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Shaking up globalisation Gender: Making the grade Mexico’s telecoms Post-crisis finance: Still liberal? Abolish modern slavery OECD Observer Crossword No 311 Q3 2017


©Karim Trabelsi/AFP. ©Tripelon-Jarry/ONLY FRANCE/AFP.

France’s poor neighbourhoods A brighter future?

CONTENTS No 311 Q3 2017



2 Post-truth human; Level for whom?; Simplex and complex; Twitterings

22 A portrait of family migration Jonathan Chaloff and Friedrich Poeschel 23 Migration: What we think we want Kate Lancaster 25 Rain or shine, Asia needs a better umbrella of social protection Alastair Wood and Willem Adema

EDITORIAL 3 Globalisation: Don’t patch it up, shake it up Angel Gurría, Secretary-General of the OECD



4 Moves to fairer tax system continue; Entrepreneurial activity picks up; Early education boosts social mobility; Soundbites; Economy; Country roundup; Bertrand Piccard; Other stories; Plus ça change

28 State-owned enterprises, international investment and national security: The way forward Frédéric Wehrlé and Hans Christiansen 30 Mexico telecom reform: Into the “last mile” Verena Weber

BLOGS 6 BlogServer



32 OECD MCM – Making globalisation work for all; OECD Forum – Bridging divides; A new network for open economies and inclusive societies; Solar present 35 Recent speeches by Angel Gurría; List of OECD Ambassadors 36 Calendar; Frankie

9 More effort needed to make the grade on gender equality Valerie Frey

ECONOMY 11 Financial regulation after the crisis: still liberal, but… Oliver Denk and Gabriel Gomes 13 Improving life in France’s lower-income neighbourhoods Nicola Brandt


Rain or shine, Asia needs a better umbrella of social protection, page 25

37 Reviews: Don’t cry for me; Better prospects for indigenous students 38 New publications 39 Focus on education 40 Review: A skill in need

GOVERNANCE 16 Abolish modern slavery Gabriela Ramos 18 Beer, conflict and compensation: Heineken-Congo agreement Roel Nieuwenkamp 20 Taxing wages: How taxes affect the disposable income of workers and wage costs of employers in OECD countries Dominique Paturot

DATABANK 41 Cutting back on CO2 emissions; Gender engineering 42 Main economic indicators 44 Don’t give up; 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 LAYOUT: Design Factory, Ireland ©OECD September 2017 ILLUSTRATIONS: David Rooney, Sylvie Serprix, ISSN 0029-7054 André Faber Tel.: +33 (0) 1 45 24 9112 WRITERS: Kate Lancaster, Clara Young Fax: +33 (0) 1 45 24 82 10 ADVERTISING MANAGER: Aleksandra Sawicka sales@oecd.org Founded in 1962. The magazine of the Organisation PRINTERS: SIEP, France; Chain of Custody certified. for Economic Co-operation and Development Applications for permission to reproduce or translate all or parts OECD Publications 2 rue André Pascal 75775 Paris cedex 16, France observer@oecd.org www.oecd.org

Modern slavery, page 16

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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. 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. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

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 Post-truth human I must admit that I ended this IdeaFactory [at the OECD Forum] more worried than I was before its beginning! When dealing with “post truth” issues, most of the attention tends to focus on the disruption that affected/ transformed the media landscape. But yesterday the conversation in the IdeaFactory moved to a much deeper level: the 100 people who worked together for three hours focused on the deep changes in how we live, connect, think, learn, seek connections, subscribe to new ideologies, develop the capacity to work with differences. Yes: digital disruptions matter. But we might need to explore how they are transforming the individual and the collective identities. I found inspiration in the comment about Primo Levi’s reflection: “It is not at all an idle matter trying to define what a human being is.” What if “being human” is becoming a different thing?

Maurizio Travaglini, commenting on “Surviving Post-Truth”, on OECD Forum Network, June 2017: www.oecd-forum. org/channels/747-trust/posts/17654-surviving-post-truth ___

Level for whom? Who would argue with the beauty of openness in the world marketplace, except of course those who fear they’ll lose from it (Globalisation: Time to level the playing field, in OECD Observer No 310, Q2 2017)? One country’s fair competition may be unfair to another. In football, a weak team may beat a strong team now and again, but the stronger team will win nine times out of ten on a level playing field. But in globalisation, tilting the playing field in favour of some weaker countries helps make sure no one loses.

Melvin Jack, Owerri, Nigeria –– Well done all for contributing to this vital debate, a debate which will be won in favour of equality when we make the governments we elect accountable, declaring all sources of revenue, and all applications of same, and for the first time being accountable for the


difference, ie the cost of government.

Anthony Edwin Botsman, commenting on “Towards an empowering state” on www.oecdinsights.org, http://oe.cd/1WL ___

Simplex– Tax avoidance is legal, it just means paying the least amount of taxes required by law. This is arguably a corporate duty to the owners/shareholders, as is the payment of all tax obligations required by law. Tax laws are complicated, even for small companies operating in just one country, and much more so for large multinationals operating globally. Complicated or vague tax codes create possibilities for tax avoidance. The solution to tax avoidance is to simplify the tax codes to enforce reasonable tax rates.

Charles Kovacs, commenting on “Tax crimes–The fight goes digital”, on OECD Insights.org http://oe.cd/23U

–and complex What people applying complex systems theory to social policy need to realise is that complex adaptive systems can be completely maladaptive in human terms. They do not necessarily produce human friendly organisations, or ecologies. Deserts are adaptive, and fairly stable. Corporations and economic systems can be both resilient and destructive, and hard to change. Improving information flow, will not necessarily result in more accurate information, just more information flow. Indeed inaccurate information may increase, as it appeals to people’s existing knowledge. Innovation can destroy existing harmonious systems, and lead to existing systems becoming even more exaggerated in their tendencies, and so on. Saying something is complex does not mean we will end up with harmony and balance.

Jon Marshall, commenting on “The Future of Economics: From Complexity to Commons”, on www.oecdinsights.org, http://oe.cd/2bc

Twitterings Jeff Junke @JeffJunke .@OECD to public sector: Empower employees to take risks, collaborate, and learn. That’s how innovation happens. https:// www.oecd.org/governance/observatorypublic-sector-innovation/blog/page/ howdopublicsectororganisationsinnovate.htm Lauren Burnhill @LaurenOPV OECD: using econometrics to track impact of #climate mitigation policies on innovative finance in renewable power http://ow.ly/ BuoF30eLTzT Richard Bistrong @RichardBistrong Drago Kos @OECD when it comes to #anticorruption “we don’t give up.” At #acstandards2017 via @ETHICIntelligen The RCP @RCPLondon We are in Paris today for discussions with @OECD_Social on how to address public health & health system challenges https:// www.rcplondon.ac.uk/news/rcp-visit-oecdparis … International Tax Review @IntlTaxReview Good to see Cambodia, Greenland, Haiti and Madagascar join the fight against tax evasion via the #OECD Global Forum http://bit. ly/2vHS2Ew Martine Schophuizen @MJFSchophuizen Really like it if ppl you dont know, from organisations that seem quite distant, take time & effort to react & offer to discuss ideas @OECD Patrick O’Donnell @patodonn I would start with Social Justice Ireland for good analysis. OECD has a huge amount of data as does EU, Eurostat, CSO etc. TP News @tpnewz OECD releases detailed Handbook to assist countries in implementing #CbC reporting requirement in their domestic law http:// www.oecd.org/tax/beps/country-bycountry-reporting-handbook-on-effectiveimplementation.htm …

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.


Globalisation: Don’t patch it up, shake it up Unless governments undertake fundamental changes, all our efforts will merely water the seeds of further crisis Angel Gurría Secretary-General of the OECD

In Giuseppe Tomasi di Lampedusa’s novel Il Gattopardo (The

Leopard), character Tancredi Falconeri famously says: “If we want things to stay as they are, things will have to change.” The Sicilian aristocracy he represents has only one way to preserve its privileges against Garibaldi’s “Risorgimento”: change things on the surface so that in practice nothing changes at all. In recent months, many voices–including the OECD’s–have expressed a resolve to “fix” globalisation amid a worldwide backlash. Understandably, such calls are being met with mistrust. The suspicion is that “the global elite” are tempted by Tancredi’s tack: make superficial changes to avoid upheaval of the order that works so well for some. We can’t blame those who are wary. For institutions that have traditionally championed the open markets and liberalisation underpinning globalisation, it might be tempting to “fix” things like you repair an old, broken engine–tweak language, jigger policy, just enough to get past today’s protectionism, isolationism and populism and return to business as usual. The truth is, however, that this won’t work. We’re beyond quick fixes to address the discontent of citizens. There is no returning to the past. Too many things are not working for too many people. The only way forward is not to patch up globalisation, but to shake it up. Unless governments undertake fundamental changes– both individually and collectively–in the way our economies, societies, and political systems work, all our efforts will merely water the seeds of further crisis. We will see reversed the peace and progress that openness and multilateral cooperation have brought over decades. The tackling of core concerns is long overdue: rising inequalities of income, wealth and opportunities; the growing disconnect between finance and the real economy; mounting divergence in productivity levels between workers, firms and regions; winner-take-most dynamics in many markets; limited progressivity of our tax systems; corruption and capture of politics and institutions by vested interests; lack of transparency and participation by ordinary citizens in

decision-making; the soundness of the education and of the values we transmit to future generations. At the OECD, we have been laying foundations for a different type of growth: inclusive, sustainable, and incorporating equality from the start. We have attempted to transcend traditional thinking and promote new approaches to economic challenges that focus on people’s well-being, beyond GDP and aggregates. But it will not be enough. There must be a new intergenerational social contract to restore the confidence of citizens in their institutions. To get that, states must set policies that empower every one of their citizens to thrive. While the answers begin at the domestic level, no solution will ultimately come in isolation. The same global dynamics that stir a sense of vulnerability and uncertainty can offer answers to our challenges. Take for instance ageing in OECD economies, where migration can be an ally. Or transnational trade and investment, which can mobilise resources towards the Sustainable Development Goals. Look at the unprecedented progress to combat tax havens or fight climate change when the international community comes together. Even today, scientific collaboration across borders is harnessing a digital and technological revolution that many fear but which can also positively transform production, consumption, the world of work and the overall functioning of our societies. The question of “globalisation or no globalisation” is long gone. The question today is what type of globalisation there will be. It doesn’t have to be the one we’ve had. We must return people’s well-being to the centre of our focus, and ensure that the benefits derived from further interconnectedness of our economies, societies, institutions and cultures are more equally shared. To do so, our politics and policies must catch up with our increasing integration. Political globalisation cannot keep trailing economic globalisation. We need better rules of the game and governance mechanisms that improve our coordinated action beyond borders. We need international standards that level the playing field and advance best policy practices. And we need to ensure more transparency, democracy, and civic engagement from the local level to the global. In June, we looked back on the lessons of the historic speech that launched the Marshall Plan 70 years earlier, a speech which ultimately led to the creation of the OECD itself. “Any assistance that this government may render in the future should provide a cure rather than a mere palliative,” said US Secretary of State George C Marshall on 5 June 1947. We now confront a similar foundational moment: one that demands decisive cures, rather than palliatives. These times require the same boldness, innovation, and above all, the long-awaited action to recreate, with our citizens, a fair and prosperous future for all. @A_Gurria www.oecdobserver.org/angelgurria


Adapted from version which originally appeared 6 June 2017 at www.oecd.org/newsroom/ globalisation-do-not-patch-it-up-shake-it-up.htm

OECD Observer No 311 Q3 2017


News brief Moves to fairer tax system continue Countries are making major progress towards the goal of creating a fairer and more effective international tax system, including increasing efforts to close down loopholes, improve transparency and ensure that multinational enterprises pay tax where they carry out their activities. This is the assessment of a key report presented by OECD Secretary-General Angel Gurría to G20 leaders in July 2017. It describes the continuing fight against tax avoidance and tax evasion as one of the major success stories of the G20. The report updates progress in key areas of OECD-G20

tax work, including movement towards automatic exchange of information between tax authorities and implementation of key measures to address tax avoidance by multinationals. “In the midst of the backlash against globalisation, we need to deliver on an agenda of inclusive growth. The work of the G20 and the OECD to repair and improve the international tax system so everyone pays their fair share remains one of the most important responses to these challenges,” Mr Gurría said. See www.oecd.org/tax/

Soundbites Fair trade– When we sprain an ankle when walking on the road, we should not blame the road and stop walking. In international economic relations, one should not impose unilateral rules. Only in this way can we achieve free and fair trade. Li Keqiang, Premier of the State Council of the People’s Republic of China, at the World Economic Forum, 12 July 2017

Anybody who believes the problems of the world can be solved with isolationism and protectionism is making a big mistake. German Chancellor Angela Merkel at the G20 summit in Hamburg, 22 June 2017

–In a digital world A critical aspect of a functioning digital society is trust. Prime Minister Jüri Ratas of Estonia, at the European Parliament in Strasbourg, 5 July 2017

©Jamie McCarthy/Getty Images/AFP

Entrepreneurial activity picks up

New business cycle?

Total business creation has risen, according to recent data. The latest Entrepreneurship at a Glance report points out that part-time self-employment has increased sharply in recent years, which

Economy Real GDP growth in the OECD area accelerated to 0.7% in the second quarter of 2017, compared with 0.5% in the previous quarter, according to provisional estimates. Growth accelerated strongly in Japan to 1%, compared with 0.4% in the previous quarter, and in the US to 0.6%, compared with 0.3%. In the UK there was a slight growth to 0.3%, compared with 0.2%, while in Germany growth slowed marginally to 0.6% compared with 0.7%. Year-on-year GDP growth for the OECD area rose to 2.4% in the second quarter,


is partially associated with the rise of digital start-ups and online platforms in what has become collectively known as the “gig economy”. But it adds that although many gig workers may be classed as individual entrepreneurs, many also provide their services under similar contractual arrangements to conventional employees. The report also includes findings from the latest “Future of Business Survey”, a joint OECD-World Bank-Facebook initiative which shows that firms trading internationally are more confident in the future outlook of their businesses, and more likely to have positive prospects of job creation. See www.oecd.org/industry/ compared with 2.1% in the previous quarter. The OECD’s composite leading indicators (CLI) continue to show 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. Growth may be stabilising in Germany. In the UK, the leading indicators point to signs of easing. OECD-area inflation picked up to 2% in

A borderless digital world represents opportunities, but also risks. Prime Minister Narendra Modi of India, speaking at the G20 summit in Hamburg, 29 June 2017

Early education boosts social mobility Countries should step up their efforts to provide affordable and high-quality early childhood education and care (ECEC) to improve social mobility and give all children the chance to fulfil their potential, according to OECD Starting Strong 2017 report. The report finds that most governments have increased their investments in day-care centres and schools in recent years. In almost all OECD countries, 15-year-olds who had access to such early education and care outperformed students who had not, OECD data shows. See www.oecd.org/education/ July 2017, compared with 1.9% in June 2017. Excluding food and energy, annual inflation was stable at 1.8% for the third consecutive month. The OECD unemployment rate for the population as a whole was stable at 5.8% in July 2017, unchanged for the second consecutive month. Across the OECD area, 36.2 million people were unemployed, 3.6 million more than in April 2008. The unemployment rate was stable in the euro area, at 9.1% in July 2017. Outside Europe, the unemployment rate increased by 0.1


Country roundup

Slovenia has built up a sound development programme over the last 12 years, and sends two-thirds of its steadily rising foreign aid budget to countries in the Western Balkans. The first DAC Peer Review of Slovenia recommends narrowing its focus to high-value projects to get the most impact from its aid contributions. www.oecd.org/slovenia/ Mexico’s 2013 telecom reform has brought tangible benefits, spurring competition that has increased access and brought down mobile Internet costs dramatically. It should continue its ICT overhaul. www.oecd.org/mexico/ South Africa’s much strengthened economy needs further structural policy reforms for macroeconomic stability, better business environment and deeper regional integration. www.oecd.org/southafrica/ Iceland is the OECD’s smallest economy and, currently, the fastest growing with booming tourism, prudent economic policies, strong trade unions, and high gender balance. But careful fiscal and monetary policy are needed to avoid boom and bust, says the latest OECD Economic Survey of Iceland. www.oecd.org/iceland/

percentage point in the US to 4.4% and decreased by 0.2 percentage point in Korea, to 3.6%. It decreased by 0.1 percentage point in Canada to 6.2%, and was stable in Japan at 2.8%. International merchandise trade among G20 countries in the second quarter of 2017 increased for the fifth consecutive quarter, though at a slower pace than over the previous three months. Export growth slowed to 1.4% in the second quarter of 2017, compared with 3.4% in the first

Solar Impulse pilot and founder Bertrand Piccard at the OECD on 6 September, where he met OECD Secretary-General Angel Gurría, and called on policymakers to be “part of the future now” by committing to developing solar-powered flight. See page 34.

