Organization for Economic Co-operation and Development (OECD)
The OECD, founded in 1961 and headquartered in Paris, is a forum for governments to share experiences and solve common problems. Its goal is to promote policies that improve the economies and welfare of people around the world. The OECD works with governments for a better understanding of economic, social and environmental changes. Analysis and data comparisons are designed to predict future trends. The OECD sets international standards in a wide range of areas.
Based on evidence and experience, the OECD recommends policies to improve people's quality of life. The organization works with business through the OECD Business and Industry Advisory Committee (BIAC) and with labour representatives through the Trade Union Advisory Committee (TUAC). The OECD also maintains contacts with civil society organizations. Common goals are a market economy, democratic institutions and a focus on the well-being of all citizens.
The OECD supports its member countries in their efforts to:
- promote sustainable economic growth
- create new employment opportunities
- improve living standards
- ensure financial stability
- contribute to economic growth in other countries
- promote the growth of world trade
In its work, the OECD also addresses the major opportunities and challenges of digitalization for the economy and society. Key topics include stimulating digital innovation, new markets and jobs, digital security or improving digitalization in administration. (See also the OECD project "Going Digital").
Alongside the OECD Economic Outlook and the OECD Growth Strategy (Going for Growth), the OECD Economic Survey per member state is the central publication in the area of economic and growth policy the OECD level.
OECD Ministerial Council Meeting - MCM 2023 on June 7/8, 2023
Under the title "Securing a Resilient Future: Shared Values and Partnerships", the annual OECD Ministerial Council Meeting (MCM) was held in Paris on June 7-8, chaired by UK (Foreign Secretary James CLEVERLY). Resilience served as a common thread for the various discussion points of this MCM, be it for the topic of trade/supply chains, be it for innovative technologies in the service of a carbon-free future or for the energy transition. This time gender equality was a special topic. A debate on Ukraine was also not to be missed in light of the dramatic events.
One of the most important outcomes was the adoption of the updated OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. The 2023 update reflects a decade of experience since its last review in 2011 and responds to urgent social, environmental and technological priorities facing societies and businesses.
The main contents or results of the meeting included:
- Adoption of the Ministerial Council Statement;
- Adoption of twelve new recommendations/decisions, including three standards which are part of the responsibility of the Federal Ministry for Labour and Economy: (i) OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, (ii) Recommendation on SME Financing and (iii) Recommendation on Principles on Corporate Governance;
- Adoption of the Ukraine Country Programme, which supports Ukraine's reform agenda, recovery and reconstruction; the programme reflects Ukraine's priorities (e.g., accession to the EUand OECD), with a focus on strengthened institutions and governance;
- Regarding global relations: adoption of a new strategic framework for the Indo-Pacific and further development of the OECD-Africa Partnership;
- MCM noted progress from the accession processes with Brazil, Bulgaria, Croatia, Peru and Romania, which are now entering the technical review process;
- Ministers also welcomed:
the OECD's contribution to promoting gender equality,
progress on the Inclusive Forum on Carbon Mitigation Approaches (IFCMA), now joined by close to 70 countries (well beyond OECD),
the establishment of the Global Forum on Technology as a platform for shaping a framework for a value-based and secure technological future and
the OECD commitment to open markets and a rules-based international trading system;
- Exchange based on the latest OECD Economic Outlook, which shows a cautiously "stabilized" picture of the future economic outlook, with various risks such as inflation not yet fully overcome;
- Regarding trade and resilience:
clear commitment by ministers to a sustainable and inclusive trading system, based on shared values;
need for a global, holistic approach encompassing many policy areas (e.g. education, financing, creating regulatory frameworks, functioning energy markets, strong SME policy, strengthening the WTO, responsible corporate governance, technology and research, development policy, and the green and digital transformation);
important OECD contribution in the form of (i) provision of data, (ii) development of standards/recommendations, and (iii) information exchange also with non-OECD members;
- Discussion on the topic of "Innovative technologies for 'net-zero' economies" underlined (i) the crucial role of cooperation with the private sector (public-private partnerships) and (ii) social considerations such as avoiding to maximize existing inequalities through new technologies or reducing these gaps (e.g. Internet expansion);
- Panel discussion on "Energy Futures" addressed the following aspects: improving energy efficiency, pushing renewable energy sources, increasing investment in green energy, fostering innovation, multi-stakeholder collaborations, appropriately trained professionals, open access to essential raw materials, reconciling combating climate change and strengthening economic growth.
