The activities of the Organisation for Economic Co-operation and Development (OECD) in 2011-2012
- Author(s):
- Parliamentary Assembly
- Origin
- Assembly debate on
3 October 2012 (32nd Sitting) (see Doc. 13019, report of the Committee
on Political Affairs and Democracy, rapporteur: Mr Bockel; and Doc. 13040, opinion
of the Committee on Social Affairs, Health and Sustainable Development,
rapporteur: Mr Braun). Text adopted by the Assembly on 3 October
2012 (32nd Sitting).
- Thesaurus
1. The Parliamentary Assembly of the
Council of Europe, enlarged to include the delegations of the national parliaments
of the Organisation for Economic Co-operation and Development (OECD)
member States which are not members of the Council of Europe, as
well as a delegation of the European Parliament, is once again considering
the activities of the OECD. The enlarged Assembly has reviewed the
activities of the OECD in 2011-2012 in the light of the reports
by the organisation and the report prepared by the Committee on
Political Affairs and Democracy.
2. Following the reform of the Assembly’s structures and working
methods, which came into effect in January 2012, the Committee on
Political Affairs and Democracy is now responsible for presenting
the report. The Assembly has sought to make the debate more political
and the enlarged Assembly also attaches importance to focusing on
an assessment of the work of the OECD not only from an economic
perspective, as it did in the past, but also from a political perspective.
In this respect, the present report focuses on responses to the
eurozone crisis and on support activities for the Middle East and
North Africa region (MENA).
3. The enlarged Assembly notes the background of the world economy
against which the activities of the OECD have been conducted in
2011-2012. Major challenges are facing the world economy: while
growth is stagnating or becoming negative, the risk of a financial
disaster is increasing. The sovereign debt crisis and the measures
taken to resolve it are having a severe impact on the countries
in the eurozone’s periphery, while economies seem to be weakening
all over the world.
4. The OECD Secretary-General has highlighted four areas of policy
action for member and partner countries’ governments to respond
to the interlinked policy challenges related to a hesitant recovery:
“go structural”, “go social”, “go green” and “go institutional”.
Many countries are confronted with high unemployment, growing inequality
(“go social”), high public debt and budget deficits. New sources
of growth and measures to strengthen competitiveness need to be
identified, including innovation, green growth, knowledge-based
assets and skills (“go structural” and “go green”) to put OECD economies
back on a strong, inclusive growth path. Restoring household and
business confidence in markets, governments and institutions (“go
institutional”), addressing long-term challenges related to rapidly
growing populations in emerging and developing economies, tackling
issues such as ageing in many developed countries, resource scarcity,
climate change and global development, also have to be added to
the policy “to-do” list to which the OECD contributes with its advice
and recommendations. It is in this context that the OECD Ministerial
Meeting – “All on Board: Policies for Inclusive Growth and Jobs”
– launched the initiative “New Approaches to Economic Challenges” (NAEC),
which aims to draw lessons from the crisis, looking at trade-offs
between different policy objectives and revisiting, where necessary,
the analytical framework in order to develop a strategic policy
agenda for inclusive growth.
5. One of the most important consequences of the crisis has been
the sharp rise in unemployment, especially youth unemployment. In
this respect, the enlarged Assembly reminds the governments concerned that,
according to recent research by the OECD, in periods of excess capacity
it is important to have in place policies that support job creation,
avoid long-term unemployment and help the most vulnerable, in particular young
people, with targeted programmes and investment in skills and education.
Active labour market policies and taxation reforms, aimed at reducing
levies on labour and shifting them towards consumption or environmental
protection, can have a relatively speedy effect on employment and
help to support investment.
