The activities of the Organisation for Economic Co-operation and Development (OECD) in 2009-2010
- Author(s):
- Parliamentary Assembly
- Origin
- Assembly debate on 6 October 2010
(33rd Sitting) (see Doc.
12340, report of the Committee on Economic Affairs and
Development, rapporteur: Mr Moscoso del Prado Hernández). Text adopted by the Assembly on
6 October 2010 (33rd Sitting).
- Thesaurus
1. For the purpose of debating the
activities of the Organisation for Economic Co-operation and Development
(OECD), the Parliamentary Assembly of the Council of Europe meets
annually in an enlarged forum including delegations from the non-European
member states of the OECD and the European Parliament. The enlarged
Parliamentary Assembly has reviewed the activities of the OECD in
2009-2010 in the light of the OECD’s latest annual report, the report
submitted by the Assembly’s Committee on Economic Affairs and Development
and the contributions of other Assembly committees in the fields
of health, social policy, the environment, agriculture, migration,
education and science.
OECD enlargement
2. The enlarged Assembly welcomes the three new members
of the organisation (Chile, Israel and Slovenia) and notes that
Estonia is likely to become a member by the end of 2010. In this
respect it decides that seven seats and votes will be allocated
to the Chilean delegation to participate in the debates of the enlarged
Assembly. It also welcomes the progress made by the Russian Federation.
The enlarged Assembly also looks forward to the further participation
of Brazil, China, India, Indonesia and South Africa in the substantive
work of the OECD under the “Enhanced Engagement” programmes leading
up to accession talks, as well as to further co-operation between
the OECD and South-East Asia as a priority region. The enlarged Assembly
reiterates its belief that full respect for democracy, human rights
and the rule of law, including international law, should constitute
an essential criterion for judging whether a candidate country should
be invited to join the OECD. The enlarged Assembly encourages the
OECD to continue further enlargement and to invite countries meeting
membership criteria to accession negotiations.
Global economy
3. The enlarged Assembly welcomes the OECD’s assessment
that, after having contracted by 3.3% overall last year, GDP in
OECD countries is projected to rise by 2.7% this year, well ahead
of the 1.9% forecast last November. Steady, if unspectacular, growth
of 2.8% is expected in 2011 as the effects of government stimulus and
industrial restocking fade. Amongst the major OECD economies, the
United States will lead the way, with growth of 3.2% expected during
this year and next. Overall, in its latest economic outlook, the
OECD describes the current situation as “relatively auspicious”.
Strong growth in emerging market economies is contributing significantly.
However, the strength of the recovery greatly differs across OECD
areas and it is weakest and most erratic in the euro area.
4. It should be noted that the key reason for this rapid recovery
is the rebound of world trade. After shrinking by 11% in 2009 (its
first annual decline since 1982), a global trade growth of 10.6%
is expected this year, with 8.4% expected in 2011, thereby returning
to pre-crisis levels. This dynamism is very much driven by the larger non-OECD
economies and particularly China, India and Brazil. Accordingly,
global output growth is expected to be around 4.5% in both 2010
and 2011. One impact of the crisis has therefore been to hasten
the decline in weight of the major developed countries within the
world economy, their share of global trade volumes having fallen
by around 2%, and of global industrial output by around 4.6%.
5. In this context, the enlarged Assembly underlines the necessity
for a successful completion of the Doha Round trade negotiations,
not least in a spirit of solidarity with the least developed countries.
It welcomes the promising results of the OECD’s co-operation with
the World Trade Organization in promoting assistance for the low-income
countries with a view to increasing their trading capacity, notably
through the “Aid for Trade” initiative. The enlarged Assembly also
notes the importance of investment as a major driver of trade flows
and job creation, and encourages the OECD to continue to play a
central role in promoting best practices with respect to international
investment. In this regard, it welcomes the launch of the update
of the OECD Guidelines for Multinational Enterprises.
6. The enlarged Assembly is concerned that government stimulus
programmes and rescue packages have led to a sharp deterioration
of public finances. Governments will therefore have to address the
consequences of exceptional stimulus spending and the rescue of
debt-stricken institutions. More than €1 000 billion was injected
into OECD countries under fiscal stimulus packages in 2009, and
although broadly successful, these interventions have increased
deficits, leaving some governments carrying levels of debt unprecedented
in peacetime, while social costs (such as unemployment benefit)
have increased and revenue expectations have been slashed. Those
countries with serious fiscal challenges need to accelerate the
pace of consolidation so as to avoid the threat of a sovereign debt
crisis. The enlarged Assembly welcomes the recent announcements made
by some countries of their intention to drastically reduce their
deficits in 2010 and strengthen their fiscal frameworks and institutions.
