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Economic outlook: Achieving a resilient recovery

The recovery from the Great Recession has been slow and arduous, and has at times threatened to derail altogether.

Getting the forecast wrong

When the worst crisis in over 50 years struck OECD countries in 2008, people rightly asked why they had not been warned. After all, the information world is awash with economists, global traders and other experts watching the markets, and international organisations such as the OECD and the IMF are tasked with what is known as economic surveillance. 

Growing green agriculture

While green growth has been paid a great deal of lip service by policymakers, business leaders and other stakeholders, few concrete strategies have been put in place. Perhaps surprisingly, even in agriculture, most OECD countries still do not have solid plans in place for pursuing green growth in this sector. 

Caring for cancer

Countries are not doing as well as they could in the battle against cancer, according to Cancer Care: Assuring Quality to Improve Survival. Cancer remains one of the leading health care challenges in all OECD countries, where more than 5 million new cases are diagnosed every year. 

Governing through crises

Major events, like the Great East Japan earthquake or indeed the euro crisis, can have important ripple effects that spread well beyond the areas immediately concerned. More recently, the budget crisis that resulted in the shutdown of large parts of the US government and public services has raised the spectre of a default, the first in the country’s history.

Crying fowl

In 1994, a simple disagreement in a marketplace in Ghana over the price of a guinea fowl turned ugly. The quarrel led to the violent death of one person, which provoked subsequent killings and then escalated into a cycle of revenge attacks. The dispute quickly grew to become what is today known as the Guinea Fowl War. By the time the Ghanaian military restored order, more than 400 villages had been burned and over 15 000 people are thought to have been killed.

Stormy waters

Climate change is, to a large extent, water change. Water is the predominant channel through which the impact of climate change will be felt. More torrential rains, floods and droughts can be expected in many parts of the world. Not only that–climate change is reshaping the future for freshwater on the planet. 

Fragile aid

Developing countries are a broad group. At the top of the pile are emerging powerhouses such as Brazil and China. At the bottom are a poor group called fragile states, such as Afghanistan and Somalia.

Cleaner Dutch energy: A tax success?

Since 1997 the Netherlands has had a tax allowance scheme aimed at promoting investments in energy-saving technologies and sustainable energy production. This so-called Energy Investment Tax Allowance, or EIA to the Dutch, reduces up-front investment costs for firms investing in the newest energy-saving and sustainable energy technologies. The basic design of the EIA has remained the same over the past 15 years: firms investing in technologies listed in an annually updated “energy list” may deduct some of the investment costs from their taxable profits.

Rethinking public pay

One of the biggest targets for reform in the pursuit of leaner government budgets is public sector pay and performance. Because of the crisis, some countries have frozen or even reduced salaries, while others have preferred to reduce benefits, even pensions. Others have decided to do nothing for the moment.

How are you, really?

The shortfalls of GDP that were already apparent before the crisis but made starker during it have led to a panoply of new initiatives to find metrics that can measure wellbeing rather than just economic growth. But while GDP has stood accused of overlooking the environment and human well-being, it has one advantage which policymakers and analysts appreciate: the methods are objective and clear. Whether measuring output or expenditure in an economy, GDP produces a single number that is easy to adjust and compare.

E-governance in Egypt

The Arab Spring and the rise of new social and democratic movements throughout large parts of the Middle East and North Africa (MENA) may not have changed the world quite as much as millions had hoped, but at least they gave a new impetus to the use of information and communications technology and the potential of “e-government” to foster participation and engagement, increase transparency and restore public trust. 

Spain’s youth unemployment lessons

Few countries have suffered the scourge of high youth unemployment as much as Spain has. There, the unemployment rate for under 25-year-olds exceeded 50% in 2012, nearly three times the OECD average. However, the crisis has not been the only cause of this; in fact, high rates of youth unemployment are not a recent phenomenon in Spain.

Still booming

The Internet is much more than a multi-billion dollar industry. The world’s economy now depends on this global “cloud”, which was once little more than a means of connecting different computers over a phone network. Today, the digital age has vast new potential to serve as a force of progress in the global economy, but better, smarter public policies will be needed for that potential to become reality.

A calm look at social unrest

In a globalised world, social unrest occurring far away can have transnational ramifications, with effects nearer to home. This has been evident in recent years with movements such as Occupy and Indignados, and the Arab Spring. Unrest could also be the consequence of a terrorist attack, but even the threat of one can lead to widespread panic. The upshot can be disorder and economic turmoil.

Compact cities

By 2050, 70% of the world’s population more than 5.5 billion people will live in urban areas. This population boom, combined with threats of global warming, high energy prices and tight government budgets make a convincing argument for better city planning. Governments faced with growing populations and dwindling natural resources have two choices: they can let urban sprawl continue to eat up useful land or they can plan “compact cities” that will be better for the economy and the environment. 

