Sustaining growth: Trust, equality, jobs
|The economy is not out of the woods yet, with limited growth at best expected in OECD countries for 2013, unemployment still rising in some areas and falling more slowly than had been hoped in others, before things start to pick up in 2014.
But this forecast, in the latest OECD Economic Outlook, is not written in stone – it assumes that governments continue with reforms to set their economies and societies back on the path to sustainable recovery – and that means sustainable socially, economically and environmentally.
One risk was averted in January, when the US Congress agreed to extend the country’s debt ceiling for a further three months until May, avoiding potential inability to pay its bills. But this decision also sent a message that Congress is taking seriously the need to find a more permanent solution than repeated debt rollovers – if lawmakers have not produced a budget bill by mid-April, they will not be paid until they do.
The key to recovery is to push ahead with reforms that will pay dividends in the medium-term, in areas such as education, innovation, taxation, jobs OECD Secretary General Angel Gurria said at Davos. This is not a case of ignoring the present, however -- "If you really want to go for a durable recovery, you really have to go for the fundamental measures," Mr. Gurria said in an interview with Bloomberg. "Some of these take a long time to get results but today, paradoxically, your best short-term policies may be your best long-term reforms.”
A key question after the crisis hit in 2008 was why it was not foreseen and prevented. At least part of the answer to that question lies in the fact that what you know depends on what, and how, you measure everything from economic growth to what makes people happy. Devising credible measures, and keeping them up to date, is a complex process. The idea that the overall well-being of a society and economy could not be captured by economic growth figures alone was already becoming clear in the early 2000s, but it took some years to develop a tool such as the OECD’s Better Life Index, for example.And existing measures were in need of updating. The way trade flows are measured, for example, dates from a time when essentially Country A produced and exported something, whether bananas, bicycles or boots, to Country B. But globalization and Internet technologies have changed all that – how do you determine the country of origin of a car or a mobile phone whose components can come from multiple other countries, and be partly assembled in several places? Work on this began as a result of the crisis, and the OECD with the WTO in January produced the first figures measuring this more complex reality which may call into question our assumptions about just who has the biggest trade surplus with whom, not to mention who is creating jobs where.
The Secretary-General speaks from the World Economic Forum in Davos.
Find out more
For more on the latest OECD economic figures and outlook: www.oecd.org/economy
For more on OECD work on employment: www.oecd.org/employment
For more on OECD work on tax issues: www.oecd.org/tax
For more on OECD work on well-being www.oecd.org/betterlifeindex