OECD Observer
News brief Q2 2016

Health workers surge

The number of doctors and nurses has reached an all-time high in the OECD area, according to a new report entitled Health Workforce Policies in OECD countries: Right Jobs, Right Skills, Right Places, issued in March. Some 3.6 million doctors and 10.8 million nurses were working in OECD countries in 2013, up from 2.9 and 8.3 respectively in 2000. Jobs in the health and social sector now account for more than 10% of total employment in many OECD countries. The surge in the number of doctors has been particularly sharp in Korea, Mexico and Turkey, from relatively low levels in 2000. As for nurses, their number has increased in nearly all OECD countries. Yet, most health workers report a mismatch between their skills and their job requirements. Reforming health workers’ training , as well as using financial incentives to promote a more even distribution of health workers and services, would help better respond to people’s changing health needs. 

Development aid rises

Development aid totalled US$131.6 billion in 2015, representing a rise of 6.9% from 2014 in real terms as aid spent on refugees in host countries more than doubled to US$12 billion. Indeed, OECD Development Assistance Committee (DAC) rules allow member countries to count certain refugee-related expenses as official development assistance (ODA) for the first year after their arrival. “Countries have had to find large sums to cover the costs of an historic refugee crisis in Europe, and most have so far avoided diverting money from development programmes”, OECD Secretary-General Angel Gurría said. Only six of the 28 DAC countries (Denmark, Luxembourg, The Netherlands, Norway, Sweden and the UK) met a United Nations target to keep ODA at or above 0.7% of GNI.

See www.oecd.org/dac/  

Stringent environmental laws work

Countries that implement tough environmental policies do not lose export competitiveness when compared against countries with more moderate regulations, according to a new OECD study. The findings suggest that emerging economies with strong manufacturing sectors like China could strengthen environmental laws without denting their overall share in export markets. High-pollution or energy-intensive industries like plastics and steel making would suffer a small disadvantage from a further tightening of regulations, but this would be compensated by growth in exports from less-polluting activities.

See www.oecd.org/economy/greeneco/  


Gross domestic product (GDP) is increasingly a poor measure of prosperity. It is not even a reliable gauge of production.

The Economist, 29 April

Let’s relax and learn to live with low productivity.

Headline, The Sunday Times, 6 March

Climate is a challenge for civilisation. We will not achieve an energy transition without businesses, though we will have to do so against the interests of some of them, particularly those tied to fossil fuels that must generally stay in the ground.

Pascal Canfin, CEO, WWF France, Les Inrocks, 29 February (our translation)

The outcome of individual economic freedom can be great inequality, which hollows out realistic notions of democracy.

Martin Wolf, Financial Times, 9 February


Composite leading indicators point to signs of easing growth in the OECD area. These anticipate trends and turning points in upcoming trends, based on the likes of order books, building permits and long-term interest rates. The leading indicators point to easing growth in Canada, Japan, the UK and the US. Stable growth momentum is anticipated in Italy and in the Euro area. The outlook for China is still pointing to tentative signs of stabilisation, but to a loss of steam in Russia and Brazil.

Real GDP growth in the OECD area slowed markedly to 0.2% in the fourth quarter of 2015, down from 0.5% and 0.6% in the previous quarters. Economic growth slowed to 0.2% in the US and decelerated marginally in France and Italy to 0.2% and 0.1% respectively. GDP growth was stable at 0.3% in Germany and picked up marginally to 0.5% in the UK, while contracting by 0.4% in Japan.

OECD-area inflation rose to 1.2% in January 2016, compared with 0.9% in December 2015. Energy prices fell slightly by 5.4% in the same period. Excluding food and energy, the OECD annual inflation rate remained stable at 1.9% in January.

The unemployment rate in the OECD area fell by 0.1 percentage point to 6.5% in January 2016, 1.6 percentage points below the January 2013 peak. Some 39.9 million people were out of work, 9 million less than in January 2013, but still 7.4 more than in April 2008. In the euro area, the unemployment rate declined by 0.1 percentage point, to 10.3%, continuing its downward trend.