©Rights reserved/OECD/IEA

The Austrian economy is strengthening, supported by recent tax reform and a pickup in international trade but policymakers should enact deeper structural reforms that will improve both fiscal sustainability and social cohesion, says the latest OECD Economic Survey of Austria. www.oecd.org/austria/

Argentina’s macroeconomic and structural reforms is yielding progress in the country’s growth agenda, according to the first OECD Multi-dimensional Economic Survey of Argentina. www.oecd.org/argentina/ Economic growth of around 7.5% makes India the fastest-growing G20 economy. Investment is still held back by relatively high corporate income tax rates and quality job creation has been low due to complex labour laws, says the latest OECD Economic Survey of India. www.oecd.org/India/ The Netherlands is making good progress in integrating its aid, trade and investment agendas. It is also an innovator in using aid flows to mobilise significant resources from the private sector, according to a new OECD report. www.oecd.org/netherlands/ Kazakhstan has enjoyed improved living standards, reduced poverty and income inequalities, and a boost in employment since the 2000s. It should now focus on improving employment opportunities for vulnerable people. www.oecd.org/kazakhstan/ quarter of 2017 while imports increased by 1.7%, down from last quarter’s 4.2% growth.

Consumer prices, selected areas

July 2017, % change on the same month of the previous year

% OECD total 4.0

3.7 All items

3.0 2.0 1.0 0.0




Food Energy All items non-food, non-energy

Other stories The number of humanitarian refugees arriving in OECD countries peaked in 2016 and governments continue to grapple with a humanitarian crisis. They should focus on helping refugees who are likely to stay in the host country settle and integrate in the labour market and society, according to the International Migration Outlook 2017. See www.oecd.org/migration/ Global food commodity prices are projected to remain low over the next decade compared to previous peaks, as demand growth in a number of emerging economies is expected to slow and biofuels impact on markets lessens, the OECD-FAO Agricultural Outlook 2017-2026 says. See www.oecd.org/agriculture/ Many countries have become more efficient in using natural resources and the services provided by the environment, but progress is too slow. If emissions embodied in international trade are included, advances in environmental productivity are more modest, the Green Growth Indicators 2017 report warns. See www.oecd.org/greengrowth

Plus ça change… There is a growing concern that excessive emphasis on relevance and responsiveness to short-term economic needs will distract schools from their essential task of teaching the basic disciplines and communication skills.. “Beyond compulsory schooling: Problems of 16-19 year olds”, by Dorotea Furth, in Issue No 1, January 1985

OECD Observer No 311 Q3 2017



BlogServer the qualitative research that goes into our work. While the sources behind the OECD’s statistical data are critical, they become alive thanks to the rich opinions and experiences of real people. From OECD Insights. More here: http://oe.cd/21G

Germany’s successful G20 presidency Noe van Hulst

How should we assess the German presidency of the G20? Despite a complicated political situation, Chancellor Angela Merkel’s team worked with their characteristic determination or Ausdauer to achieve concrete actions and advance their three aims of building resilience, improving sustainability and assuming responsibility. The Leaders’ Declaration “Shaping an Interconnected World” rightly sends the message that “we can achieve more together than by acting alone”. From OECD Insights. More here: http://oe.cd/218

We need an empowering narrative Gabriela Ramos

When the subprime crisis started, most economists, and the policymakers they advised, thought it would only affect people who had bought homes they couldn’t afford. They didn’t expect that national problem to trigger a cascade of events that almost caused the collapse of the world financial system. Nor did they foresee how the financial crisis would lead to the Great Recession. From OECD Insights. More here: http://oe.cd/24u

Excessive informal sector: A drag on productivity Aleksander Surdej

The informal economy remains a problem when we discuss the prospects of economic development. It is perceived as a hindrance to economic progress because the informal sector does not pay taxes, does not include its employees in social insurance schemes and does little to offer labour law protections. From OECD “Development matters” platform. More here: http://oe.cd/230

People on the move: Growing mobility, increasing diversity Marc Fuster

International human mobility is on the rise. Increasing numbers of people are regularly coming and going across borders, and societies are growing increasingly diverse as a result. This raises some important questions. How can we ensure public services are accessible to a more diverse population? How can we ensure that respectful communication across languages and cultures is supported in society? From OECD Education & Skills Today. More here: http://oe.cd/24y

Beyond the numbers: The qualitative research behind our reports

Statistical Insights: Purchasing Power Parities – not only about Big Macs Pierre-Alain Pionnier, Francette Koechlin and Sophie Bournot

All travellers know that the prices of goods and services vary between countries. In order to capture these price differences, Eurostat and the OECD collect data on the prices of identical goods and services in their member countries, and compile “Purchasing Power Parities” (PPPs) – conversion rates that neutralise price differences between countries. From OECD Ecoscope. More here: http://oe.cd/24v

What happens with your skills when you leave school? Dirk Van Damme

Moving from the world of school to the world of work is one of the most dramatic changes in the lives of young people. And for many youngsters this transition does not go smoothly. Spells of frictional or longer-term unemployment, job insecurity because of low-paid or temporary contracts, and the uncertainties associated with starting to live autonomously produce a challenging phase in young people’s lives. From OECD Education & Skills Today. More here: http://oe.cd/24z

Want to catch a counterfeiter? Check your filter Bill Below

The world may be getting smaller, but for counterfeiters, there are still plenty of places to hide, suggests a new joint study from the OECD/EUIPO, Mapping the Real Trade Routes of Fake Goods. Globalisation, free trade zones, an interconnected planet and vastly uneven governance arrangements are boons for counterfeiters. From OECD Insights. More here: http://oe.cd/21p

Tamara Krawchenko

The OECD is known for data and numbers. Indeed, providing high quality comparative indicators for better policymaking is our bread and butter. But, what is less known is the extent to which we are a “listening” organisation, and how this improves


These extracts from blogs appeared in Q3 2017 and courtesy of OECD Insights, OECD Education & Skills Today, OECD Ecoscope, Wikigender, Wikiprogress and other content and social media platforms managed by the OECD.

POLITICO Pro provides the most distinct and authoritative policy news coverage of Europe and beyond and because of that, Pros depend on us to do their jobs.

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More effort needed to make the grade on gender equality

©David Rooney

Valerie Frey, OECD Directorate for Employment, Labour and Social Affairs

OECD countries and key emerging economies have made headway in closing gender gaps, but not nearly enough. Gender equality is still a long way off. This is the latest assessment of gender parity in education, employment, entrepreneurship, and public life in The Pursuit of Gender Equality: An Uphill Battle. The report, which follows the 2013 OECD Recommendation on Gender Equality in Education, Employment and Entrepreneurship and the 2015 OECD Recommendation on Gender Equality in Public Life, identifies important gender gaps and offers policy recommendations on how to resolve them. While policies are changing for the better, much more improvement is needed.

Gender gaps still exist in all areas of social and economic life and in all countries. True, young women in OECD countries now frequently obtain more

The median female worker earns almost 15% less than her male counterpart in the OECD area years of schooling than young men, but girls continue to underperform and are less likely to study in more lucrative science, technology, engineering, and mathematics (STEM) fields. Women’s labour force participation rates have moved closer to men’s over the past few decades, but women are still less likely than men to take up paid work in every

OECD country. When women do work, they are more likely to work part-time, are less likely to be in management, and will likely earn less than men. The median female worker earns almost 15% less than her male counterpart, on average, in the OECD area. Women are also underrepresented in political office, holding, on average, fewer than one-third of seats in lower houses of national legislatures in OECD countries. But there is some cause for optimism. In fact, many countries are starting to make the grade in three policy areas: promoting fathers’ leave-taking, targeting the gender wage gap, and combatting violence against women. Take paternity leave and fathers’ parental leave first. Fathers’

OECD Observer No 311 Q3 2017


unpaid caregiving is crucial for establishing an equal division of unpaid work at home and for enabling mothers to enter and advance in the labour force. Many countries understand this, and now offer paid paternity leave for the time around childbirth. Since 2013, the Czech Republic, Ireland, Italy, and Turkey have introduced statutory paid paternity leave. Other countries, including Germany, Japan, Korea, Norway, and Sweden, are reserving a leave period that only fathers can use.

Switzerland, and the UK. Other countries are trying new strategies, like online pay gap calculators and certifications for companies showing good practice. The recent creation of the Equal Pay International Coalition (EPIC), convened by the International Labour Organisation (ILO), the OECD, and UN Women, should also help nudge countries forward on pay equality.

Beyond these important pay and care issues, preventing and ending violence against women is widely reported by What about the pay gap? Women in the governments as the most urgent gender labour force still earn less than their male equality issue among OECD countries counterparts in every OECD country. and adherents to the OECD Gender Since 2013, about two-thirds of OECD Recommendations (see graph). Anticountries have introduced pay equity harassment Number of countries listingnew this as one of the most urgent gender equality issues laws have been introduced 25 policies. These include pay transparency or reinforced in Austria, Costa Rica, and20the requirement that companies not France, Iceland, Israel, Korea, Mexico, only carry out analyses of gender wage Portugal and Slovenia. Awareness-raising gaps15but also share that information with campaigns about sexual harassment and employees, auditors, or the public. Since its different manifestations have been 2013, 10 pay transparency tools have been launched in Belgium, Denmark, Estonia, implemented or proposed in Australia, Greece, Israel, Korea, Lithuania, the 5 Germany, Japan, Lithuania, Sweden, Netherlands and Portugal. And Australia,

Mexico, and Sweden have gone further in taking national, whole-of-government approaches to sanctioning and preventing violence against women. Gender equality remains a distant goal. Clearly, governments must act more urgently in reforming and strengthening their gender equality policies. Without a renewed commitment, as our report details, the struggle for gender equality will remain an uphill battle indeed. Share article at http://oe.cd/24r References and links OECD (2017), The Pursuit of Gender Equality: An Uphill Battle, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264281318-en. OECD (2016), 2015 OECD Recommendation of the Council on Gender Equality in Public Life, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264252820-en. OECD (2017), 2013 OECD Recommendation of the Council on Gender Equality in Education, Employment and Entrepreneurship, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264279391-en.

0 Lower life expectancy

Women being more likely to be

Women receiving lower pensions

Facing prejudice Low number of Other Priority issues in due gender equality to stereotypes women in high

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The unequal sharing of household

Women being paid less than

Violence against women

amongofmen than men than men boys in education listing the following about levels of politics between the Number adherentpoorer countries to the 2013 Gender Recommendation asmen oneand of the three most urgenttasks issues needing tomen beforaddressed in their country women

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men and women

same work

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Number of countries listing this as one of the most urgent gender equality issues 25





0 Lower life expectancy among men

Women being more likely to be poorer than men

Women receiving lower pensions than men

Higher drop-out rates among boys in education


Note: 35 countries responded. Each country could select up to three priority issues. Source: OECD Employment, Labour and Social Affairs Committee (ELSAC) questionnaire on progress in implementing the 2013 Gender Recommendation.


Violence against women


Financial regulation after the crisis: Still liberal, but… Oliver Denk, OECD Directorate for Employment, Labour and Social Affairs, and Gabriel Gomes, OECD Economics Department

of the 30 years leading up to the crisis was one of liberalisation in domestic and international capital markets, accompanied by efforts to strengthen frameworks for bank supervision. But the various dimensions of financial policy are rarely assessed together, even though they all matter for financial markets, corporations and households. This is precisely what we have set out to do, as we explain in our new OECD working paper. In fact, we have assembled a novel dataset on financial policies from 2006 to 2015 by building on an index from the International Monetary Fund. The index by the IMF is the most widely used measure of financial reforms in cross-

It remains to be seen whether the renewed state ownership of banks is part of a temporary post-crisis phenomenon or something longer term

©André Faber

country empirical research, having been used in some 200 publications. The trouble is the IMF dataset was only available up to 2005–so we have effectively extended it by another 10 years. The index has its strength in covering many different types of financial policies, though it is not overly specific on most dimensions.

In a report issued in June 2017, the Trump administration laid out its proposal for overhauling some of the regulations President Obama had enacted with a view to avoiding a financial market meltdown of the kind we saw in 2008. But what do we actually know about how financial regulation has evolved around the world since the global financial crisis? Bank supervision has certainly been an active area of reform, not only in the US, but in many other countries. The Basel III accord, the new international regulatory

framework for banks that is currently being rolled out, is one well-known testimony. Some countries took less well-publicised action to tighten up supervision, not least when oversight existed institutionally but failed to function properly in practice. Financial policy, however, goes much beyond bank supervision. It also includes aspects such as credit controls, ease of entry into the banking sector, capital account controls and government ownership of banks. The general picture

What do we find? In some areas, financial policy has become less liberalised since the global crisis. Bank privatisation has seen the strongest break in trend. Governments reduced their ownership in banks over the one to two decades before the crisis. But since then, recapitalisations in a number of countries have increased government ownership and lowered financial liberalisation in this respect, as our charts show. In other areas, financial liberalisation has more or less stayed the same. Take restrictions to international capital movements. By standard measures, these had largely gone in most advanced economies before the crisis. Today, the developed world as a whole is as financially open as 10 years ago. However,

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some countries such as Chile, Iceland and Slovenia have tightened their capital account restrictions, even if others like Australia, Korea and Turkey have lifted theirs. Bank supervision efforts continued to strengthen through the 2000s under the Basel accords. In many countries, this has not only changed how capital requirements are set, but also reinforced the way in which supervisory authorities assess prudential reports and statistical returns from banks through on-site and off-site examinations. On the whole, our data suggest that the financial crisis has not undone the financial liberalisation that was achieved in the preceding three decades or so. However, it remains to be seen whether the renewed state ownership of banks is part of a temporary post-crisis phenomenon or something long term. Governments do tend to sell off their stakes in banks when they find the opportunity, and a few countries–Austria is a good example–have now unwound their increased ownership in banks, in some cases thanks to liquidation. Developments have been quite different for emerging market economies, in particular the BRIICS countries*, where financial liberalisation has continued at the same quite rapid pace as before the global crisis. One reason is that entry barriers into the banking sector have been lowered in some cases; other factors include stronger bank supervision and the deregulation of stock markets. Finance nevertheless remains substantially less liberalised in the BRIICS than the OECD (see second chart opposite.). These are just some of the revelations of our new data, which will hopefully allow the many researchers who have been relying on the IMF dataset for quantifying financial policies to delve into an additional 10 years of observations. This is vital for tracking how policy has affected financial systems and the real economy since the crisis.