OECD Ministerial Meeting - MCM 2022 on June 7/8, 2023 - Economic Outlook
The latest OECD Economic Outlook was presented as part of the MCM 2023. Key message: The situation is stabilizing, albeit at a low growth level, but the improvement remains fragile.
According to the projections in the OECD's latest economic outlook released on June 7, global growth will fall to 2.7 percent in 2023 (from 3.3 percent in 2022) and rise again slightly to 2.9 percent in 2024, slightly above that in the Economic Outlook in November 2022. The eurozone is expected to grow by 0.9 percent in 2023 and 1.5 percent in 2024, China is recovering with GDP growth of 5.4 percent in 2023 and 5.1 percent in 2024, while the USA is showing declining growth.
Inflation rates are slowly declining in the eurozone (5.8 percent in 2023; 3.2 percent in 2024) due to lower retail prices for energy and food, but core inflation continues still persists and inflationary pressure remains. However, tighter monetary policy measures to combat inflation could lead to tighter financing conditions and thus to tensions in the financial system.
In Austria, GDP growth is expected to decline from 4.9 percent in 2022 to 0.2 percent, before returning to the eurozone growth rate of 1.6 percent in 2024 (1.5 percent). Inflation rate has already peaked at 8.6 percent at the end of 2022; it is expected to decline to 8.0 percent in 2023 and 3.9 percent in 2024. Private consumption is expected to recover by 2024 in line with the rise in real wages, while the unemployment rate is forecast to increase slightly (from 4.7 percent in 2022 to 5.0 percent in 2023 and 5.1 percent in 2024).
Under the title "The Future We Want: Better Policies for the Next Generation and a Sustainable Transition", the annual OECD Ministerial Council Meeting was held in Paris on June 9-10. In light of the Russian aggression against Ukraine and its massive impact on the global economy, ministers discussed solutions for a proper policy mix to address the new and old challenges: successful, post-pandemic economic recovery; climate crisis and the consequences of war for the global economy, especially for the most vulnerable.
Among the most substantive content of the meeting were:
- political commitment to support the reconstruction of Ukraine (based on a speech by President Zelensky during the opening ceremony);
- exchange of views on the economic and social consequences of Russian aggression at a time when the world is still dealing with the aftermath of the pandemic. In this context, the OECD Economic Outlook paints a picture of slowing growth and a prolonged period of more stubborn inflation;
- success of the OECD work and concrete implementation of the reform of international taxation (allocation of taxing rights and introduction of a minimum tax rate);
- strengthening the interaction between trade and environment: trade liberalization and environmental goals should be pursued together, for example through environmental chapters in free trade agreements, through duty-free environmental goods or by ending environmentally harmful subsidies;
- forcing open global markets as a prerequisite for economic recovery and green (energy) transformation;
- establishing a new partnership with Africa with special attention to energy challenges;
- the green transition: creating a new multilateral OECD platform for a coherent approach to reducing global emissions (Inclusive Forum on Carbon Mitigation Approaches), through stocktaking, information exchange and sharing of best practices with broad participation beyond the OECD.
In addition, the MCM adopted eight new multilateral standards covering a wide range of areas, such as sustainable investment (quality in the sense of investment sustainability), blockchain or SMEs. He also adopted the traditional Ministerial Council Statement and, with the adoption of the roadmaps (strategy papers), the starting signal for concrete accession negotiations for five accession candidates (Brazil, Bulgaria, Croatia, Peru and Romania) was given. Discussions on the roadmap with Argentina are still ongoing.
The OECD Economic Outlook was presented ahead of MCM 2022.
Key messages from the June 8, 2022 press conference: Russia's invasion of Ukraine immediately slowed the recovery of the pandemic-weakened economy. This has put the global economy on a path of lower growth and higher inflation.
According to the projections of the OECD's June 2022 Economic Outlook, global growth will decline dramatically to 3 percent in 2022 and fall to 2.8 percent in 2023. This is significantly weaker than predicted in the December 2021 Economic Outlook.