6. However, rising inequality began long before the financial
recession, and the slackening of growth has heightened its political
resonance. According to recent research by the OECD, the growth
of inequalities is due primarily to a considerable broadening of
wage-derived income. While the opening of markets and technological
progress have allowed productivity and growth to be increased, the
least skilled workers have been the least able to grasp the opportunities
thereby created. Since the mid-1990s, taxation and welfare systems
have become less redistributive. The OECD places emphasis on improving
the skills of the workforce to combat inequalities and the OECD
Skills Strategy was accordingly put before the member countries
at the ministerial meeting in May 2012 to ensure that the necessary
investments are supported by the development of appropriate skills.
The enlarged Assembly believes that it is necessary to review national
taxation systems, better to target support programmes for the most
vulnerable population groups and to pursue reforms aimed at reducing
labour market segmentation, ensuring more jobs of higher quality.
7. The enlarged Assembly is concerned about continued tax evasion
and tax avoidance that deprive State budgets of essential revenue.
Referring to the Assembly’s
Resolution
1881 (2012) on promoting an appropriate policy on tax
havens and its report on the same subject, the enlarged Assembly
urges the OECD to intensify its work in these areas and to seek
synergies with relevant international partners, notably the European
Union and the International Monetary Fund, in order to help States
to eliminate harmful tax practices, narrow the gap between the taxation
of income from capital and from work, and improve regulation of
the financial sector so as to improve management of international
capital flows.
8. In the same vein, the enlarged Assembly considers it relevant
to endorse the International Labour Organization’s recent call for
action on the youth employment crisis, aggravated by the global
financial and economic crisis, which represents a challenge to the
prosperity and cohesion of our societies. In this respect, youth
employment measures and policies have to take into account that,
even if education and training are essential for young people to
enter the labour market successfully, better skills do not automatically
translate into improved labour market outcomes and more jobs. Consequently,
it is important to develop programmes specially focused on fostering
youth access to decent and productive work and promoting youth entrepreneurship,
with the aim of contributing to reinstating growth in a sustainable
and fair manner.
9. In the light of current demographic trends and repercussions
from the financial crisis, notably in Europe, there is an urgent
need to enhance the sustainability of pension systems and the adequacy
of pension levels in many countries, not least as a result of austerity
measures that have aggravated social inequalities. Referring to
the Assembly’s
Resolution
1882 (2012) and
Recommendation
2000 (2012) on decent pensions for all, the enlarged
Assembly calls for the OECD and the Council of Europe to work together
with a view to promoting good practice in this field and preparing
practical instruments (such as guidelines) to advise member States
in their ongoing or forthcoming pension system reforms.
10. The enlarged Assembly notes with interest the OECD’s forecasts
of an upturn in activity in 2013, at both global and European level.
Decisions at political level are vital to bring this about. This
should start with consolidation measures within the eurozone that
are bolder than those taken to date, within a credible medium-term
framework, as well as structural pro-growth reforms. Otherwise,
Europe runs the risk of plunging into a spiral of bank busts, defaults
and negative growth – a calamity that could jeopardise the entire
European project.
11. The causes of the sovereign debt crisis are multiple: low
interest rates and easy access to credit led households, private
companies, the banking sector and governments to become over-indebted;
the lack of regulation of financial markets meant that banks neglected
to manage their risks and have become over-extended over the last
20 years. Government and banking sector debt has reached untenable
levels, triggering a crisis of confidence and, in some countries,
a liquidity crisis. In the summer of 2011, financial markets began to
question the ability of some European governments to finance their
public borrowing, in part due to the increasing likelihood of their
having to bail out their private banking sectors.
12. In this regard, the enlarged Assembly notes that the current
crisis was also caused by the fact that legal measures were taken
too late to prevent excess risk-taking by financial institutions,
and therefore emphasises the importance of ensuring the effectiveness
of the national and international regulatory framework, in particular
the early warning mechanism for financial risk, in order to make
the operations of financial institutions fair and reasonable. Further,
the enlarged Assembly appreciates the OECD’s efforts to present
the policy direction of financial regulation through its NAEC initiative,
and calls for the OECD to continue providing its member countries
with the necessary expertise.
