Can I afford to heat my home this winter? Find a job and feed my family? Get treatment if I am sick? Will there be a decent education for my children, and an adequate pension for me? These questions affect us all, but in an interdependent globalised world, who is responsible for solving them?
The financial and economic crisis has affected all of us. Obviously no single individual can solve a global problem – nor can a single local or national government or regional grouping or international organisation. The crisis has made clear that having specialised organisations doing policy in their own corners is not enough to turn things around. We need a new way of tackling global problems – high food and energy prices, growing competition for scarce global resources, a breakdown of trust in our banking systems, and the need to create jobs to build a lasting recovery.
There is no magic bullet answer, but the emergence of the G20 has provided a forum where government leaders from around the globe, developed, developing and emerging economies, can come together to tackle these issues. In 2008, the G20 called on the OECD and other key international organisations to help it respond to the global economic crisis. Since then, the OECD has been an active participant in G20 meetings and summits, providing analysis, data and policy recommendations on virtually all the issues being tackled.
The OECD was a key participant at the G20 summit in Cannes on November 3 - 4. With 50 years of expertise across all areas of government from employment to fighting corruption and tackling tax havens, it has been a policy laboratory for finding economic solutions to the world’s most pressing problems.
Take jobs. It is one of the most difficult challenges facing international leaders, with more than 200 million people out of work worldwide, 75 million of them young people. The OECD and the UN International Labour Organization (ILO) have prepared joint reports to the G20 on ways to boost employment, ensure young people have the education and training to fill available jobs, ensure access to jobs for all sectors of society and encourage small and medium sized enterprises as engines of job creation.
Take the fight against tax havens, which deprive governments of the revenue they need to finance public spending on schools, hospitals, roads at a time when budgets are particularly tight. The OECD was the only international organisation tackling this issue pre-crisis, and the G20 built on that decade of work and the OECD’s Global tax forum to broaden the fight against tax havens. Almost all offshore and onshore tax jurisdictions have committed to tax transparency to ensure that people pay their taxes. The Global Forum will be delivering reviews of 59 tax jurisdictions to the G20 summit in Cannes.
Rising energy prices are a concern to everyone, as heating and transport bills soar, but when rising prices reflect rising global demand, national subsidies to keep prices down are not a long-term solution and may even encourage over-consumption. The OECD and organisations such as the International Energy Agency, OPEC and the World Bank were tasked in 2009 by the G20 to measure the scope of fossil fuel subsidies that encouraged wasteful use of resources and suggest ways to phase them out. The latest report from the OECD and IEA found that OECD governments spend up to 75 billion dollars a year subsidising fossil fuels. The report brings together an inventory of subsidies in both developed and emerging/developing economies, and shows how reducing inefficient subsidies would raise revenue and reduce emissions of greenhouse gases.
But how to change our energy habits for the future? The OECD has also produced a report with other international organisations on the overall issue of financing measures to combat climate change, including energy, particularly in the developing world, which was delivered to G20 finance ministers in October ahead of the Cannes summit.
Energy is not the only worry – rising food prices are eating into family budgets, and in developing countries can mean the difference between feeding oneself or going hungry. Commissioned by the G20, the OECD and the UN Food and Agriculture Organization (FAO) have delivered a report on price volatility in food and agriculture markets, and what governments can do to lessen and manage the risks, particularly for the world’s poorest and most vulnerable.
A lack of trust is at the heart of the current economic crisis. To help restore consumers trust in the banking and financial system, the OECD developed new principles of consumer financial protection which were adopted by G20 finance ministers in October 2011. “Without consumer trust and confidence we could jeopardise the basis for global economic recovery and growth,” says OECD Secretary-General Angel Gurría. Working together does not mean slowing the process – the G20 requested these principles in February 2011, and they were delivered in October after a process orchestrated by the OECD.
The OECD is also supporting the G20 in areas such as development policy, particularly innovative ways to attract investment, the fight against corruption, and the need to combat trade protectionism.
In the words of OECD Secretary-General Angel Gurría: “We will need new approaches to international cooperation that reflect the degree of global integration, that are sensitive to the importance of emerging economies and to the realities of the developing world, that base their decisions on new economic thinking, and that have the capacity to generate political consensus, international standards, and binding decisions. The rise of the G20 has been one of the most important developments in this respect…..The great challenge for international governance today is to generate the necessary leadership and the objective technical analysis to produce consensus for taking binding decisions, based on mutual learning and shared sovereignty. The OECD is ready to support this process.”
“This crisis revealed with blinding clarity the enormous risk of living in an integrated global economy with fragmented international governance. It is true. We cannot integrate our economies without integrating or at least coordinating our acts of government, institutions and policies, as the financial crisis of the euro zone has so amply demonstrated.”
OECD Secretary-General Angel Gurría
Speech on G20, emerging economies global governance and development
"Casinos are better regulated than our financial system. A Financial Transactions Tax will help stop financial speculation and generate revenue for investment in jobs,"
ITUC General Secretary Sharan Burrow
Union statement on G20 finance ministers
(Read full statement)
“Without decisive action, we risk prolonging record levels of long-term unemployment and having millions more young people enter adulthood without the prospect of meaningful work……. This would be tragic for the individuals involved, their families and our societies…The way out of the crisis will come from the private sector growth. Governments must focus on creating a better business environment to restore investor confidence”