.
Indeed, the OECD has been working tirelessly since the crisis started to help make reforms happen in a range of key areas, including taxation, inequality, jobs, investment, development and governance. This work is bearing fruit. In 2014 we led efforts towards ending tax base erosion and profit shifting (BEPS) and improving transparency, notably with over 90 jurisdictions committing to implement the Automatic Exchange of Tax Information reporting standard at the latest by 2018.
"Our work will not let up in 2015, which will be a decisive year for addressing urgent global challenges"
We also continued to raise the bar in policy thinking through our New Approaches to Economic Challenges (NAEC) initiative, produced the first ever comparative analysis of global well-being, and further honed our pioneering Better Life Index by adding regional dimensions. Our reports on how inequality damages growth, the importance of skills and migration to well-being and prosperity, and on school performance through our PISA programme, provided valuable guidance for policymakers everywhere. Our organisation reached out by launching the Southeast Asia Programme at the Ministerial Council Meeting chaired by Japan, and advanced on the accession of Colombia and Latvia, as well as on the action plans with Costa Rica and Lithuania.
Our work will not let up in 2015, which will be a decisive year for addressing urgent global challenges. Three crucial events stand out: the conference on Financing for Development in Addis Ababa, in Ethiopia next July; a summit in September to launch the UN Sustainable Development Goals to succeed the Millennium Development Goals; and the UN Climate Change Conference (COP 21) in Paris in November-December. The eyes of the world (and its hopes!) will be focused on these summits, and the OECD is determined to play its part in ensuring successful outcomes.
It has been a tragic, dark and unsettling start to 2015. But in the spirit of the unity march in Paris, we must forge on together, to build a more inclusive, more prosperous and more peaceful future for our world.
©OECD Observer No 301, December 2014-January 2015