Government ownership of banks has increased since the crisis Index of bank privatisation: average of 43 OECD and G20 countries 1



New index data 0.25

0 95 19

90 19

05 20

00 20

Source: Denk, O. and G. Gomes (2017), “Financial re-regulation since the global crisis?: An index-based assessment”


Financial liberalisation in 2015 Aggregate index of financial liberalisation

0.75 France


US 0.5




Switzerland 0.25


New index data





0.91 0.77

Russia Japan 90 19 Iceland

95 19

10 0.76 20 0.74

05 20

00 20 0.40




Brazil China

15 20




Source: Denk, O. and G. Gomes (2017), “Financial re-regulation since the global crisis?: An index-based assessment”

If you are such a researcher and would like to use the dataset, please contact us at Oliver.DENK@oecd.org and Gabriel.GOMES@oecd.org. France * BRIICS countries include Brazil, Russia, India, Indonesia, US China, South Africa Greece

References and links Denk, O. and G. Gomes (2017), “Financial Re-Regulation since the Global Crisis? An1Index-Based Assessment”, OECD Economics Department Working Papers, No 1396, 1 OECD Publishing, Paris 0.95

Share this article at http://oe.cd/207. It originally appeared Switzerland on OECD Insights blog, www.oecdinsights.org, 29 June 2017.




15 20

10 20









Improving life in France’s lower-income neighbourhoods

©Karim Trabelsi/AFP

Nicola Brandt, OECD Economics Department

While overall poverty is relatively low in France, it can be highly concentrated at the neighbourhood level. In some cases, 40% of households in such neighbourhoods are below the relative poverty line. Unemployment is high, children struggle in school, housing and urban infrastructure is run down, and there is a lack of local employers, public and private services, and amenities. The French government deploys special education, employment, business and safety measures in these areas. There are also policies to promote social mixing: municipalities in areas of tension must devote at least 25% of housing to social housing or face fines. The Programme National pour la Rénovation Urbaine is a large-scale urban renovation programme that aims to attract residents from wealthier areas to lower-income neighbourhoods where dilapidated social housing estates have been replaced

with smaller units mixing social, private rental and owner-occupied housing. Such policies are based on the idea that high geographical concentrations of poverty reinforce and reproduce economic and social disadvantage. Indeed, in the United States, children who move away from neighbourhoods with a high concentration of poverty are found to attain higher levels of education and earnings than their peers who stayed behind. While these results do not necessarily carry over to the French context where poverty overall is much lower and the social safety net stronger than in the US, there is clear evidence that social disadvantage is reinforced for inhabitants of France’s poor neighbourhoods. Their unemployment risk is almost double that of individuals with comparable characteristics who live in wealthier neighbourhoods. Studies show that this

is partly due to discrimination: those with foreign-sounding names or addresses in lower-income areas are less likely to obtain job interviews. Another issue is that many lower-income neighbourhoods are remote and poorly connected to transport infrastructure and services. This is especially a problem during off-hours, which particularly impacts low-skilled workers who are also less likely to have a driver’s license or own a car. The recently released OECD Economic Survey of France concludes that active policies are needed to fight discrimination. This can include awareness campaigns for employment recruiters, mentoring and coaching sessions for job seekers, and direct placements with potential employers, something that has worked well for university graduates. While the urban renovation programme has improved infrastructure, and many

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residents are satisfied with the results, the impact on social mixity is unclear. Echoing the experiences of other countries, many people whose buildings were being demolished to make way for mixed housing were relocated to other high-poverty neighbourhoods. Moreover, mixing different kinds of housing has not brought about more social interaction.

Impact of socio-economic background on pupils performance* in %, 2015 25



As the government plans to extend the programme, the Economic Survey recommends better integration with employment and social policies. Consultation with residents about




Risk of unemployment in France’s banlieues is almost double that of people with comparable characteristics who live in wealthier neighbourhoods



* Percentage variance in the PISA reading score for children aged 15 years explained by family environment (parents’ level of education and income, social and occupational status, cultural possessions, books and educational resources available at home). Source: OECD (2016), PISA 2015 Results (Vol. II): Excellence and Equity in Education

planned renovation projects should be used as an entry point for basic skills and language training. Construction and renovation work could be an opportunity for apprenticeship-style training for building sector jobs. Indeed, consultation needs to improve, and citizen councils introduced in 2014 to help draft strategy documents for the economic and social development of lower-income neighbourhoods are a first step in that direction. Strong resident participation in designing and implementing renovation projects has been successfully practiced in Germany where residents often rehabilitate their buildings themselves. In the US, residents of demolished buildings often had negative experiences with forced relocation; they now have a right to return when construction is finished.


France has run priority education programmes that devote more resources to schools with disadvantaged pupils for more than 30 years but the impact of socio-economic background on learning outcomes is still among the highest in the OECD. The OECD Economic Survey of France argues that individualised support for struggling students suffers from not enough high-quality initial and continuing pedagogical training for teachers. More must be done to offer attractive pay and career prospects for teachers who work

30 in schools with a high population of disadvantaged children. While the bonus 25 for teaching in priority education schools has20 recently been raised, it remains too low to stabilise teaching teams. And 15 perversely, advantages for teachers in these schools have actually encouraged 10 them to leave faster.

Likelihood of unemployment by place of residence*, 2014 in %, 15-29 year-olds, 2014 35 30 25 20 15 10 5 0 Poor neighbourhoods

Surrounding urban areas

* Adjusted personal characteristics, education and immigrant status; employed native-born women aged 30 to 49 with a baccalauréat only are defined as the reference group. Source: ONPV (2016), Rapport annuel 2015



References and links Bunel,0M., Y. L’Horty and P. Petit (2016), “Discrimination Poor neighbourhoods based on place of residence and access to employment”, Urban Studies, Vol. 53, No. 2, pp. 267-86.

Chetty, R. and N. Hendren (2015), “The impacts of neighborhoods on intergenerational mobility: childhood exposure effects and county-level estimates”, https:// scholar.harvard.edu/files/hendren/files/nbhds_paper.pdf. Chetty, R., N. Hendren and L. Katz (2016), “The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment”, American Economic Review, Vol. 106, No. 4, pp. 855-902, April. Kirszbaum, T. (2013), “Rénovation urbaine et équité sociale: Choice Neighborhoods aux Etats-Unis”, [Rapport de recherche] ISP; CNRS; Commissariat général à la urban areas stratégie et à laSurrounding prospective; secretariat général du Comité interministériel des villes.

Abolish modern slavery!


Gabriela Ramos, OECD Chief of Staff and Sherpa to the G20

There are 45.8 million slaves in the world today according to the 2016 Global Slavery Index, nearly four times the total number of Africans sold in the Americas during the four centuries of the transatlantic slave trade. Modern servitude goes under a variety of names such as human trafficking or compulsory labour, fulfilling the prophecy of the great abolitionist Frederick Douglass, himself a former slave, that slavery “will call itself by yet another name; and you and I and all of us had better wait and see what new form this old monster will assume, in what new skin this old snake will come forth.” One new form is child trafficking in India. It’s designed to meet the demand for household help from the expanding


middle class by taking advantage of supply from impoverished rural communities. Deepti Minch was sold to a family in Delhi. “My life was tough. I worked from six in the morning until midnight. I had to cook meals, clean the house, take care of the children and massage the legs of my employers before going to bed.” Child labour is one of the worst forms of abuse. In the Indian case, the OECD has partnered with Nobel Laureate Kailash Satyarthi on a range of issues related to promoting children’s welfare and well-being. Mr Satyarthi and the grassroots movement founded by him, Bachpan Bachao Andolan (Save the Childhood Movement), have liberated more than

84,000 children from exploitation and developed a successful model for their education and rehabilitation. Juliane Kippenberg of Human Rights Watch describes how children have been injured and killed in mining accidents, suffered poisoning from mercury used in gold processing, and developed respiratory disease from exposure to dust. She welcomes another OECD initiative to develop practical actions to help identify, mitigate and account for the risks of child labour in the mineral supply chains, like carrying out independent third-party audits on due diligence practices at smelters and refiners. The issues go far beyond mining. Modern slaves may be sewing the clothes you


wear, growing the food you eat, and producing the gadgets that keep you entertained and informed. Around two million of them are working for states or rebel groups, and can become trapped in a vicious circle in which militia fight for control of precious resources such as minerals, while the profits from controlling mines fund further conflict. Consumers, business leaders, and policymakers all have a duty to tackle this crime. And we have the tools to do so. The 2010 US Dodd-Frank Act obliges public companies to report on products containing minerals that may be benefiting armed groups in the Democratic Republic of the Congo. The UK government recognised the scale and seriousness of the problem by passing the 2015 Modern Slavery Act. Prime Minister Theresa May set up a government task force on modern slavery and appointed an Anti-Slavery Commissioner. In an article promising that her government will lead the way in defeating modern slavery, the Prime Minister highlights the human suffering behind the headlines: “people are enduring experiences that are simply horrifying in their inhumanity. Vulnerable people who have travelled long distances believing they were heading for legitimate jobs are finding they have been duped, forced into hard labour, and then locked up and abused.” The UK legislators are well aware of the complexity of the task facing them, and produced a Practical Guide for companies on transparency in supply chains that recommends the OECD Guidelines for Multinational Enterprises (MNEs). They point out that although the OECD Guidelines are not specifically focused on modern slavery (although the Due Diligence Guidelines do include it), “they provide principles and standards for responsible business conduct in areas such as employment and industrial relations and human rights which may help organisations when seeking to respond to or prevent modern slavery.” Ending slavery is made even more

difficult by the size and complexity of supply chains that make it hard to identify who is responsible for ensuring rights are respected at all the locations involved in production. Workers are often employed by subcontractors or subsubcontractors of MNEs in their own

Modern slaves may be sewing the clothes you wear, growing the food you eat, and producing the gadgets that keep you entertained and informed country, and unfortunately it may take a catastrophe like the 2013 collapse of garment factories at Rana Plaza in Bangladesh to set change in motion. Following that tragedy, the OECD developed a Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector. This guidance, elaborated through an intense multistakeholder process, supports a common understanding of due diligence and responsible supply chain management in the sector. One of the most notable features is that it doesn’t allow multinationals to use the failings of local contractors as an excuse: “Enterprises should…seek to prevent or mitigate an adverse impact where they have not contributed to that impact, when the impact is nevertheless directly linked to their operations, products or services by a business relationship.” It doesn’t always take a big disaster to change things though. The OECD and FAO produced due diligence guidance for the agricultural sector that will, among other things, help newcomers to the sector, such as institutional investors, deal with ethical dilemmas and uphold internationally agreed standards of responsible business conduct, notably in markets with weak governance and insecure land rights. For instance the guidance recognises that regardless of the legal framework in which an operation takes place, indigenous people often have customary or traditional rights

based on their relationship to the land, their culture and socio-economic status. It’s easy to see how workers would benefit from improved conditions and why consumers would choose ethicallysourced products. But it makes good business sense too. The evidence on company performance shows that the ones that behave responsibly towards their employees, the environment, and society do better than the rest. Modern slavery is a highly internationalised affair, and to end it we need to reinforce international co-ordination and co-operation. As more countries and sectors step up the fight against slavery and other abuses, our experience with the MNE Guidelines and Due Diligence Guidance is likely to be called upon increasingly. We advocate the approach pioneered in the apparel industry where we work with industry, government, worker organisations, and civil society to elaborate strategies and we have to work together to implement them. We can all learn from each other and use our shared knowledge to expose slavery and help to abolish it. As Frederick Douglass said, “It flourishes best where it meets no reproving frowns, and hears no condemning voices.” First published www.oecdinsights.org, 29 June 2017. Share with http://oe.cd/203 References and links See the Global Slavery Index at https://www.globalslaveryindex.org/ OECD (2011), OECD Guidelines for Multinational Enterprises, 2011 Edition, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264115415-en May, Theresa, “My Government will lead the way in defeating modern slavery”, 30 July 2016, The Telegraph, London, UK. Nieuwenkamp, Roel, “Can Companies Really Do Well By Doing Good? The Business Case for Corporate Responsibility”, at http://oe.cd/275

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Beer, conflict and compensation: Heineken-Congo agreement Roel Nieuwenkamp, Chair of the OECD Working Party on Responsible Business Conduct

cannot legally enforce remedy. However, the NCP process can facilitate remedy, including compensation, as part of a mediation or conciliation process. NCPs can also recommend remedy, including financial compensation, in their final statements. The Heineken agreement illustrates that NCP processes are not exclusively forward-looking, but can also function retroactively. Another reason why this is a historic agreement is that it shows that longstanding issues such as the Heineken case, that took place 15 years ago, can still be solved by an NCP process today. NCPs are known to get a lot of complex cases that often have already been in courts for years. This case demonstrates that even human rights issues that go back many years can still be solved if the conditions are in place. The case is also a landmark because it shows that NCPs, when properly organised, can deal with human and labour rights issues

©Kris Pannecoucke/PANOS-REA

Heineken’s agreement with Congolese workers sets an excellent example of how OECD processes can effectively settle a dispute

Heineken International’s Bralima brewery, by the Congo River

Doing business in conflict areas is challenging for everyone, whether you are talking about mining or even brewing beer. In 2015 a group of 168 former workers of Heineken’s subsidiary Bralima in the Democratic Republic of Congo submitted a complaint to the Dutch National Contact Point (NCP), a grievance mechanism set up under the OECD Guidelines for Multinational Enterprises, about the company’s conduct during the civil war in that country (1999-2003). The complaint concerned allegations of Bralima unjustly dismissing its workers and co-operating with the rebel movement in RCD-Goma, and the negative consequences this had for the firm’s workers and their families.

Make no mistake: a critical factor in this case was that Heineken and the complainants engaged fully and responsibly with the process. In many cases, using this problem-solving approach is more effective in addressing corporate responsibility issues than legalistic ones. Another reason for success was that the NCP was positioned to handle the case professionally. As the NCP is an adequately resourced, independent responsible business authority, which made it possible to be accessible and equitable towards all parties in a remote area ravaged by civil war. The mediation could rely on government support too, as it was facilitated by Dutch embassies in France and Uganda.

The complaint was successfully resolved recently. Details of the agreement between Heineken and the former Congolese workers, facilitated by the Dutch NCP, are confidential, but the overall outcome is public. All parties describe it as satisfactory and civil society even hailed it as “historic”.

In short, several lessons on different levels can be drawn from the resolution of this business and human rights case. Above all, it should inspire other governments and NCPs, and businesses too. It shows that with the right mindset, companies can successfully turn human rights issues into opportunities for improving corporate responsibility.

This is good news. Heineken, their former workers and the Dutch NCP deserve praise for solving this highly complex corporate responsibility issue. Why? One key reason lies in the fact that monetary compensation was awarded, according to reports. Although there have been many different sorts of remedy through the NCP system, monetary compensation has been rare. Still, it is important to manage expectations. For a start, NCPs are a non-judicial grievance mechanism, meaning that the NCPs


in conflict areas. Indeed, Heineken has committed to improving its policy and practices on doing business in volatile and conflictaffected countries. Other companies should now follow Heineken’s example.

Share article at http://oe.cd/23v References and links Van Beemen, Olivier, “En RDC, une poignée d’ouvriers fait plier le géant Heineken”, 18 August 2017, Le Monde, Paris, France. Read at www.lemonde.fr/afrique/article/2017/08/18/en-rdc-une-poignee-d-ouvriers-fait-plier-legeant-heineken_5173706_3212.html#XXFqhUqvG2PvqTFF.99 OECD (2011), OECD Guidelines for Multinational Enterprises, 2011 Edition, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264115415-en


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


Taxing wages: How taxes affect the disposable income of workers and wage costs of employers in OECD countries one-earner couples with two children earning an average wage is higher than their gross wage.

