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No 310 Q2 2017

www.oecdobserver.org

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Global economy Time to level the playing field

The future of driverless Tax crime Africa’s schools do better Innovating in electricity Rethinking infrastructure Tackling obesity


CONTENTS No 310 Q2 2017

READERS’ VIEWS

GOVERNANCE

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24 Is there still time to save our trust in government? Bill Below 26 Tax crimes: The fight goes digital Melissa Dejong

Healthy debate; Mine the gap; Food storage; Trade rule; Taxing problem; Twitterings

EDITORIAL 3

International co-operation is more important than ever Angel Gurría, Secretary-General of the OECD

DEVELOPMENT 28 Opening a new chapter in the infrastructure of Latin America Juan Pablo Bonilla, Manager of the Climate Change and Sustainable Development Sector, Inter-American Development Bank

NEWS BRIEF 4

More confident outlook; Closing global tax loopholes; New peak in development aid; Soundbites; Economy; Country roundup; Mel Young ; Other stories; Plus ça change

OECD.ORG 30 Business and well-being; Development aid stats: A primer; OECD appoints Masamichi Kono as Deputy Secretary-General; Conference on business, finance and gender 31 Recent speeches by Angel Gurría; List of OECD Ambassadors 32 Calendar, Frankie

BLOGS 6 BlogServer

ECONOMY 9 Globalisation: Time to level the playing field Adrian Blundell-Wignall 11 Global economic outlook: Better, but not good enough Catherine Mann

BOOKS

ENVIRONMENT AND ENERGY

DATABANK

SOCIETY

as are better medical could the number of a contributing factor?

t European countries at te number of doctors has en 2000 and 2012. Overall, ntire period, there were doctors in 2012 compared 2000 to 2012, there were rs in the United Kingdom, many, 40% more in Spain, n Portugal and in the 11). The exceptions are Czech Republic, where octors has remained over the period, while life also improved.

Priming up for primary school Andreas Schleicher We must tackle the growing burden of obesity Trend in the number of doctors Francesca Colombo Selected EU countries, 2000 to 2012 (or nearest year) Why it pays for cities to fight road deaths–and how they can get better at it Alexandre Santacreu, International Transport Forum and Safer City Streets

erform administrative es from about 70% in mark to less than 20% in rkey and Italy.

differences in internet

4 9

3

DATABANK

2

13

Tax crimes, page 26 8

19

12 10

7

18 14

17

Index 2000=100

160

UK

Greece

Portugal

Spain

Germany

Netherlands

Czech Republic

11

France

21

140

15

UK Netherlands Germany France

Spain Portugal Czech Republic

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24

Crossword, page 40 20

100 2000

2002

2004

2006

2008

2010

2012

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http://dx.doi.org/10.1787/health_glance_eur-2014-en

Source: OECD 2014

stabilised or slowed in countries hard hit by the crisis. Despite this upward trend, with a third of doctors over 55 years of age, many European countries could face a shortage of doctors in future, particularly in rural areas.

OECD (2014), Health at a Glance: Europe 2014, OECD Publishing. http://dx.doi.org/10.1787/health_glance_ eur-2014-en

% 90

Sending filled forms, 2013

Getting Information, 2013

Sending filled forms, 2010

70

60

50

40

30

20

10 0

22

26

16

Greece

120

80

6

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37 Will your job be automated?; Bribes don’t pay 1 38 Main economic indicators 40 Africa’s school progress; Crossword

Published in English and French by the OECD EDITOR-IN-CHIEF: Rory J. Clarke EDITORIAL ASSISTANT, WRITER: Balázs Gyimesi www.oecdobserver.org EDITORIAL INTERN: Marguerite Demoures www.oecdinsights.org Using e-governments services ment generation LAYOUT: Design Factory, Ireland 2017 % ofJune individuals obtaining information and sending completed forms on government websites in the last 12 months ols simplified our ©OECD public authorities? From ILLUSTRATIONS: David Rooney, Sylvie Serprix ing to downloading ofISSN 0029-7054 administrative procedures, WRITER: Clara Young, Claire MacDonald Tel.: +33 (0) 1 45 24 9112 most of OECD countries ADVISERS: Emily Hewlett and Luke Slawomirski, range of online services. Fax: +33 (0) 1 45 24 82 10 ed. Most people in thesales@oecd.org OECD Health Division -government services ADVERTISING MANAGER: Aleksandra Sawicka n on administrationFounded in 1962. The magazine of the Organisation though many also use it ADVERTISING SALES: LDMD ms, such as tax returns. for Economic Co-operation and Development rvices are used on PRINTERS: SIEP, France; Chain of Custody certified. than 45% of individuals OECD Publications 2 rue André Pascal ation, but users show a Applications for permission to reproduce or translate all or parts propensity to use them 75775 Paris cedex 16, France o filling in a document of articles from the OECD Observer, should be addressed to: observer@oecd.org % do. Editor, OECD Observer, 2 rue André Pascal, 75775 Paris, usage rates: in 2013, 90% and more of In any case, companies are one The step ahead: e of individuals usingwww.oecd.org

e trend clearly rose both the 2008 world economic there were over 10% doctors in 2012 compared ver, the number has

Priming up for primary school, page 18

33 Reviews: Under the sea; Web of collective action 34 New publications 35 Focus: World economy 36 Review: Digital disruption

14 Radical innovation in the electricity sector Chris Pike 16 Driverless trucks: Taking hold of the wheel Clara Young

18 20 at large CD area are living longer 22 es. Improved lifestyles

Radical innovation in the electricity sector, page 14

P R 8 N C N K U L A L R E ISL DNK NLD NOR KOR SWE FIN CHE AUS CAN NZL IRL BEL FRA ISR EST ECD AUT PRT LUX ES GB EU2 SV GR HU SV DE PO IT CH TU CZ O

Source: OECD, ICT database and Eurostat, Information Society Statistics

the adult population had access to the internet in the Nordic countries, but less than 60% in Turkey. Despite a high internet usage rate, the Germans do not seem eager to perform administrative requirements online.

http://dx.doi.org/10.1787/9789264221796-en

cedex 16, France.

e-governments services are used by more than 80% of businesses in OECD countries.

OECD (2014), Measuring the Digital Economy: A New Perspective, OECD Publishing. http://dx.doi.org/10.1787/9789264221796-en

OECD Observer No 302 April 2015

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All signed articles in the OECD Observer express the opinions of the authors and do not necessarily represent the official views of the OECD or its member countries.

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the of ar e ed am is ye lat s n e s r o e l r th is idd 100 Ac __ M _ The statistical data for Israel are supplied by and under the responsibility _ n 1 byethe e OECD is ic of the relevant Israeli authorities. The use of such data b om tat without prejudice to the status of the Golan Heights, East Jerusalem on and c ic s nd Israeli settlements in the West Bank under the terms of international law. E a m 7 dem r sh o con ea, fo This document, as well as any data and map included herein, e are without prejudice to the status of or sovereignty over any ey ns to territory, to the delimitation of international frontiers and 9 K ropea teres boundaries and to the name of any territory, city or area. n u i E o al10 at's eci h p t S t jec 11 pla ub S ess s l t 12 ilo erie 5 P liv Reprinted and translated articles should carry the credit line “Reprinted from the OECD Observer”, plus date of issue. Signed articles reprinted must bear the author’s name. Two voucher copies should be sent to the Editor. All correspondence should be addressed to the Editor. The Organisation cannot be responsible for returning unsolicited manuscripts.


Readers’ views We welcome your feedback. Send your letters to observer@oecd.org or post your comments at www.oecdobserver.org or www.oecdinsights.org

Healthy debate It is common sense for patients to be in charge of their own data (“Governing data for better healthcare”, No 309, Q1 2017, http:// oe.cd/1JT). But will they have the time, or the ability, to stay ahead of the “experts”, and really know what to do with it all? As you warn, health data in the wrong hands can be used to harm patients. It is likely that professional intermediaries will wield too much power over worried patients. The OECD Recommendation is welcome, but the onus is on elected governments to provide healthcare and put patient interests first.

Josephine Clerc, Oise, France ___

in these mines to benefit.

Mahad, commenting on “Smartphones are child’s play, but what about the child labour?”, OECD Insights blog, 27 April 2017. See: http://wp.me/p2v6oD-2Sw.

Adonde Guaman, commenting on “Facing the facts about trade: Why people are angry and what we need to do about it”, Medium.com, 25 April 2017.

Taxing problem Tax avoidance is legal, it just means paying the least amount of taxes required by law. This is arguably a corporate duty of the owners-shareholders, as is the payment of all tax obligations required by law. The solution to tax avoidance is to simplify the tax codes to enforce reasonable tax rates.

Charles Kovacs, commenting on “Tax Crimes–The Fights Goes Digital”, OECD Insights blog, 5 April 2017. See: http:// wp.me/p2v6oD-2Rr. _____

Twitterings Andrea Chiarello @chiarello90 The beauty of a #tax policy newsletter: “It’s not easy being a tax proposal when you don’t have the #OECD quality stamp” #CCCTB @EU_Taxud Theresa Yurkewich @ts_tidbits Paris in 1 week for the @OECD Forum 2017! Looking forward to discussions with global leaders on our digital world & proud to rep @YDCanada.

As someone with a specialist interest in medicine, I would say that your healthcare issue (OECD Observer No 309, Q1 2017) is an excellent expression of a liberal, reformist, state-managed, market-capitalist approach to promoting higher quality healthcare for all in order to reduce costs. You have a post-neo-liberal agenda for stripping a great National Health System to the bone under the smokescreen of devolution to local powers in the UK minister’s editorial, and a progressive Swedish agenda for patient-power within a well-resourced system a few pages later. But that’s the nature of the OECD beast–or of any international org that still has national politicians on its policy boards.

___

Steven Palmer, Professor of History, University of Windsor, Canada

Sat Goel, commenting on “The Sahel and West Africa had a good agricultural season, so why does food insecurity persist?”, OECD Insights blog, 11 April 2017. See: http:// wp.me/p2v6oD-2RG/ .

Dennis Alvor @dennisalvord

Trade rule

Follow us on Twitter @OECDObserver Comments and letters may be edited for publishing. Send your letters to observer@oecd.org or post your comments at these portals: www.oecdobserver.org, www.oecdinsights.org, or at the other OECD portals on this page.

Mine the gap At the end of the day, responsible stewardship of the mining industry in the Democratic Republic of Congo rests with the government there. Firms that have a vested interest in maintaining the lowest costs to source minerals cannot be pressed with the responsibility of attempting to ensure sound practices are in place for employees and the

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environment. Corporate social responsibility can only go so far. Realistically, children are working because even their father or mother. who is also employed at the mine, cannot earn enough to support their family. [...] The honest and sustainable answer rests with strengthening the role of the regulatory bodies that are within the state, and provide a revenue stream through taxation and licensing of the mineral industry to establish the proper framework for the people working

trade to be not only sustainable but to bring about better lives for all!

Politely disagree, Mahad. There is a growing market for sustainable wares, improving ecological and social standards. There is an expanding market for sustainable clothes, food, cosmetics etc. It is about time the electronics industry caught up.

Anna, responding to above comment on same post.

Food storage The biggest problem in food is storage. First-in-first-out (FIFO) should be the way to distribution, but bag storage leads to last-infirst-out (LIFO) systems. India loses a lot of food grains costing billions of dollars because of gunny sack storage.

You say “only truly integrated domestic and international policies–focused on opportunity and well-being as the ultimate goal–can help trade bring about better lives for all.” Wrong. The focus must be on efficiency of production, period! That’s the only way for

Aleksejs Loskutovs @Loskutovs In anti-corruption we have to deal with real facts, not fake news. OECD’s Frantz at #OECDIntegrity Forum. #anticorruption Sean Kelly MEP @SeanKellyMEP 500,000 people have voluntarily disclosed secret off-shore accounts since #OECD & @union_european began tax evasion crackdown. @NewstalkFM Walter Alvarez M. @WAlvarezMeza Great! @OECD’s Report with 100+ cases about how behavioural economics support the public policy design @CassSunstein @R_Thaler @danariely Thoughtful piece on the importance of trust in our public institutions via @OECD #government https://lnkd.in/dRFVHPN


EDITORIAL

International co-operation is more important than ever Only together can we deliver better policies for better lives Angel Gurría Secretary-General of the OECD

Rarely in our lifetime has international co-operation been as important for the world as it is today. Global growth, though recovering slowly, is stumbling along at just over 3%. The scars of the crisis run long and deep, with rising inequality, fragile job markets and waning trust fuelling protectionism and populist backlashes in some OECD countries. Social and environmental problems, as well as several conflicts, add to the list of challenges we face. Can they be solved if there is division among us? We confront a new, difficult political reality, characterised by strong opposition to the very international co-operation and interaction that has driven peace and prosperity for over half a century. We must break this cycle! We must begin by acknowledging that many people in many places, including in some of the OECD’s founding countries, feel let down and angry. They have not seen their incomes rise in decades, but have seen inequality rising instead. The richest 10% of the population in the OECD now earn around 10 times more than the poorest 10%, and gulfs have opened between thriving cities and old industrial heartlands, reflecting a growing concentration of wealth and market power in fewer hands. Many people lacked the means and skills to adapt to an open, competitive economy. But many skilled middle-class people also suffered, as firms closed or moved away, public services were cut and homes lost value. They hope that pulling up the draw bridge will help, but it will lead only to isolation and a downward spiral. Nevertheless, the backlash holds a fundamental lesson: that a thriving, inclusive global economy cannot be forged without placing people, their regions and their homes at the centre of our policy efforts. This means going both local and global: “going local” to bolster infrastructure, public services and social cohesion to improve people’s lives, but also to better understand the realities, challenges and expectations that people face in their daily lives; and “going global” through enhanced international co-operation so that our countries can share ideas and policies, and play by the same rules as they tap the world’s enormous potential. Making the global economy work for everyone will be the focus of our OECD Week on 6-8 June, encompassing both our annual Ministerial Council Meeting (MCM) and OECD Forum, as well as several side events and meetings. At the OECD, we are leading the charge by reaching beyond GDP to develop new models under our Inclusive Growth and New Approaches to Economic Challenges (NAEC) initiatives to put people’s well-being at the centre of our policies. We are studying the interconnections between rising

inequality and slowing productivity, to show how our countries and regions can expand by reducing inequality, investing in skills and fostering an environment in which small and large firms can flourish. We are examining the effects of technological change, particularly digitalisation, which will be fundamental for progress, as it revolutionises health, education, transport and communications, and opens new opportunities for people everywhere. This also implies acknowledging and understanding how digitalisation also brings disruption: OECD data shows that nearly 10% of jobs are at high risk from automation and another 25% could require major retooling. To address this, we are helping countries identify policies that can equip people and places with the skills and infrastructure they need to thrive in the global digital world. We are also doubling our efforts to foster the openness of our economies while making trade and investment fairer, by devising more progressive, inclusive, coherent and integrated policy packages to help markets work for everyone. Instead of the lure of barriers that only cut people off from each other, we are advancing a full range of structural policies that help balance social protection with flexible, empowering labour markets; drive investments into education, innovation and physical infrastructure throughout our lands; reduce the market concentration of wealth; and foster responsible business conduct and public sector integrity. The OECD will continue to underpin international co-operation with rules and standards that are ever stronger, fairer and more inclusive. This involves supporting better international regulatory co-operation between international organisations, as well as leveraging our instruments and policy recommendations through key fora like the G7 and G20. It includes leading the international tax agenda and making it more trustworthy for tax-payers, thanks notably to tackling corruption, to robust tax transparency standards and the Base Erosion Profit Shifting project, which most of the world’s countries now adhere to. This work is also contributing to levelling the playing field in international markets. Crucially, it demonstrates that international co-operation, not protectionism, is the way forward. And we are also committed to ensuring the adequate implementation of international agreements struck in 2015, particularly the 2030 Agenda for Sustainable Development and the Paris Climate Agreement, which are key for delivering a better world for everyone, regardless of their income, address, gender, creed or colour. On 6-8 June, our member and partner countries will gather for OECD Week as testimony to their belief in international co-operation. Together we will mark the 70th anniversary of the Marshall Plan, which helped heal war-torn Europe and inspire the future OECD. President John F Kennedy, whose world vision helped give direction to our fledgling organisation, declared in 1961 that “united there is little we cannot do.” Kennedy’s 100th birthday would be on 29 May. Let these anniversaries remind us how far we have come together, and that only together can we deliver better policies for better lives. @A_Gurria

www.oecdobserver.org/angelgurria www.oecd.org/about/secretarygeneral

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News brief More confident outlook

©OECD

GDP growth from 3% in 2016 to 3.6% in 2018.