The key challenge is to strike the right balance between policies
aiming at achieving fiscal consolidation while at the same time
supporting the recovery by efforts to boost competitiveness, economic
growth and job creation.
7. The enlarged Assembly notes with concern that the euro area
budget deficit rose from 2% of GDP in 2008 to 6.3% in 2009 and,
while there is substantial variation between members, a determined
process of fiscal consolidation is clearly needed (given that this
average is more than double the Maastricht criteria of 3%). Moreover,
as the instability has continued, the markets have raised broader
concerns about the perceived internal contradictions of the currency,
and even cast doubt upon its long-term viability. The enlarged Assembly fully
supports the conclusions of the OECD that such concerns will need
to be directly addressed by strengthening the area’s financial regulatory
and supervisory architecture and adhering more strictly to rules. There
is certainly a need for stronger oversight of domestic policies,
taking into account issues of competitiveness. Consideration should
also be given to external auditing and to the possibility of more
effective sanctions for non-compliance.
8. The financial, economic and social crisis has called into
question a number of assumptions which have underpinned the member
states’ economic policies over the last few decades, such as deregulation,
the primacy of economic criteria in all areas of life, and an overemphasis
on profit and growth. Confidence in the globalised free market economic
model of capitalism has been undermined. The enlarged Assembly fears
that our financial system no longer does the basic job required
of it – to underpin the productive economy and the fundamental operating
systems upon which we all depend. Finance should be a means, not
an end, and support society’s vital operating systems: the core
economy of family, neighbourhood and community, and the environment.
9. The enlarged Assembly last year urged “the OECD to investigate
the role its past policy advice played regarding the vulnerability
of monetary, financial and economic systems to crises. It [asked]
the OECD to present the results to the Parliamentary Assembly within
ten months. This investigation could provide valuable lessons for
the OECD in order to improve its future policy advice” (
Resolution 1684 (2009),
paragraph 12). The Assembly deplores the fact that no formal document
has been written and invites the OECD to perform such an investigation
within four months and report back to the Assembly.
10. The enlarged Assembly therefore deems it crucial that the
OECD’s “Strategic Response to the Crisis”, designed to counter the
effects of the crisis in a range of areas, be put into practice
(notably in improving tax transparency, aligning financial sector
regulations and incentives so as to achieve more effective oversight, and
improve risk management and corporate governance). The enlarged
Assembly considers international co-operation to be particularly
important in building a stronger, globally more consistent, supervisory
and regulatory framework for the financial sector so that it serves
the real economy, promotes sustainable enterprises and decent work
(according to the International Labour Organization’s definition)
and better protects savings and pensions. In this respect, the enlarged
Assembly commends the multilateral work achieved and the standards
set by the OECD as regards the different aspects of social and employment policies,
social cohesion and good governance. Moreover, the enlarged Assembly
encourages the OECD to further promote the study “Measuring the
Progress of Societies”.
11. The enlarged Assembly notes with concern that according to
new OECD estimates, global imbalances are likely to increase in
the near future. It therefore calls on governments, including those
of emerging economies, to address the problem of economic imbalances
and structural limitations highlighted by the crisis through co-ordinated
reform of national policies, taking into account the size of the
respective economies. In part, this should mean the progressive
abolishment of emergency support measures, but more fundamentally, it
should entail measures correcting disproportionate levels of savings,
investment and consumption. In recent years, saving and spending
rates have diverged between economies, as some have become excessively focused
on consumption and others on production. A sustainable growth model
also requires that savings and investment be fairly distributed
globally and not excessively concentrated.
12. The enlarged Assembly welcomes the conclusions of the OECD
Ministerial Council meeting of 27 and 28 May 2010, adopted by the
OECD member states and accession countries. These conclusions are
relevant to all open market economies and place strong emphasis
on fiscal consolidation, implementing structural reforms and strengthening
commitment to the fundamental principles of propriety, integrity
and transparency. These policies and strategies are essential to
ensure that recovery takes hold and is transformed into balanced and
self-sustained growth.
13. The current economic crisis had led to record unemployment
in many OECD countries and has given rise to fears of a jobless
recovery. Unemployment and output gaps are likely to remain high.
