The OECD and the world economy
- Author(s):
- Parliamentary Assembly
- Origin
- Assembly debate on 4 October 2006 (28th Sitting) (seeDoc. 11012, report of the Committee on Economic Affairs and Development, rapporteur: Mr Cosidó). Text adopted by the Assembly on 4 October 2006 (28th Sitting).
- Thesaurus
1. The Parliamentary Assembly of the Council of Europe, enlarged to include delegations from the
parliaments of non-European member states of the Organisation for Economic Co-operation and
Development (OECD), debated the recent activities of the OECD on the basis of the 2006 report on
the OECD and the world economy, presented by the Committee on Economic Affairs and
Development and contributions from other Assembly committees.
2. The enlarged Assembly welcomes the continued resilience of the world economy in the face of
such challenges as higher energy prices, incipient inflation and trade and fiscal imbalances in certain
countries. These challenges require vigilant economic oversight with a view to taking timely and
balanced corrective action where necessary.
3. The enlarged Assembly considers that the liberalisation of international trade is one of the most
effective measures for stimulating world growth. For this it is necessary to revive the Doha Round
and continue working towards the elimination of the customs barriers and government subsidies to
producers that undermine the free market, whilst recognising the special situation of the least
developed countries in promoting fair trade.
4. To stimulate growth and prosperity, it is also necessary to ensure the stability and transparency of
an increasingly efficient global capital market. To promote foreign investment, which is vital to
guaranteeing more stable and balanced worldwide economic development, countries must guarantee
a minimum of legal certainty so that political risks are not added to those which are specifically
business-related.
5. Controlled migration flows may have a positive effect on world growth due, on the one hand, to
labour mobility towards the dynamic economies where labour is in greatest demand and, on the other,
the foreign currency remittances which these immigrants send back to their countries of origin. To
keep control of this process of labour market globalisation, the countries of origin and destination
must jointly pursue more appropriate immigration policies, including those for the integration of
immigrants into society, and adopt measures to combat illegal immigration.
6. World economic growth is threatened by certain imbalances which may prove detrimental in the
long term. Those countries which have an excessive and increasing public debt must accordingly be
called upon to control their public expenditure. The excessive balance of trade disequilibrium in some
countries may also prove, in the long term, to be a risk factor for the whole of the world economy.
7. The sharp increase in the price of energy products is an obstacle to the growth of the world
economy and a risk for the future if the trend persists. The enlarged Parliamentary Assembly
underlines that predictions of a steady increase in energy demand make it necessary to call for the
development of renewable energy sources (solar, wind and bio-energy) and new generations of
nuclear power, improved energy efficiency and increased investment in research and development on
new, safer and cleaner energy sources. An increase in oil extraction and refinement capacity would
also be necessary in the short and medium term.
8. The widening gap between rich and poor countries, which is especially dramatic in the case of
Africa, calls for both an increase in the funds earmarked by the developed countries for co-operation
and development aid and a far-reaching reorientation of that aid in line with the 2005 Paris
Declaration on Aid Effectiveness. The priorities should be to improve environmental protection,
conditions for women, education, health care, good governance and trade-related infrastructure, as
well as promoting growth benefiting the poor, in the countries concerned. The fight against
corruption, a real cancer eating away at economic development in poor countries, must be another
priority on the international agenda. When providing development aid, it is important to be in line
with national development strategies and priorities identified by recipient countries, and to adapt to
differing country situations. Greater involvement of civil society is also needed, through such
initiatives as the fair trade movement.
9. Agriculture and rural development are keys to development in the less advanced countries. The
OECD countries must mobilise to enable agriculture to develop and these countries to prosper.
Access to the world market for their agricultural products would also make it easier to curb the move
away from the countryside and emigration, while ensuring a more balanced distribution of the
population.
10. Generally, but more specifically in the case of the European Union, whose growth, year after
year, has fallen short of its own expectations, greater efforts must be made to implement the Lisbon
2000 Agenda. The pace of reform should be stepped up with a view to promoting sustainable
economic growth together with a quantitative and qualitative improvement in employment and
greater social cohesion. Such reforms should aim, among other things, at a better adjustment of the
labour market to the needs of the business and other sectors, more flexible regulation of the economy
so as to increase competitiveness, greater support for research and development, raising the standard
of education and vocational training, and modernisation of the social welfare system in order better to
combat social exclusion.
11. The reform processes across Europe that have been caused by European integration and the
process of globalisation encompass the whole sphere of economic activity today. Working relations,
social security systems, distribution of income – all have been put to the test and have faced pressure
for massive change over the course of the last fifteen years. The European response must not be a race towards a lowering of social standards. Peace, prosperity and social cohesion are based on the
protection of those high standards. Instead, intelligent solutions must be developed which make gains
in efficiency possible and which are generally acceptable to the people at the same time. It is
therefore a matter of urgency to devise a common approach to meeting the three major challenges of
globalisation, technological evolution and demographic change. The crux of the matter is clear: the
European social model (which is distinguished by a specific balance between economic growth and
social justice) must demonstrate its ability to respond creatively to these challenges.
12. Quality of life is more than financial prosperity and the price of humanity more than a pay
cheque. In an increasingly interdependent world it is important to maintain the focus on culture and
ensure that educational processes are adjusted to living as well as earning a living. For this reason the
enlarged Assembly continues to insist on the complementarity of the work of the OECD with other
more culturally oriented organisations such as the Council of Europe. It looks forward with interest,
therefore, to the contribution of the OECD to the overview of European co-operation that will be
made by the Standing Conference of European Ministers of Education when it meets next in Istanbul
in May 2007.
13. Sustainable development requires that economic growth and social rights be reconciled with the
protection of the environment. To this end, the Assembly calls for full implementation of the Kyoto
Protocol commitments with regard to climate change. Those countries that have not signed the
protocol should do so and new instruments of international co-operation should be conceived where
necessary to meet other major challenges of environmental protection.
14. Democracy, political liberty and human rights are realities inseparable from economic and social
development. Political instability and such human rights violations as child labour, human trafficking
and discrimination against women all have an economic as well as a political impact. All Council of
Europe and OECD member states should therefore reaffirm their commitment to democratic and
human rights principles and values and step up their efforts to raise awareness of them across the
globe.
15. The enlarged Assembly believes that the OECD is uniquely positioned to serve as the hub for
global economic policy co-ordination, bringing together the expertise and experience it has acquired
across the spectrum of economic policy. The enlarged Assembly therefore calls on the OECD to
facilitate discussion among key member countries, the European Union, leading economies of non-
OECD members, and developing countries with the goal of reaching agreement on the core elements
of a new global economic agenda. This agenda would be based on the OECD’s mandate, namely the
promotion of sustainable economic growth, trade liberalisation and development.
