As I wrote in these pages a year ago, in 2015 the hopes of the world would rest on global leaders as they prepared for historic summits. Those hopes were not dashed. In unprecedented fashion, the world spoke with one voice as agreements were forged on financing development at Addis Ababa in July, on the UN Sustainable Development Goals (SDGs) in New York in September, and at the UN Climate Change Conference (COP21) in Paris in December. We also achieved important progress on disaster risk reduction in Sendai in March, and on trade in Nairobi in December. The OECD worked tirelessly in support of these important gatherings. Now, we must ensure that these agreements are adequately implemented.
Take climate, for instance. The commitment in Paris, achieved at the end of one of the warmest years on record, includes clear and ambitious targets for limiting the rise in global temperatures to below 2°C, a five-year review cycle, rules on transparency, and a framework for supporting developing countries. It lays the pathway to a more climate-resilient future, which governments must now follow by putting their agreements into action.
The OECD will support these efforts by providing data, analysis, monitoring and advice, helping policy makers address both the challenges and the opportunities. One such golden opportunity appears now: with oil prices low, OECD countries should act right away to slash fossil fuel subsidies. Apart from the low-carbon benefits, this would free up resources for other priorities, including addressing the fallout of the crisis and today’s sluggish world economy.
Together with the G20, we have also made major advances to improve global governance. In 2015 there was a major international agreement on tax, with the endorsement of the Base Erosion and Profit Shifting (BEPS) project. In 2016 we will seek its implementation via an inclusive framework involving more developing countries. And we will continue to push for tax transparency under the Automatic Exchange of Information initiative.
We will also be supporting other G20 efforts to build an innovative, inclusive and interconnected world economy. Under China’s G20 presidency, our work on innovation, corruption, trade and investment will be at the forefront of policy debates. We are also working closely with Japan to support their G7 presidency.
The world’s growth engine is still in the repair shop. In our economic forecasting last spring, we showed some optimism, only for that to be followed by downward revisions during the year. The OECD Economic Outlook in November showed global growth prospects dimming again: a further slowdown in emerging markets that will weigh on global activity and trade, and subdued investment and spending in the advanced economies. Is there a silver lining that might lead us to revise our forecasts upwards for a change?
Job creation is slowly picking up in many countries, thanks to determined efforts by policy makers, while low commodity prices could help demand. However, over 40 million people in OECD countries remain without jobs–a third have been out of work for a year or more–and risk becoming trapped at the bottom of the economic and social ladder. A multidimensional approach is needed, with strong labour activation measures backed by interconnected social policies covering skills, gender, youth and equal opportunities.
To explore such approaches, the OECD hosted a major Policy Forum, back to back with an Employment and Labour Ministers’ Meeting on 14-15 January. The transformations that are shaping the future of work were explored at these important gatherings. Our organisation scans these trends carefully, through our work on skills, innovation and well-being, and under our New Approaches to Economic Challenges (NAEC) initiative. With digitalisation, for example, we see new opportunities and markets, and are witnessing major shifts in skills, capital and workplace organisation. Moreover, our data reveal that when it comes to job creation, quality and quantity can go together as long as the right policy and institutional settings are in place.
One fundamental challenge to address in 2016 is how to reverse the perplexing slowdown in productivity growth that has characterised even the most advanced OECD countries since the early 2000s. Could policies to address inclusiveness help productivity at the same time? After all, income inequality has widened in the past decade or so, and is at its highest level in 30 years in most OECD countries. With our NAEC mind-set, we must look at such issues holistically in our endeavour to make our economies and our societies more dynamic, resilient and inclusive. Is there a nexus between equality and productivity? Is it a two-way street?
Productivity and inclusive growth will lead the agenda at our annual OECD Ministerial Council Meeting (MCM) on 1-2 June, held in conjunction with the OECD Forum, on 31 May-1 June, during the by now well-established OECD Week. The MCM will be chaired by Chile, allowing us to cast a spotlight on Latin America’s enormous potential. Indeed, during the MCM, we will be launching a Regional Programme for Latin America and the Caribbean at the OECD, giving further coherence and consistency to our work and engagement with the region.
A series of ministerial conferences will also feature in 2016: on fighting bribery and corruption in March, on strengthening the global food system in April, on the digital economy in June and on the environment in September. We will be busy on other fronts as well. With the refugee crisis in Europe, our work on migration and integration has taken on a unique relevance. And we continue to move forward with the policy agendas on gender, children’s well-being, education and skills, and much more. We also look forward to advancing the accession process with Colombia, Costa Rica, Latvia and Lithuania, and continuing to implement our different regional and country programmes.
It is a busy agenda. But I am sure that we will rise to expectations and deliver on it again. Now, more than ever, we must ensure that the important agreements that the international community reached in 2015 are properly implemented. We owe it to our people, to our planet and to the future generations.
©OECD Observer No 305 Q1 2016