OECD Chief Economist Catherine Mann

The global economy is expected to pick up moderately but greater efforts are needed to ensure that benefits from growth and globalisation are more widely shared, says the OECD’s Economic Outlook 2017. Stronger business and consumer confidence, rising industrial production, and recovering employment and trade flows will all contribute to an improvement in global

Closing global tax loopholes A series of tax treaty measures is being implemented to update the existing network of bilateral tax treaties and reduce opportunities for tax avoidance by multinational enterprises. The signing ceremony for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (Base Erosion and Profit Shifting) will take place during the annual OECD Week, with ministers and high-level officials from

Economy Real GDP growth in the OECD area decelerated sharply to 0.4% in the first quarter of 2017, compared with 0.7% in the previous quarter, according to provisional estimates. Growth slowed markedly in the UK, to 0.3%, compared with 0.7% in the previous quarter, and the US, to 0.2%, compared with 0.5%. On the other hand, growth picked up in Germany, to 0.6%, and Japan, to 0.5%. Year-on-year GDP growth for the OECD area was stable at 2% in the first quarter of 2017. However, the OECD’s

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The Economic Outlook suggests that an integrated approach is needed to make globalisation work for all. This must include domestic policies to encourage opportunity, innovation and the creation of new firms, so as to yield economic growth that is both stronger than in the recent past and also more inclusive. At the same time, more effective targeted policies are needed to support people and regions that risk getting left behind. Also, countries must work together to fill gaps in the governance of the international economy and ensure a more level playing field. See www.oecd.org/economy/

76 countries and jurisdictions having signed or formally expressed their intention to sign the convention. The new convention will also strengthen provisions to resolve treaty disputes, including through mandatory binding arbitration, thereby reducing double taxation and increasing tax certainty. The first modifications to bilateral tax treaties are expected to enter into effect in early 2018. See www.oecd.org/tax/ composite leading indicators point to stable growth momentum going forward in the OECD area as a whole. 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. Stable growth momentum is expected in the US, Japan, the UK and the euro area as a whole, including France and Italy. OECD-area inflation slowed to 2.3% in March 2017, compared with 2.5% in February 2017. Excluding food and energy, annual inflation slowed marginally to 1.8%

Soundbites The dynamism brought about by free trade should become the foundation of global peace and prosperity, as was the case with the industrial revolution. However, this must be open to all, and people have to be compensated fairly for their efforts. Shinzo Abe, at the G7 Summit in Taormina, Italy, 27 May 2017

I don’t think there is such a thing as ‘tax simplification’. It’s inherently complicated. Suku V Radia, CEO of Bankers Trust, Iowa, in The New York Times, 27 April 2017

Rich do pay their way to make society more equal Headline in The Times, 26 April 2017

In science, interaction and co-operation are very important. Openness and interconnectedness are virtually taken for granted as part of life. Angela Merkel, at the G20 Dialogue Forum for the Science and Research Community (S20) in Halle (Saale), 22 March 2017

New peak in development aid Development aid reached a new peak of US$142.6 billion in 2016, an increase of 8.9% from 2015 after adjusting for exchange rates and inflation. A rise in aid spent on refugees in donor countries boosted the total, but even stripping out refugee costs, aid rose 7.1%, according to official data collected by the OECD Development Assistance Committee (DAC). Despite this progress, bilateral aid to the least-developed countries fell by 3.9% in real terms from 2015 and aid to Africa fell 0.5%, as some DAC members backtracked on a commitment to reverse past declines in flows to the poorest countries. See www.oecd.org/dac/ in March, compared with 1.9% in the year to February. The OECD unemployment rate for the population as a whole fell by 0.1 percentage point, to 6.0%, in March 2017. Across the OECD area, 37.5 million people were unemployed, 4.9 million more than in April 2008, before the crisis. The unemployment rate was stable in the euro area, at 9.5% in March 2017. Outside Europe, the unemployment rate fell by 0.2 percentage point in the US to 4.5% and by 0.3 percentage point in Korea, to 3.7%. It increased by 0.1


NEWS BRIEF

Other stories

Spain’s economy is enjoying a robust recovery from deep recession but further measures to promote innovative business investment and improve skills are needed to boost inclusive growth, says the latest OECD Economic Survey of Spain. www.oecd.org/spain/

Nearly one in five mobile phones and one in four video game consoles shipped internationally is fake, as a growing trade in counterfeit IT and communications hardware weighs on consumers, manufacturers and public finances, according to Trade in Counterfeit ICT Goods. Smartphone batteries, chargers and music players are also increasingly falling prey to counterfeiters.

Though New Zealand generates 80% of its electricity from renewable sources, it has the second-highest level of emissions per GDP unit in the OECD and the fifth-highest emissions per capita. The latest Environmental Performance Review of New Zealand finds that intensive dairy farming, road transport and industry have pushed up gross greenhouse gas emissions by 23% since 1990. www.oecd.org/newzealand/ The Chinese economy will remain the major driver of global growth for the foreseeable future, says the latest OECD Economic Survey of China, which recommends continued efforts to rebalance the economy. www.oecd.org/china/ The value of Philippine agricultural output increased by 73% over the 1990-2013 period but Agricultural Policies in the Philippines shows that the growth rate has been slower than that seen in most Southeast Asian countries. www.oecd.org/countries/philippines/ The Colombian economy has been more resilient than other Latin American countries to the recent fall in commodities prices, and remains among the strongest in

©Julien Daniel /OECD

Country roundup

President of the Homeless World Cup, Mel Young (right), with OECD SecretaryGeneral Angel Gurría at OECD headquarters in March. Mr Young is recognised as one of the world’s leading social entrepreneurs.

the region. The latest OECD Economic Survey of Colombia projects GDP will grow by 2.2% in 2017 and 3% in 2018. It identifies priority areas for future action, including reforms to strengthen the quality of education, reduce informality and increase work opportunities for women. www.oecd.org/countries/colombia/ Estonia needs to move faster to reduce its dependence on shale oil so it can advance towards a greener economy, and reduce air pollution and waste generation, the OECD’s first Environmental Performance Review of Estonia recommends. Estonia has the most carbon-intensive economy in the OECD. http://www.oecd.org/estonia/ All OECD reports can be found at www.oecd-ilibrary.org

percentage point in Canada to 6.7%, and was stable in Japan at 2.8%. International merchandise trade among G20 countries in the first quarter of 2017 increased for the fourth straight quarter and has almost regained its pre-crisis levels but remains around 10% lower than the highs reached in 2011-2014. Export growth picked up to 3% in the first quarter of 2017, compared with 1.5% in the fourth quarter of 2016 while imports increased by 4%, significantly up on last quarter’s 1.2% growth.

Consumer prices, selected areas

9.1

8.0

All items

6.0 4.0 2.0 0.0

Food

2.3

1.8 0.9

Lending volumes and credit conditions for small and medium-sized enterprises (SMEs) have gradually improved, according to Financing SMEs and Entrepreneurs 2017: An OECD Scoreboard, but demand-side obstacles such as a lack of financial knowledge are contributing to holding back a stronger recovery. See www.oecd.org/industry/ In an increasingly competitive international environment, providing workers with the right mix of skills can help ensure that globalisation translates into new jobs and productivity gains rather than negative economic and social outcomes, according to the OECD Skills Outlook 2017. See www.oecd.org/education/

Plus ça change…

May 2017, % change on the same month of the previous quarter % OECD total 10.0

See www.oecd.org/governance/

Energy

There is now a rare chance to realise a period of rapid, widely shared growth and to reverse the trends towards deepening inequality and exclusion that have marked recent decades. “The future of the global economy: towards a long boom?”, by Riel Miller, in Issue No 217/218, Summer 1999

All items non-food, non-energy

-2.0

OECD Observer No 310 Q2 2017

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BLOGS

BlogServer and inclusive labour markets that underpin social cohesion and well-being. From OECD Skills and Work. More here: http://bit.ly/2vIv8IU

Going for Growth 2017: Policies for growth to benefit all Alain De Serres and Nicolas Ruiz

The support for governments’ pro-growth structural reform agenda is being undermined by the prolonged period of stagnating living standards that has affected a large share of the population in many countries. Growing political headwinds are clearly one factor contributing to the steady slowdown in the pace of reforms observed since the immediate post-crisis years. Yet, the reforms are needed, both to escape the low-growth trap and to prepare for rapid technological changes. From OECD Ecoscope. More here: http://oe.cd/233

What skills are needed for tomorrow’s digital world? Glenda Quintini

How we all benefit when women have access to finance Mary Ellen Iskenderian

The International Finance Corporation estimates that approximately 65% of women-led small and medium enterprises (SMEs) in developing economies are either unserved or underserved financially. For a women entrepreneur, this means the odds are already stacked against the growth potential of her business. From OECD “Development matters” platform. More here: http://oe.cd/23I

Irrational me… Behavioural Economics hits its stride Bill Below

As humans we sometimes invest poorly, accept software updates without reading the fine print, choose the wrong business partners, commit heroic acts, are optimistic when we should be cautious and pessimistic when we should be sanguine. Human rationality is bounded, as some politely put it. The good news may be that, although people do many things they regret, they often do so in predictable ways. From OECD Insights. More here: http://oe.cd/23J

Financial incentives for steering education and training Stijn Broecke

At a time when globalisation, technological progress and demographic change are profoundly altering the types of jobs that are available, as well as how and by whom they are carried out, investing in skills is more important than ever to build resilient

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Information and communication technologies (ICT) are profoundly changing the skill profile of jobs. The use of ICT in the workplace–affecting only a handful of jobs a few decades ago– is now required in all but two occupations in the United States: dishwashing and food cooking. In most OECD countries, over 95% of workers in large businesses and 85% in medium-sized businesses have access to and use the internet as part of their jobs. In small businesses the share is at least 65%. From OECD Skills and Work. More here: http://bit.ly/2iM1r7M

Employment ins and outs in OECD countries Paula Garda

Labour markets are in a continual state of flux. Workers get employed, leave a job and become unemployed, join the labour force or leave the labour force. The balance of these flows determines the overall employment rate. Analysing workers’ ins and outs of employment is critical to our understanding of labour market dynamics, especially from a welfare perspective. ECD Ecoscope. More here: http://oe.cd/23H

Why it pays for cities to fight road deaths–and how they can get better at it Alexandre Santacreu

Every minute of every day, someone loses their life in a traffic crash on a city street. With cities growing rapidly and urban motor traffic also increasing dramatically in many cities, the situation is likely to get worse, not better in years to come. A high level of urban road safety is increasingly seen as a critical component of a liveable city. From OECD Insights. More here: http://oe.cd/1TN

These extracts from blogs are courtesy of OECD Insights, OECD Education & Skills Today, OECD Ecoscope, Wikigender, Wikiprogress and other content and social media platforms managed by the OECD.


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ECONOMY

Globalisation: Time to level the playing field

©Shutterstock

Adrian Blundell-Wignall, Special Advisor to the OECD Secretary-General on Financial and Enterprise Affairs

Today the debate rages about whether the decline in living standards is due to the effects of globalisation or to poor domestic policies. Both have surely played a role. But the problems often associated with globalisation (inequality, the hollowing out of the middle class, employment of less-skilled workers in advanced countries, etc.) do not originate from “openness” as such. The problem is that not all countries are open to the same degree and the playing field in the cross-border activities of businesses is not level. Since entering World Trade Organization (WTO) in 2001, China has quickly become the largest exporting nation in the world, with 14% of merchandise exports and 18% of manufacturing. Hong Kong (China), Singapore and Korea together export as

much as the United States or Germany. Companies may also set up production abroad, closer to foreign markets. China has increasingly joined this model too, and is now responsible for 11% of world merger and acquisition (M&A) outflows in 2016. In recent years it has been switching away from M&A in oil and gas much more towards high technology companies. In parallel, the number of state-owned enterprises (SOEs) among the Fortune Global 500 companies grew from 9.8% in 2005 to 22.8% in 2014. Most are domiciled in Asia, and the largest among them are Chinese banks. Distortions, resulting from subsidies and other advantages accorded to SOEs, often coming via cheaper finance from SOE banks, are important. But strong government ownership of shares in emerging economies is present across all

industrial sectors. Emerging-market SOEs have greatly contributed to the current excess capacity in key materials, energy and industrial sectors, contributing to a decline in the average return on equity in many sectors and countries. No matter where firms sit in the value chain, penetration of markets by emerging economies evokes responses from

Openness promotes opportunities, but the governance of trade, international investment and competition does not use a common rule book companies to move further up the value chain–forcing them to restructure and enhance technology to remain

OECD Observer No 310 Q2 2017

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competitive. If they don’t take advantage of global economies of scale, they will in any case find themselves facing strong competition from other successful firms, whether at home or abroad. The fastest productivity growth companies are also those that take advantage of foreign sales–whether by exporting or by setting up subsidiaries that produce abroad to serve foreign markets. There is nothing wrong with success in cross-border activities–provided of course that success is not based on unfair competition. The leaps in productive potential can be enormous, but all of this requires investment, innovation and new technology. The company data shows that it makes no sense to try to separate these things out. The companies at the forefront of innovation and technology (as reflected in productivity growth) are often multinationals engaged in trade and foreign direct investment–they buy and sell business segments, set up to produce abroad and export from multiple global production bases. The losers in this story–those workers affected by reduced hours, innovative work contracts and compressed wages– belong to companies that are scattered within their own industry. It is not that the middle class as such is being hollowed out but that these ranks are swelled by those that work for less successful companies forced to restructure or exit.

Each subscription to the OECD Observer includes the OECD Yearbook. Return the order form on page 36, subscribe at www.oecdobserver.org/subscribe.html or email us at observer@oecd.org

We need improved rules of the game and enhanced international co-operation. OECD standards can play a leading role in shaping this conversation, and promoting a level playing field that ensures the benefits of globalisation are shared by all. This requires a commitment by economies participating in globalised markets to a common set of transparent principles that are consistent with mutually-beneficial competition, trade and international investment across a range of areas.

OECD Yearbook

2016

ECONO MIES PRODU CTIVE IES INCLUS IVE SOCIET

of the key social, focuses on some of the OECD Yearbook arising both from the continuing ts The sixth edition ntal challenges global agreemen Part 1, economic and environme crisis, but also from ambitious climate change. economic development and ty and aftermath of the past year on taxation, explores the declines in productivi s, struck over the there is Productive Economie in recent years and asks whether looks Innovative and making . It also inequality witnessed ty might inform policy the increases in ding of productivi two trends that on our understan both a link between these a range the digital economy, 2, Future Societies, examines at the impact of today, Part of the economy. on the way we live and on the future to make an impact societies and economies, starting already of migrants in our of issues that are barriers , the integration and how we remove including digitisation and support parents, to Action, examines what is children t how we educate Part 3, From Agreements struck in 2015 and looks at to success for women. global agreemen y in combating communit significant al honour the internation needed to challenges facing nt goals and tackling the implementation sustainable developme abuse, meeting international tax climate change. by leaders from experts are joined to examine these Yearbook, OECD and civil society In the 2016 OECD labour, academia today. government, business, facing our societies and other questions

Originally published under the title, “For globalisation to work for all, you have to level the playing field first”, at http://oecdinsights.org/2017/05/30/for-globalisation-towork-for-all/

INCLUSIVE SOCIETIES

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Keeping you ahead of the policy challenges of our time. Since 1962.