13. The enlarged Assembly welcomes the measures that the eurozone
members have been adopting in order to cope with this situation,
such as the new financial support mechanisms (the European Financial Stabilisation
Mechanism and the European Financial Stability Facility), created
in May 2010, and the Treaty on Stability, Co-ordination and Governance
in the Economic and Monetary Union, which should come into force in
January 2013. This new treaty, aimed at providing enhanced policy
co-ordination and surveillance within the eurozone, gives the European
Commission and the European Council the right to examine national
draft budgets and, if necessary, suggest amendments, and makes the
European Commission’s recommendations binding under the Stability
and Growth Pact.
14. On top of the economic, employment and social difficulties,
there are now doubts about the public’s acceptance of adjustment
processes. In the economic report on the eurozone which it published
in May 2012, the OECD recommends a range of measures in line with
the guidelines recently adopted at European level and which are
designed to address the sovereign debt crisis combined with targeted
measures to invest in people’s skills and education and targeted
support for the most vulnerable. The enlarged Assembly urges the governments
concerned to make sure that the impact of the process is socially
balanced and shared fairly throughout all sections of society so
as to reduce inequalities. Public acceptance depends on this.
15. The enlarged Assembly welcomes the valuable contribution made
by the OECD to the consensual view and the agreements reached at
the Rio+20 Conference aimed at achieving sustainable development,
through its Green Growth Strategy. The OECD sees it as a practical
and flexible approach that assesses economic and environmental policies
together, in a way that points to an economic recovery based on
the sustainable use of natural resources, efficiency in the use
of energy and the development of ecosystem services, which is compatible
with economic growth, job creation and poverty eradication. At the
same time, the enlarged Assembly recalls that these types of initiatives
and efforts should contribute to States’ fulfilment of, and further commitment
to, international environmental obligations.
16. The Assembly recalls its
Recommendation 2002 (2012) and
Resolution 1885 (2012) on
the young generation sacrificed: social, economic and political
implications of the financial crisis,
Resolution 1884 (2012) on austerity
measures – a danger for democracy and social rights and
Resolution 1886 (2012) on
the impact of the economic crisis on local and regional authorities
in Europe. All these texts, adopted during the June 2012 part-session,
point to a reorientation of the programmes to combat the crisis
in order to promote economic growth while protecting the most disadvantaged
groups of the population, in particular young people. The Assembly
welcomes the ground-breaking work of the OECD in this field and
encourages it to continue to search for concrete policy solutions.
17. In June 2012, the Assembly also adopted
Resolution 1888 (2012) on the crisis
of democracy and the role of the State in today’s Europe, which
analysed the relationship between governance and the crisis, as
well as the dangers to democracy linked to certain measures taken
in response to the crisis. Its conclusions, pointing out that Europe
needs sound States based on strong democracies that can ensure proper representation
and increased participation of its citizens at local, regional,
national and transnational levels, could constitute valuable input
to democratic deliberation in other OECD and non-OECD countries.
18. Also during the June 2012 part-session, the Assembly adopted
Resolution 1892 (2012) on
the crisis of transition to democracy in Egypt and
Resolution 1893 (2012) on
political transition in Tunisia, which were follow-ups to its work
on the recent political developments in those countries. It recalls
once again its
Resolution 1831
(2011) on co-operation between the Council of Europe
and the emerging democracies in the Arab world, and it confirms
its readiness to share its experience in democratic transition to
facilitate their political transition.
19. Therefore, the enlarged Assembly welcomes the OECD’s decision
to enhance its co-operation programme with the Arab countries following
the recent political developments. It notes that the OECD’s approach
of enabling Arab countries to benefit from its expertise regarding
reform, tapping into the expertise of its member States and creating
the conditions for regional co-operation is very similar to that
advocated by the Parliamentary Assembly in
Resolution 1831 (2011). It calls
on the OECD to co-ordinate and proactively contribute to various
appropriate projects.