Dominique Paturot, OECD Centre for Tax Policy and Administration Every worker and employer is directly affected by taxes on wages. Taxation is one of the principal ways we finance public services. It also helps us achieve important social objectives, such as redistributing wealth to address inequalities. But as the OECD’s annual Taxing Wages points out, tax policies on labour income may have an impact on individuals’ behaviour with respect to the labour market or their consumption habits. Comparing the labour income taxes people actually pay among OECD countries, in particular, net personal average tax rates for single individuals and families with children, shows how taxes impact household disposable income. This can help policymakers adjust policy incentives, for instance, for people to enter the workforce or work more hours. A worker’s gross wage is reduced by personal income taxes as well as social security contributions paid to the government to finance the likes of healthcare, unemployment benefits, pensions and other social insurance schemes. The amount of deductions differs depending on such factors as family composition, working situation and income level. A worker’s net disposable income comprises the remainder of their wage plus any cash transfers the state pays out. In Taxing Wages, we calculate the disposable incomes of eight household types across OECD countries, including the combined impact of personal income taxes, social security contributions, and family benefits. The report places most emphasis on a single worker with average earnings and a one-earner couple at the same level of earnings with two children. Among OECD countries, Belgium has the highest net personal average tax rate for a single worker with average earnings: 40.7%, in 2016. This means that the disposable income of the average worker in Belgium is the remaining 59.3% of their gross wage. At the other extreme, Chile has the lowest net personal average tax rate, at 7%. Thus, a single average worker in Chile takes home 93% of their gross wage. For a one-earner couple with average earnings and two children, the net personal average tax rate is highest in Denmark (25.5%). There, the disposable household income after tax, including family benefits, comes to 74.5% of the gross wage. The lowest is in Ireland (-1.6%), where the rate is negative due to the total amount of family benefits exceeding total personal income tax and employee social security payments. As a result, the disposable income of Irish

Tax wedge One important question, not least from a competitiveness viewpoint, is how taxes affect the overall cost of hiring a worker. This means looking not just at taxes paid by workers, but the additional deductions employers have to pay as well, usually as social security contributions and payroll taxes. The sum of all this is the tax wedge, which is the difference between the employer’s cost of hiring a worker and the worker’s net disposable income. It includes personal income tax and social security contributions paid by the employee and the employer (including payroll taxes) net of family benefits. The tax wedge can be quite a high percentage of labour costs, and therefore clearly has a bearing on the hiring decisions of firms. The OECD’s average tax wedge was 36% of labour costs in 2016 for a single average worker. The tax wedge is 26.6% for a one-earner couple with average earnings with two children. In almost every OECD country, the tax wedge is lower for one-earner couples than for single workers (see chart). The highest tax wedge for a single worker with average earnings is in Belgium, with 54%. The lowest is in Chile, with just 7%. For one-earner couples with average earnings and two children the highest is France (40%) and the lowest is New Zealand (6.2%). Taxing Wages provides a comprehensive overview of the effects of tax policies on the incentives on employees and employers with respect to the labour market. However, these indicators, which focus on the structure of income tax systems, do not provide a complete picture of the overall impact of the government sector on people’s welfare. For this, other factors such as indirect taxes (eg. VAT) would have to be taken into account, as would other forms of income, such as from self-employment or capital income, and other tax allowances and cash transfers not considered in Taxing Wages. The effect on welfare of services provided by the state, access to education and health facilities, and the incidence of corporate and other direct taxes on earnings and prices would also have to be considered. Readers can find more data on these aspects by visiting the OECD Tax Database (http://www.oecd.org/tax/tax-policy/ tax-database.htm). Share article at http://oe.cd/25F Links www.oecd.org/tax/tax-policy/taxing-wages.htm

Comparison of tax wedge for single workers and one-earner couples, 2016 % 60 Single person at 100% of average earnings, no child One-earner married couple at 100% of average earnings, 2 children

50 40 30 20






















Source: OECD.stat BE L DE U HU N FR A




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A portrait of family migration

©Stringer, Italy/Reuters

Jonathan Chaloff and Friedrich Poeschel, OECD Directorate for Employment, Labour and Social Affairs

Migration is all over the news in Europe, North America and Australia. When people think about migration, they tend to picture either refugees driven to undertake dangerous journeys in order to escape threatening situations or people coming to a new country to pursue studies or work. Yet there is a large category of migrants all too often overlooked: family migrants. Such migrants accounted for 40% of migration to the OECD area in 2015 and they typically make up 25-50% of an OECD country’s foreign-born population–and as much as 70% in the United States. Why is family migration receiving so little attention? In part because family migration is often seen as a natural derivative of other categories of migration, one that takes place automatically based on international conventions and human rights. The lack of attention may also be due to the diversity of family migrants as a group: they migrate for various family-related reasons and have diverse demographic


profiles. One family migrant may be an infant, moving with his or her parents or as part of an international adoption. Another may be a parent or grandparent, rejoining an adult migrant who moved to the destination country long ago. And there are also those who migrate to “follow their heart”–forming a family with a native-born partner (in many OECD countries, at least 10% of marriages are between a citizen and a foreigner), joining a partner who has already migrated or accompanying a spouse who is a labour migrant. A closer look at family migrants does reveal some common characteristics, however. If family migrants are predominantly female, men typically comprise at least 40%. Family also tend to be younger than labour migrants, and are more likely to settle permanently in their new countries. Their education level tends to be related to that of their spouse, with those who come to join a citizen of the destination country, or who arrive together with a labour migrant, better

educated, on average, than those who reunite with partners or marry a migrant later on. In most countries however the education of family migrants has been increasing recently. Once arrived, family migrants generally struggle to enter the

Family migrants generally take 15 to 20 years to reach the same employment rate as nativeborn people labour market, taking 15 to 20 years, notably in Europe, to reach the same employment rate as native-born people. This may be due to the fact that family migrants do not come with a job offer in hand but also to family migrants’ often limited abilities in the hostcountry language. What does this mean for governments and migrants alike? Whenever close family relationships are involved, stakes are high. It’s true that family migration levels can, to a certain extent, be


anticipated more than other migration flows, and immigration authorities thus can be prepared to deal with them. And family ties are not automatic grounds for migration: in practice, family migration is subject to restrictions and requirements. But establishing the right mix of requirements is challenging and policy makers have to balance different priorities and constraints. How long should family migrants have to wait to be reunited? On the one hand, short waits accelerate the integration of children in schools and allow families to be together; on the other, longer waits may be needed to ensure income and housing requirements are met. Yet restrictions may make a country less attractive for sought-after labour migrants who want to bring their families. And while language requirements and other conditions may effectively speed up the integration of family migrants, they may also delay or prevent it. Finally, what about migrants who are joining citizens to form a family? Should the same conditions apply to them? With migration comes family! This is a simple fact of life and it is time to give family migration more attention. This may be a difficult area for policymakers, but it cannot be ignored. Further analysis of policy trade-offs and bottlenecks, as well as better data, will go a long way to providing a firm basis for future family migration policies. First published on www.oecdinsights.org, August 2017. Share this article at http://oe.cd/225 References and links European Migration Network (2017), Synthesis Report – Family Reunification of TCNs in the EU plus Norway: National Practices, European Commission. Visit the International Forum on Migration Statistics 2018 at www.oecd.org/migration/forum-migration-statistics/ OECD (2017), “A portrait of family migration in OECD countries”, in International Migration Outlook 2017, OECD Publishing, Paris. http://dx.doi.org/10.1787/ migr_outlook-2017-6-en


Migration: What we think we want

We are far more open towards immigration than some people might have us believe, a new survey shows. If there is one issue that has been influencing democratic elections over the past year, it’s immigration. It was one of the dominant talking points in the Brexit referendum in the UK, the presidential elections in the US and France, and the general elections in the Netherlands and Germany. On balance, this is understandable. After all, many OECD countries, large and small, are struggling with how to manage their recent unprecedented high levels of migrants and refugees. OECD countries received about 1.6 million asylum applications a year in both 2015 and 2016, the greatest number since the Second World War. And nearly 75% of these applications were made in an EU country. Countries have to find a way forward. As well as the humanitarian aspects involved, they must respect long-standing international commitments and obligations to process refugees according to specific rules, such as those agreed under the United Nations 1951 Refugee Convention. However, the impact of public disquiet cannot be underestimated, with some claiming that migrants and refugees are receiving more benefits than the native-born do, or are taking their jobs,

and crowding their schools, health systems and public housing. The trouble is, there is plenty of evidence to show these claims are misplaced, as Peter Sutherland, UN Special Envoy on

About 80% of people will accept the “right” kind of newcomer, while a very small minority of participants want no immigration at all Migration from 2006-2017, has noted. Still, political parties espousing strongly anti-immigrant views have gained ground and though not every election has gone their way, their voices remain prominent in the debate. But are these voices really representative of how most people feel about migration or are they just the loudest? Knowing more about this can help inform better policymaking. Dominik Hangartner of the London School of Economics and co-director of the Stanford-Zurich Immigration Policy Lab has looked at this question and shared his findings recently at an OECD New Approaches to Economic Challenges seminar. His project investigated what types of asylum seekers the European public were willing to accept, what kind of socio-cultural, economic and/or political

OECD Observer No 311 Q3 2017


Among respondents in all education and skill levels and in all countries, the survey found highly consistent attitudes about what kind of migrants and asylum seekers citizens would prefer to welcome. The vast majority (about 80%) were willing to accept the “right” kind of newcomer; only a very small minority of participants wanted no immigration at all. But who is this acceptable migrant or asylum seeker? For most respondents, it would be a young skilled man who speaks the local language, and who was able and willing to become economically active in his new home. He would be someone vulnerable and in need, fleeing persecution with a clear and consistent asylum story. Respondents also expressed religious preferences, and placed little emphasis on the country of origin. However, what kind of migrants and refugees to accept is only part of the challenge. European policymakers are also grappling with where to process asylum seekers and where to resettle those whose claims are successful. The principle of processing seekers in the first country that they enter has been seen as unmanageable by countries and unfair by many citizens. To address this, Mr Hangartner asked survey participants how, in their opinion, should the number of asylum applications


Thousands 1400 1200 1000 800 600 400 200

16 20

15 20

14 20

13 20

12 20

11 20

10 20

09 20

08 20





To do this, a survey was conducted in 15 countries: Austria, the Czech Republic, Denmark, France, Germany, Greece, Hungary, Italy, the Netherlands, Norway, Poland, Spain, Sweden, Switzerland and the UK. People were asked to choose between hypothetical profiles of asylum seekers, with nine randomly varied attributes: age, language skills, previous job, religion, consistency of their story, vulnerability, reason for migration, country of origin and gender. Participants looked at profile pairs and were asked, “Which of the two applicants would you personally prefer to be allowed to stay?”

New asylum applications since 2006 in the European Union


preferences shaped native-born people’s attitudes to migrants and refugees and to what extent these attitudes varied across social groups and countries.

Note: Preliminary data for 2016. Source: OECD Migration Outlook 2017, data from UNHCR and Eurostat. Available at: http://dx.doi.org/10.1787/migr_outlook-2017-graph10-en

per country be determined, and offered three choices: the status quo (the “Dublin regulation”, where allocation is based on first entry to Europe); the same number of asylum seekers for all EU countries; or, allocation proportional to each country’s ability based on their size, population, GDP, unemployment and prior record. Most participants preferred a proportional system based on each country’s capacity, rather than the current policy of first entry point into Europe. For Mr Hangartner, the results show that Europeans care deeply about the fairness of the system chosen, not just the consequences of the policy for them personally or for their countries. Could such a proportional system really be established? Where would the most skilled workers go, the ones most able to participate in the economy? How would they be distributed both across and within countries? And as a participant at the event pointed out, can policymakers develop a more compelling case for accepting refugees and asylum seekers when so few fully correspond with the survey’s preferred profile? There are grounds for optimism, though. Notwithstanding the religious bias shown in the responses, Mr Hangartner’s survey sends a signal to policymakers that the loudest voices in this debate may not represent all citizens, that migration is in fact welcome and that perhaps consensus

can be built. In the context of upcoming revisions to the EU’s Dublin Regulation and of the nearly 1 million asylum applications currently pending in the EU, this matters more than ever. Kate Lancaster The survey reported in this article is an independent survey, and does not necessarily reflect the views of the OECD, or its member or partner countries. References and links Bansak, K., Hainmueller, J. and Hangartner, D. (2016) “How economic, humanitarian, and religious concerns shape European attitudes toward asylum seekers”, Science, American Association for the Advancement of Science (AAAS), 354(6309), pp. 217–222., 10.1126/ science.aag2147. Bansak, K., Hainmueller, J. and Hangartner, D. (2017) “Europeans support a proportional allocation of asylum seekers”, Nature Human Behaviour, Springer Nature, 1(7), p. 133, 10.1038/s41562-017-0133. Sutherland, Peter (2015), “We must harness the true strength of migration”, OECD Yearbook, OECD Publishing, Paris. Available at: http://www.oecd.org/forum/ oecdyearbook/we-must-harness-the-true-strength-ofmigration.htm. OECD work on migration, visit http://www.oecd.org/ migration OECD work on the role of local authorities in migrant integration, visit http://www.oecd.org/cfe/regional-policy/ migrantintegrationincities.htm OECD “Strength through Diversity” project, visit http:// www.oecd.org/edu/school/strength-through-diversity.htm OECD New Approaches to Economic Challenges, http:// www.oecd.org/naec/ The Stanford-Zurich Immigration Policy Lab, http://www. immigrationlab.org/ The EU Dublin Regulation: https://ec.europa.eu/ home-affairs/what-we-do/policies/asylum/examination-ofapplicants_en


Rain or shine, Asia needs a better umbrella of social protection Alastair Wood and Willem Adema, OECD Directorate for Employment, Labour and Social Affairs

programmes is even lower, and only a limited number of poor workers have access to employment guarantee schemes. Extending social protection is clearly needed not only to further reduce poverty, but also to provide for the population’s increasing medical and financial needs. Crucially, population ageing in Asia is expected to progress at a fast pace: by 2030 there will be fewer than seven people of working age (15-65) per senior citizen (65+), compared to more than 10 today. So what are countries doing to prepare for this


Some Asian countries have established pension schemes for low-income households

An Indonesian proverb says that a firm tree does not fear the storm. After the Asian Financial Crisis of 1997/98, Asian economies recovered with strong economic growth (on average 4.2% annually), which over the past decade has contributed to a decline in “absolute poverty”–here defined as those with incomes of less than $2 per day. The share of people living in poverty fell from over half to a third of Asia’s population, with large reductions especially in China, Indonesia and Viet Nam. Greater prosperity has also contributed to lower fertility rates and higher life expectancy. Now the challenge is to create good jobs for Asia’s increasingly educated workforce and prepare for population ageing, which will drive social spending upwards. With increasing prosperity, the leeway for greater public social expenditure (defined broadly as support for households in difficult circumstances which adversely affect their welfare) is growing, but at 7% of GDP it remains low compared with the OECD average of 21% of GDP. Indeed, in many Asian countries, including India and Indonesia, public social spending is often as low as 2 or 3% of GDP. Our report on A Decade of Social Protection Development in Selected Asian Countries indicates that one

of the reasons for such low social spending is related to the large number of informal workers. Indeed, the problem isn’t so much the lack of jobs (Cambodia and Nepal, for instance, have over 80% employment rates) but rather the lack of good quality jobs–meaning the quality of the working environment, earnings quality and job security, as set out under the OECD Job Quality Framework. Informal workers in Asia frequently work long hours for little pay, with little to no job security and without social protection coverage. These workers do not make contributions to social insurance schemes– for healthcare and pensions for example– and therefore they cannot claim health insurance benefits when they fall ill or draw a pension when they grow old. As the bulk of public social spending goes to pension and health benefits tied to formal employment, current government efforts are more likely to benefit better-off households rather than poor ones. Governments have sometimes put in place last-resort benefits but spending on such social assistance benefits (support in cash or in-kind which is targeted at low-income households) is limited as benefits are small and they are not given to everyone. Public spending on labour market

challenge? Richer Asian countries such as Japan, Korea and Singapore have long since put in place mandatory pension systems to which workers contribute during their working life. In recent years, China has arguably been particularly successful in increasing pension coverage. In addition to its pension provisions for civil servants, China’s basic urban worker pension system covered almost 9 out of 10 workers in 2015, while the basic national resident pension system (which includes the rural pensions scheme) covered 500 million people, or about 75% of the target population (see report by Queisser et al, 2016). Various measures were also used to encourage pension saving, such as subsidising contributions or making pension payments to the elderly parents of those workers who started to contribute to rural pension schemes. In the poorer countries, not many workers have had a chance to save for retirement, and contributory pension systems still do not cover many workers. To fill the gap, some Asian countries, such as Bangladesh, India, Nepal and Thailand, have established pension schemes targeted at low-income households, which are often the main or only system of income provision in retirement. However, coverage of such schemes is variable and the payment

OECD Observer No 311 Q3 2017

















rates are generally low. Increasing access to social protection is an imperative for achieving more inclusive and cohesive societies in Asia. The challenge facing many economies with a large rural sector or a large urban informal sector is overcoming administrative bottlenecks limiting coverage extension of social protection, not least because of the very limited capacity to register participants in insurance schemes and/or collect contributions from employers and employees. One approach worth considering is India’s effort of equipping all its citizens with a digital identity. This initiative, known as Aadhaar, is not compulsory yet, but covers about 4 out of 5 Indian citizens and addresses a range of activities from financial services, such as daily bank transfers to making benefit payments. This includes, for example, making payments to low-income households that are eligible for the “cooking gas subsidy” and “social assistance pensions”.