ECONOMIES 2016 PRODUCTIVE

Openness promotes opportunities for business. But the governance of trade,

This year’s OECD Business and Finance Outlook discusses many aspects of the lopsided nature of the world economy, among them: the growing role of state-owned enterprises (SOEs), uneven financial regulations, distorting capital account and exchange rate management, cross-border cartels that translate into benefits for companies and shareholders rather than into lower consumer prices, collusive behaviour in investment bank underwriting practices, corner-cutting responsible business conduct, and the bribery and corruption that distort international investment and misallocate resources.

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Some large emerging economies have managed to pull millions of people out of poverty–and the long-term future of every country lies with continued success in this regard. Competition too is to be welcomed. Like any sporting match, let the best teams win. But also like any sporting match, the game needs to be played with the same rulebook. If the same rules do not apply to all, then fairness is put into question. If fairness is questioned, then sustainability of open trade and investment in the global economy is also put at risk.

international investment and competition does not use a common rule book. Without this, the size and cost of the other policies needed to protect the losers will continue to be burdensome and possibly beyond reach.

References OECD (2017), OECD Business and Finance Outlook 2017, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264274891-en

OECD Observer 1 Volume 2016 Supplement ISSN 0029-7054

OECD (2017), OECD Business and Finance Scoreboard 2017, www.oecd.org/daf/OECD-Businessand-Finance-Scoreboard.htm

Volume 2016 Supplement

1


ECONOMY

Global economic outlook: Better, but not good enough Catherine Mann, OECD Chief Economist* The mood in the global economy has brightened during the last year. Confidence indicators, industrial production, headline measures of employment, and cross-border trade flows have improved in most economies. However, this still-modest cyclical expansion is not yet robust enough to yield a durable improvement in potential output or to reduce persistent inequalities. Financial vulnerabilities could be realised by policy and geopolitical shocks. Compared to the 20-year pre-crisis average against which expectations have been set, OECD per capita GDP growth remains over 0.5 percentage point weaker and global growth overall, projected to rise to just above 3.5% by 2018, also lags. In sum, the global economic outlook is better, but not good enough to sustainably improve citizens’ well-being. Investment has been a missing support for global growth, trade, productivity and real wages. The Economic Outlook June 2015 special chapter on investment for inclusive growth noted three key signals for business to invest: a broad-based global cyclical upturn in demand, regulation that promotes competition, and low policy uncertainties. The first signal may be in train, although the dependence of emerging market and commodity-based economies, in particular, on developments in China clouds the stability of the overall global upturn. On the second signal, the Business and Finance

All told, investment prospects are better, but with reservations as to the permanence and clarity of the signals Outlook 2017 documents mergers and acquisitions and cartel behaviour that may dampen the competitive need to invest. On the third signal, protectionist policies in G20 countries and antiglobalisation rhetoric, along with other factors, raise uncertainties. All told, investment prospects are better, but with reservations as to the permanence and clarity of the signals. Employment growth has recovered relatively well in recent years with trends for employment and labour force participation rates now higher than in the decade prior to the crisis (notably excepting the US). But, along some dimensions–hours worked and part-time jobs–the quality of work is more precarious, as discussed in the forthcoming Employment Outlook 2017. Productivity and real wages both diverge, with a large gap between the highest productivity globalised firms and “the rest”. So, while at the macro level labour market prospects and outcomes are better, the foundations for robust consumption and shared well-being are less apparent. International trade growth revived in the last year, although it still remains less robust than in pre-crisis decades. Technologydriven and deeper trade integration through global value chains creates new markets and raises productivity. Access to a wider variety of goods and services at cheaper prices raises well-being and consumers’ purchasing power, particularly low-income consumers. But these gains come with adjustment costs, neither of which have been equally shared across regions and individuals, yielding pressure to retreat from globalisation. The analysis in the special chapter in this Economic Outlook documents that globalisation is part of broader trends: a changing

Outlook summary

OECD area, % change, unless otherwise indicated

Real GDP growth World OECD US Euro area Japan Non-OECD China Output gap, % of potential GDP Unemployment rate, % of labour force Inflation Fiscal balance, % of GDP World real trade growth

2016 2017 %

2018

3.0 3.5 3.6 1.8 2.1 2.1 1.6 2.1 2.4 1.7 1.8 1.8 1.0 1.4 1.0 4.1 4.6 4.8 6.7 6.6 6.4 -1.4 -0.8 -0.3 6.3 6.0 5.8 1.1 2.3 2.2 -3.0 -2.8 -2.7 2.4 4.6 3.8

Source: OECD Economic Outlook No 101 database http://dx.doi.org/10.1787/888933505049

pattern of tastes as income rises, which yields a greater demand for services compared to manufactured goods; on-going technological change, which reduces the workers needed to produce manufactured goods; and evolving trade patterns, wherein producers in advanced economies face enhanced competition not only from firms in emerging market economies but also from advanced economy peers. Manufacturing jobs–a key locus of the globalisation backlash– are more regionally concentrated than are services, adding to the burden of adjustment for those firms and workers. There are upside risks to the projections for investment, trade, and productivity. Evidence from business surveys and from data suggest that the ageing of the capital stock may spur investment in higher quality capital with more advanced technology. This would improve cyclical conditions and support a revival of investment-intensive global value chains, with knock-on benefits to domestic demand. Higher quality capital would also improve productivity and boost potential output; but would also present new challenges, including to inclusiveness, as outlined in The Next Production Revolution. Financial vulnerabilities continue to cloud the projections. Geopolitical shocks and trade protectionism could catalyse snap-backs in asset prices and realise downside risks through a variety of channels. The global cyclical upturn is not yet assured; nor are the higher productivity, greater inclusiveness, and non-discriminatory international system that are needed to improve well-being for all. Policymakers cannot be complacent. *Extract from the editorial of the OECD Economic Outlook No 101, June 2017 References and links OECD (2017), OECD Economic Outlook, Volume 2017 Issue 1, OECD Publishing, Paris. http://dx.doi.org/10.1787/eco_outlook-v2017-1-en OECD (2017), OECD Business and Finance Outlook 2017, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264274891-en OECD (2017), OECD Employment Outlook 2017, OECD Publishing, Paris. http://dx.doi.org/10.1787/empl_outlook-2017-en

OECD Observer No 310 Q2 2017

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How do you measure

a Better Life? For nearly a decade, the OECD has been working to identify societal progress – ways that move us beyond GDP to examine the issues that impact people’s lives. The OECD’s Better Life Index is an interactive tool that invites the public to share their thoughts on what factors contribute to a better life and to compare well-being across different countries on a range of topics such as clean air, education, income and health. Over five million visitors from around the world have used the Better Life Index and more than 90 000 people have created and shared their personal Better Life Index with the OECD. This feedback has allowed us to identify life satisfaction, education and health as top well-being priorities. What is most important to you?

Create and share your Better Life Index with us at: www.oecdbetterlifeindex.org


SPOTLIGHT ON HEALTHCARE

The OECD Better Life Index enables you to rate countries according to the importance you give 11 topics. Each petal of the flower represents one topic and the size of the petal the country’s rating for that topic.

Find out more about how life compares in OECD countries by ordering the book How’s Life? Measuring Well-Being. Available now on the OECD Online Bookshop: OECD Observer No 310 Q2 2017 http://www.oecd.org/bookshop

13


Radical innovation in the electricity sector

©Shutterstock

Chris Pike, OECD Directorate for Financial and Enterprise Affairs

With new business models on the horizon, competition in the electricity sector may be beginning to stir. The rise of the digital economy, like the industrial economy before it, has led numerous markets to experience radical innovation in business models that have shaken incumbent firms and benefited consumers. This evolution in business model has often left markets unrecognisable from those that preceded them. The revolution in electricity generation has of course been under way for some time, and this has given us green and distributed generators that pose existential threats to traditional generation businesses. However, the distribution and retail of electricity has so

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far remained remarkably unchanged. This now seems set to change, and a variety of new business models are competing to lead that change. There is much need for innovation in a sector of systemic importance, with low productivity, but with a huge role in delivering the Paris climate agreement, and in combatting fuel poverty. Indeed, in the search for inclusive and sustainable growth it may be fundamental. There are three competitive challenges to traditional business models. The first challenge to traditional business models comes from the sharing economy. This offers the prospect of peer-to-peer (P2P) energy trading between ‘pro-sumers’ (producer-consumers). It differs from the uber model in two important ways.

Firstly, it does actually involve the sharing of spare capacity (à la Airbnb), and therefore unleashes a significant capacity expansion at zero marginal cost (in contrast to the smaller increase in supply that occurs when restrictive regulations are challenged). Secondly, if, as appears possible, P2P electricity models adopt blockchain technology, it may represent an evolutionary step in the ‘sharing’ business model. This is because the blockchain, with its ability to provide accurate and certified records of activity, provides a role akin to reviews on digital platforms and allows trust to develop between the buyer and the generator in both the transaction and the origins of the electricity. Once the blockchain is functioning (and there are already numerous open-source blockchains), the


ENVIRONMENT

role of the digital platform becomes passive (if it is required at all), which has the added advantage of reducing or even eliminating intermediation costs. This therefore has the potential to both lower electricity prices and increase the incentives of generators to enter the market.

Given this cost, the grid operator may prefer instead to reduce demand by triggering a demand-side response from contracted demand aggregators. The value of such a capability can then be reflected in discounts on those contracts, which make them attractive to customers and profitable for the aggregator.

Consumers that use the P2P electricity market who choose to purchase from local generators may rarely, if ever, need the transmission grid, and so may argue that they should not be required to crosssubsidise it. However, contributing to the funding of the distribution grid will still be necessary since there remains a need for a local distribution grid onto which each household generator would need to be able to transfer its spare capacity in order to sell it locally. There is also a question of how buyers of local energy resolve the problem of intermittency in local renewable generation. Battery storage, where capacity continues to increase, may be one answer, but this may also be challenged by ‘super-grids’ that create the ability to quickly transport renewable energy across continents when local renewable capacity is short.

A third challenge is from firms seeking to de-commoditise electricity and sell it as a service (for example, lighting) rather than by the kWh. These Electricity Service Companies (ESCOs) charge for the service and seek to make energy consumption more efficient in order to reduce costs and increase margins. They install sensors and use algorithms to turn off or turn down lighting when it’s not needed, or to manage heat production and retention. This model has been a growing part of the supply of electricity to large business for some time, but the arrival of the ‘internet of things’ creates the opportunity to retail it to households and small businesses. There is also the potential for these firms to bundle electricity in with other utilities in contracts for ‘household services’.

A second challenge to traditional business models comes from demand aggregators. Some governments have looked at whether they can reduce energy costs by encouraging consumers to form buying groups that use their collective purchasing power to obtain discounts. Thus far, this has involved supporting the set-up of buyer groups to which consumers must choose to opt-in, which typically involve small numbers of already price-sensitive customers. While the formation of opt-out buying groups holds more promise, the real business model innovation comes from those firms that go a step further and contract with customers that are prepared to have their usage curbed when the grid operator is experiencing high demand. At such times, which become more frequent as the grid relies on intermittent local renewable energy sources, the grid operator would otherwise ‘turn on’ high cost, typically non-renewable, generators.

In the midst of this competitive upheaval, competition agencies and regulators have a delicate role to play. They need to advocate that regulation keep pace with the changes; they should call for regulations that become obsolete or that distort competition or protect incumbents to be removed or revised; they may also identify the need for new rules given the different risks posed by the new business models. They need to facilitate innovation by giving firms the freedom to innovate, without picking winners. They also need to distinguish between pro- and anticompetitive responses from incumbents who might look to exclude innovative rivals, but might also look to innovate and price or contract more competitively. For competition authorities, regulators and policymakers questions therefore abound. Will these innovations result in anticompetitive bundling of energy services? Incumbents engaging in predatory pricing? Grid operators refusing to supply? Anti-

competitive acquisition of innovative entrants? How should access to, and use of, the distribution and transmission grids

Blockchain technology may be an evolutionary step in the electricitysharing business model be priced? What rights do consumers have to obtain two-way connection to the grid? Is there a case for vertical separation of distribution grid operators? Will capacity reward mechanisms for non-renewable power stations help or hinder innovation? What protections would purchasers with demand-response contracts require? Can multiple ESCOs have access to the meter? Will this increase consumer engagement, lead to dynamic pricing, or help facilitate the transition to green power sources? In the end, the disruption caused by new business models and technological innovation is competition in action, and it inevitably threatens existing business models, but it also provides an opportunity for competition agencies to use their enforcement and advocacy powers to promote greater competition and maximise consumer welfare. References Diane Cardwell (2017), “Solar Experiment Lets Neighbors Trade Energy Among Themselves”, The New York Times, 13 March 2017 Matthew Crosby (2014), “Will There Ever Be an Airbnb or Uber for the Electricity Grid?” Green Tech Media, 8 September 2014 Visit www.oecd.org/daf/competition/radical-innovation-inthe-electricity-sector.htm

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Driverless trucks: Taking hold of the wheel

ŠShutterstock

hire drivers due to the current shortage. Yet doing so adds to the number of people who will have to transition to new jobs when driverless technology is adopted. For drivers or would-be drivers, the future of trucking will be interesting, but there will be fewer jobs.

With all the recent attention on driverless cars one would be forgiven for thinking that autonomous vehicles were a novelty item. Yet, driverless trucks have been used in mines and ports for some time now. In 2016, a US start-up boasted its first commercial delivery (of beer cans) using a highly automated truck. The on-board system handled all the motorway sections of the journey without a driver. It is likely that trucks will be the first fully driverless vehicles on our public roads. The first objection that comes to mind is the safety of these vehicles, for they are not failsafe. Driverless enthusiast Joshua Brown, for instance, died last May after putting his Tesla into autopilot mode. Accidents like his fuel scepticism that computers and sensors can drive better than humans can. But aside from that, driverless vehicles are also dogged by numerous legal issues, most notably: who is to blame when there is an accident? Still, automation opens up many opportunities, and together with international bodies governments are working to adapt industry regulation and road rules to the wholly new idea of what it means to drive a vehicle. The European automotive industry allocates a large part of its e44.7 billion research and development (R&D) budget every year to connected and automated driving. In the space of just four years, this has yielded amazing advances in computing power, software and sensor technology. Computers now recognise over 96% of physical objects and human faces. They are now being trained to recognise and rapidly respond to a huge array of real-world situations on our roads. The appetite for driverless technology is likely to grow as it becomes available. According to Daniel Veryard, an economist with the International Transport Forum (ITF), driverless trucks on longdistance routes cost 30% less than conventionally manned trucks. Not only do drivers represent the biggest chunk of operational costs, they need rest breaks. Driverless trucks can operate day and night without having to stop, except for refuelling. Veryard also points out that driverless trucks are a solution to the current shortage of qualified drivers. The ITF estimates there are nearly six million professional heavy truck drivers employed in the US and Europe now. Projections show that 6.4 million truck drivers will be needed by 2030, yet fewer than 5.6 million will be available. The trucking industry faces a dilemma. Right now, it still needs to

