13/02/2007 - With a number of the world’s most advanced countries finally shaking off the sluggish economic growth of recent years, now is the time to step up, not slacken, the pace of reform, according to the latest edition of the OECD's annual Going for Growth report.
In a preface to the report, the OECD's Chief Economist, Jean-Philippe Cotis, cautions that cyclical buoyancy in continental Europe and Asian OECD countries must not lead to complacency. “Governments should resist the temptation to ease up on reforms aimed at boosting productivity and creating more jobs”, says Mr.Cotis.
It is in part thanks to the progress already made in reforming labour and product markets that unemployment has begun to fall in Europe, claims the report. But more needs to be done to boost long-term growth. Removing obstacles to labour force participation and job creation would increase living standards. Opening up product and financial markets to greater competition should raise productivity and rebalance national income away from business profits and into higher salaries and job creation, it adds.
Now in its third year, Going for Growth highlights the weaknesses that are holding back OECD economies from raising material living standards and suggests five priority areas for action for each of the OECD’s 30 members and the EU area.
The recommendations are tailored for each country but some common priorities emerge:
For much of continental Europe the main focus is on improving labour market performance to reduce unemployment and lift labour force participation.
For lower-income countries, as well as in Japan and Switzerland, raising productivity is the main challenge. Priorities focus more on liberalisation of product markets, especially in network industries and in services.
English-speaking countries generally display good labour market performance but need to raise skill levels, in particular through improvements in secondary education.
Many EU countries need to strengthen higher-education systems to improve graduation rates and, in some cases, the quality of teaching and research.
The report also looks at the political and economic impediments standing in the way of structural reforms and at how they can best be promoted and implemented.
To obtain a copy of Going for Growth 2007: Economic Policy Reforms, or for further information, journalists are invited to contact the OECD’s Media Division (tel: +33 1 4524 9700). The report can be purchased in paper or electronic form through the OECD’s Online Bookshop. Subscribers and readers at subscribing institutions can access the online version via SourceOECD.
Further information about the report can be found at www.oecd.org/growth/goingforgrowth2007