Public social spending increasing in Asia Trends in public social spending as % of GDP, 2000 and 2013 / 2014 or latest year % 0













Japan OECD New Zealand Australia Mongolia Korea Armenia China Azerbaijan Thailand Asia Viet Nam Malaysia Singapore Hong Kong, China Asia non OECD Papua New Guinea Nepal Sri Lanka Philippines Fiji Bangladesh Indonesia

New technologies can represent a great opportunity for governments in Asia to leapfrog standard registration methods, track social protection eligibility, and help extend coverage to all those who need social protection most.

Cambodia India Pakistan

2013 / 2014 or latest year



Myanmar % 0













Source: OECD Social Expenditure Database. http://www.oecd.org/social/expenditure.htm

Informal employment is widespread in Asia Informal employment in total employment, 2016 or latest year available % 0











First published on www.oecdinsights.org, June 2017. Share this article at http://oe.cd/27D

Brunei Darussalam

Excluding agriculture


Including agriculture


References and links

Viet Nam

OECD (2017), A Decade of Social Protection Development in Selected Asian Countries, OECD Publishing, Paris, http://dx.doi.org/10.1787/ 9789264272262-en

Sri Lanka

OECD (2016), The OECD Job Quality Framework, www.oecd.org/employment/job-quality.htm Queisser, M., Reilly, A. and Hu, Y. (2016), “China’s pension system and reform: an OECD perspective”, Economic and Political Studies, 4:4, pp. 345-67

Samoa Indonesia Pakistan India Bangladesh Cambodia % 0



Source: ILO ILOSTAT Database (download 19 October 2016).









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State-owned enterprises, international investment and national security: The way forward

©David Rooney

Frédéric Wehrlé and Hans Christiansen, OECD Directorate for Financial and Enterprise Affairs

For most of the past half century, countries around the world have gradually opened up to foreign investment, and with good effect. Investment from other countries has supported growth and development, created jobs and enhanced welfare. Today, as our data show, OECD countries retain only limited traditional regulatory restrictions to inward foreign investment in the form of foreign ownership ceilings and other discriminatory conditions. While many emerging economies are generally less open, they have made their legal regimes for foreign direct investment less restrictive. Ongoing monitoring by the OECD shows that these liberalisation efforts continued after the 2008 financial crisis. However, since the 2000s, a new and opposing trend has emerged: the screening and review of foreign


investment projects, particularly those by state-owned enterprises (SOEs), to mitigate risks to national security. In fact, a recent survey shows that more and more governments are introducing or enhancing screening mechanisms for inbound investment projects to identify and address perceived threats. Onethird of the 59 advanced and emerging economies that participate in our investment policy dialogue now operate such mechanisms. Several governments are now subjecting investment proposals involving SOEs to greater scrutiny, and at times prohibiting these investments. Some countries have established special rules for the review and admission of investments by SOEs or are considering new policies to address the issue. Could the precedent offered by the Santiago Principles help point a way

forward? In 2008, following widely publicised concerns regarding highprofile investment projects by non-OECD sovereign wealth funds (SWFs) in some large OECD countries, the community of SWFs and their government owners adopted a code of good conduct, the Santiago Principles. These principles were motivated by a desire to ensure that countries do not use national security arguments as a cover for protectionism against foreign SWFs. A decade later, the upsurge of SOEs in global investment and related national security concerns expressed by recipient countries could motivate similar arrangements with respect to investment by foreign SOEs. International investment by SOEs is a growing concern The increasing participation of SOEs in the global marketplace, particularly as


international investors, makes it all the more important to balance concerns about the good governance of SOEs and to maintain a level playing field. As bearers of state as well as commercial interests, SOEs may place their emphasis on strategic acquisitions, such as advanced technologies for example, on non-market terms. It is fitting therefore that the rise of SOEs should revive interest in investment policies related to national security. Australia, for instance, screens all SOE investments whereas it screens private investments only when they exceed a value threshold. Canada applies different

Governments are subjecting investment proposals involving SOEs to greater scrutiny trigger thresholds for the application of its net-benefit test if the investor is stateowned. The United States has established specific rules regarding SOEs as part of its national security review mechanism (CFIUS), which require investigation of all government-controlled investments concerning US businesses. Germany has just strengthened its review mechanism. France, Germany and Italy have called for EU policies to address the issue. Strengthening screening of foreign direct investment (FDI) on national security grounds is also under consideration in the Netherlands, the UK and the US. Heightened awareness of the implications of SOE investment has also been evident in more recent international investment agreements. The Trans-Pacific Partnership agreement (TPP), for example, dedicates an entire chapter to SOE investments, whereas in older agreements SOEs were effectively afforded a status broadly similar to that of private investors. Governments have always been careful to secure policy space to safeguard national security needs. The OECD Codes of Liberalisation, for instance, just as many investment treaties, contain corresponding national security

exceptions. These exceptions are typically self-judging, and the term “national security” is intentionally broad. Because of the discretionary nature of invoking national security as a ground for restricting foreign investment, the OECD Guidelines for Recipient Country Investment Policies relating to National Security were issued as an OECD Recommendation in 2009. These guidelines offer a set of specific recommendations providing for nondiscrimination, transparency and predictability, as well as regulatory proportionality and accountability, including effective safeguards against undue influence and conflict of interest. Internationally agreed rules on SOEs would bring benefits While concerns relating to SOE investments are legitimate–and many SOEs are less transparent than private firms–the imposition of outright or unqualified restrictions on SOE investments in recipient countries benefit neither host nor home countries as opportunities for mutually beneficial international investment are forgone. Applying internationally agreed commitments to SOEs and their government owners would help reassure recipient country regulators by offering greater transparency, addressing potential distortions that may arise from state ownership, and ensuring that SOE owners also observe high standards of governance, disclosure and accountability. In turn, these regulators could be expected to apply the same conditions to SOEs that they apply to investment proposals by privately-owned companies.

Enterprises. These guidelines include specific provisions by which the legal and regulatory framework for SOEs, as well as their practices, should ensure a level playing field and fair competition in the marketplace when SOEs engage in economic activities. If translated to an international market context, and if fully implemented, these provisions could fully address the concerns of investment regulators. The last element required to emulate the “Santiago arrangement” would be to secure a commitment by SOEs to abide by these standards. This could help convince recipient countries to keep their economies open and to uphold both the letter and the spirit of the principles of OECD guidance on national security. The OECD stands ready to help forge a mutually beneficial and trusted arrangement for SOEs so that home and host societies can reap the benefits of international investment, while addressing important security concerns that inhibit certain investments proposed by SOEs today. Originally published on OECD Insights blog at http://oe.cd/27J References and links International Forum of Sovereign Wealth Funds (2008), Sovereign Wealth Funds. Generally Accepted Principles and Practices. “Santiago Principles”, available at: www.ifswf.org/santiago-principles-landing/ santiago-principles. OECD (2016), State-Owned Enterprises as Global Competitors: A Challenge or an Opportunity?, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264262096-en. See OECD Codes of Liberalisation of Capital Movements and of Current Invisible Operations, 2012-2017 at: www.oecd.org/investment/investment-policy/codes.htm.

A similar outcome to that agreed by SWFs can be achieved for SOE investments today. After all, recommendations on good practices for governance, disclosure accountability and transparency of SOEs have already been agreed on under the OECD Guidelines on Corporate Governance of State-Owned

OECD Observer No 311 Q3 2017


Mexico telecom reform: Into the “last mile” Verena Weber, OECD Directorate for Science, Technology and Innovation the telecommunications regulatory body, lifted restrictions on foreign direct investment in telecommunication and satellite communication services, successfully achieved digital switchover in 2016, and set about reinforcing its domestic telecommunication infrastructures. Most crucially, however, Mexico has begun levelling a playing field long dominated in telecommunication services by América Móvil, who owns fixed operators Telmex and Telnor, and

©David Rooney

The government’s Red Compartida goal is to extend coverage to 92.2% of the Mexican population by 2024

Since Mexico embarked on reform of its telecommunication and broadcast market in 2013, the results can be roundly summarised in a single phrase: price drop, revenue up. With the exception of the price index for pay TV, which has gone up 5%, the cost of roaming, and domestic and international phone calls has dropped steeply, with Mexicans now enjoying some of the lowest-cost mobile services in the OECD area. The word spread, and the number of mobile broadband subscriptions skyrocketed. In its recent Telecommunication and Broadcasting Review of Mexico 2017, the OECD reported a 50 million increase in mobile broadband subscriptions between 2012 and 2016, which puts its growth rate at just under 390%. Average data use has similarly grown, by 91%, and between 2013 and 2016, 20 more million people


gained access to the Internet, increasing the number of people making online transactions from two to 10 million between 2014 and 2016. This exuberance has translated into more revenue for telecommunication and broadcast players, who chalked up 16% growth between 2011 and 2016. Clearly, Mexican consumers are responding to better services and prices by buying smartphones, subscribing to bundled telecom services, and signing up for on-demand services like Netflix, Blim and Claro Video. The initial results of the reform have therefore been good. Following 28 of the 31 recommendations the OECD made in its Review of Telecommunication Policy and Regulation in Mexico in 2012, the Mexican government empowered the Instituto Federal de Telecomunicaciones (IFT) as

mobile operator Telcel. The initial round of regulatory actions included eliminating prices on long-distance calls, which brought welcome relief to consumers. Meanwhile, in broadcasting, a third national network started up in October 2016 with new regional players set to introduce more competition when they enter the market in 2018. On the other hand, market concentration in pay TV has increased, likely contributing to rising prices. Other measures have aimed to create a more competitive market, and the results of these have been more mitigated. There has been slow progress on unbundling local loops that would allow rivals to use the incumbent’s “last mile” of their fixed line networks and have access to information about their infrastructure. The OECD’s latest review has therefore supported an IFT decision to speed things up: that América Móvil functionally separate incumbents Telmex and Telnor into two separate legal entities. But there is also a carrot that goes with the stick. Up until now, Telmex has been prohibited from the pay TV and broadcasting market. The OECD has suggested that Telmex be given entry to this market once the separation has


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0 May 2013

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Aug 2015

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Source: OECD Telecommunications and Broadcasting Review of Mexico 2017

taken place. Not only could Telmex become a hefty competitor to Televisa, the player with by far the largest market shares in pay TV and broadcasting, but the incentive may also encourage Telmex to upgrade its fixed broadband infrastructure. Mexico’s average broadband speed is still below the OECD’s average and has among the lowest penetrations of fixed broadband.

References and links OECD (2017), OECD Telecommunication 2016 OECD Yearbook and Broadcasting Review of Mexico 2017, OECD Publishing, Paris. http://dx.doi.org/10.1787/ 9789264278011-en ECONO MIES PRODU CTIVE IES INCLUS IVE SOCIET

OECD (2012), OECD Review of Telecommunication Policy and Regulation in Mexico, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264060111-en


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 these understan our both on a link between a range the digital economy, 2, Future Societies, examines at the impact of today, Part of the economy. on the way we live future impact the , an on and to make societies and economies already starting of migrants in our of issues that are barriers , the integration and how we remove what is parents, including digitisation children and support t to Action, examines how we educate Part 3, From Agreements struck in 2015 and looks at to success for women. agreemen combating in global y communit significant the international needed to honour challenges facing nt goals and tackling the implementation sustainable developme meeting abuse, 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


The 2017 review concludes that reforms have brought more competition, dynamic investment and consumer satisfaction to

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OECD Yearbook

A further major initiative is the Red Compartida, a wholesale shared mobile network, which aims at increasing digital inclusion and connecting Mexico’s rural areas. The spectrum for this network comes from the digital switchover, completed in 2016. As a public-private partnership with concession awarded to ALTÁN Redes in 2016, Red Compartida has begun to deploy its open access network. Its goal is to extend coverage to 92.2% of the Mexican population by 2024, particularly those in rural areas currently outside broadband reach. This is the first shared purely wholesale mobile network not only in Mexico, but the OECD area.

Mexico’s telecommunications. This needs to continue, but with a greater emphasis on inclusiveness. Mexico aims to expand access to rural and remote regions, and public institutions like schools and healthcare facilities. The advances made since the reform have already begun to yield economic benefits; by fostering more long-term national endeavours like Red Compartida and other initiatives such as Mexico Conectado, Mexico will see benefits of a more social nature: a highly connected citizenry that is better informed, more civically engaged, and better served by digitalised public services.

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OECD Observer 1 Volume 2016 Supplement ISSN 0029-7054

Volume 2016 Supplement


OECD Observer No 311 Q3 2017



Making globalisation work for all Ministerial Council Meeting, 7-8 June 2017

2017, which together with other events encompass OECD Week, the summit in the OECD calendar. The 2017 meeting was chaired by Denmark, with Australia and the UK as vice-chairs. “Instead of walls against globalisation, we need to give people a bridge to the future,” said Danish Prime Minister Lars Løkke Rasmussen, ahead of the event. In an echo of the pledge in the 2030 Agenda for Sustainable Development to “leave no one behind”, the meeting explored a new inclusive growth narrative centred on improving well-being for all in open and digitalised economies, and set out to define a more people-centred approach to international standard-setting. “Making Globalisation Work: Better Lives For All” 2017 Ministerial Council Statement: http://www.oecd.org/mcm/documents/2017-ministerial-council-statement.htm International Trade, Investment and Climate Change: Statement of the Chair of the Ministerial Council Meeting 2017 http://www.oecd.org/mcm/documents/statement-of-the-chair-of-mcm-2017.htm


For more key documents, statements and other resources, see www.oecd.org/mcm

Bridging divides OECD Forum, 6-7 June 2017 “Millennials don’t trust government, they don’t even trust their doctor.” “Inequality is being created by design.” “Gender equality is not only the right thing to do, it is smart economics.” “There’s no way the skills sets we can conceive of right now will last for the next century”. “The question is not whether we have artificial intelligence or not, but any intelligence at all.” “Globalisation, inclusiveness and growth should go hand in hand.” These soundbites offer just a hint of the rich, diverse and lively public discussions at the OECD Forum 2017


Family photo in the OECD garden: for details and other photos, see https://www.flickr.com/ photos/oecd/

which took place on 6-7 June (to find who said what, and for more soundbites, see https://issuu.com/oecd.publishing/ docs/quotesbook_forum2017_10_issuu). Bridging divides, particularly through inclusive growth, trust and digitalisation,

formed the overall theme of this major gathering, which is held every year in conjunction with the OECD Ministerial Council Meeting. Our societies have become marked by divisions–between haves and have-nots, skilled and unskilled, urban and peripheral, and

Engaging with OECD experts and guest speakers


Explore policies to deliver a more inclusive globalisation, and respond to growing public concerns that globalisation has not benefitted all fairly: these were primary concerns of discussions at the Ministerial Council Meeting (MCM) which took place at the OECD headquarters in Paris, France on 7-8 June 2017. The annual meeting was preceded by the OECD Forum, 6-7 June


Prime Minister Lars Løkke Rasmussen of Denmark and OECD Secretary-General Angel Gurría, at the OECD Ministerial Council Meeting 2017. Denmark chaired this year’s meeting.