16

The ITF is looking at how driverless road freight transport can develop over the next two decades. It is also studying its impact on labour. Driverless trucks address the problem of driver shortage in the long term and offer a way to gradually replace retiring drivers. However, the transition to driverless trucks is likely to reduce demand for drivers at a faster rate than the supply shortage. Veryard estimates that of the projected 6.4 million driver jobs needed in 2030, between 3.4 and 4.4 million will become redundant if driverless trucks are deployed quickly. This means that between over two million drivers across the US and Europe could be directly displaced by 2030. For businesses and displaced workers alike, largescale and rapid adoption would be highly disruptive. To ease the transition the road freight transport industry will have to put in place a retraining scheme for redundant drivers. This may be challenging. While truck drivers are typically flexible, self-reliant and able to concentrate for long periods, they tend to be older and have less formal education. Finding and re-training for alternative jobs will be particularly difficult with displaced drivers competing with workers displaced from other sectors undergoing automation. Then there is the problem of how to finance retraining. One idea being floated is partial financing via a permit scheme. Following a driverless vehicle safety approval process by the relevant authority, an electronic certificate is issued. Governments could auction these permits to road freight operators. Proceeds from permit sales could be used to fund transition arrangements for displaced drivers, such as retraining programmes or income replacement payments. The number of government permits issued each year would be set in consultation with a temporary advisory board that includes representatives from labour unions, road freight businesses, vehicle manufacturers and government. The board would also advise the government in developing a policy mix that fairly distributes costs, benefits and risks from automated road haulage. Balancing costs and benefits will require data on the demand for driverless operations and developments in the labour market. If demand for permits is high, permits will fetch high prices (or be sold in large volumes), generating strong revenue for active labour market programmes, which policy makers should put in place sooner rather than later. Though rapidly accumulating computing power suggests labour will be increasingly superseded in trucking, new demands will arise, and new jobs too. Trucks may become driverless, but the future shouldn’t be. Clara Young

ITF (2017), Managing the Transition to Driverless Road Freight Transport, ITF, Paris, or read the study at http://oe.cd/trucks Visit the International Transport Forum at https://www.itf-oecd.org


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Priming up for primary school

©Shutterstock

Andreas Schleicher, Director, OECD Directorate for Education and Skills

Why do children in their last year of pre-primary education spend so much time playing and the year after sitting in large classes listening to their teacher? Why do we pay the teachers of our youngest children so much less than we pay the teachers of our oldest children? Why do first-year primary teachers know so little about the children from whom their pre-primary teachers have learned so much? The simple answer is that that’s the way we have always done this. But we have learned so much about how children learn and what they learn best at different stages in their development that we can, and should, do a lot better. It is time for this knowledge and experience to shape education policy and practice more distinctly. To this end, the OECD has just published its first internationally

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comparative set of indicators on early childhood education and care. We have analysed what more can be done to shift the focus from making our youngest ready for school towards serving them and their parents in building solid foundations for their future. This is important. The first years of life lay the foundations for future skills development and learning, and investments in high-quality early childhood education and care pay huge dividends in terms of children’s longterm learning and development, particularly the most marginalised ones. Most OECD countries recognise this, and this is reflected in our indicators which show the steeply rising enrolment and spending figures. These efforts should not be underestimated. In most industrialised

nations, early childhood education has advanced from a service for a minority of children to virtually universal enrolment for at least one year. However, for the youngest children, provision remains patchy. Beyond that, the benefits of early learning can fade during the first years of primary school if the transition between early childhood education and care, and primary schooling is not well-prepared, or if continuity in quality is not ensured. For many children, the transition from the last period of early childhood education to the start of primary school is a big cultural change–in the people surrounding them, the ways in which they interact, their number of peers, the types of activities they are engaged in, and their physical surroundings. This often gets compounded by a fragmentation in services, difficulties in


SOCIETY

engaging all relevant actors, weak collaboration among stakeholders, and poor knowledge management across institutional boundaries. Quality transitions that are well-prepared and child-centred, managed by highly educated staff who are collaborating professionally and guided by appropriate and aligned curricula, can go a long way to ensuring that the positive impacts of early learning and care will last through primary school and beyond. But there is more to successful transitions. This starts with professional continuity. In most, but not all countries we surveyed, pre-school and primary teachers already have access to transition training, and qualification levels required for pre-school and primary teachers are increasingly brought into line. But pre-primary teachers often have less working time than their primary school peers for tasks outside the classroom. There are discrepancies between the status and perspectives of early childhood and primary school teachers, and structural hurdles to co-operation and co-ordination. There is also a lack of relevant training on and support for transitions at both levels. Curriculum and pedagogical continuity is equally important. On the one hand, many countries have made efforts to better align or integrate their curricula, ensuring that instructional techniques and strategies do not vary too much across transitions. However, in the majority of jurisdictions, children have a less favourable staff-child ratio during their first year of primary school than during their final year of pre-primary education. Adding to these differences and inconsistencies in curricula is insufficient shared pedagogical understanding among early childhood education and school staff, and inconsistent delivery of pedagogy during transitions. Developmental continuity is also important. The report portrays many efforts that have been made to prepare

children, parents and teachers for the transition to primary school but important differences remain among jurisdictions in their recognition of the importance of children’s participation

For many children, the transition from the last period of early childhood education to the start of primary school is a big cultural change in transition preparations. Jurisdictions also show various capacities in raising awareness among parents about the importance of the transition process, particularly for parents from disadvantaged backgrounds. There are also differences in promoting closer collaboration between early childhood and primary school staff and increasing co-operation with other child development services. More can also be done to align the working conditions of pre-school and primary school teachers: increase flexibility and responsiveness to individual communities, families and children while at the same time strengthening the coherence of services to overcome structural and informational roadblocks to co-operation and continuity. Collaboration among staff, managers, parents and the community can also be better facilitated by reciprocal communication, inclusivity, mutual trust and respect. This report makes a start in building a comparative evidence base on effective early childhood, and care policies and practices, but it recognises that there remain important gaps in our knowledge base. That is encouragement for us at the OECD to push the frontiers further. As a next step, we will be conducting our first survey of staff in early childhood education care, to give these staff their own voice, which is badly lacking in current policy development. The survey seeks to identify strengths and opportunities for early childhood learning and well-being environments with an

emphasis on professional and pedagogical practises. It will also take a close look at the work organisation, careers and rewards of staff. Further down the road, we will try to broaden the range of early learning outcomes that are currently measured to ensure that these don’t remain limited to cognitive aspects but instead give due attention to the social and emotional qualities of children where early action can make such a huge difference. Originally published at http://oecdeducationtoday. blogspot.fr/2017/06/priming-up-for-primary-school.html References and links OECD (2017), Starting Strong 2017: Key OECD Indicators on Early Childhood Education and Care, OECD Publishing, Paris. http://dx.doi.org/10.1787/ 9789264276116-en OECD (2017), Starting Strong V: Transitions from Early Childhood Education and Care to Primary Education, OECD Publishing, Paris. http://dx.doi. org/10.1787/ 9789264276253-en Visit www.oecd.org/education/school/ earlychildhoodeducationandcare.htm

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OECD Observer No 310 Q2 2017

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We must tackle the growing burden of obesity

ŠREUTERS/Rick Wilkiing

Francesca Colombo, Head, Health Division, OECD Directorate for Employment, Labour and Social Affairs

In 2010, the OECD’s influential report, Fit not Fat: Obesity and the Economics of Prevention, warned about the rapidly rising challenge of obesity and its consequences for our health. Nearly a decade later, the situation has unfortunately not improved enough. Our new data released in May show that the obesity epidemic has spread further, even though this has happened at a slower pace than before. Today, over half of all adults and nearly one in six children are overweight or obese in the OECD area. In the United States and Mexico, one out of every three adults is obese. Social disparities persist and have increased in some countries. Less-educated women are two to three times more likely to be

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overweight than those with a higher level of education. Obesity rates have grown rapidly in England, Mexico and the United States since the 1990s. The outlook for the future is worrying as new projections show a continuing increase of obesity if no significant change occurs. Obesity rates are projected to increase at a faster pace in Korea and Switzerland where rates have been historically low. There are many reasons why we must tackle obesity. Obesity is a key risk factor for numerous chronic diseases, such as diabetes and cardiovascular disease. The failure of health systems to tackle obesity leads to millions of deaths and disability. This also damages our economies. Obese

people are less likely to be employed than normal-weight people. They are less productive at work due to more sick days and fewer worked hours, and they earn about 10% less than non-obese people.

Chile, Iceland, Ireland, and Mexico ban food and beverage advertising on television and radio during peak children audience hours The good news is that much of this is preventable, as OECD work shows. Comprehensive policy packages, including school-based and worksite interventions, interventions in primary care settings, and broader regulatory and fiscal policies can address obesity


SOCIETY

effectively. A number of countries have recently implemented policies, ranging from tax measures–for example, in Belgium, Chile, Finland, France, Hungary, and Mexico–and subsidies to encourage active commuting instead of cars. The latter was implemented at the subnational level in Canada and France, while France and Sweden both prescribe physical activity. Canada, Chile, Korea, and the UK have reformulated food products, and France, Sweden, Turkey, the UK and New York City have made changes in portion sizes. In the past few years, new policies to fight obesity have emerged, including communication. Improving nutrient information displayed on food labels through easy-to-understand symbols placed on the front of pre-packaged food products can help consumers make healthier food choices. These symbols exist in Australia, Chile, Denmark, England, France, Iceland, Korea, Lithuania, New Zealand, Norway, and Sweden. Health promotion campaigns have also been spread through social media. Examples of health-promotion-dedicated websites, mobile apps and online tools to help people change their behaviour can be seen in Chile, Estonia, England and the Netherlands. Some countries have reinforced the marketing regulation of potentially unhealthy foods and sweetened beverages directed at children and young adults. Chile, Iceland, Ireland, and Mexico, for example, ban food and beverage advertising on television and radio during peak children audience hours. Other bans apply in schools, for example, in Chile, Spain, Turkey and Poland, in public transport in Australia, and in theatres in Norway. While the impact of these polices has not been fully evaluated yet, early evidence shows they empower people to make healthier choices, and can also affect food manufacturers’ behaviour. These are just some examples. Most OECD countries are now using simultaneously complementary policy tools and creating synergies to promote

healthier lifestyles. But there is no room for complacency. OECD countries on average still allocate only around 3% of their health budgets to public health and prevention. Addressing obesity requires investment and comprehensive policies that target broad social and environmental determinants. Crucially, it requires strong leadership and political will.

Originally published at OECD Insights, see http://oe.cd/1Ze References and links OECD/EU (2016), Health at a Glance: Europe 2016: State of Health in the EU Cycle, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264265592-en OECD (2010), Obesity and the Economics of Prevention: Fit not Fat, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264084865-en Visit www.oecd.org/health/obesity-update.htm

Obesity rates As % of total of adult population (aged 15 years and over), 2015 or nearest year

38.2

US Mexico

32.4

New Zealand

30.7

Hungary

30

Australia

27.9

UK

26.9

Canada

25.8

Chile

25.1

Finland

24.8

Germany

23.6

Ireland

23

Luxembourg

22.6

Turkey

22.3

Latvia*

21.3

Czech Rep.

21

OECD (35)

19.5

Slovenia*

19.2

Iceland*

19

Belgium

18.6

Estonia

18

Israel*

17.8

Greece*

17

Spain*

16.7

Poland*

16.7

Portugal*

16.6

Slovak Rep*

16.3

France*

15.3

Denmark*

14.9

Austria*

14.7

Netherlands*

12.8

Sweden*

12.3

Norway*

12

Switzerland*

10.3

Italy*

9.8

Korea Japan

5.3 3.7

Note * means that self-reported height and weight data are used in these countries, while measured data in other countries . Source: OECD (2017), OECD Health Statistics 2017 (Forthcoming in June 2017) www.oecd.org/health/obesity-update.htm

US Mexico New Zealand Hungary Australia UK

38.2 32.4 30.7 Observer No 310 Q2 2017 OECD 30 27.9 26.9

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Why it pays for cities to fight road deaths–and how they can get better at it Alexandre Santacreu, International Transport Forum and Safer City Streets

having to fear for their lives. It also makes them more inclusive because those who cannot afford cars can be mobile without running lethal risks. But in practical terms, what can mayors and city authorities do to enhance traffic safety in their city? One obvious answer is: do not reinvent the wheel–learn from what others are already doing. Many good practices for urban road safety exist around the world and only wait to be copied. A second, maybe less obvious answer is: get your data in shape. Measure what is happening on your streets and how it changes so you can base policy decisions on evidence, not assumptions. When cities learn from each other These two thoughts are the driving ideas behind Safer City Streets, the global traffic safety network for liveable cities. Little more than six months after it launched in October 2016, a total of 38 cities began working together in the Safer City Streets network, ranging from Astana in Kazakhstan to Zurich, New York City, Mexico City, Rio de Janeiro, London, Berlin, Melbourne, Buenos Aires, Montreal and many others. The Safer City Streets network, which held its first meeting in Paris on 20 and 21 April 2017, provides the first global platform for cities and road safety experts to exchange experiences and

©Shutterstock

Better data collection on urban road crashes enables better policy decisions

Every minute of every day, someone loses their life in a traffic crash on a city street. With cities growing rapidly and urban motor traffic also increasing dramatically in many cities, the situation is likely to get worse, not better, in years to come. More and more city authorities are realising that dangerous traffic conditions on their streets take a toll that goes beyond the human tragedy and economic loss caused by road deaths and crash injuries. Dangerous traffic makes people feel unsafe and people who feel unsafe will refrain from doing normal things like letting their children walk to school or cycling to work, for instance. A high level of urban road safety is increasingly seen as a critical component of a liveable city. It improves citizens’ quality of life, it increases choices, it opens up opportunities. Ultimately, safer city streets are about enhanced personal freedom. This was recognised in the United Nation’s Sustainable Development Goals in 2016. Governments agreed (in goal number 11) to “make cities and human settlements inclusive, safe, resilient and sustainable”. This includes “improving road safety,… with special attention to the needs of those in vulnerable situations”. The link between the different objectives is easy to spot: improving road safety makes cities not only safer, but also more sustainable because it enables people to walk or cycle without

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discuss ideas. At the heart of Safer City Streets activity will be efforts to improve the collection of data about urban road crashes to enable cities to compare themselves with others and base policy decisions on reliable evidence. A methodology for the database has already been developed and many of the cities have started feeding in their numbers. The flying start has been helped by the fact that Safer City Streets itself is building on previous experience: it is modelled on the highly successful International Traffic Safety Data and Analysis Group (IRTAD), the International Transport Forum’s permanent working group on road safety, which brings together countries and national road safety stakeholders. Fittingly, the annual IRTAD meeting was held back-to-back with the inaugural meeting of Safer City Streets–which also included a joint workshop with POLIS, a network of European cities and regions, on how to bring cities from both networks together in order to find the best solutions for data collection. Cities that are interested in finding out more about Safer City Streets are invited to contact the author at alexandre.santacreu@itf-oecd.org. They should also know that membership in Safer City Streets is currently free thanks to a very generous grant from the Fédération International de l’Automobile (FIA). Originally published on OECD Insights blog at http://oe.cd/1TN References and links Visit Safer City Streets at https://www.itf-oecd.org/safer-city-streets Find out more about the International Traffic Safety Data and Analysis Group at https://www.itf-oecd.org/IRTAD Find out more about POLIS at https://www.polisnetwork.eu/


SODEXO HEALTHCARE Safe, Caring, and Effective Our single minded focus on Quality of Life enables healthcare providers to achieve efficient and sustainable health outcomes for patients and their families

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Is there still time to save our trust in government?

