Insights › From Crisis to Recovery - Foreword
The current global economic crisis was triggered by a financial crisis caused by ever-increasing thirst for short-term profit. In addition, against a background of government support for the expansion of financial markets, many people turned a blind eye to basic issues of business ethics and regulation. We now need to rewrite the rules of finance and global business. To restore the trust that is fundamental to functioning markets, we need better regulation, better supervision, better corporate governance and better co-ordination.
We also need fairer social policies and an end to the bottlenecks that block competition and innovation and hamper sustainable growth. We must also find the most productive ways for governments to exit from their massive emergency interventions once the world economy is firmly back on a growth path.
Dealing with fiscal deficits and unemployment while encouraging new sources of growth will absorb policy makers’ attention in the near term, but lifting our collective sights to focus on wider issues, such as the environment and development, is a challenge we must also meet.
How can we move from recession to recovery? The OECD’s strategic response involves strengthening corporate governance and doing more to combat the dark sides of globalisation, such as corruption and tax evasion.
As well as correcting the mistakes of the past, we have to prepare the future. We are elaborating a “Green Growth Strategy” to guide national and international policies so that all countries can realise the potential of this new approach to growth. Our analysis shows a need for governments to take a stronger lead in fostering greener production, procurement and consumption patterns by devising clearer frameworks and ensuring that markets work properly. They should drop some costly habits too, notably subsidising fossil fuels, which would help fight climate change and save money as well.
We also need new thinking in other areas, from competition, investment and pensions policies to tackling education, health care, social exclusion and poverty. We need to raise productivity while keeping trade and investment frontiers open. We must find ways to spread opportunity and the fruits of future growth more evenly and encourage the scientific, technical and organisational innovation needed for a “green” recovery.
This latest Insights book draws on the OECD’s analyses of why the financial crisis occurred and how it spread so rapidly into the real economy. It calls on the Organisation’s extensive expertise in the analysis of economic growth, employment policy, financial markets and the other domains affected by the crisis and crucial to the recovery.
I trust you will find it useful in understanding the origins of our present situation and in judging the responses to it.
Secretary General to the OECD