As for trade, total (seasonally adjusted) merchandise exports of the G20 continued to contract for the sixth consecutive quarter, falling by 1.6% in the fourth quarter of 2015 compared to the previous quarter, while merchandise imports declined for the seventh consecutive quarter, by 1.9%. Exports dropped sharply across large oil exporters such as Canada, Indonesia, Russia and Saudi Arabia, reflecting falling oil prices and an appreciating US dollar. Among G20 economies, only China and Turkey saw exports and imports grow in the fourth quarter of 2015.

Country roundup

Germany is in a solid economic position, but ageing and technological change require new investments in people, the latest OECD Economic Survey of Germany finds. www.oecd.org/germany

Polish economic growth remains solid and unemployment is decreasing, but further investments in infrastructure and skills will be essential to sustain a continuing improvement in living standards, environmental quality and well-being, according to the latest OECD Economic Survey of Poland. www.oecd.org/poland

Lithuania has made remarkable economic and social progress, but further policy reforms will be necessary to ensure a more productive and inclusive economy, according to the first-ever OECD Economic Survey of Lithuania. www.oecd.org/countries/lithuania

Boosting economic growth and investment to create jobs, improve the stability of public finances and provide an effective social safety net are crucial to help Greece recover from the profound social costs of the economic crisis, the latest OECD Economic Survey of Greece says. www.oecd.org/greece

Spain’s gradual economic recovery should enable it to start reversing the sharp decline in its development assistance since 2010 and focus more of its aid budget on the neediest countries, according to the latest OECD DAC Peer Review of Spain. www.oecd.org/spain

Serious concern, is how the OECD Working Group on Bribery viewed progress in Belgium, Finland and Slovenia in implementing the Anti-Bribery Convention. www.oecd.org/daf/anti-bribery/

The Slovak Republic has undertaken a series of reforms to improve its education system, and now needs to improve equity and inclusion in schools. www.oecd.org/slovakia/  

Private hospital prices in South Africa are too expensive for citizens, according to a new OECD health working paper in February. www.oecd.org/southafrica

Costa Rica has made impressive economic, social and environmental progress, but further institutional and policy reforms will be necessary to ensure stronger and more inclusive growth, according to the first-ever OECD Economic Survey of Costa Rica. www.oecd.org/countries/costarica  

Silvana Koch-Mehrin, founder and chairperson of the Women in Parliaments Global Forum, speaking at an OECD conference on improving women’s access to leadership, 8 March 2016.

Other stories

Countries should modernise their consumer protection laws to address new risks posed by online commerce, according to new OECD guidelines for member countries and emerging economies. In particular, these laws should cover “free” apps–services offered for free in exchange for gaining access to the user’s personal data–and peer-to-peer Internet transactions. See www.oecd.org/internet/  

OECD countries have strengthened their determination to work towards greater gender equality in public life–including in governments, parliaments and judiciaries–through the launch of the OECD Recommendation on Gender Equality in Public Life. Actions recommended include introducing quotas or voluntary target, linking public funding for political parties to their gender ratios and rethinking traditional working hours to provide more flexibility for working mothers and offering incentives to men to take parental leave. See www.oecd.org/gender/

OECD countries remain the most popular travel destinations in the world, accounting for more than 60% of global travel receipts, according to OECD Tourism Trends and Policies 2016. Within the OECD area, tourism represents on average 4.1% of GDP, 5.9% of employment and 21.3% of service exports.
See www.oecd.org/industry/tourism/

Plus ça change...

Big farm enterprises which can apply the most modern techniques and use expensive equipment have a great advantage over the small farms, particularly in mountainous or other difficult areas. Therefore, prices that would be high enough for the big modernised farms would not give the small farmers a decent living.

“Agricultural policies reconsidered”, by Thorkil Kristensen, OECD Secretary-General, in Issue No 37, December 1968

©OECD Observer No 306 Q2 2016