©Robert Galbraith/Reuters

Bill Below, OECD Directorate for Public Governance and Territorial Development

Public trust is not doing well in many modern democracies. If it is the canary in the coal mine, in survey after survey, the canary has been brought up wheezing at best. According to the OECD’s Trust and Public Policy: How Better Governance Can Help Rebuild Public Trust, trust remains dangerously low (disclosure: I am one of the contributing authors). Only 42% of citizens in OECD countries trust their national government, down two percentage points from the pre-2007 average. Exploring the mechanisms of trust and possible policy responses to rebuild it constitute the publication’s dual mission. But haven’t writers, poets, satirists and stand-up comedians been

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telling us for 3000 years that we can’t trust politicians and governments? We do seem to tolerate a degree of overpromising from the political candidates we support. Not surprisingly, we report greater trust in government when our preferred party is in power and less trust when the opposition takes the reins. But when a lack of trust extends beyond the inevitable partisan divide to become entrenched, and attitudes towards democratic systems turn negative, we are in uncharted, unwanted territory. Political parties generally are experiencing declining trust. According to a Eurobarometer survey, between 2007 and 2015, trust in political parties (already low) decreased by an average of two percentage points in

OECD/EU member countries (from 21% to 19%). What happened? A partial answer might be found in the widening disparity between levels of trust in public institutions according to income. High-income individuals report a higher degree of trust in government (10% higher on average) than the non-affluent. That people tend to trust a system that reliably improves their wealth and are apt to distrust any system that cannot seems intuitively correct. Yet, data suggest there are other things going on. For example, during the period of worldwide economic expansion lasting from the end of the last world war to the early-1970s, at least in the United States for which


GOVERNANCE

we have numbers (Pew Public Trust in Government: 1958-2015), public trust was high until October 1964 (77% of US citizens trusted the government in Washington DC always or most of the time). After this, trust began a steady, 16-year decline. This period began shortly after President John F Kennedy’s

Trust levels among the mass population hover below 50% on average assassination and included the Vietnam war, vast civil unrest and the Watergate scandal–plenty of reasons to lose trust in government. Whether these events adequately explain the loss of trust we can’t know for sure, but it points to at least one conclusion: that prosperity isn’t in itself a sufficient indicator of trust in government. A related figure, this time from an Edelman Trust Barometer survey, may provide a further clue. It describes a 12-point gap in government trust between informed citizens and the wider public. Informed populations have at least a college education, are in the top 25% of salaries and regularly stay informed. For this population, trust is at a 16-year high. However, trust levels among the mass population hover below 50% on average in more than 60% of the countries surveyed (not all of them in the OECD). This seems to suggest there are important shifts accompanying the transformation to knowledge economies that developed democracies are undergoing. What are the costs of lost public trust? High trust is associated with co-operative behaviour, while low trust is associated with resistance, even to things that seem to be in the person’s overall best interest. Greater trust reduces transaction costs and, by extension can increase compliance while reducing the need for enforcement. The bottom line is, trust influences the relationship between citizens and government and

in turn has an impact on the outcomes of public policy. The weight of evidence shows that low trust entails costs for public policy, and thus, there is a strong argument in favour of building more trust. We are also seeing the fallout from the systemic toxicity of growing inequality. Trust in government is increasing for some but for others there is a growing perception of government run by and for “establishment elites”. What can be done? Some of the recommendations covered in the book include actions in the following policy areas: Integrity: Integrity is essential for trust and policies must reflect this. This means building integrity on a local level where trust is forged, ensuring that senior officials lead by example, and employing integrity strategies to better defend the public interest. Inclusive and transparent policy making: Trust improves when citizens participate and provide input into policy making. Ensuring transparency in areas such as campaign financing and lobbying helps to establish a level playing field and instils trust that the system isn’t rigged for elites. Public service delivery: Citizens form strong opinions of public trust through the services they use. Governments need to monitor service effectiveness and ensure that citizen feedback translates to consistently better services.

a number of budgetary management instruments. Open government: Governments must be more transparent in their actions, provide greater access to services and information and be responsive to new ideas, demands and needs. Justice: Trust in legal and justice services is a foothold for broader public trust. Countries must embrace innovative policies to ensure that targeted, timely and appropriate legal assistance services and approaches are available to all who seek them. None of these are quick fixes. They can only be accomplished with political will and the consistent application of appropriate policy tools. Unfortunately, populism and extreme nationalism propose their own set of quick fixes. If democracies don’t get to work addressing urgent trust issues, false and corrosive promises will have their day. References and links OECD (2017), Trust and Public Policy: How Better Governance Can Help Rebuild Public Trust, OECD Publishing, Paris. http://dx.doi.org/10.1787/ 9789264268920-en

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Regulation: Regulations are an essential interface between citizens and government. Giving citizens a greater voice in regulatory design and implementation, ensuring the respect of citizens and adequately communicating procedures are identified as trust-builders. Budgetary governance: The global financial crisis weakened public finances and reduced citizen trust in the ability of governments to manage public finances. Stronger fiscal discipline, long-term sustainability, transparency and credibility can be achieved through

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OECD Observer No 310 Q2 2017

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Tax crimes: The fight goes digital

©Serprix

Melissa Dejong, OECD Centre for Tax Policy and Administration

Tax has been a high-profile topic in recent years. People often think of large-scale tax avoidance by huge multinationals–which the OECD has estimated at between US$100-240 billion in lost revenue annually. However, tax evasion and fraud go on every day, and may be happening right at your local restaurant, bar, grocery store or hairdresser’s. In the digital world, everyday tax evasion can be facilitated even more by taxpayers using readily available technology to evade tax. Previously, tax evasion in small businesses could be undertaken simply by accepting cash under the table or keeping a separate set of books. Now, the same outcomes can be achieved even more efficiently, using software such as “zappers” and “phantomware.” Zappers physically prevent sales from appearing on the records. Phantomware creates virtual sales terminals for the same purpose. Both allow businesses to selectively delete or reduce their sales figures without leaving a trace of any alteration. The taxpayer reports lower sales and lower taxable income, all the while retaining the actual profit. This type of evasion and fraud (called “electronic sales suppression”) makes it hard for tax authorities to detect any discrepancies. These types of tax evasion technologies are also now becoming available over the internet, which can make it harder for tax authorities to control and penalise. Not only that, but taxpayers can also evade tax by over-reporting their deductions. This can occur by creating false invoices that look genuine but where no outgoings have actually been paid. This fraudulently reduces taxable income, causing substantial revenue losses to the government. For example, in the Slovak Republic, the amount of risky VAT detected in domestic invoicing fraud in 2014 and 2015 was more than half a billion euros. Tax authorities also face challenges in the online-sharing economy through online ride-sharing and home-sharing marketplaces. These online-sharing platforms–which are, of course, legal–can generate taxable income for taxpayers, but which may not be reported and stay under the radar of the tax authority. However, tax authorities are catching up. The OECD’s new report Technology Tools to Tackle Tax Evasion and Tax

26

Fraud shows how technology is being used by tax administrations around the world as a powerful tool to swiftly identify and tackle tax evasion and tax fraud. The report details countries’ technical experience and revenue successes from implementing technology tools, particularly to counter electronic sales suppression and false invoicing. It demonstrates how easy and effective these technology tools can be. For example, a number of technology solutions to combat electronic sales suppression are available, which can include a tamper-proof black box installed in point-of-sales machines as well as real-time transaction-reporting to the tax authority. The results are impressive. Sweden experienced an increased tax revenue of €300 million per annum. Rwanda and Hungary both saw significant VAT increases: 20% in Rwanda within two years of introducing this solution and 15% in Hungary in the first year

Electronic invoicing solutions can prevent and reduce tax evasion of operation, which more than covered implementation costs. Mexico brought 4.2 million micro-businesses into the formal economy as a result of e-invoicing. And in Quebec, Canada, not only was substantial revenue recovered, but it enabled the tax authority to conduct audits more efficiently, with the number of inspections being increased from 120 to 8,000 per year. The report also shares successes in using technology to tackle false invoicing. Countries have already shown that using electronic invoicing solutions can prevent and reduce tax evasion: invoices can be verified as authentic using digital signatures and online verification tools. It can also make tax compliance easier for businesses where electronic documentation replaces paper-based audits or reporting obligations. Finally, the report describes the emerging tools tax authorities are using to detect online business activity. It notes that this is likely to be a growing area for tax authorities in the digital world. Besides detailing the technical features of these solutions, the report also explains best practices for effectively implementing them. By sharing these successes and best practices, it is hoped that other tax authorities can leverage this information and give consideration to how they might quickly implement similar solutions. Not only can this mean more revenue for public services, but it has a preventative and deterrent effect, and levels the playing field for compliant businesses that pay their fair share of taxes. This report is part of an ongoing series of reports on tax and technology, which is produced by the OECD’s Task Force on Tax Crime and Other Crimes. The Task Force furthers the work of the Oslo Dialogue, which promotes a whole-of-government approach to fighting tax crimes and illicit flows. Originally published on OECD Insights blog at http://oe.cd/23U References and links www.oecd.org/tax/crime/ www.oecd.org/ctp/crime/publications-and-reports-on-tax-crime.htm


Opening a new chapter in the infrastructure of Latin America

Crossroads with nature in Serra do Mar, ©www.fotografiasaereas.com.br

Juan Pablo Bonilla, Manager of the Climate Change and Sustainable Development Sector, Inter-American Development Bank

In Latin America, as elsewhere, sustainable infrastructure plays a vital role in improving the quality of life and supporting economic growth. It determines our capacity to engage competitively in global trade and to grow our economies. In our cities, where 80% of the region’s population lives, infrastructure helps reduce poverty by enhancing access to basic services and facilitating access to knowledge and employment opportunities. What many people don’t know is that sustainable infrastructure also has a lasting impact on climate resilience. Every year, natural disasters generate US$2 billion in costs in Latin America, not counting the incalculable loss of human life: in Colombia, my own country, the

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April 2017 rain-driven mudslides took the lives of more than 250 people. Good infrastructure is now more critical than ever to ensure that our homes become safer and more resilient to environmental shocks.

Agreement, the UN Sustainable Development Agenda, and the New Urban Agenda–all took effect in 2016. They reflect a need for a new direction: that of making infrastructure less carbon-reliant and more climate-resilient.

Since infrastructure is not built overnight, the decisions that we make today could have a major impact on our future climate. A new report by the OECD, Investing in Climate, Investing in Growth, shows that–at a global level–the next 10 years will be crucial in shifting infrastructure investment onto a more sustainable path. If we do not make this shift, we may witness an escalation of the tragic events that devastated part of Colombia and Peru earlier in 2017. Major global agreements–the Paris Climate

The real question, of course, is how to transform these agreements into reality. With budgetary and fiscal constraints, Latin America faces the challenge of bringing together governments, private investors and the public to finance the next generation of infrastructure projects and replace the obsolescent carbonemitting infrastructure of today. A critical starting point is the Nationally Determined Contributions (NDCs), the national climate plans that countries


DEVELOPMENT

submitted when signing on to the Paris Agreement. Each NDC includes a national mitigation plan as well as proposals on

The next 10 years will be crucial in shifting infrastructure investment onto a more sustainable path how countries will adapt to a changing climate. The NDCs, which will be reviewed, updated and improved every five years, are vital to helping reinforce signals to the private sector on the need to invest in low-emission, climateresilient infrastructure. As the new OECD report demonstrates, development banks, both multinational and national, have a role to play in turning plans into concrete actions. For example, the Inter-American Development Bank (IDB) has launched NDC Invest–a one-stop shop that provides flexible support to countries in order to integrate NDCs into their national planning; create portfolios of bankable, sustainable projects; support new business and financial models; and reduce the investment risks associated with these projects. Our aim is to help

countries meet their commitments, and we have already begun working with Brazil, Chile, Guatemala and Mexico to this end. The Sustainable Development Goals also provide incentives to integrate across different sectors and promote sustainable infrastructure. At the IDB, we are increasingly adopting comprehensive and inter-disciplinary solutions–health, housing, transport, biodiversity and climate–involving both the public and private sectors. An example is the Serra do Mar project in Brazil, where protected areas were created and improved along with housing, transport, education and health services for local communities, while reducing people’s vulnerability to the likes of mudslides and other natural disasters. Together with other multilateral development banks (MDBs), we are also working to mobilise private investment for sustainable infrastructure solutions, including urban transport and renewable energy projects, as there is simply not enough money available in the public

sector to achieve the scale of change we need to deliver on these vital agreements in the time available. Mobilising private capital will depend on a judicious use of concessional funds to reduce risks throughout the project cycle: from improved early planning and project preparation through construction and operations. To be effective, we must all work together–the MDBs, governments, private sector and civil society–to build more climate-resilient and low-carbon infrastructure in a more sustainable world. And the time to act is now. References and links OECD (2017), Investing in Climate, Investing in Growth, OECD Publishing, Paris. http://dx.doi.org/10.1787/ 9789264273528-en Investing in Climate, Investing in Growth project web page http://www.oecd.org/environment/cc/g20-climate/ The New Urban Agenda: Key Commitments http://www.un.org/sustainabledevelopment/ blog/2016/10/newurbanagenda/

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OECD Observer No 310 Q2 2017

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OECD.ORG

More businesses want to have a positive impact on society. But how do you gauge, for example, how sustainable business practices and investments are? Together with Fordham University and

Development aid stats: A primer Aid data can be difficult for journalists to understand. As a lead-up to the OECD’s release of official development assistance (ODA) data for 2016, head of aid statistics Yasmin Ahmad hosted a webinar in April. Besides looking at the latest trends in aid flow, the webinar spent time on technical issues such as the effect of currency rates on aid data and rules on countries using ODA for in-donor refugee costs. For those who missed the webinar, they may still find the answers to their questions at www.oecd.org/dac/stats/faq.htm Read the ODA summary at http://oe.cd/24q

HEC Paris, the OECD held a workshop in February 2017 on ways to measure business’ impact on well-being. Researchers, experts, business executives and a wide range of actors on the ground looked at how to establish a consistent system of indicators based on existing corporate social responsibility metrics, genuine corporate practices and

the OECD’s own experience in measuring well being in its Better Life Index (BLI). Emphasis was placed on the importance of co-ordinated information systems for businesses, NGOs, and governments. Learn more about the workshop at http://oe.cd/24t

OECD appoints Masamichi Kono as Deputy Secretary-General In May, the OECD appointed Masamichi Kono as Deputy Secretary-General. He replaced Rintaro Tamaki, who stepped down after six years in the post, and will take up his position in August. Mr Kono has a distinguished career in financial regulation and supervision both in Japan and internationally. He is a former vice minister for International Affairs of Japan’s Financial Services Agency (JFSA) and in this capacity he represented the JFSA on various international bodies, including the

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Business and well-being

Financial Stability Board (2009-2016) where he chaired its Regional Consultative Group for Asia. He was also president of JFSA’s Global Financial Partnership Centre (GLOPAC). For more on Mr Kono, visit http://oe.cd/24s

Conference on business, finance and gender

Watch the webcast of the conference at http://oe.cd/25i

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©OECD

How should pension systems account for gender differences and deliver equitable pensions for women and men? Do differences in financial literacy between men and women impact their long-term well-being? These were some of the questions debated at the OECDhosted conference that took place on International Women’s Day, 8 March. The conference was attended by senior decision-makers from the public and corporate worlds, experts, academics and stakeholders.