The enlarged Assembly believes that appropriate labour market and
social policies can do much to promote a job-rich recovery. As countries
face the challenge of fiscal consolidation, the enlarged Assembly
deems it particularly important to continue to make room in budgets
for cost-effective labour-market programmes that support workers
at greatest risk of becoming long-term unemployed and thus losing
attachment to the labour market.
14. The enlarged Assembly is convinced that labour market reforms
need to be implemented to raise potential output, support innovation
and prevent high unemployment from becoming entrenched. It welcomes the
reassessed OECD Jobs Strategy which provides a comprehensive framework
for promoting greater labour market adaptability. Moreover, it welcomes
the OECD’s emphasis on the Green Growth Strategy and encourages
the organisation to continue to play a key role in global efforts
to promote green growth and social sustainability. At the same time,
the enlarged Assembly encourages the OECD to carry out more work
and analysis on the pressing issue of youth unemployment as policies
are needed to help young people find a firm foothold in the labour
market – including by enhancing their skills – so as to promote
their career prospects.
15. In the aftermath of the global crisis, the enlarged Assembly
welcomes the OECD’s approach in considering corporate governance
to be a crucial area in which lessons need to be learned and best
practices extended. It welcomes the conclusions of the OECD Corporate
Governance Committee which found that corporate governance weaknesses
and failures had played an important role in the development of
the crisis, particularly in terms of remuneration, risk management,
board practices and the exercise of shareholder rights. In this
respect, the enlarged Assembly reiterates its support for the OECD
Principles of Corporate Governance which provide a good platform
from which to address failures and it hopes that priority will be
given to their implementation.
16. The enlarged Assembly welcomes the joint efforts of the OECD
and the Council of Europe which have led to the drafting of the
Protocol amending the Convention on Mutual Administrative Assistance
on Tax Matters (ETS No. 208), opened for signature on 27 May 2010.
The protocol reflects technological developments in information
transfer and brings the Convention on Mutual Administrative Assistance
on Tax Matters (ETS No. 127) into line with the ”international standard
on exchange of information for tax purposes” – the leading code
of its type (initiated by the OECD). It should facilitate the fight
against tax evasion and counteract tax avoidance and has been made
available to countries which are members of neither the OECD nor
the Council of Europe. The amendments to the convention introduced
by the protocol were designed specifically to allow access to, and
exchange of, bank information to both combat tax crimes and to address other
forms of non-compliance (other civil tax matters such as abusive
transfer pricing and aggressive tax planning). The enlarged Assembly
is confident that – strengthened by the protocol – the pioneering
work of the convention will now reach a new scale and scope and
that it will become a keystone for international tax co-operation.
Social and health policy
17. The enlarged Assembly commends the work undertaken
by the OECD in recommending responsive, fair and effective labour
market policies that could respond to the current unemployment crisis
and beyond. It encourages the OECD to invite its members to step
up efforts to create jobs and to maintain effective support for
the people most in need, notably young people and the long-term
unemployed. It remains, however, particularly concerned about the
situation of older workers who face a sharp increase in long-term unemployment,
and are likely to be hit hard by pension reforms. The enlarged Assembly
therefore urges the governments of the OECD countries to strengthen
their policies aimed at achieving the right balance between work
and retirement and at facilitating a longer active life, and to
ensure that retirement pensions are sufficient to allow elderly
women and men to lead a decent life and that pensions are safe in
the wake of economic crises.
18. The enlarged Assembly also notes that growing health spending
puts pressure on government budgets and warns against the risks
of indiscriminately cutting spending in public health care, since
this could threaten equal access to health in OECD countries. It
therefore invites the OECD countries to make the issue of good governance
in the health sector a priority, given the importance of democratic
accountability and transparency in public health decision making,
and to recognise that the protection of health as a human right
is an essential condition for social cohesion and economic stability.
Equal access to health care and treatment should be ensured to everyone
living in OECD countries, without any discrimination including on
the basis of immigration status or financial means.
Environment and agriculture
19. The enlarged Assembly welcomes the work done by the
OECD in the environmental field and is pleased to note a growing
awareness that emergence from the economic crisis depends on the
development of new environmentally friendly sources of growth.
20. In this connection, it hails the launch of the Green Growth
Strategy, which pinpoints the principal obstacles to be overcome
in order to foster strong and ecologically sustainable economic
growth and which simultaneously offers policy makers practical tools
for making the transition to a greener economy.