20. It is crucially important, from the perspective of promoting
global economic growth, that the OECD strengthen dialogue not only
with its member States, but also with non-member countries that
hold prominent positions in the world economy. In this regard, the
enlarged Assembly hopes that the process towards full membership
of the Russian Federation in the OECD will progress and include
relevant democratic elements; it encourages the OECD to strengthen
its relations with major partners, to expand its membership, and
to continue to make proposals to major partners for the promotion
of sound economic growth.
21. Finally, the enlarged Assembly appreciates the OECD’s leading
role in formulating various policy initiatives, such as job creation,
improvement of the development policy, promotion of free trade and
other policy issues referred to in preceding paragraphs. The enlarged
Assembly also invites the OECD to provide the participants of the
enlarged debate, between now and the next debate, with information
regarding its policy initiatives on the issues to which this resolution
refers.
22. Lastly, the enlarged Assembly resolves to amend the Rules
of Procedure for enlarged debates of the Parliamentary Assembly
on the activities of the OECD (see appendix) to take account of
the reform of the Parliamentary Assembly’s structures and of the
new apportionment of tasks among its committees.
Appendix – Modification of
the Rules of Procedure for enlarged debates of the Parliamentary
Assembly on the activities of the OECD
1. The Rules of Procedure for enlarged debates of the
Parliamentary Assembly on the activities of the OECD are modified
as follows:
1.1 in Section I on
“General Principles”, replace paragraph 1 with the following paragraph:
“Parliamentary debates on the activities
of the OECD shall be held on the basis of an agreement between the
Parliamentary Assembly of the Council of Europe and the national
parliaments of OECD member States which are not members of the Council
of Europe and with the approval of the OECD Council.”;
1.2 in Section II on “Participants”, replace sub-paragraph
1.2 with the following sub-paragraph:
“delegations of the national parliaments of OECD member
States which are not members of the Council of Europe”;
1.3 in Section IV on “Use of languages and documents”, delete
paragraph 6;
1.4 in Section VI on “Amendments and sub-amendments”, replace
paragraph 3 with the following paragraph:
“The President of the Parliamentary Assembly shall decide
on the admissibility of amendments and sub-amendments, which must
be signed by at least five members and tabled in accordance with
the deadlines set out in Rule 33.6 of the Rules of the Procedure
of the Assembly”;
1.5 in Section VIII on “Voting”, delete paragraph 2;
1.6 in Section IX on “Procedure in committee and examination
of the report in reply to the OECD activity report”:
1.6.1 in
paragraph 1, replace the words “The Parliamentary Assembly committees
concerned by OECD matters may hold meetings” with the words “The
Parliamentary Assembly committee responsible for preparing a report
on the activities of the OECD may hold meetings”, and delete the
footnote;
1.6.2 replace paragraph 2 with the following paragraph:
“At meetings of the Parliamentary
Assembly committee in question, delegations of the national parliaments
of the OECD member States which are not members of the Council of
Europe shall be allocated the following numbers of votes:
– United States of America, Japan and Mexico: 4 votes
– Canada and Republic of Korea: 3 votes
– Australia and Chile: 2 votes
– New Zealand and Israel: 1 vote”;
1.6.3 consequently delete Appendix 2 to the Rules of Procedure;
1.7 delete Section X on “Liaison meetings”;
1.8 in Section XI on “Special guests and parliamentary observers”,
in the title and paragraphs 1 and 2, replace the words “special
guest(s) and parliamentary observer(s)” with the words “special
guest(s), parliamentary observer(s) and partner(s) for democracy”;
1.9 in paragraph 4 of Appendix 1:
1.9.1 replace the
words “special guest or permanent observer status” with the words
“special guest, permanent observer or partner for democracy status”;
1.9.2 at the end of the paragraph add the following: “Morocco:
3; Palestinian National Council: 1”.