Sarah Gordon, Business editor of The Financial Times


OECD.ORG

Recent speeches by Angel Gurría G7 Leaders’ Summit: The role of innovation as a driver of growth and development in Africa Remarks delivered in Taormina, Italy, 27 May 2017

Ambassadors Mr Paul Dühr, Luxembourg Mr Paulo Vizeu Pinheiro, Portugal

PISA 2015: Volume IV Students’ Financial Literacy Launch in Paris, France, 24 May 2017

©OECD/Julien Daniel

Ms Marlies Stubits-Weidinger, Austria Mr Klavs A. Holm, Denmark

Petersberg Climate Dialogue: Investing in climate, investing in growth

Mr Noé Van Hulst, Netherlands

Remarks delivered in Berlin, Germany, 23 May 2017

Ms Claudia Serrano, Chile

G20 Health Ministers’ Meeting: Fighting antimicrobial resistance Introductory remarks delivered in Berlin, Germany, 20 May 2017 G20 Labour and Employment Ministers Meeting: Shaping the future of work

For a complete list of the speeches and statements, including those in French and other languages, go to: http://www.oecd.org/about/ secretary-general/

Mr Dionisio Pérez Jácome Friscione, Mexico

Remarks delivered in Bad Neuenahr, Germany, 19 May 2017 Second international conference on national urban policy Opening remarks delivered in Paris, France, 15 May 2017

Ms Annika Markovic, Sweden

Ms Elin Østebø Johansen, Norway Mr Ulrich Lehner, Switzerland Mr Carmel Shama-Hacohen, Israel Mr Zoltán Cséfalvay, Hungary Mr Pierre Duquesne, France Mr James Kember, New Zealand Ms Michelle d’Auray, Canada Mr Brian Pontifex, Australia Mr George Krimpas, Greece Mr Matei Hoffmann, Germany Mr José Ignacio Wert, Spain Mr Jean-Joël Schittecatte, Belgium Mr Jong-Won Yoon, Korea Mr Christopher Sharrock, United Kingdom

Secretary-General Strategic Orientations: Better lives through better policies and multilateral co-operation Remarks delivered in Paris, France, 7 June 2017 2017 Ministerial Council Meeting Welcoming remarks delivered in Paris, France, 7 June 2017 Signing ceremony: Multilateral Convention on Tax Treaty Related Measures to Prevent BEPS

G7 Finance Ministers and Central Bank Governors’ Meeting: Inequality and growth Remarks delivered in Bari, Italy, 12 May 2017

Ms Ivita Burmistre, Latvia Mr Aleksander Surdej, Poland

Europe Day 2017

Mr Pekka Puustinen, Finland

Opening remarks delivered at the OECD, Paris, France, 9 May 2017

Mr Dermot Nolan, Ireland

Making globalisation work for all: An OECD perspective Remarks delivered in Copenhagen, Denmark, 27 April 2017 Putting water at the centre of the global agenda

Opening remarks delivered in Paris, France, 7 June 2017

Remarks delivered in New York, US, 24 April 2017

OECD Forum 2017: Bridging Divides

Tax Inspectors Without Borders Governing Board meeting

Opening remarks delivered in Paris, France, 6 June 2017

Mr Erdem Bas¸çi, Turkey

Welcoming remarks delivered in Washington, US, 22 April 2017

Strategic public procurement: Procuring sustainable, innovative and socially responsible solutions

Remarks to the United States Council for International Business Roundtable

Opening remarks at the UICP Espaces Congrès, Paris, France, 2 June 2017

Remarks delivered in Washington, US, 21 April 2017

Mr Kristjan Andri Stéfansson, Iceland Mr Alessandro Busacca, Italy Mr Petr Gandalovic, Czech Republic Ms Irena Sodin, Slovenia Mr Hiroshi Oe, Japan Mr Alar Streimann, Estonia —­— Mr Juraj Tomáš, Slovak Republic Chargé d’Affaires a.i. Mr Peter Haas, United States Chargé d’Affaires a.i. —­— European Union Mr Rupert Schlegelmilch

May 2017

OECD Observer No 310 Q2 2017

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OECD.ORG

Calendar highlights Please note that many of the OECD meetings mentioned are not open to the public or the media and are listed as a guide only. All meetings are in Paris unless otherwise stated. For a comprehensive list, see the OECD website at www.oecd.org/newsroom/upcomingevents

MAY

JULY

2

Launch of OECD Skills Outlook 2017

7-8

G20 Summit 2017, Hamburg, Germany

19

Tenth OECD Rural Development Conference, Paris, France

11

Launch of Aid for Trade at a Glance 2017

11-12

22

Launch of African Economic Outlook 2017

Greece-OECD Public Integrity Forum, Athens, Greece

24

Launch of PISA 2015 Results, Volume IV: Financial Literacy

13

Launch of Government at a Glance 2017

26-27 G7 Summit 2017, Taormina, Italy

SEPTEMBER 12 Launch of Education at a Glance 2017 18

JUNE 1

Ninth International Economic Forum on Latin America and the Caribbean, Paris, France

4-7

World Investment Forum 2017, Newport Beach, US

OECD OECD Forum 6-7 June; OECD Ministerial Council Meeting 7-8 June 12-16

World Summit on the Information Society Forum, Geneva, Switzerland

13

High-Level Policy Forum on the OECD Jobs Strategy, Berlin, Germany

29

Launch of International Migration Outlook 2017

Green Investment and Financing Forum, Paris, France

26-27

Conference on Artificial Intelligence, “AI: Intelligent Machines, Smart Policies”, Paris, France

NOVEMBER 1

OECD Secretary-General lecture on climate, Toronto, Canada

8-11

Asia-Pacific Economic Cooperation Summit, Da Nang, Viet Nam

14

Launch of the International Energy Agency’s World Energy Outlook 2017, London, United Kingdom

15

Launch of How’s Life? Measuring Well-being 2017

6-1

COP 23, Bonn, Germany

20-21

Conference on Innovation in Government, Paris, France

OCTOBER 2-3 Meeting on Tourism Policies for Sustainable and Inclusive Growth, Paris, France 4

International Economic Forum on Africa, Paris, France

11

Launch of OECD Digital Economy Outlook 2017

11-12

Meeting of the OECD Global Parliamentary Network, Paris, France

DECEMBER 6-10

G200 Youth Forum 2017, Dubai, UAE

19-20 Champion Mayors Conference, Seoul, Korea

9

World Anti-corruption Day

23-25 OECD Eurasia Week, Almaty, Kazakhstan

7-8

Forum of the Americas, Paris, France

This strip originally appeared in OECD Observer No 268, June 2008.

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Launch of Entrepreneurship at a Glance 2017

24-25


BOOKS OECD iLibrary

Under the sea With marine biodiversity deteriorating at an alarming rate, there will soon be little left of the “octopus’s garden” that The Beatles once sang about. According to Marine Protected Areas: Economics, Management and Effective Policy Mixes, pollution, overfishing and rising temperatures have damaged or destroyed 60% of the earth’s marine ecosystems. Policymakers have been addressing the issue, too, and are increasingly designating marine protected areas (MPAs) as an instrument for the preservation of biodiversity.

and other effective means in the form of MPAs. One example is the Iroise Marine National Park in Brittany, France. It was created to foster controlled tourism and a sustainable fishery, among others. Another prominent MPA is the Great Barrier Reef Marine Park in Queensland, Australia. Despite its protected status, coral cover and seagrass meadows are both shrinking due to agricultural activities, ocean acidification and climate change. A major challenge of these protected areas is the enforcement of rules and regulations, but technology can provide solutions. The Global Fishing Watch initiative launched in 2016 by the non-profit organisation, Oceana, in co-operation with Google, efficiently and cost-effectively monitors large commercial fishing vessels using advanced software and data processing.

Today, 4.1% of the total marine environment is protected by legislation

Although MPAs currently cover less than 5% of the total marine environment, their

share is set to grow to 10% by 2020, as agreed by countries adhering both to the Convention on Biological Diversity and the Sustainable Development Goals. This will not only help conserve maritime biodiversity, but also contribute to the economy with an estimated US$622-923 billion over the period 2015-2050. There may be hope for the “octopus’s garden” after all. OECD (2017), Marine Protected Areas: Economics, Management and Effective Policy Mixes, OECD Publishing, Paris. http://dx.doi.org/10.1787/ 9789264276208-en

Web of collective action A tweet alone might go unnoticed, but a swarm of them can make quite a buzz. Take the examples of movements such as Black Lives Matter, or online petitions like the one in favour of women on banknotes in the UK, or demonstrations in the Middle East and elsewhere organised on social media. Collective action made up of individuals microdonating effort, time and money on social media to political and social causes is characteristic of our turbulent times. Political Turbulence shows how social media activism works, who is involved and what consequences it might have. The “Save Our Bees” campaign demonstrated how every voice

contributes to the success of a movement. Even ordinary people with modest following on social media played a role in scaling it up, with bees being mentioned in over 15,000 tweets on certain days at the beginning of 2013. Together, they succeeded in effecting policy change: the European Commission decided to restrict the use of insecticides harmful to bees in May 2013. What kinds of people take part in these actions? Experiments show that personality matters. Agreeable and individualistic people are more likely to contribute when their actions are visible on social media, whereas pro-social individuals prefer not to make their actions visible. How do such movements develop? According to research, extroversion is linked to the launch of collective actions, while agreeable people are more likely to wait until a cause gets sufficient support before joining it.

This new form of collective action creates what the authors call “chaotic pluralism”. This improves the access of disadvantaged people to political action and affords more latitude to challengers of established agendas. However, chaotic pluralism can also undermine mutual accommodation and the value of compromise. Governments should take social media seriously and use it both to understand citizens’ needs and concerns, and for achieving collective goals. Research is key, and to make sense of the swarm of tweets, social and natural sciences will have to join forces. Margetts, Helen, et al (2015), Political Turbulence: How Social Media Shape Collective Action, Princeton University Press, Princeton. http://press.princeton.edu/ titles/10582.html

OECD Observer No 310 Q2 2017

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BOOKS OECD iLibrary

New publications The Nature of Problem Solving: Using Research to Inspire 21st Century Learning The Nature of Problem Solving presents the background and the main ideas behind the development of the PISA 2012 assessment of problem solving, as well as results from research collaborations that originated within the group of experts who guided the development of this assessment. It illustrates the past, present and future of problem-solving research and how this research is helping educators prepare students to navigate an increasingly uncertain, volatile and ambiguous world. ISBN: 978-92-64-27389-4 May 2017, 272 pages €55.00 $66.00 £44.00 ¥7 100

Trust and Public Policy: How Better Governance Can Help Rebuild Public Trust Trust plays a very tangible role in the effectiveness of government. Yet, public trust has been eroding just when policymakers need it most, given persistent unemployment, rising inequality and a variety of global pressures. This report examines the influence of trust on policymaking and explores some of the steps governments can take to strengthen public trust. ISBN: 978-92-64-26891-3 April 2017, 160 pages €24.00 $29.00 £19.00 ¥3 100

Diffuse Pollution, Degraded Waters: Emerging Policy Solutions

34

All publications available at www.oecd.org/bookshop and www.OECD-iLibrary.org Behavioural Insights and Public Policy: Lessons from Around the World

“Behavioural insights”, or insights derived from the behavioural and social sciences, including decision making, psychology, cognitive science, neuroscience, organisational and group behaviour, are being applied by governments with the aim of making public policies work better. This report suggests ways to ensure that this experimental approach can be successfully and sustainably used as a public policy tool. ISBN: 978-92-64-26907-1 March 2017, 404 pages €80.00 $96.00 £64.00 ¥10 400

The Role of Economic Regulators in the Governance of Infrastructure Based on a survey of 34 economic regulators covering 77 sectors and subsectors including energy, transport, communications and water, this report explores how economic regulators carry out this task, and suggests how this experience can be usefully applied in the governance of infrastructure more broadly. ISBN: 978-92-64-27265-1 April 2017, 64 pages €24.00 $29.00 £19.00 ¥3 100

Empowering and Enabling Teachers to Improve Equity and Outcomes for All

This report outlines the water quality challenges facing OECD countries today, presents a range of policy instruments and innovative case studies of diffuse pollution control, and concludes with an integrated policy framework to tackle diffuse water pollution.

The adaptability of education systems and their ability to evolve ultimately depends on enabling teachers to transform what and how students learn. This requires strong support and training for teachers, both before and after they enter the profession, with new forms of professional development to help teachers engage in more direct instruction and adapt it to the needs of their diverse classrooms.

ISBN: 978-92-64-26905-7 April 2017, 120 pages €24.00 $29.00 £19.00 ¥3 100

ISBN: 978-92-64-27322-1 April 2017, 112 pages €25.00 $30.00 £20.00 ¥3 200

Preventing Policy Capture: Integrity in Public Decision Making This report exposes how “policy capture”, where public decisions over policies are consistently or repeatedly directed away from the public interest towards a specific interest, can exacerbate inequalities and undermine democratic values, economic growth and trust in government. ISBN: 978-92-64-06522-2 April 2017, 84 pages €24.00 $29.00 £19.00 ¥3 100

OECD Territorial Reviews: Northern Sparsely Populated Areas The northern sparsely populated areas (NSPA) of Finland, Norway and Sweden are becoming increasingly important to the geopolitical and economic interests of these countries and the European Union. This report sets out policy recommendations at cross-border, national and regional scales to enhance prosperity and well-being across the NSPA. ISBN: 978-92-64-26823-4 March 2017, 224 pages €34.00 $40.00 £27.00 ¥4 400

ITF Transport Outlook 2017 The ITF Transport Outlook provides an overview of recent trends and near-term prospects for the transport sector at a global level. It also presents long-term projections for transport demand to 2050 for freight (maritime, air and surface) and passenger transport (car, rail and air) as well as related CO2 emissions, under different policy scenarios. ISBN: 978-92-82-10799-7 February 2017, 224 pages €45.00 $54.00 £36.00 ¥5 800


BOOKS OECD iLibrary

Focus: World economy Economic Policy Reforms 2017: Going for Growth Going for Growth is the OECD’s regular report on structural reforms in policy areas that have been identified as priorities to boost incomes in OECD and selected non-OECD countries. Policy priorities are updated every two years and presented in a full report, which includes individual country notes with detailed policy recommendations to address the priorities, as well as a follow-up on actions taken.

ISBN: 978-92-64-27031-2 March 2017, 344 pages €84.00 $101.00 £67.00 ¥10 900

International VAT/ GST Guidelines The International VAT/ GST Guidelines now present a set of internationally agreed standards and recommended approaches to address the issues that arise from the uncoordinated application of national VAT systems in the context of international trade. They focus in particular on trade in services and intangibles, which poses increasingly important challenges for the design and operation of VAT systems worldwide.

ISBN: 978-92-64-27204-0 April 2017, 116 pages €24.00 $29.00 £19.00 ¥3 100

Business Dynamics and Productivity This publication focuses on business dynamics across eight countries (Belgium, Brazil, Canada, Costa Rica, Japan, New Zealand, Norway, United Kingdom) and over time, building upon the evidence collected in the framework of the OECD DynEmp project for 22 countries.

ISBN: 978-92-64-26922-4 April 2017, 224 pages €40.00 $48.00 £32.00 ¥5 200

All publications available at www.oecd.org/bookshop and www.OECD-iLibrary.org Trade in Counterfeit ICT Goods

Recent years have witnessed a constant rise in the spread of ICT (information and communication technologies) infrastructure and a growing demand for ICT goods. This study looks at the trade in counterfeit ICT goods, including the size of the trade, the main sources of fake goods, and the countries whose companies are most affected.

ISBN: 978-92-64-27082-4 April 2017, 92 pages €24.00 $29.00 £19.00 ¥3 100

Beyond Shifting Wealth: Perspectives on Development Risks and Opportunities from the Global South This shifting weight of global economic activity from “the West” to “East and South” is referred to as “shifting wealth”. This anthology takes stock of the situation and goes beyond the “shifting wealth” narrative. It offers a forward-looking perspective on global risks and development opportunities over the next 15 years.

ISBN: 978-92-64-27314-6 April 2017, 92 pages €24.00 $29.00 £19.00 ¥3 100

Standard for Automatic Exchange of Financial Account Information in Tax Matters, Second Edition

Methodology for Assessing the Implementation of the G20/ OECD Principles of Corporate Governance The G20/OECD Principles of Corporate Governance help policy makers evaluate and improve the legal, regulatory, and institutional framework for corporate governance, with a view to supporting economic efficiency, sustainable growth and financial stability. They are one of the Key Standards for Sound Financial Systems adopted by the Financial Stability Board (FSB).

ISBN: 978-92-64-26966-8 March 2017, 164 pages €30.00 $36.00 £24.00 ¥3 900

Interrelations between Public Policies, Migration and Development Interrelations between Public Policies, Migration and Development is the result of a project carried out by the European Union and the OECD Development Centre in ten partner countries. The project aimed to provide policy makers with evidence on the way migration influences specific sectors–labour market, agriculture, education, investment and financial services, and social protection and health–and, in turn, how sectoral policies affect migration.

ISBN: 978-92-64-26560-8 March 2017, 280 pages €55.00 $66.00 £44.00 ¥7 100

Mobilising Bond Markets for a LowCarbon Transition

jurisdictions on an annual basis.