A new network for open economies and inclusive societies Noe van Hulst, Ambassador of the Netherlands to the OECD


Who would have guessed just a decade ago that trade and investment policies would emerge today as one of the most contested fields in OECD countries? We’ve had protests about globalisation before, but this time it seems different. As Martin Wolf wrote in the Financial Times, “The era of globalisation under a US-led order is drawing to a close… The question is whether protectionism and conflict will define the next phase”.


Networking hub

Her Royal Highness, Crown Princess of Denmark, and OECD Secretary-General Angel Gurría, at the OECD Forum 2017.



Bridging of globa Divides is the them l of reform interaction, excha e of OECD Forum divisions , economic trans nge and progr 2017. After many social, have again begu ition, emerging ess, driven by a poten years cultural markets and geog n to erupt in but have t mixtu and OECD countries.technological re there has deepened sinceraphical divide innovation s have Some the financ and a resurbeen a backl of these , ial crisis been lurking ash income, for some started challenges gence of prote against intern in 2008 . Indee time, and risks for key globa ctionist, even ational co-op d, lately eratio l agree nationalist dashing ment the hope , polici n and globalism, es. s for progrs on climate What shoul and susta All of this pose ess of peop and make d policymake le every inable developmes where. does digitathe global econrs do to help nt, bridg divides? lisation hold omy work bette e these dang for bridg erous divide How can What must be ing econ r for everyone? s, done omic, What back fake facts, knowledge to bring people social and geog promise news and and value of and positive raphi internation post-truths narratives institutions close cal , and al co-op be mars r toget her? eration, restore faith halled In OECD to beat and confid openness Yearbook ence governmen and world 2017 progress?in the and other t, business, , OECD exper ts labour, questions academia are joined by facing thought and our socie ties todaycivil society to leaders from examine . these


ok 2017





between us and them. Overcoming such divisions, which have deepened since the start of the financial crisis in 2008, is a challenge that lies at the heart of the OECD’s work. It is a complicated task, as policymakers must work not only in an environment of adversity, but in an era in which the notions of facts and truth, let alone expertise, have been called into question.

of participants went from debate to café corner to idea factory, trawling through issues, hearing diagnoses and trying out solutions with panellists, authors and each other. They engaged with OECD experts as well as guest speakers from around the world, including Her Royal Highness, Crown Princess of Denmark, Shiji Gao of the State Council of China, Sharan Burrow of the International Trade Union Confederation, Oley DibbaWadda of the Association for the Development of Education in Africa, Michel Landel of Sodexo, Stav Shaffir, an Israeli parliamentarian, and many others. Thousands more people participated online too, eager to have their say in what has become one of the world’s most highly regarded public policy events. OECD Obser e 2017 Supplementver ISSN 0029-7 1 054



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trim size:


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for: 5.5mm


Inequalities, migration, generational and gender divides, automation and jobs, and how to encourage global businesses to conduct themselves responsibly wherever they invest were all matters for discussion as thousands

www.oecd.org/forum/oecdyearbook See video highlights of OECD Week 2017 https://www.youtube.com/watch?time_continue=1&v= 0HWDOhZzfnE

For very open economies like the Netherlands this question of how the “next phase” will shape up in 2017 and beyond is of critical importance. At this juncture, the Dutch economy is growing at a solid 2% per year pace with unemployment coming down rapidly to 5%, but the downward risks are all related to where the global economy is heading. Many other countries have a similarly high exposure to shifts in the global economy. More than two-thirds of OECD countries score above average when it comes to indicators of openness to trade, trade policy, FDI openness and infrastructure for trade. Several emerging and developing economies, though below average on such scores, aspire to further opening up their economies and drawing on the global economy to improve their well-being. The OECD has a pivotal role to play in leading these aspirations. And it cooperates with other international organisations, such as the WTO, the IMF and the World Bank, in clearly demonstrating the adverse impact of rising protectionism, keeping track of what’s happening in trade and investment and stimulating policy dialogue on how to foster global inclusive growth. But the OECD plays a special role too, as a harbinger of ideas and solutions, and presenting visions and roadmaps to follow, particularly in times of uncertainty, such as now. In this light it is very fitting that the focus of June’s

OECD Observer No 311 Q3 2017



©Michael Dean/OECD

of a new Network for Open Economies and Inclusive Societies. The aim is to take forward the momentum for policy improvements, and proactively join forces to advance a well-functioning, open and fairly balanced global economy. The Network* will be facilitated by the OECD and has the dual purpose of firstly, targetting peer learning and effective exchange of good practices, and secondly, providing a powerful new voice in the international policy arena.

Noe van Hulst

OECD Ministerial Meeting (MCM) under the Danish presidency was “making globalisation work for all”. And it was on that occasion a group of 19 countries announced the formation

Solar present


“We are not in the future. The rest of the world is in the past.” Swiss innovator Bertrand Piccard whose round-the-world flight in a solar-powered plane absorbed the world’s attention and imagination in 2015-16, does not mince words. Piccard


The context could not be more challenging for the new Network, given the backlash against globalisation in some OECD countries and the morose trading situation globally. Indeed, some experts believe that the relationship between trade and GDP growth is undergoing a fundamental shift, which according to OECD analysis has contributed to a slowdown in productivity.

Could it be that low trade growth is somehow intertwined with the general global growth malaise? To what extent is a contraction in so-called global value chains (GVCs) to blame, in which case slower trade would be just a natural outcome, and therefore not a major concern? We need to find answers to such questions. […] This is an extract: for the full article, including references and further reading, see online version of this article at http://oe.cd/20H, or search on www.oecdobserver.org Wolf, M. (2017), The march to world disorder, Financial Times, 6 January 2017. *Network founding members are Argentina, Belgium, Canada, Chile, Colombia, Costa Rica, Czech Republic, Finland, Germany, Hungary, Japan, Latvia, Luxembourg, Netherlands, Norway, Peru, Poland, Spain and Sweden. See press release, 8 June 2017 at https://www.permanentrepresentations.nl/ permanent-representations/pr-oecd-paris/news/2017/05/24/ launch-network-for-open-economies-and-inclusive-societies.

proved that solar-powered transport is technically possible. What is needed now are investors and policymakers to help make it happen, not least by providing legal frameworks and cutting back on bureaucracy, he told a packed audience at the Big IdEAs distinguished speaker series, organised by the International Energy Agency and hosted by the OECD in September 2017.

paradigms in order to change the future. Mr Piccard is now leveraging his pioneering exploits to encourage investment in renewable energies and build strategic alliances to confront climate change. One goal he is working on is a list of 1,000 solutions that are “profitable for protecting the environment”, which he will present at the UN climate change summit, COP24, in Poland in 2018.

Mr Piccard was the initiator and visionary behind the plane. The first Solar Impulse plane took off in 2010, and was followed in 2015 by Solar Impulse 2, which Mr Piccard co-piloted with André Borschberg on a round-the-world trip, ending in July 2016. It was the very first airplane to circumnavigate the globe without fuel, propelled entirely by solar energy. Electric aviation for short-haul flights will be a reality within a decade, Mr Piccard bets. A medical doctor and explorer, Mr Piccard is a forward-thinking leader and activist on sustainability. It is not just about technology but about belief, understanding and determination, he says as he urges his audiences to break free of current

It’s a tall order, but Mr Piccard is used to that : “When we started out people laughed at us. We felt like Dumbo [with our big solar airplane]. We don’t know which road leads to our goal–so we need to visit all of them.” Watch Bertrand Piccard’s Big IdEAs lecture at https://youtu.be/NqFA4m7r-jI Visit http://bertrandpiccard.com and https://solarimpulse.com/ For more on the Big IdEAs series, see www.iea.org/ newsroom/events/bigideas/ See also the OECD’s New Approaches to Economic Challenges initiative at www.oecd.org/NAEC Read “With the sun on its wings” in OECD Observer No 279 May 2010, http://oe.cd/-b


Recent speeches by Angel Gurría Globalisation, Inequality and Thailand 4.0 Remarks delivered at the Amartya Sen Lecture in Bangkok, Thailand, 24 August 2017

Ambassadors Mr Paul Dühr, Luxembourg

Opportunities and Policy Challenges of Digital Transformation in SEA

Mr Paulo Vizeu Pinheiro, Portugal

Opening remarks delivered at the OECD Southeast Asia Regional Forum in Bangkok, Thailand, 24 August 2017

Mr Klavs A. Holm, Denmark

Ms Marlies Stubits-Weidinger, Austria

Mr Noé Van Hulst, Netherlands

©OECD/Julien Daniel

Ms Annika Markovic, Sweden

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/

High-level follow-up meeting of the Global Deal for Decent Work and Inclusive Growth Remarks delivered in New York, US, 18 September 2017 Achieving the SDGs through Health for All Remarks delivered at the United Nations Headquarters, New York, US, 18 September 2017 Equator Prize 2017 Award Ceremony

Investing in Climate, Investing in Growth

Ms Claudia Serrano, Chile

Opening remarks delivered at a seminar in Pretoria, South Africa, 25 July 2017

Ms Elin Østebø Johansen, Norway

Globalisation, regional integration and prospects for South Africa

Mr Zoltán Cséfalvay, Hungary

Remarks delivered at the South African Institute of International Affairs, 24 July 2017

Mr James Kember, New Zealand

OECD Economic Survey of South Africa 2017

Mr Brian Pontifex, Australia

Launch in Pretoria, South Africa, 24 July 2017

Mr George Krimpas, Greece

Aid for Trade Global Review 2017 Remarks delivered in Geneva, Switzerland, 11 July 2017

Mr Ulrich Lehner, Switzerland Mr Carmel Shama-Hacohen, Israel

Mr Pierre Duquesne, France

Ms Michelle d’Auray, Canada

Mr José Ignacio Wert, Spain Mr Jean-Joël Schittecatte, Belgium Mr Jong-Won Yoon, Korea Mr Christopher Sharrock, United Kingdom

OECD-FAO Agricultural Outlook 2017-2026

Mr Erdem Bas¸çi, Turkey

Launch in Paris, France, 10 July 2017

Ms Ivita Burmistre, Latvia

Remarks delivered in New York, US, 17 September 2017

G20 Summit: Session on digitalisation, women’s empowerment and employment

ECOFIN meeting on international taxation

Remarks delivered in Hamburg, Germany, 8 July 2017

Opening remarks delivered in Tallinn, Estonia, 16 September 2017

G20 Summit: Session on climate and energy

OECD Economic Survey of Estonia 2017

Remarks delivered in Hamburg, Germany, 7 July 2017

Launch in Tallinn, Estonia, 15 September 2017

Mr Aleksander Surdej, Poland Mr Pekka Puustinen, Finland Mr Dermot Nolan, Ireland Mr Kristjan Andri Stéfansson, Iceland Mr Alessandro Busacca, Italy Mr Petr Gandalovic, Czech Republic Ms Irena Sodin, Slovenia Mr Hiroshi Oe, Japan

Tidewater 2017

Mr Alar Streimann, Estonia

Remarks delivered at the opening session in Lisbon, Portugal, 3 July 2017

Ms Monica Aspe Bernal, Mexico

The impact of scientific and technological advances and innovation

OECD Global Forum on Responsible Business

Remarks delivered in Beijing, China, 12 September 2017

Opening remarks delivered in Paris, France, 29 June 2017

—­— Mr Juraj Tomáš, Slovak Republic Chargé d’Affaires a.i.

Challenges and solutions for globalisation

OECD International Migration Outlook 2017


Remarks delivered in Beijing, China, 12 September 2017

Launch in Paris, France, 29 June 2017

European Union

OECD Economic Survey of Latvia 2017 Launch in Riga, Latvia, 15 September 2017

Conduct 2017

Mr Martin Hanz, Germany

Mr Peter Haas, United States Chargé d’Affaires a.i.

Mr Rupert Schlegelmilch

OECD Economic Survey of Slovenia 2017

OECD Economic Survey of the Slovak Republic 2017

Launch in Ljubljana, Slovenia, 5 September 2017

Launch in Bratislava, Slovak Republic, 21 June 2017

August 2017

OECD Observer No 311 Q3 2017



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 JULY 7-8

G20 Summit 2017, Hamburg, Germany


Launch of Aid for Trade at a Glance 2017


Greece-OECD Public Integrity Forum, Athens, Greece


Launch of Government at a Glance 2017


Launch of Education at a Glance 2017


Launch of Entrepreneurship at a Glance 2017

26-27 OECD Conference on Artificial Intelligence – “AI: Intelligent Machines, Smart Policies”, Paris, France


OECD Secretary-General lecture on Climate Action: Time for implementation, Toronto, Canada


Public consultation on the tax challenges of digitalisation, Berkeley, United States of America


21 International launch of PISA 2015 Results Volume V 28

OECD Economic Outlook 2017/2, Paris, France

28-30 The Women Political Leaders Global Forum (WPL), Reykjavik, Iceland DECEMBER 5

Launch of Pensions at a Glance 2017


The Stockholm Conference, Pacific Alliance, Stockholm, Sweden


G200 Youth Forum 2017, Dubai, UAE


Meeting on Tourism Policies for Sustainable and Inclusive Growth, Paris, France


Public consultation on transfer pricing matters, Paris, France


OECD Global Forum on Competition, Paris, France


International Economic Forum on Africa, Paris, France


5th OECD Forum on Tax and Crime, London, United Kingdom


Forum of the Americas, Paris, France


Launch of OECD Digital Economy Outlook 2017


World Anti-corruption Day


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



Meeting of the OECD Global Parliamentary Network, Paris, France

Roundtable on 20 years of the Anti-Bribery Convention, Paris, France


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


One Planet Summit, Paris, France


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

23-26 World Economic Forum Annual Meeting, Davos-Klosters, Switzerland

19-20 Champion Mayors Conference, Seoul, Korea 23-25 OECD Eurasia Week, Almaty, Kazakhstan

This strip originally appeared in OECD Observer No 300, Q3 2014.