Europe is suffering the most from the economic and social effects of the war. Many European countries are directly affected by their energy imports and the influx of refugees.
High inflation is cutting into private household budgets. Socially vulnerable people are particularly affected. In the world's poorest economies, the risk of a severe food crisis is still acute due to supply shortages and high prices.
Further increases in food and energy prices as well as persistent supply bottlenecks are major contributors to consumer price inflation reaching a higher level and remaining high for longer than previously assumed. In some advanced economies, inflation is now expected to reach levels not seen since the 1970s. Cost pressures are expected to ease in the course of 2023 as the effect of rising interest rates begins to be felt. However, core inflation in many major economies is expected to remain at or above the central banks' target range.
"Higher commodity prices are hitting countries around the world, adding to inflationary pressures, squeezing real incomes and spending, and thus slowing the recovery," OECD Secretary General Mathias Cormann said at the launch of the Economic Outlook. "This slowdown is directly attributable to Russia's unprovoked and unjustifiable war of aggression, which is hurting real incomes, growth and employment prospects worldwide."
The outlook is fraught with uncertainty and, more importantly, significant downside risks. It is not known how long Russia's war against Ukraine will last and how far it will escalate, he said.
Many low-income and emerging economies face even greater challenges. In addition to rising food and energy prices, they also face lower demand growth in their export markets and possible capital outflows as a result of rising interest rates in advanced economies.
In addition, the pandemic is not over either. More aggressive or contagious variants could spread, and China's zero-covid strategy could lead to further supply chain disruptions.
"The outlook is sobering, and Russia's aggression against Ukraine is already costing the world dearly," said Chief Economist Laurence Boone. "Exactly how costly - and how the burden is shared - depends heavily on the choices made by policymakers and citizens. We cannot accept famine at any price."
More international cooperation is essential to avoid a food crisis. To help countries affected by supply disruptions, it is important to counter export restrictions that raise prices on world markets. Increased efforts are also needed to transport raw materials from Ukraine, as well as targeted direct aid. Governments must act urgently to protect low-income households from the costs of war. However, the best solution to cushion the effect of higher prices is temporary, targeted, means-tested fiscal measures.
In most economies with healthy growth and employment performance, accommodative monetary policy is no longer justified given the level of inflation. The more widespread and entrenched inflation is, the more rapid the change in policy must be. In many emerging economies, further interest rate increases are probably necessary to anchor inflation expectations and prevent destabilizing capital outflows.
The war has once again demonstrated the importance of energy security. A faster energy transition would not only reduce CO2 emissions but also improve security of supply. Regulatory and fiscal measures can create incentives for switching to alternative energy sources. However, the large-scale expansion of renewables also requires copper, rare earths and other raw materials that only a few countries have. Open global trade is therefore essential for both the energy transition and energy security.
With the September 2021 OECD Economic Outlook Interim Report, the OECD presents its latest global economic forecast with a focus on the G20 countries.
The global economy is growing significantly faster than expected a year ago. However, the recovery remains unstable. The OECD points out that the economic recovery varies greatly from country to country or from sector to sector. Production gaps persist, particularly in emerging and developing countries with low vaccination rates. This results in risks - for both advanced and emerging economies. The extraordinary support measures taken by governments and central banks following the outbreak of the Corona pandemic prevented the worst from happening. Given the progress in vaccination and the gradual economic recovery, the OECD projects strong global economic growth of 5.7 percent in 2021 and 4.5 percent in 2022.
After more than a year of working together to protect health and economies, the need for collective action remains. Whether it is defeating COVID-19, rebuilding post-crisis economies and societies, addressing the climate crisis, or managing the disruptive impacts of critical and emerging technologies, no single challenge facing citizens today can be effectively addressed by one nation alone. Finding solutions to these global challenges requires cooperation and coordination. It requires trust built on shared values. Moreover, solutions must be green and inclusive to serve as intergenerational responses.
For 60 years, the OECD has served as an effective platform for like-minded, market-oriented democracies to collaborate and find solutions to the most pressing economic challenges. To honour the organization's 60th anniversary and draw attention to its critical work, the 2021 OECD Council Meeting at Ministerial Level, chaired by the United States with Korea and Luxembourg as Vice-Chairs, gathers leaders and ministers under the theme "Shared Values: Building a Green and Inclusive Future."