This report describes the development of the green bond market as an innovative instrument for green finance, and provides a review of policy actions and options to promote further market development and growth.

ISBN: 978-92-64-26798-5 April 2017, 326 pages €75.00 $90.00 £60.00 ¥9 700

ISBN: 978-92-64-27231-6 April 2017, 132 pages €25.00 $30.00 £20.00 ¥3 200

The Common Reporting Standard (CRS), developed in response to the G20 request and approved by the OECD Council on 15 July 2014, calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other

OECD Observer No 310 Q2 2017

35


BOOKS OECD iLibrary

Digital disruption Goethe said, “He who lives must be prepared for changes.” The fourth industrial revolution will certainly bring about significant changes that we will have to be prepared for. Japanese estimates suggest that the use of big data and analytics in some divisions of Japanese manufacturers could lower maintenance costs by almost JP¥5 trillion (€41 billion). Other estimates suggest that new technologies could boost value-added in Germany’s mechanical, electrical and automotive sectors, among others, by an additional €78 billion by 2025. However, new technologies are being diffused rather slowly, according to The Next Production Revolution: Implications for Governments and Business. Take the

example of Germany, where a 2015 survey of 4,500 businesses found that only 4% had implemented digitalised and networked production processes or had plans to do so. Smaller firms are lagging behind, as only 36% of surveyed companies with 50 to 249 employees in Europe use industrial robots, compared to 74% of companies with 1,000 or more employees. Global connections via trade, the international mobility of skilled labour, and connections and knowledge exchange within national economies are some of the factors that shape the diffusion process of new technologies. The effects of productivity-enhancing technology on employees are more mixed as it causes job losses in some cases and job gains in others. Even sectors such as commercial hauliers, which represent three million employees in the EU, could see marked labour market shocks if the need for drivers is eliminated by technology, according to the report.

Although the overall employment and economic effects of new technologies bring many benefits, the disruption caused by technological change should not be underestimated. Policymakers have a key role to play in helping create the right conditions for the adoption of new technologies and knowledge, particularly among smaller businesses. It includes encouraging life-long skills development, greater interaction between industry and education, and improving conditions for business creation, for instance. Such adjustment processes are needed to prepare for the radical (and unforeseen) changes that digital disruption means. OECD (2017), The Next Production Revolution: Implications for Governments and Business, OECD Publishing, Paris. http://dx.doi.org/10.1787/ 9789264271036-en

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DATABANK

Will your job be automated?

Not all countries are equal in the face of this challenge. The current OECD average for the share of jobs at risk of being automated–that is, those having at least 50% automatable tasks–is 34.3%; the share of jobs considered “high risk”–that is, with at least 70% automatable tasks–is 9%. But these shares are higher in some countries such as the Slovak Republic, with 45.9% jobs risking automation, 11% of which are

% 50

% 50

25

20

20

15

15

10

10

5

5

0

0

Source: OECD calculations based on the Survey of Adult Skills (PIAAC) (2012, 2015)

SV K

PO L

NZ L*

inevitable transformation in the labour market will require a comprehensive and early response, combining security and adaptability, as well as lifelong education to ensure that workers of all ages can adapt to this oscillating environment.

Different levels of risk do not appear to be closely correlated with levels of development, as the chart indicates.

OECD (2017), OECD Economic Surveys: New Zealand 2017, OECD Publishing, Paris. http://dx.doi.org/10.1787/eco_surveys-nzl2017-en

Digitalisation is also an opportunity, and the OECD argues that it is essential for countries to have a strong policy focus on preparing people for change. Facing the

Bad investment Corruption and foreign direct investment of adherents versus non-adherents to the OECD anti-Bribery Convention, 2012-2015

Anyone looking for proof that international agreements work should look at the OECD Anti-bribery Convention. One reason is investment. In fact, countries that adhere to the convention (currently 43) invest more abroad than those that have not joined. Corruption wastes resources that could otherwise be invested abroad–each year individuals and companies pay bribes roughly of the order of France’s GDP, around US$2 trillion. However, bribes don’t pay, as the clear correlation between lower levels of corruption and higher foreign direct investment (FDI) outflows suggests in our graph. The vast majority of countries adhering to the OECD Anti-bribery Convention are less corrupt and invest much more abroad than non-adhering countries, and therefore are more likely to benefit from foreign sales and scale economies. These countries are not all OECD members, as the convention’s reach extends beyond the area of the organisation, to incorporate eight non-

http://dx.doi.org/10.1787/888933497340

high risk, than in others such as Korea, with 24.4% jobs at risk, 6% of which are high risk.

Bribes don’t pay

DE U

30

25

OE CD *

35

30

TU R*

40

35

FR A

45

ES T

45 40

KO R

Job automation is widely seen as one of the biggest challenges of the digital revolution, and a source of uncertainty and insecurity for many workers today. The automation of routine tasks has already lowered the share of middle-skill jobs, and polarised low- and high-income jobs, which is associated with rising inequality. In some cases, digitalisation has reduced the demand for low-skilled as well as middle-skilled workers, while increasing demand for a high-skilled workforce, which cannot always be met by the existing supply. The risk is higher wages for some, but unemployment for others.

Risk of job automation Jobs at risk of automation, 2012 and 2015*

4.5

CCI Index

4

Non-adherents

Adherents

3.5 3 2.5 2 1.5 1 0.5 -2

-1

0

0

1

2

4

3

Note: The dotted line shows a linear trend while the solid line shows a quadratic one Source: OECD Business and Finance Outlook 2017

OECD countries among its adherents, such as Bulgaria, Colombia and South Africa. Joining the convention means committing to several rules, such as criminalising the offering of bribes to foreign public officials, and committing to co-operate in monitoring and promoting the full implementation of the convention. The OECD is determined to continue its efforts

5

6

8 7 FDI outflows (%GDP)

http://dx.doi.org/10.1787/9789264274891-en

on implementation, as called for in the 2017 Ministerial Council statement. As the graph shows, such efforts could improve countries’ positions as investors. Unlike bribes, anti-corruption measures pay by freeing up resources for investment. OECD (2017), OECD Business and Finance Outlook 2017, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264274891-en

OECD Observer No 310 Q2 2017

37


DATABANK % change from: previous period

38

level:

previous year

current period

same period last year

Australia

Gross domestic product Industrial production Consumer price index

Q2-2017 0.6 2.8 Q2-2017 0.8 1.8 Q2-2017 0.7 Q2-2017 1.4 0.7 4.7 Q2-2017 0.7 1.9 Q2-2017 0.2

Current balance Unemployment rate Interest rate

Q2-2017 -7.2 -11.5 Q2-2014 -12.8 -12.9 Q2-2017 5.6 Q2-2014 5.9 5.7 5.6 2.1 Q2-2017 1.7 Q2-2014 2.7 2.9

Austria

Gross domestic product Industrial production Consumer price index

Q2-2017 0.6 0.9 Q2-2014 0.2 2.8 Q2-2014 -0.9 4.7 Q2-2017 1.4 0.2 Q2-2014 1.0 1.8 Q2-2017 0.7 1.9

Current balance Unemployment rate Interest rate

Q1-2017 1.7 Q1-2014 1.5 2.8 3.1 Q2-2017 5.4 Q2-2014 5.0 6.1 4.7 Q2-2017 -0.3 Q2-2014 0.3 -0.3 0.2

Belgium

Gross domestic product Industrial production Consumer price index

1.5 Q2-2017 0.4 Q2-2014 0.1 1.0 Q2-2014 0.6 Q2-2017 0.9 3.6 3.4 Q2-2014 -0.3 0.4 Q2-2017 0.3 1.9

Current balance Unemployment rate Interest rate

Q1-2017 -1.0 1.1 Q1-2014 -0.2 -5.0 Q1-2017 7.6 Q2-2014 8.5 8.2 8.4 Q2-2017 -0.3 0.2 Q2-2014 0.3 -0.3

Canada

Gross domestic product Industrial production Consumer price index

Q2-2017 1.1 Q2-2014 0.8 2.5 3.7 Q2-2017 2.1 7.5 Q2-2014 0.8 4.5 Q2-2014 1.3 2.2 Q2-2017 0.6 1.3

Current balance Unemployment rate Interest rate

Q2-2017 -12.1 Q2-2014 -10.9 -14.6 -15.0 Q2-2017 6.5 7.1 Q2-2014 7.0 6.9 Q2-2017 0.8 Q2-2014 1.2 0.8 1.2

Chile

Gross domestic product Industrial production Consumer price index

Q2-2017 0.7 1.3 Q2-2014 0.2 2.1 Q2-2014 -3.3 -1.0 Q2-2017 0.5 -1.5 Q2-2014 1.6 2.3 Q2-2017 0.5 5.1

Current balance Unemployment rate Interest rate

Q2-2017 -1.7 Q1-2014 -2.0 -1.3 -3.1 Q2-2017 6.7 Q2-2014 6.2 6.6 5.9 Q2-2017 2.6 5.0 Q2-2014 3.9 3.5

Czech Republic

Gross domestic product Industrial production Consumer price index

2.5 Q2-2014 0.3 Q2-2017 2.5 4.7 Q2-2014 0.2 5.8 6.7 Q2-2017 0.2 Q2-2014 0.1 0.2 Q2-2017 0.3 2.2

Current balance Unemployment rate Interest rate

1.3 Q1-2017 0.3 Q2-2014 -1.9 -1.0 Q2-2017 3.0 Q2-2014 6.2 4.0 6.9 Q2-2017 0.3 Q2-2014 0.4 0.3 0.5

Denmark

Gross domestic product Industrial production Consumer price index

Q2-2017 0.6 Q2-2014 0.2 2.7 1.1 Q2-2014 0.6 0.8 Q2-2017 0.1 2.8 Q2-2014 0.4 Q2-2017 0.4 0.8 0.6

Current balance Unemployment rate Interest rate

Q2-2017 7.0 Q2-2014 5.3 6.4 5.8 Q2-2017 5.7 Q2-2014 6.4 6.2 6.9 Q2-2017 -0.2 Q2-2014 0.3 -0.1 0.3

Estonia

Gross domestic product Industrial production Consumer price index

Q2-2017 1.3 2.9 Q2-2014 1.1 5.2 Q2-2014 3.3 Q2-2017 2.0 11.3 2.5 Q2-2017 1.0 Q2-2014 0.3 0.0 3.1

Current balance Unemployment rate Interest rate

Q2-2017 0.1 0.1 Q1-2014 -0.1 0.0 Q2-2017 6.5 Q2-2014 7.5 6.6 8.3 Q2-2017 -0.3 0.2 Q2-2014 0.3 -0.3

Finland

Gross domestic product Industrial production Consumer price index

Q2-2017 0.4 -0.1 Q2-2014 0.2 3.0 Q2-2014 0.5 -1.9 Q2-2017 1.8 2.8 Q2-2014 0.2 Q2-2017 0.4 0.8 0.9

Current balance Unemployment rate Interest rate

Q1-2017 0.6 Q1-2014 -0.4 -0.2 -0.5 Q2-2017 8.8 Q2-2014 8.6 8.9 8.1 Q2-2017 -0.3 0.2 Q2-2014 0.3 -0.3

France

Gross domestic product Industrial production Consumer price index

Q2-2014 0.0 1.8 Q2-2017 0.5 0.1 Q2-2017 1.1 Q2-2014 -0.5 -2.1 1.8 Q2-2017 0.6 Q2-2014 0.4 0.9 0.6

Current balance Unemployment rate Interest rate

Q1-2017 -9.3 -5.6 Q1-2014 -6.7 -13.2 Q2-2017 9.6 10.1 Q2-2014 10.2 10.3 Q2-2017 -0.3 Q2-2014 0.3 -0.3 0.2

Germany

Gross domestic product Industrial production Consumer price index

Q2-2014 -0.2 1.3 Q2-2017 0.6 2.1 Q2-2017 1.4 3.1 Q2-2014 -0.9 1.5 Q2-2014 0.2 Q2-2017 0.3 1.7 1.1

Current balance Unemployment rate Interest rate

Q1-2017 71.7 67.0 Q1-2014 68.6 65.0 Q2-2017 3.8 Q2-2014 5.0 4.2 5.3 Q2-2017 -0.3 Q2-2014 0.3 -0.3 0.2

Greece

Gross domestic product Industrial production Consumer price index

.. .. 0.8 Q2-2017 0.5 Q1-2014 2.4 3.6 Q2-2017 -3.8 0.5 Q2-2014 1.2 -1.5 Q2-2017 1.3 1.3

Current balance Unemployment rate Interest rate

Q1-2017 0.7 0.2 Q2-2014 0.4 -0.4 Q1-2017 22.6 27.6 Q2-2014 27.1 24.0 Q2-2017 -0.3 0.2 Q2-2014 0.3 -0.3

Hungary

Gross domestic product Industrial production Consumer price index

Q2-2014 0.8 3.5 Q2-2017 0.9 3.7 Q2-2014 3.5 10.3 Q2-2017 1.4 4.9 Q2-2014 0.2 -0.2 Q2-2017 0.6 2.1

Current balance Unemployment rate Interest rate

Q1-2017 1.4 1.5 Q4-2013 1.4 0.3 Q2-2017 4.3 5.2 Q2-2014 8.0 10.4 Q2-2017 0.2 1.0 Q2-2014 2.8 4.6

Iceland

Gross domestic product Industrial production Consumer price index

Q2-2014 -1.2 2.2 2.7 Q2-2017 -1.1 Q2-2014 -5.0 Q1-2017 -1.8 -5.0 -1.7 Q2-2014 0.9 2.3 Q2-2017 0.9 1.7

Current balance Unemployment rate Interest rate

Q2-2017 0.3 Q1-2014 0.0 0.3 0.1 Q2-2017 2.4 6.1 Q2-2014 5.1 3.0 Q2-2017 5.3 Q2-2014 6.1 6.6 6.2

Ireland

Gross domestic product Industrial production Consumer price index

6.5 Q2-2014 1.5 5.8 Q2-2017 1.4 Q2-2017 3.5 Q1-2014 3.8 -0.9 2.8 Q2-2014 0.8 0.4 Q2-2017 0.9 0.2

Current balance Unemployment rate Interest rate

Q2-2017 2.1 Q1-2014 3.0 5.8 3.2 Q2-2017 6.4 8.4 Q2-2014 11.7 13.7 Q2-2017 -0.3 Q2-2014 0.3 -0.3 0.2

Israel

Gross domestic product Industrial production Consumer price index

Q2-2014 0.4 2.9 Q2-2017 0.6 2.2 Q2-2014 -3.9 Q2-2017 3.9 -0.6 3.0 Q2-2014 0.4 0.8 Q2-2017 0.4 0.4

Current balance Unemployment rate Interest rate

Q2-2017 2.3 1.7 Q2-2014 2.2 3.1 Q2-2017 4.4 Q2-2014 6.1 4.7 6.7 Q2-2017 0.1 Q2-2014 0.7 0.1 1.5

Italy

Gross domestic product Industrial production Consumer price index

Q2-2014 -0.2 -0.2 Q2-2017 0.4 1.5 Q2-2017 1.1 Q2-2014 -0.5 -0.1 3.2 Q2-2014 0.2 0.4 Q2-2017 0.4 1.5

Current balance Unemployment rate Interest rate

Q1-2017 13.3 9.6 Q1-2014 7.9 -0.1 Q2-2017 11.3 11.6 Q2-2014 12.5 12.2 Q2-2017 -0.3 Q2-2014 0.3 -0.3 0.2

Japan

Gross domestic product Industrial production Consumer price index

Q2-2017 0.6 1.6 Q2-2014 -1.8 0.0 Q2-2017 2.0 Q2-2014 -3.6 2.4 5.5 Q2-2014 2.5 0.4 Q2-2017 0.4 3.6

Current balance Unemployment rate Interest rate

44.8 Q1-2017 47.7 Q2-2014 6.3 18.7 Q2-2017 2.9 3.2 Q2-2014 3.6 4.0 Q2-2017 0.1 0.1 Q2-2014 0.2 0.2

Korea

Gross domestic product Industrial production Consumer price index

Q2-2017 0.6 3.5 Q2-2014 0.5 2.7 Q2-2014 -0.9 0.0 Q2-2017 -2.4 1.2 Q2-2014 0.3 Q2-2017 0.0 1.9 1.6

Current balance Unemployment rate Interest rate

Q2-2017 16.3 Q2-2014 23.6 25.3 19.4 Q2-2017 3.8 3.1 Q2-2014 3.7 3.7 Q2-2017 1.4 1.5 Q2-2014 2.7 2.7

Luxembourg Latvia

Gross domestic product Industrial production Consumer price index

Q2-2017 1.2 4.8 Q1-2014 0.8 3.8 Q2-2014 -0.1 8.8 Q2-2017 2.5 8.9 Q2-2014 0.5 0.9 Q2-2017 1.2 3.1

Current balance Unemployment rate Interest rate

Q2-2017 -0.2 0.0 Q2-2017 8.9 9.5 Q2-2017 -0.3 -0.3

Luxembourg Mexico

Gross domestic product Industrial production Consumer price index

Q1-2017 0.1 3.3 Q2-2014 1.0 2.7 Q2-2014 0.9 -0.4.. Q2-2017 3.7 Q2-2014 -0.1 Q2-2017 0.8 3.6 1.7

Current balance Unemployment rate Interest rate

Q1-2017 0.6 0.3 Q2-2014 -7.1 -5.7 Q2-2017 5.9 Q2-2014 5.0 6.3 5.1 Q2-2017 -0.3 Q2-2014 3.7 -0.3 4.3

Mexico

Gross domestic product Industrial production Consumer price index

Q2-2017 0.6 3.0 Q2-2017 -0.3 .. Q2-2017 0.7 6.1

Current balance Unemployment rate Interest rate

Q2-2017 -1.2 -6.7 www.oecd.org/bookshop Q2-2017 3.4 3.9 Q2-2017 7.1 4.2


DATABANK level:

