The COVID-19 pandemic is transforming how we think about our economies and our societies. The policy choices governments make today will determine their success in building a transition to a greener, more inclusive and more resilient tomorrow. It is an opportunity to chart a path that empowers everyone to face the future with confidence.
COVID-19 has widened gaps and exacerbated existing social challenges around the world.
Falls in measures of life satisfaction in Latin America, however, were particularly pronounced compared with OECD countries, despite increases in income in the past two decades. These falls were seen across different demographic groups: women, young people, rural, indigenous and Afro-descendant populations were especially vulnerable.
For 15-to-29 year-olds in the OECD, the life satisfaction score fell from 6.85 to 6.76 (on a scale of 0 to 10) between 2019 and 2020, a difference of 0.09. In Latin America, the corresponding figures are 6.64 and 6.06 – a difference of 0.58.
USD 125 billion: this is the estimated sum of corporate profits expected to be reallocated to governments as a result of the recent landmark international tax deal led by the OECD.
Agreed to by 136 countries and jurisdictions representing 90% of global GDP, the deal establishes the principle that companies pay tax where they generate profits – which has become more challenging as the global economy has become more digitalised. An agreed minimum global corporate tax rate of 15% means governments will have a greater capacity to fund essential public services.
In the G20, the range of corporate income tax revenue as a share of total tax revenue is currently between 7% (US) and 58% (India); in the OECD it is between 1% (Latvia) and 45% (Chile).
How corporate taxes will evolve over time remains to be seen.
Inflationary pressure in the global economy is stemming from a surge in demand accompanying the reopening of economies, which is pushing up the prices of key commodities, including fuel, metals and food.
Cost pressures are being amplified by supply chain tensions. Shipping costs, in particular, have risen sharply, reflecting strains in vessel and container capacity.
G20 consumer price inflation is expected to peak in late 2021 – but the long-term inflation outlook will depend on inflation expectations and wage inflation.
Venture capital investment in artificial intelligence technology increased 20-fold between 2012 and 2020. This scaling up of AI cuts through all sectors of the economy, including transport, healthcare, business, digital security and others.
The transport sector alone saw USD 18 billion of VC funding in 2020 with mobility and autonomous vehicles taking centre stage in global efforts to scale up broader sustainable mobility drives.
However, governments and other actors must think hard about how best to harness the power of technology with people in mind. The OECD AI Principles focuses on human-centred values and nurturing trust – and can therefore support inclusive growth, sustainable development and well-being.