21. The enlarged Assembly stresses the need for the rapid adoption
of tangible measures, in particular with regard to the reform of
environmentally harmful subsidies (for instance for fossil fuels),
the elimination of barriers to trade in environmental goods and
services, support for innovation (in accordance with the principle of
precaution applied to the development of all new technologies whose
environmental effects are not yet known for certain), the dissemination
of clean technologies and harmonisation of means of action at the international
level.
22. It proposes devising new tools for measuring well-being, no
longer focusing on material well-being alone but also taking into
account the quality of the environment and the quality of life.
In this connection, it refers to
Recommendation 1885 (2009) on drafting
an additional protocol to the European Convention on Human Rights concerning
the right to a healthy environment and recommends that the Committee
of Ministers take all the necessary measures to ensure that this
instrument is drawn up as soon as possible.
23. At the same time, the enlarged Assembly stresses the need
to reach an international agreement on greenhouse gas emissions,
so that the largest possible number of countries is committed to
achieving a substantial reduction.
Migration and population
24. The enlarged Assembly expresses its concern over
the effects that the recent economic crisis has had on international
migration flows and on the employment situation of migrants in most
OECD countries. It welcomes the OECD’s continuing efforts to assist
governments in seeking responses and adjustment to the tightened
labour market situation. In this respect, it particularly hails
the recent publication of International Migration
Outlook 2010.
25. While recognising that most of the decline in migration for
employment has been driven by lower demand, the enlarged Assembly
continues to be concerned about the tightening of administrative
mechanisms for immigration in several OECD countries. It renews
its call on the governments of member states to keep open legal
avenues of entry and employment of migrants and to provide guarantees
for adequate and effective protection of the rights of migrants,
as well as for their equal treatment with native-born job seekers
on the labour market. The enlarged Assembly further calls on governments
to adopt measures that would help identify and meet endemic skills
shortages that will become more apparent with economic recovery.
26. Furthermore, considering the structural needs for labour on
the one hand and the increased number of irregular migrants residing
in OECD countries on the other, the enlarged Assembly encourages
the OECD to carry out a study on the possibilities of regularising
the status of those irregular migrants who cannot or will not return
to their countries of origin, and their integration in legal channels
of the labour market.
Education and science
27. The enlarged Parliamentary Assembly welcomes the
OECD’s development of a new student performance assessment tool,
Assessment of Higher Education Learning Outcomes (AHELO), a tool
to assist universities in assessing and improving teaching, to help
students in making better choices in selecting educational institutions,
and to help policy makers in ensuring that the considerable amounts
spent on higher education are spent well. In addition, this tool
will allow employers to know whether the skills of the graduates entering
the job market match their needs.
28. The enlarged Parliamentary Assembly draws the attention of
member states to the need for more focused budget spending on education
policies, bearing in mind the OECD’s findings that the quality of education
and training is more important than the length of education programmes,
and that the learning (and teaching) environment must be improved
in order to render education effective and optimise outcomes. The OECD
Centre for Effective Learning Environments (CELE) promotes the exchange
and analysis of policy, research and experience in all matters related
to educational construction with the objectives of improving the quality
and suitability of educational buildings, ensuring that the best
use is made of the resources devoted to planning, building, running
and maintaining educational buildings and giving early warning of
the impact on educational construction of trends in education and
in society as a whole.
29. Again with respect to the optimisation of resources, the enlarged
Parliamentary Assembly notes the OECD’s warning that a new form
of “digital divide” has emerged with respect to information and
communication technology, separating students with economic, cultural
and social capital, enabling them to gain the right competences
and skills to benefit from computer use, from those who do not.
Studies show that although governments invest in computing equipment
for schools, their use by teachers and students does not meet expectations.
Global indicators are needed for assessing how so-called “21st century
competencies” are integrated intocompulsory
education to improve teaching processes, enhance individualised
education programmes and prepare students for adult life by giving
them those skills necessary in a society where technology-related
competencies are increasingly indispensable.
30. The enlarged Parliamentary Assembly is concerned that figures
for OECD member states still show that immigrant students often
have more restricted access to quality education, leave school earlier
and have fewer higher education qualifications than their native
peers. It encourages Council of Europe member states to step up
efforts to ensure that first and second generation migrants have
early and equal access to education and to the appropriate assistance
in integrating national systems, and that educational structures
are designed to suit pupils from different cultural backgrounds.