Under the committed leadership of the United States, this second part of the Ministerial Council Meeting took place on October 5 and 6. In his keynote address, U.S. Secretary of State Anthony BLINKEN highlighted four priorities for the global future and for the OECD: (i) overcoming the COVID-19 pandemic, (ii) climate action, (iii) addressing inequality, and (iv) benefits and risks of technology.
Chaired by the US and co-chaired by Luxembourg and South Korea, the Ministers as well as the representatives of the EU, BIAC and TUAC, thanked OECD General-Secretary Gurria for his commitment to the increased relevance of the OECD as a think and do tank, for important policy recommendations, especially during the pandemic, for the enlargement of the OECD with more members and increased global influence, also through intensified cooperation with the G20. Costa Rica was welcomed as the new 38th member.
Member States' inputs on lessons learned from the crisis and priorities for the future were very consistent: rapid political action and the start of successful vaccination efforts lead to optimistic economic outlook, but uneven by country and marked by uncertainties, depending on further vaccination successes globally - with multiple calls for international solidarity to help developing countries with vaccination. Economic support would have to continue, but probably slowly scaled back and more focused. The importance of multilateral cooperation and open markets was again stressed. Challenges were raised by all countries to be addressed simultaneously in a focused manner: climate change, loss of biodiversity, inequalities, need for structural reforms and digital transformation. Common values, such as market economy, open trade, human rights and international cooperation, rule-based and fact-based policy decision-making should continue to form the basis for policies and measures in the future. Finally, a number of documents and recommendations were adopted, including an action plan for youth, the environment, international mobility and travel, and the protection of children in the digital environment.
On the second day, the handover ceremony to the new General-Secretary Mathias Cormann and his opening statement outlining his priorities for inclusive and green reconstruction based on the shared values of OECD members followed.
The OECD Council, consisting of the ambassadors of the 37 member countries, appointed the Australian Mathias Cormann as the organization's sixth Secretary-General on March 15, 2021. His five-year term began on June 1, 2021. Member countries made the decision after a seven-month selection process launched in August 2020.
Mathias Cormann took office on June 1, 2021, one day after the end of the third term of Angel Gurria, who led the organization as Secretary-General for 15 years. Mathias Cormann is the first OECD Secretary-General from the Asia-Pacific region.
On October 28/29, 2020 this year's (virtual) OECD Ministerial Council Meeting was held under the title "The Path to Recovery: Strong, Resilient, Green and Inclusive".
Spanish Prime Minister Pedro Sánchez: Main topics of the meeting are recovery and transformation. The pandemic has triggered the biggest global crisis. More than 1.1 million people lost their lives. 42 Million have been infected. 2020 will see the worst recession since World War II, with global GDP expected to fall by 4.5 percent. Even though countries around the world responded with unprecedented measures, the crisis is not over. Action must be taken jointly to contain the pandemic and ensure a strong, robust, green and inclusive recovery.
The participants agreed that the COVID-19 crisis had intensified existing global problems such as inequalities and the digital divide. The elimination of these and challenges such as climate change, biodiversity loss and especially the protection of particularly vulnerable groups were priorities in the context of recovery. The transformative potential of digitalization should be exploited. Free, fair and stable trade, investments and open markets are central elements for the economic recovery. In order to achieve more resilient global supply chains, diversification and removing existing barriers in supply chains must be focused on. Protectionism is not an option. The accelerated implementation of the OECD Guidelines for Multinational Enterprises for Responsible Business Conduct could further strengthen the resilience of supply chains. In unison, all representatives expressed a clear commitment to the need for more international cooperation in addressing this global crisis and for a global level playing field. The OECD was asked to accompany the recovery phase with its analytical and data-based potential in an advisory capacity, as it also has the necessary tools to collect and analyse data on measures taken and their effects and thus contribute to improving the necessary transparency. Furthermore, the OECD and its important role as an international platform for global cooperation was also reaffirmed with G20, G7 or the Asia-Pacific Economic Cooperation.
Department for OECD, Sustainability: firstname.lastname@example.org