OECD participation at UN Framework Convention on Climate Change COP 23, Bonn, Germany

20-21 Conference on Innovation in Government, Paris, France



Don’t cry for me Argentina’s economy has survived recurring states of crises, alternating between periods of recession and high economic growth. The economy, and its people, need to be better equipped to be more resilient to shocks. Encouragingly, bold reforms have successfully turned Argentina’s tumultuous economy around. Now that the economy has been broadly stabilised, the OECD’s Multidimensional Economic Survey of Argentina 2017 recommends further reforms to ensure these advances can be sustained and shared. In particular, priorities

should focus on raising productivity and competitiveness, while reinforcing people-centred growth so that the benefits reach all Argentines. The remaining challenges facing Argentina are threefold. First, longlasting macroeconomic stability must be achieved to counter economic crises, which are often rooted in fiscal problems. This can be achieved by reducing the fiscal deficit and bringing down inflation. Second, Argentina has a long-standing problem as a weak performer in investment and productivity compared to its neighbours. Reforms are needed in competition, trade, infrastructure, and skills, among others. Third, inequality, poverty and informality are still undermining growth and well-being. Improvements are needed in education, regulations, taxes and law to better

protect student and workers, and improve outcomes. While Argentina has made significant strides in improving the economy, the report warns against the threat of falling back into crisis and leaving large parts of the population behind. Many Argentines are still struggling to make ends meet: a third live in poverty and another fifth are at risk of falling into poverty. Now that the foundations have been laid, Argentina should maintain momentum and break away from a pattern of crisis. OECD (2017), OECD Economic Surveys: Argentina 2017: Multli-dimensional Economic Survey, OECD Publishing, Paris. http://dx.doi.org/10.1787/eco_surveys-arg2017-en

Better prospects for indigenous students Plutarch once said, “Education is not the filling of a pail, but the lighting of a fire.” The educational prospects of indigenous students in Canada, New Zealand and Queensland, Australia, are getting brighter, a new study of the OECD finds. The share of indigenous pupils graduating from high school increased between 2010 and 2015 in all regions analysed in Promising Practices in Supporting Success for Indigenous Students. The largest growth was observed in Canada with an increase of more than 10 percentage points to 53%. However this share has not yet reached that of indigenous pupils graduating in New

Zealand and Queensland, Australia (both 68%).

with academic coaches has been particularly effective.

Policies are getting better at supporting the well-being, participation, engagement and achievement in education of indigenous students. Take the example of New Zealand, where the expulsion rate of indigenous students was halved between 2005 and 2015. Expulsion from school is a punishment that can have extreme consequences for pupils, limiting their ability to finish their education. To avoid it, certain schools in New Zealand introduced the indigenous practice of Te Whakatika, a process that helps students resolve issues in groups. In Queensland, Australia, the enrolment gap between indigenous and non-indigenous students has nearly closed in the past decade, falling from 29.2% in 2008 to 0.9% in 2016. In this regard, supporting students and schools

While there is a strong commitment to improve education outcomes for indigenous peoples in the countries and regions analysed in the book, certain challenges remain, such as the teaching of indigenous languages, which is often missing from high-school curricula. The remoteness of schools is another problem, as it renders the recruitment of teachers more difficult and raises social issues. The fire is lit but persistent efforts and data collection are needed to keep prospects bright for indigenous students. OECD (2017), Promising Practices in Supporting Success for Indigenous Students, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264279421-en

OECD Observer No 311 Q3 2017



New publications International Migration Outlook 2017 The International Migration Outlook 2017, the 41st edition of this annual OECD publication, analyses recent developments in migration movements and policies in OECD countries and selected non-member countries. ISBN: 978-92-64-27555-3 August 2017, 364 pages €116.00 $150.00 £89.00 ¥14 270

Aid for Trade at a Glance 2017: Promoting Trade, Inclusiveness and Connectivity for Sustainable Development This edition of Aid for Trade at a Glance focuses on trade connectivity, which is critical for economic growth, inclusiveness and sustainable development. This report builds on the analysis of trade costs and extends it into the digital domain, reflecting the changing nature of trade. ISBN: 978-92-64-27846-2 August 2017, 552 pages €70.00 $84.00 £56.00 ¥9 100

OECD-FAO Agricultural Outlook 2017-2026 The thirteenth joint edition of the OECDFAO Agricultural Outlook provides market projections for major agricultural commodities, biofuels and fish. The 2017 report contains a special feature on the prospects for, and challenges facing, Southeast Asia. ISBN: 978-92-64-27547-8 July 2017, 150 pages €68.00 $82.00 £54.00 ¥8 800

All publications are available to read and share at www.oecd-ilibrary.org OECD Research and Development Expenditure in Industry 2016

This publication is a unique source of detailed internationallycomparable business R&D data, making it an invaluable tool for economic research and analysis. ISBN: 978-92-64-27454-9 June 2017, 92 pages €24.00 $29.00 £19.00 ¥3 100

African Economic Outlook 2017: Entrepreneurship and Industrialisation The African Economic Outlook 2017 presents the continent’s current state of affairs and forecasts its situation for the coming two years. This annual report examines Africa’s performance in crucial areas: macroeconomics, external financial flows and tax revenues, trade policies and regional integration, human development, and governance. ISBN: 978-92-64-27454-9 June 2017, 316 pages €55.00 $66.00 £44.00 ¥7 100

Small, Medium, Strong. Trends in SME Performance and Business Conditions This publication addresses a growing demand by governments for tools to monitor the business environment for small and medium-sized enterprises, and benchmark the effectiveness of policies in creating appropriate conditions for them to flourish and grow. ISBN: 978-92-64-27567-6 June 2017, 120 pages €24.00 $29.00 £19.00 ¥3 100


OECD Business and Finance Outlook 2017 The OECD Business and Finance Outlook is an annual publication that presents unique data and analysis that looks at what might affect and change, both favourably and unfavourably, tomorrow’s world of business, finance and investment. ISBN: 978-92-64-27488-4 June 2017, 172 pages €35.00 $42.00 £28.00 ¥4 500

Green Growth Indicators 2017 Green growth policies need to be founded on a good understanding of the determinants of green growth and need to be supported with appropriate indicators to monitor progress. This book presents a selection of updated and new indicators that illustrate the progress that OECD and G20 countries have made since the 1990s. ISBN: 978-92-64-26577-6 June 2017, 160 pages €24.00 $29.00 £19.00 ¥3 100

National Urban Policy in OECD Countries This publication has been prepared for the Habitat III conference and builds on existing United Nations Human Settlements Programme (UN Habitat) methodology. The findings of this report will contribute to the global monitoring process of National Urban Policy, as will the Global Report on National Urban Policy, jointly produced by UN Habitat and the OECD. ISBN: 978-92-64-27188-3 May 2017, 136 pages €24.00 $29.00 £19.00 ¥3 100


Focus on education The OECD Handbook for Innovative Learning Environments How might we know whether our schools or systems are set up to optimise learning? How can we find out whether we are getting the most from technology? Teachers and educational leaders who grapple with such questions will find this handbook an invaluable resource.

ISBN: 978-92-64-27723-6 August 2017, 100 pages €24.00 $29.00 £19.00 ¥3 100

Getting Skills Right: Skills for Jobs Indicators This report describes the construction of the database of skill needs indicators, such as the OECD Skills for Jobs Database, and presents initial results and analysis. It identifies the existing knowledge gaps concerning skills imbalances, providing the rationale for the development of the new skill needs and mismatch indicators.

ISBN: 978-92-64-27786-1 August 2017, 112 pages €24.00 $29.00 £19.00 ¥3 100

The Funding of School Education: Connecting Resources and Learning This report on the funding of school education constitutes the first in a series of thematic comparative reports bringing together findings from the OECD School Resources Review. School systems have limited financial resources with which to pursue their objectives and the design of school funding policies plays a key role in ensuring that resources are directed to where they can make the most difference.

All publications available at www.oecd.org/bookshop and www.OECD-iLibrary.org Starting Strong 2017: Key OECD Indicators on Early Childhood Education and Care

Early childhood education and care (ECEC) can help lay the foundations for future skills development, well-being and learning. The report takes a hard look at issues such as access and governance, equity, financing, curriculum, the teaching workforce and parent engagement.

ISBN: 978-92-64-27610-9 July 2017, 192 pages €24.00 $29.00 £19.00 ¥3 100

Engaging Employers in Apprenticeship Opportunities: Making It Happen Locally This joint OECD-ILO publication provides guidance on how local and regional governments can foster business-education partnerships in apprenticeship programmes and other types of work-based learning, drawing on case studies across nine countries.

ISBN: 978-92-64-26658-2 June 2017, 244 pages €50.00 $60.00 £40.00 ¥6 500

PISA 2015 Results (Volume IV): Students’ Financial Literacy PISA 2015 Results (Volume IV): Students’ Financial Literacy explores students’ experience with and knowledge about money and provides an overall picture of 15-year-olds’ ability to apply their accumulated knowledge and skills to real-life situations involving financial issues and decisions.

OECD Skills Outlook 2017: Skills and Global Value Chains The OECD Skills Outlook 2017 shows how countries can make the most of global value chains, socially and economically, by investing in the skills of their populations. This report presents new analyses based on the Survey of Adult Skills and the Trade in Value Added Database.

ISBN: 978-92-64-27317-7 May 2017, 164 pages €30.00 $36.00 £24.00 ¥3 900

PISA 2015 Results (Volume III): Students’ Well-Being PISA 2015 Results (Volume III): Students’ Well-Being explores a comprehensive set of well-being indicators for adolescents that covers both negative outcomes (such as anxiety, low performance) and the positive impulses that promote healthy development (such as interest, engagement, motivation to achieve).

ISBN: 978-92-64-27381-8 June 2017, 528 pages €60.00 $72.00 £48.00 ¥7 800

Taxation and Skills This Tax Policy Study on Taxation and Skills examines how tax policy can encourage skills development in OECD countries. This study also assesses the returns to tertiary and adult education and examines how these returns are shared between governments and students.

ISBN: 978-92-64-26937-8 April 2017, 240 pages €50.00 $60.00 £40.00 ¥6 500

ISBN: 978-92-64-27023-7 June 2017, 268 pages €35.00 $42.00 £28.00 ¥4 500

ISBN: 978-92-64-27613-0 July 2017, 316 pages €60.00 $72.00 £48.00 ¥7 800 OECD Observer No 311 Q3 2017



A skill in need A skilled labour force can help countries integrate into the global market, but which skills are in demand and are countries able to supply them? OECD Skills Outlook 2017: Skills and global value chains provides some answers. Based on the Survey of Adult Skills and the Trade in Value Added Database, OECD Skills Outlook 2017 reports on skill sets by country and how these skills translate to global market performance and global value chains (GVCs). It throws light on the global shift of market forces and the countries doing best to equip their

population with the skills necessary to remain competitive on a global scale. The study shows that OECD countries that used to enjoy a comparative advantage because the education level of their population was higher, such as Canada, will have to focus on the right skills more than ever. This is especially the case as the levels of tertiary education and vocational skills are on the rise in many developing and emerging countries. Consequently, countries increasingly compete through their skills, not only through their level of education, in global value chains. Several OECD countries have improved their participation in global value chains in recent years, including Israel, Japan and Turkey. Countries appearing to have benefited the most include Chile, Korea

and Poland, having increased both their productivity and their participation in these value chains. On the other hand, the effects of participation in global value chains on employment and inequality remain unclear. Import competition from low-cost countries has led to a fall in employment, especially in the manufacturing sector. At the same time, OECD countries export high-tech products and business services to other countries, creating new employment opportunities. Bolstering cognitive skills, in IT for instance, is essential for rising up the global value chain and making it work for all. OECD (2017), OECD Skills Outlook 2017: Skills and Global Value Chains, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264273351-en

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Gender engineering

Gender parity across disciplines: still a long way to go % of woman students in tertiary level studies in OECD countries, 2015



But this “relative” decoupling is not enough if the world is to reach its objective of staying under a global 2°C increase. CO2 emissions must be cut back sharply. Too few countries have recorded “absolute decoupling”, meaning GDP continues to grow while carbon emissions actually fall, rather than just slowing. While most OECD countries were either close to or had entered this stage in 2014, the fastest developing economies, namely China and India, had a less than proportional to GDP, but still very marked increase in CO2 emissions, far from reversing the trend. Between 1995 and 2014, average emissions of OECD countries rose by only 3%, while average emissions of BRIICS countries rose by 139%.


Health and welfare

Social sciences journalism and information

Arts and humanities



Business, Natural sciences, admin. and law maths and stats




Information and communications technologies


business administration and law at 54%. In 2015, an average of 27% of new entrants in OECD countries selected a field of study in science, technology, engineering or mathematics (STEM) with most going into engineering, manufacturing and construction–only 24% of the latter were

women. Encouraging more women to take up careers in these areas is a policy concern in the OECD area. OECD (2017), Education at a Glance 2017: OECD Indicators, OECD Publishing, Paris. http://dx.doi.org/10.1787/eag-2017-en

Most countries have decoupled CO2 emissions from economic growth OECD and G20

Demand-based CO vs GDP, 1995 to 2011 ²

Production-based CO vs GDP, 1995 to 2014 ² Change in production-based C0 emissions, %, 1995-2014 ²

Apart from a few countries such as Brazil and Saudi Arabia, most countries’ CO2 emissions are increasing proportionally less than GDP.


Source: Education at a Glance 2017: OECD Indicators

Cutting back on CO2 emissions Investment in green technologies, carbon pricing and other environmental policies have aimed at increasing economic growth while slowing down, and then reversing, carbon dioxide (CO2) emissions. How well has this decoupling been doing until now?



45° line

Zone 1: No decoupling



45° line

Zone 1: No decoupling



100% Zone 2: Relative decoupling 50%

Zone 2: Relative decoupling



50% 0%

Change in demand-based C0 emissions, %, 1995-2011 ²

More women are going into postsecondary education than men: women’s enrolment rates are 11 percentage points higher on average than that of men. But look closer: there are noticeable differences between the disciplines women are choosing to pursue and those of their male counterparts. In fact, women make up 78% of students in education and 76% of students in health and welfare. Women are over-represented in these areas, as they are in the arts and humanities, social sciences, journalism and information. Meanwhile, only 24% and 19% of students in engineering, and information and communications technologies (ICT), respectively, are women. Men and women are equally represented at 50% in the natural sciences, maths and statistics, as well as

Zone 3: Absolute decoupling


Zone 3: Absolute decoupling






Change in GDP, %, 1995-2011

Source: OECD (2017), Green Growth Indicators 2017

These figures are based on measures of production-based CO2, which only take domestic production into account. Looking at demand-based CO2 which takes the production and transportation of imported products into account, OECD countries aren’t performing that well. Sweden, for instance, although its production-based carbon emissions






Change in GDP, %, 1995-2014


have decreased, has seen an increase in demand-based carbon emissions. Germany and Denmark have seen their carbon emissions decrease according to both measures. OECD (2017), Green Growth Indicators 2017, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264268586-en

OECD Observer No 311 Q3 2017


DATABANK % change from: previous period



previous year

current period

same period last year


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 1.8 Q3-2017 0.6 1.9

Current balance Unemployment rate Interest rate

Q2-2017 -7.2 -11.5 Q2-2014 -12.8 -12.9 Q3-2017 5.6 Q2-2014 5.9 5.7 5.6 Q3-2017 1.7 2.9 Q2-2014 2.7 1.8


Gross domestic product Industrial production Consumer price index

Q2-2014 0.2 Q3-2017 0.6 0.9 3.1 Q2-2014 -0.9 0.2 Q2-2017 1.4 4.7 Q2-2014 1.0 1.8 Q3-2017 0.1 2.1

Current balance Unemployment rate Interest rate

Q2-2017 2.0 Q1-2014 1.5 2.1 3.1 Q3-2017 5.5 Q2-2014 5.0 6.2 4.7 Q3-2017 -0.3 Q2-2014 0.3 -0.3 0.2


Gross domestic product Industrial production Consumer price index

1.7 Q3-2017 0.3 Q2-2014 0.1 1.0 Q2-2014 0.6 Q2-2017 0.8 3.4 3.5 Q2-2014 -0.3 0.4 Q3-2017 0.2 1.9

Current balance Unemployment rate Interest rate

Q2-2017 -1.4 -5.0 Q1-2014 -0.2 -0.2 Q3-2017 7.2 7.7 Q2-2014 8.5 8.4 Q3-2017 -0.3 0.2 Q2-2014 0.3 -0.3


Gross domestic product Industrial production Consumer price index

Q2-2017 1.1 Q2-2014 0.8 2.5 3.7 Q2-2017 2.3 7.7 Q2-2014 0.8 4.5 Q2-2014 1.3 2.2 Q3-2017 0.1 1.4

Current balance Unemployment rate Interest rate

Q2-2017 -12.1 Q2-2014 -10.9 -14.6 -15.0 Q3-2017 6.2 7.1 Q2-2014 7.0 7.0 Q3-2017 1.2 Q2-2014 1.2 0.8 1.2


Gross domestic product Industrial production Consumer price index

Q2-2014 0.2 Q2-2017 0.7 1.3 2.1 Q2-2014 -3.3 -1.5 Q3-2017 5.1 3.6 Q2-2014 1.6 5.1 Q3-2017 0.1 1.7

Current balance Unemployment rate Interest rate

Q2-2017 -1.7 Q1-2014 -2.0 -1.3 -3.1 Q3-2017 6.5 Q2-2014 6.2 6.5 5.9 Q3-2017 2.5 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 6.8 5.8 Q2-2017 0.2 Q2-2014 0.1 Q3-2017 0.5 0.2 2.5

