OECD Observer
News brief Q1 2017

Migration follows beaten track

Despite growing economic dynamism in many emerging regions, international migration flows are not being diverted towards these new alternative poles, according to a new OECD Development Centre report. The share of developing country migrants heading to high-income countries has jumped from 36% to 51% of the world total over the last 20 years. For the countries migrants are leaving, the loss of labour can relieve pressure in over-crowded labour markets, propping up wages and easing unemployment. Moreover, migrants send home remittances and bring knowledge as they return. But emigration also can come with economic and social costs, such as labour shortages, a loss of educated and skilled workers and repercussions for family members left behind. Countries of destination can benefit from migration to make up for worker shortages. However, immigrants are less likely to have formal labour contracts than native-born workers, the report warns.

The need for greater international co-operation to address migration may also grow, the report says. See more on Perspectives on Global Development 2017: International Migration in a Shifting World.

See www.oecd.org/dev/   

R&D funding at risk

A decline in public funding of R&D research in a number of countries could pose a threat to innovation at a time when global challenges like climate change and ageing populations demand solutions, according to a new OECD report. Spending on R&D in government and higher education institutions in OECD countries fell in 2014 for the first time since the data were first collected in 1981. The latest OECD Science, Technology and Innovation Outlook warns that a backlash against globalisation and migration in some countries could also become a cause for concern: indeed, innovation is increasingly driven by cross-border co-operation and the ability of scientists, students and entrepreneurs to move about and work in different countries over their careers.

See www.oecd.org/innovation/

Mainstreaming biodiversity

The world must ramp up its efforts to use natural resources more sustainably and conserve biological diversity and the ecosystems on which we depend for human life, the OECD told participants at the COP13 Convention on Biological Diversity held in Cancun, Mexico, on 7 December. Countries are doing more to preserve biodiversity. Yet billions of dollars are still spent each year subsidising fossil fuels and agriculture that put pressure on natural services like water purification, climate regulation and insect pollination.

See http://oe.cd/BLUE     


Rather than seeking refuge in nationalism and isolationism, we believe that a better response to globalisation lies in localisation.

Michael Bloomberg and George Osborne, The Times, 27 February

We need leaders who remember the dangers of a fragmented Europe. Europe can slip back into war.

Jacques Attali, French economist and former minister, in an interview on www.euractiv.com, 20 January

The ability of statistics to accurately represent the world is declining. In its wake, a new age of big data controlled by private companies is taking over-and putting democracy in peril.

William Davies, The Guardian, 19 January

La robotisation ne tue pas le travail, elle le transforme.

Headline, Le Monde, 19 January 


Global economic growth is expected to pick up modestly next year to some 3.6% from a projected 3.3% in 2017, but risks of rising protectionism, financial vulnerabilities and potential market volatility hang over the outlook.

The OECD’s composite leading indicators continue to point to growth momentum picking up in several economies. By using data from the likes of order books, building permits and long-term interest rates, these leading indicators help anticipate trends and turning points in the economic cycle. Though there are signs of growth picking up in a few countries, stable momentum is anticipated in the OECD area as a whole.

In fact, real GDP growth in the OECD area decelerated slightly to 0.4% in the fourth quarter of 2016, compared with 0.5% in the previous quarter.

OECD-area inflation jumped to 2.3% in January 2017, compared with 1.8% in December 2016. Excluding food and energy, annual inflation picked up only marginally, to 1.9%.

The unemployment rate in the OECD area fell by 0.1 percentage point to 6.1% in January 2017 after two consecutive months of stability. Some 38.3 million people were out of work, 5.7 million more than in April 2008, before the crisis. The unemployment rate was stable in the euro area at 9.6%. Outside Europe, the unemployment rate increased by 0.1 percentage point in the US to 4.8%, while it fell by the same percentage point to 6.8% in Canada, 3% in Japan and 3.6% in Mexico.

Export growth picked up strongly to 1.5%, compared with 0.3% in the previous quarter. Imports increased by 0.8%, marginally up on last quarter’s 0.7% growth. Merchandise trade still remains around 10% below its pre-crisis levels.   

Country roundup

The Swedish economy is growing strongly, with unemployment trending downwards and living standards still among the highest in the world. But further policy actions will be needed to continue delivering inclusive, resilient and green growth, the latest OECD Economic Survey of Sweden says. www.oecd.org/sweden/

Portugal’s economy is recovering from a deep recession, thanks to a broad structural reform agenda that has led to falling unemployment and an improved export performance, a new Economic Survey says. Comprehensive reforms to Portugal’s labour market between 2011 and 2015 have helped create jobs and reduce the country’s high unemployment rate, according to Labour Market Reforms in Portugal 2011-2015: A Preliminary Assessment. www.oecd.org/portugal/

Reforms are starting to bear fruit in Mexico, but further action is needed to boost productivity and ensure more inclusive growth, the latest OECD Economic Survey of Mexico argues. www.oecd.org/mexico/

The US has maintained foreign aid volumes through the aftermath of the global economic crisis and has visibly improved the focus and effectiveness of its development assistance. These trends should be maintained and reforms to the US Agency for International Development should be consolidated, according to the latest DAC Peer Review of the United States. www.oecd.org/unitedstates/

Denmark should boost benefit coverage for low-skilled and low-wage workers and improve the support available to blue-collar workers as part of a series of reforms to help laid-off workers get back into work more quickly, according to Back to Work: Denmark. www.oecd.org/denmark/

Despite a challenging global environment, the growth prospects of Southeast Asia, China and India remain robust over the medium term, according to the OECD Development Centre’s Economic Outlook for Southeast Asia, China and India. www.oecd.org/dev/asia-pacific/

Governments in Latin America will need to improve public sector management and capacity–including budget allocation–to relieve the pressure on public finances from sliding commodity prices, according to Government at a Glance: Latin America and the Caribbean 2017. www.oecd.org/dev/americas/

All OECD reports can be found at www.oecd-ilibrary.org.   

Clara López

Minister of Labour Clara Lopez, with OECD Secretary-General Angel Gurria, during a visit to the OECD in February, where she spoke about developments in Colombian labour policy and the Peace Agreement. Colombia is currently in accession discussions with the OECD. 

Visit www.oecd.org/latin-america/countries/colombia/

Other stories

Current policies to mitigate carbondioxide emissions from global transport will not be enough to achieve international climate ambitions, a study from the International Transport Forum finds. The ITF Transport Outlook 2017 shows transport emissions rising sharply by 2050, and even under its optimistic scenario emissions remain around 2015 levels. See www.itf-oecd.org/  

Nearly one in five mobile phones shipped internationally is fake, as a growing trade in counterfeit IT and communications goods weighs on consumers, manufacturers and public finances. An OECD report, Trade in Counterfeit Goods, finds that batteries, chargers, memory cards, video game consoles and music players are also being counterfeited. See www.oecd.org/governance/

New international guidance on fighting corruption in the development sector went into effect on 9 December 2016, backed by more than 40 countries, with progress on agreed recommendations to be monitored by the OECD Working Group on Bribery and the OECD Development Assistance Committee (DAC). See www.oecd.org/corruption/ and www.oecd.org/dac/   

Plus ça change...

Over the next 50 years, the twin engines of population ageing and changing health technology may substantially increase health spending.

“Health spending: its growth and control”, by George J Schieber, in Issue No 137, November 1985   

©OECD Observer No 309 Q1 2017