% change from: previous period

current period

previous year

same period last year

Netherlands

Gross domestic product Industrial production Consumer price index

1.1 Q2-2014 0.7 Q2-2017 1.5 3.8 Q2-2014 3.7 Q2-2017 -0.1 -2.0 1.1 Q2-2014 0.8 1.0 Q2-2017 0.7 1.2

Current balance Unemployment rate Interest rate

Q4-2013 24.7 Q1-2017 18.2 25.6 13.3 Q2-2014 7.0 6.6 Q2-2017 5.0 6.3 Q2-2014 0.3 Q2-2017 -0.3 0.2 -0.3

New Zealand

Gross domestic product Industrial production Consumer price index

Q2-2014 0.5 Q2-2017 1.1 Q2-2014 -1.1 Q2-2017 1.0 Q2-2014 0.3 Q2-2017 0.0

3.3 2.5 2.7 1.4 1.6 1.7

Current balance Unemployment rate Interest rate

Q4-2013 -0.7 Q2-2017 -1.1 -1.8 -1.2 Q2-2014 5.6 Q2-2017 4.8 6.4 5.1 Q2-2014 3.4 2.6 Q2-2017 2.0 2.4

Norway

Gross domestic product Industrial production Consumer price index

Q2-2014 0.9 1.8 Q2-2017 1.1 2.1 Q2-2014 -1.1 Q2-2017 0.2 0.2 2.2 Q2-2014 0.7 1.8 Q2-2017 0.8 2.1

Current balance Unemployment rate Interest rate

Q2-2014 12.4 14.3 Q2-2017 4.2 2.3 Q2-2014 3.3 3.5 Q2-2017 4.4 4.7 Q2-2014 1.8 1.8 Q2-2017 0.9 1.0

Poland

Gross domestic product Industrial production Consumer price index

Q2-2014 0.6 Q2-2017 1.1 3.3 4.4 Q2-2014 -0.2 3.4 Q2-2017 1.3 5.7 Q2-2014 0.0 0.3 Q2-2017 0.3 1.9

Current balance Unemployment rate Interest rate

Q1-2014 -0.8 -3.0 Q1-2017 0.2 -0.1 Q2-2014 9.2 10.5 Q2-2017 5.1 6.3 Q2-2014 2.7 2.9 Q2-2017 1.7 1.7

Portugal

Gross domestic product Industrial production Consumer price index

Q2-2014 0.3 0.9 3.0 Q2-2017 0.3 1.5 Q2-2014 1.6 2.4 Q2-2017 -0.1 Q2-2014 1.0 -0.3 1.4 Q2-2017 1.8

Current balance Unemployment rate Interest rate

Q2-2014 -0.1 0.7 Q1-2017 0.9 1.0 Q2-2014 14.4 Q2-2017 9.3 16.9 11.3 Q2-2014 0.3 0.2 -0.3 Q2-2017 -0.3

Slovak Republic

Gross domestic product Industrial production Consumer price index

Q2-2014 0.6 2.4 Q2-2017 0.8 3.1 Q2-2014 -0.8 4.9 Q2-2017 -1.5 1.5 Q2-2014 0.2 -0.1 Q2-2017 0.4 1.0

Current balance Unemployment rate Interest rate

Q1-2014 0.5 0.5 Q1-2017 -0.3 -0.5 Q2-2014 13.4 Q2-2017 7.9 14.3 9.9 Q2-2014 0.3 Q2-2017 -0.3 0.2 -0.3

Slovenia

Gross domestic product Industrial production Consumer price index

Q2014 1.0 2.8 Q2-2017 1.1 5.2 Q2-2014 1.8 3.8 Q2-2017 1.9 7.7 Q2-2014 1.5 0.6 Q2-2017 1.3 1.4

Current balance Unemployment rate Interest rate

Q2-2014 0.7 Q1-2017 0.9 0.7 0.8 Q2-2014 9.5 10.5 Q2-2017 7.1 8.1 Q2-2014 0.3 0.2 Q2-2017 -0.3 -0.3

Spain

Gross domestic product Industrial production Consumer price index

Q2-2014 0.6 3.1 1.2 Q2-2017 0.9 Q2-2014 0.6 2.3 Q2-2017 0.6 2.2 Q2-2014 1.0 2.0 0.2 Q2-2017 0.8

Current balance Unemployment rate Interest rate

Q2-2014 -5.6 Q1-2017 4.9 1.3 5.2 Q2-2014 24.7 26.2 Q2-2017 17.3 20.1 Q2-2014 0.3 Q2-2017 -0.3 0.2 -0.3

Sweden

Gross domestic product Industrial production Consumer price index

Q2-2014 0.7 2.6 Q2-2017 1.3 3.0 Q2-2014 -1.4 Q2-2017 0.9 -0.6 5.7 Q2-2014 0.6 0.0 Q2-2017 0.9 1.8

Current balance Unemployment rate Interest rate

Q2-2014 7.5 Q2-2017 6.3 9.2 5.6 Q2-2014 8.0 8.0 Q2-2017 6.7 6.8 Q2-2014 0.6 0.9 Q2-2017 -0.6 -0.6

Switzerland

Gross domestic product Industrial production Consumer price index

Q2-2014 0.0 0.4 1.1 Q2-2017 0.3 Q4-2013 -1.0 Q2-2017 1.3 -1.2 2.9 Q2-2014 0.5 0.4 0.1 Q2-2017 0.6

Current balance Unemployment rate Interest rate

Q4-2013 14.3 15.1 Q2-2017 15.0 18.6 Q2-2014 4.4 Q2-2017 4.4 4.2 4.6 Q2-2014 0.0 Q2-2017 -0.7 0.0 -0.7

Turkey

Gross domestic product Industrial production Consumer price index

Q2-2014 -0.5 2.5 Q2-2017 2.1 6.1 Q2-2014 -0.9 2.6 Q2-2017 1.8 4.6 Q2-2014 2.6 9.4 Q2-2017 2.5 11.5

Current balance Unemployment rate Interest rate

Q2-2014 -9.3 -17.5 Q1-2017 -8.3 -7.7 Q1-2014 9.1 8.5 Q1-2017 11.6 10.1 .. .. .. ..

United Kingdom

Gross domestic product Industrial production Consumer price index

Q2-2014 0.9 Q2-2017 0.3 3.2 1.7 Q2-2014 0.3 -0.3 2.1 Q2-2017 -0.4 Q2-2014 0.7 2.7 1.7 Q2-2017 1.1

Current balance Unemployment rate Interest rate

Q1-2014 -30.6 -27.3 Q1-2017 -20.9 -36.8 Q2-2014 6.3 7.7 Q1-2017 4.5 5.0 Q2-2014 0.5 0.5 Q2-2017 0.3 0.6

United States

Gross domestic product Industrial production Consumer price index

Q2-2014 1.1 Q2-2017 0.8 2.6 2.2 Q2-2014 1.3 4.2 Q2-2017 1.4 2.1 Q2-2014 1.2 2.1 Q2-2017 0.5 1.9

Current balance Unemployment rate Interest rate

Q2-2014 -98.5 -106.1 Q2-2017 -123.1 -108.2 Q2-2014 6.2 7.5 Q2-2017 4.4 4.9 Q4-2013 0.0 Q2-2017 1.1 0.2 0.6

European Union

Gross domestic product Industrial production Consumer price index

Q2-2014 0.2 2.4 1.2 Q2-2017 0.7 Q2-2014 0.0 2.8 1.3 Q2-2017 1.0 Q2-2014 .. 0.7 Q1-2017 .. 1.8

Current balance Unemployment rate Interest rate

.. .. Q1-2017 62.8 63.2 Q2-2014 10.3 10.9 Q2-2017 7.7 8.7 .. .. .. ..

Euro area

Gross domestic product Industrial production Consumer price index

Q2-2014 0.0 0.7 Q2-2017 0.6 2.3 Q2-2014 -0.1 0.8 Q2-2017 1.2 2.6 Q2-2014 .. 1.8 .. 0.6 Q1-2017

Current balance Unemployment rate Interest rate

Q4-2012 51.7 105.8 17.2 Q1-2017 96.8 Q2-2014 11.6 12.0 Q2-2017 9.2 10.1 Q2-2014 0.3 0.2 Q2-2017 -0.3 -0.3

1 Brazil

Gross domestic product Industrial production Consumer price index

Q2-2017 0.2 -0.8 Q2-2014 -0.6 0.2 Q2-2014 -1.9 -4.2 Q2-2017 1.0 1.0 Q2-2014 2.0 6.4 Q2-2017 0.5 3.6

Current balance Unemployment rate Interest rate

Q2-2014 -19.6 -19.9 Q2-2017 1.5 -4.2 .. .. .. .. .. .. .. ..

1 China

Gross domestic product Industrial production Consumer price index

.. .. .. .. Q2-2014 -0.4 2.2 Q2-2017 -0.1 1.4

Interest rate

Q1-2017 30.7 Q2-2013 54.2 58.1 58.8 .. .. .. .. Q2-2014 4.6 .. .. 4.7

1 India

Gross domestic product Industrial production Consumer price index

Q2-2017 1.4 5.9 Q2-2014 1.2 Q2-2014 2.0 4.3 Q1-2017 2.0 1.9 Q2-2017 1.5 Q2-2014 2.5 6.9 1.5

Current balance Unemployment rate Interest rate

Q1-2017 -7.2 .. .. -2.7 .. .. .. .. Q2-2017 6.2 .. .. 6.9

1Indonesia

Gross domestic product Industrial production Consumer price index

Q2-2017 1.2 4.9 Q2-2014 1.2 5.1 .. .. Q2-2014 0.4 4.3 Q2-2017 0.6 7.1

Interest rate

Russian Federation

Gross domestic product Industrial production Consumer price index

Q1-2014 -0.3 0.7 Q2-2017 1.1 2.3 Q2-2017 2.1 Q2-2014 0.9 3.4 1.6 Q2-2014 2.6 Q2-2017 0.9 4.2 7.6

Q2-2017 -3.8 Q4-2013 -3.5 -7.3 -4.1 .. .. Q2-2017 6.6 .. .. 7.2 Q2-2014 8.5 5.7 Q1-2017 13.3 4.1

1 South Africa

Gross domestic product Industrial production Consumer price index

Q2-2017 0.6 0.5 Q2-2014 0.2 1.1 .. .. Q2-2014 2.0 6.6 Q2-2017 1.1 5.2

Non-members

balance Current Unemployment rate

balance Current Unemployment rate Current balance Unemployment rate Interest rate

balance Current Unemployment rate Interest rate

Gross domestic product: Volume series; seasonally adjusted. Leading indicators: A composite indicator based on other indicators of economic activity, which signals cyclical movements in industrial production from six to nine months in advance. Consumer price index: Measures changes in average retail prices of a fixed basket of goods and services. Current balance: Billion US$; seasonally adjusted. Unemployment rate: % of civilian labour force, standardised unemployment rate; national definitions for Iceland, Mexico and Turkey; seasonally adjusted apart from Turkey. Interest rate: Three months.

Current balance data are reported according to the BPM6 classification.

Q2-2012 22.7 .. .. 23.4 Q2-2017 9.1 12.2 .. .. Q2-2014 8.8 7.4 Q1-2017 -1.9 -3.5

.. .. .. .. Q2-2017 7.4 .. .. 7.2 ..=not available, 1 Key Partners. Source: Main Economic Indicators.

OECD Observer No 310 Q2 2017

39


DATABANK

Africa’s school progress Higher investment in human development in Africa is paying off. One reflection of this is the share of both girls and boys completing their secondary education, which has increased between 2005 and 2014. Take East Africa, which comprises among others Ethiopia, Kenya and Uganda. Here, the share of young people graduating from secondary school increased by 24 percentage points for boys and 27 percentage points for girls, almost closing the gender gap. The highest increase in the case of boys was in Central Africa, including countries such as Cameroon, Congo and Gambia, where the share of those graduating rose by 28 percentage points. But there are lagging regions: the lowest increase was in West Africa–Burkina Faso, Ghana and Nigeria, for instance–where both the shares of girls and boys graduating rose by only around 10 percentage points. Sub-Saharan Africa’s share of total expenditure spent on education is only surpassed by that of East Asian countries

Gender composition of secondary school completion by region of Africa, 2005 and 2014 (% age group)

2

3

4

70 50 35

40

0

16

21

20 23

18

27 28

© Myles Mellor/OECD Observer

For crossword solutions do the OECD crossword online. See www.oecdobserver.org/crossword

40

19

25

47

58

46

54 43

35

13

2005

Female

such as Japan and South Korea, and Latin America and the Caribbean. To build on this progress, policy measures are needed to reduce adolescent pregnancy and increase the participation of girls and women in both secondary school education and in the workplace.

22

24

45

North Africa 69

63

33

Source: African Economic Outlook 2017: Entrepreneurship and Industrialisation

13

17

46 31

Male

14 15

50

Southern Africa

10

10 12

44

17

20

9

11

39

30

5

8

West Africa

59

57

6 7

East Africa

60

OECD Observer Crossword 1

Central Africa

% relevant age group 80

26

Male

2014

Female

http://dx.doi.org/10.1787/aeo-2017-en

AfDB/OECD/UNDP (2017), African Economic Outlook 2017: Entrepreneurship and Industrialisation, OECD Publishing, Paris. http://dx.doi.org/10.1787/aeo-2017-en

No 2, 2017 Across 1 Middle name of the president who would have been 100 this year 7 Economic ____ is related to supply and demand 9 Key economic stat 10 European sea, for short 11 Special-interest org., for short 12 Subject that’s often tied to tax revenues 15 Pilotless plane, being tested for use in package deliveries 18 Price 20 Type of chart in excel 21 Morning time 23 Type of car now being tested to improve road safety, 2 words 27 __, senor! 28 Gold, corn, coffee, or steel for example

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OECD Observer No 310 Q2 2017  
OECD Observer No 310 Q2 2017