Turkey’s economy

The OECD is preparing its forthcoming Economic Survey of Turkey. What issues will be examined? We asked the OECD Economics Department to outline them. Turkey has achieved strong growth in terms of GDP and employment and its public finances are in comparatively good shape. As you prepare your forthcoming Economic Survey of Turkey, what factors would you say contributed to these successes? 

Behind closed doors

“Wise men don’t need advice. Fools won’t take it,” said Benjamin Franklin. Yet, from Machiavelli through Richelieu to Kissinger, people in power have always relied on good advice from people they trust. But where should the line be drawn (rather than blurred) between influence and intrigue, cost and benefit? 

Support where it works

Inventors, entrepreneurs and start-ups offer a glimmer of hope in a time of low growth and austerity, with governments and economists alike shifting their attention towards innovation as a way out of a protracted crisis. Government-supported policies and programmes to support business innovation have been around for decades, but how successful are they and what lessons can be drawn for these more austere times? 

Energy from the sun

Thomas Edison’s assertion that “genius is 1% inspiration, 99% perspiration” is particularly pertinent to the solar energy sector. This remarkable technology could hold answers to so many of the world’s energy challenges, but only at the cost of hard effort and investment. Solar Energy Perspectives, the first in-depth study dedicated to solar technology from the International Energy Agency (IEA), a sister organisation of the OECD, gives a comprehensive analysis of solar energy’s potential as well as the policies required to increase its capacity in the coming decades. 

Factory approved

Starting a factory? While “quick and dirty” may be the easiest business model to follow, the OECD is encouraging start-ups to start smart, with sustainability in mind. The OECD Sustainable Manufacturing Toolkit is a seven-step checklist to help businesses integrate good environmental practice, and stay on the side of investors, regulators, customers and local communities.

How's Life?

Have you ever had the feeling that economists and governments speak about wealth and growth in a way that doesn’t always chime with your own everyday experience?

Tax loopholes

When the OECD joined the G20 crackdown on tax havens during the economic crisis in 2009, its longstanding work helped to curb this harmful tax practice and implement a global standard of bank transparency. Now the organisation is focusing on another time-honoured malpractice: that of slipping taxable income through fiscal loopholes. Some call this creative accounting, the OECD calls it aggressive tax planning, and because it is hurting government revenue, it is hurting entire economies as well.

Coming out of the water closet

In the last edition of the OECD Observer we showed how investing in a gas-based kitchen can save lives. The simple water closet can also be a means to good health and dignity, and a source of economic wellbeing, says a new OECD report, Benefits of Investing in Water and Sanitation.

Learning to care

In 1950, less than 1% of the global population was over 80. By 2050, the share of those aged 80 and over is expected to reach nearly 10% across OECD countries. The trouble is, while people are living longer, they are not always able to look after themselves. Relying on family help can be difficult, not just financially, but also because, as people live longer, their children may also be ageing and facing challenges of their own. That is why public authorities are starting to focus on the issue of long-term care and the provision of services for elderly people with reduced functional capacities.

Trade for aid

As efforts to restart the stalled Doha Development Round negotiations intensify, the policy focus on world trade, and, specifically, its relation to development aid and growth in poorer countries, has become more acute. Trade is a powerful engine for economic growth, as the OECD’s founders argued 50 years ago, and, as such, can contribute to reducing poverty. However, efforts to improve trade in developing countries are often hampered by domestic constraints, particularly a lack of adequate economic infrastructures, as well as institutional and organisational obstacles.

Green house?

How much more would you be willing to pay for renewable energy? Are environmental concerns a factor in how much you use your car? And are you really thinking about the environment when you buy organic food? All these questions, and more, are at the heart of the 2008 survey which forms the basis of Greening Household Behaviour. A part of the OECD’s Green Growth Strategy, this survey covered 10,000 households across ten OECD countries to determine how our day-to-day relationship with the environment may affect reforms, and is due for another round in 2011.

OECD Yearbook 2011

Read the OECD Yearbook 2011, inaugural edition for the 50th anniversary of the Organisation for Economic Co-operation and Development. See the articles below or click here for the Issuu pdf version, which features key trends since the 1960s for OECD and partner countries; from page 103.

Biofuels: A second chance

As biofuel production grew fourfold from 2000 to 2008, criticism of the industry seemed to increase nearly as dramatically. Production of these transport fuels, which are based on food crops such as grains, sugar cane and vegetable oils, competes with food crops and drives up food prices, experts argue. Also, from land-clearance needed for cultivation, production and use, these biofuels may actually increase, rather than reduce, greenhouse gas emissions.

Urban energy

Despite the mitigated outcome of the recent Copenhagen climate change summit, efforts to develop renewable energy still make progress. Practical solutions to improve the development and implementation of renewable energies and boost their efficiency are constantly being sought. Attention is starting to focus on cities.