Current balance Unemployment rate Interest rate

Q2-2017 0.9 Q2-2014 -1.9 0.8 -1.0 Q3-2017 2.8 Q2-2014 6.2 4.0 6.9 Q3-2017 0.4 Q2-2014 0.4 0.3 0.5


Gross domestic product Industrial production Consumer price index

Q2-2014 0.2 Q2-2017 0.7 2.7 1.1 Q2-2014 0.6 0.8 Q2-2017 -0.3 2.5 Q2-2014 0.4 Q3-2017 0.5 0.6 1.5

Current balance Unemployment rate Interest rate

Q3-2017 6.6 Q2-2014 5.3 5.7 5.8 Q3-2017 5.7 Q2-2014 6.4 6.4 6.9 Q3-2017 -0.3 Q2-2014 0.3 -0.2 0.3


Gross domestic product Industrial production Consumer price index

Q2-2017 1.3 Q2-2014 1.1 2.9 5.2 Q2-2014 3.3 Q3-2017 -2.8 4.4 2.5 Q3-2017 0.9 Q2-2014 0.3 0.0 3.7

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 6.5 8.3 Q3-2017 -0.3 0.2 Q2-2014 0.3 -0.3


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 1.7 3.0 Q2-2014 0.2 0.9 Q3-2017 0.0 0.7

Current balance Unemployment rate Interest rate

Q2-2017 -0.4 Q1-2014 -0.4 -0.8 -0.5 Q3-2017 8.7 Q2-2014 8.6 8.7 8.1 Q3-2017 -0.3 0.2 Q2-2014 0.3 -0.3


Gross domestic product Industrial production Consumer price index

Q2-2014 0.0 2.2 Q3-2017 0.5 0.1 Q2-2017 1.1 Q2-2014 -0.5 -2.1 1.7 Q2-2014 0.4 0.9 Q3-2017 0.0 0.6

Current balance Unemployment rate Interest rate

Q2-2017 -5.2 -4.5 Q1-2014 -6.7 -13.2 Q3-2017 9.7 9.9 Q2-2014 10.2 10.3 Q3-2017 -0.3 Q2-2014 0.3 -0.3 0.2


Gross domestic product Industrial production Consumer price index

Q2-2014 -0.2 1.3 Q2-2017 0.6 2.1 Q2-2017 1.5 3.1 Q2-2014 -0.9 1.5 Q2-2014 0.2 Q3-2017 0.5 1.7 1.1

Current balance Unemployment rate Interest rate

Q2-2017 65.6 87.1 Q1-2014 68.6 65.0 Q3-2017 3.6 4.1 Q2-2014 5.0 5.3 Q3-2017 -0.3 Q2-2014 0.3 -0.3 0.2


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 Q3-2017 -1.2 1.0

Current balance Unemployment rate Interest rate

Q2-2017 -0.1 0.2 Q2-2014 0.4 -0.4 Q2-2017 21.6 27.6 Q2-2014 27.1 23.6 Q3-2017 -0.3 0.2 Q2-2014 0.3 -0.3


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 1.6 5.0 Q3-2017 0.2 Q2-2014 0.2 -0.2 2.4

Current balance Unemployment rate Interest rate

Q2-2017 1.5 2.1 Q4-2013 1.4 0.3 Q2-2017 4.3 5.2 Q2-2014 8.0 10.4 Q3-2017 0.3 Q2-2014 2.8 0.8 4.6


Gross domestic product Industrial production Consumer price index

Q2-2014 -1.2 2.2 2.7 Q2-2017 -1.1 Q2-2014 -5.0 Q2-2017 -0.1 -3.2 -1.7 Q2-2014 0.9 2.3 Q3-2017 0.3 1.6

Current balance Unemployment rate Interest rate

Q2-2017 0.3 Q1-2014 0.0 0.3 0.1 Q3-2017 2.9 6.1 Q2-2014 5.1 3.0 Q3-2017 4.9 Q2-2014 6.1 6.3 6.2


Gross domestic product Industrial production Consumer price index

6.5 Q2-2017 1.4 Q2-2014 1.5 5.8 Q2-2017 3.3 Q1-2014 3.8 -1.0 2.8 Q2-2014 0.8 0.4 Q3-2017 0.1 0.1

Current balance Unemployment rate Interest rate

Q2-2017 2.1 Q1-2014 3.0 5.8 3.2 Q3-2017 6.1 7.8 Q2-2014 11.7 13.7 Q3-2017 -0.3 Q2-2014 0.3 -0.3 0.2


Gross domestic product Industrial production Consumer price index

Q2-2014 0.4 3.0 Q2-2017 0.6 2.2 Q2-2014 -3.9 Q2-2017 3.9 -0.6 3.0 Q2-2014 0.4 -0.2 Q3-2017 -0.2 0.8

Current balance Unemployment rate Interest rate

Q2-2017 2.3 1.7 Q2-2014 2.2 3.1 Q3-2017 4.1 Q2-2014 6.1 4.7 6.7 Q3-2017 0.1 Q2-2014 0.7 0.1 1.5


Gross domestic product Industrial production Consumer price index

Q2-2014 -0.2 -0.2 Q2-2017 0.3 1.5 Q2-2017 1.3 Q2-2014 -0.5 -0.1 3.4 Q2-2014 0.2 0.4 Q3-2017 0.1 1.1

Current balance Unemployment rate Interest rate

Q2-2017 12.3 14.8 Q1-2014 7.9 -0.1 Q3-2017 11.2 11.6 Q2-2014 12.5 12.2 Q3-2017 -0.3 Q2-2014 0.3 -0.3 0.2


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 0.6 Q3-2017 0.0 3.6

Current balance Unemployment rate Interest rate

47.4 Q3-2017 55.3 Q2-2014 6.3 18.7 Q3-2017 2.8 Q2-2014 3.6 3.0 4.0 Q3-2017 0.1 0.1 Q2-2014 0.2 0.2


Gross domestic product Industrial production Consumer price index

Q3-2017 1.4 3.6 Q2-2014 0.5 3.5 Q2-2014 -0.9 1.3 Q3-2017 1.5 1.2 Q2-2014 0.3 2.3 Q3-2017 0.6 1.6

Current balance Unemployment rate Interest rate

Q3-2017 23.4 Q2-2014 23.6 20.5 19.4 Q3-2017 3.7 3.1 Q2-2014 3.7 3.8 Q3-2017 1.4 1.4 Q2-2014 2.7 2.7

Luxembourg Latvia

Gross domestic product Industrial production Consumer price index

Q1-2014 0.8 Q3-2017 1.5 3.8 6.1 Q2-2017 2.5 Q2-2014 -0.1 8.8 9.0 Q2-2014 0.5 0.9 Q3-2017 -0.6 2.9

Current balance Unemployment rate Interest rate

Q2-2017 -0.2 0.0 Q3-2017 8.2 Q2-2017 8.9 9.8 9.5 Q3-2017 -0.3 Q2-2017 -0.3 -0.3

Luxembourg Mexico

Gross domestic product Industrial production Consumer price index

Q2-2014 1.0 2.2 Q2-2017 0.6 2.7 Q2-2017 3.2 Q2-2014 0.9 0.6.. Q2-2014 -0.1 Q3-2017 0.1 3.6 1.9

Current balance Unemployment rate Interest rate

Q2-2017 0.6 0.8 Q2-2014 -7.1 -5.7 Q3-2017 6.0 Q2-2014 5.0 6.3 5.1 Q3-2017 -0.3 Q2-2014 3.7 -0.3 4.3


Gross domestic product Industrial production Consumer price index

Q3-2017 -0.2 1.8 Q2-2017 -0.2 .. Q3-2017 0.9 6.5

Current balance Unemployment rate Interest rate

Q2-2017 -1.2 -6.7 Q3-2017 3.3 3.8 Q3-2017 7.4 4.7


% change from: previous period

current period

previous year

same period last year


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 -0.4 -2.0 0.8 Q2-2014 0.8 1.0 Q3-2017 0.5 1.4

Current balance Unemployment rate Interest rate

Q4-2013 24.7 Q2-2017 19.4 25.6 16.5 Q2-2014 7.0 6.6 Q3-2017 4.7 5.8 Q2-2014 0.3 0.2 Q3-2017 -0.3 -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 Q3-2017 0.5

3.3 2.5 2.7 1.4 1.6 1.9

Current balance Unemployment rate Interest rate

Q4-2013 -0.7 Q2-2017 -1.1 -1.8 -1.2 Q2-2014 5.6 Q3-2017 4.6 6.4 4.9 Q2-2014 3.4 2.6 Q3-2017 2.0 2.3


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 0.3 0.2 2.1 Q2-2014 0.7 Q3-2017 0.3 1.8 1.5

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 1.81.1 Q3-2017 0.8


Gross domestic product Industrial production Consumer price index

Q2-2014 0.6 3.3 Q2-2017 1.1 4.4 Q2-2014 -0.2 3.4 Q3-2017 1.4 7.4 Q2-2014 0.0 2.0 0.3 Q3-2017 -0.2

Current balance Unemployment rate Interest rate

Q1-2014 -0.8 -3.0 Q2-2017 -1.9 0.0 Q2-2014 9.2 10.5 Q3-2017 4.7 6.0 Q2-2014 2.7 2.9 Q3-2017 1.7 1.7


Gross domestic product Industrial production Consumer price index

Q2-2014 0.3 3.0 Q2-2017 0.3 0.9 1.5 Q2-2014 1.6 6.9 Q3-2017 4.9 Q2-2014 1.0 1.1 Q3-2017 -0.7 -0.3

Current balance Unemployment rate Interest rate

Q2-2014 -0.1 0.1 Q2-2017 0.1 1.0 Q2-2014 14.4 Q3-2017 8.8 16.9 10.9 Q2-2014 0.3 Q3-2017 -0.3 0.2 -0.3

Slovak Republic

Gross domestic product Industrial production Consumer price index

Q2-2014 0.6 3.4 2.4 Q2-2017 0.9 Q2-2014 -0.8 4.9 Q2-2017 -1.4 1.5 Q2-2014 0.2 -0.1 Q3-2017 0.2 1.5

Current balance Unemployment rate Interest rate

Q1-2014 0.5 0.5 Q2-2017 -0.5 -0.1 Q2-2014 13.4 14.3 Q3-2017 7.4 9.6 Q2-2014 0.3 Q3-2017 -0.3 0.2 -0.3


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 7.8 Q2-2014 1.5 0.6 Q3-2017 -0.4 1.2

Current balance Unemployment rate Interest rate

Q2-2014 0.7 Q2-2017 0.7 0.7 0.6 Q2-2014 9.5 10.5 Q3-2017 6.5 7.8 Q2-2014 0.3 0.2 Q3-2017 -0.3 -0.3


Gross domestic product Industrial production Consumer price index

Q2-2014 -5.6 Q2-2017 5.2 1.3 6.6 Q2-2014 24.7 26.2 Q3-2017 16.8 19.4 Q2-2014 0.3 Q3-2017 -0.3 0.2 -0.3


Gross domestic product Industrial production Consumer price index

Q2-2014 0.6 1.2 Current balance Q3-2017 0.8 3.2 Q2-2014 0.6 2.3 Unemployment rate Q2-2017 0.6 2.2 Q2-2014 1.0 0.2 Interest rate Q3-2017 -0.5 1.7 Q2-2014 0.7 2.6 Current balance Q2-2017 1.3 3.0 Q2-2014 -1.4 Unemployment rate Q3-2017 0.0 -0.6 5.9 Q2-2014 0.6 0.0 Interest rate Q3-2017 0.5 2.2


Gross domestic product Industrial production Consumer price index

Q2-2014 0.0 Q2-2017 0.3 Q4-2013 -1.0 Q2-2017 1.3 Q2-2014 0.5 Q3-2017 -0.2

1.1 0.4 -1.2 2.9 0.1 0.5

Current balance Unemployment rate Interest rate

Q2-2014 7.5 Q2-2017 6.3 9.2 5.6 Q2-2014 8.0 8.0 Q3-2017 6.8 6.9 Q2-2014 0.6 0.9 Q3-2017 -0.7 -0.7 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 Q3-2017 -0.7 0.0 -0.7


Gross domestic product Industrial production Consumer price index

Q2-2014 -0.5 Q2-2017 2.1 2.5 6.1 Q2-2014 -0.9 2.6 Q2-2017 1.8 4.6 Q2-2014 2.6 9.4 Q3-2017 0.7 10.6

Current balance Unemployment rate Interest rate

Q2-2014 -9.3 -17.5 Q2-2017 -10.0 -8.2 Q1-2014 9.1 8.5 Q2-2017 11.2 10.5 .. .. .. ..

United Kingdom

Gross domestic product Industrial production Consumer price index

Q2-2014 0.9 Q3-2017 0.4 Q2-2014 0.3 Q2-2017 -0.3 Q2-2014 0.7 Q3-2017 0.5

3.2 1.5 2.1 0.2 1.7 2.8

Current balance Unemployment rate Interest rate

Q1-2014 -30.6 -27.3 Q2-2017 -29.7 -40.8 Q2-2014 6.3 7.7 Q2-2017 4.4 4.9 Q2-2014 0.5 Q3-2017 0.3 0.5 0.5

United States

Gross domestic product Industrial production Consumer price index

Q2-2014 1.1 Q3-2017 0.7 2.6 2.3 Q2-2014 1.3 4.2 Q3-2017 -0.4 1.5 Q2-2014 1.2 2.0 2.1 Q3-2017 0.4

Current balance Unemployment rate Interest rate

Q2-2014 -98.5 -106.1 Q2-2017 -123.1 -108.2 Q2-2014 6.2 7.5 Q3-2017 4.3 4.9 Q4-2013 0.0 Q3-2017 1.2 0.2 0.7

European Union

Gross domestic product Industrial production Consumer price index

Q2-2014 0.2 1.2 Q3-2017 0.6 2.5 Q2-2014 0.0 2.8 1.3 Q2-2017 1.1 Q2-2014 .. 0.7 Q2-2017 .. 1.7

Current balance Unemployment rate Interest rate

.. .. Q2-2017 46.1 66.1 Q2-2014 10.3 10.9 Q3-2017 7.5 8.5 .. .. .. ..

Euro area

Gross domestic product Industrial production Consumer price index

Q2-2014 0.0 0.7 Q3-2017 0.6 2.5 Q2-2014 -0.1 0.8 Q2-2017 1.2 2.6 Q2-2014 .. 0.6 Q2-2017 .. 1.5

Current balance Unemployment rate Interest rate

Q4-2012 51.7 108.4 17.2 Q2-2017 78.9 Q2-2014 11.6 12.0 Q3-2017 9.0 9.9 Q2-2014 0.3 Q3-2017 -0.3 0.2 -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 Q3-2017 0.9 2.9 Q3-2017 0.4 Q2-2014 2.0 6.4 2.6

Current balance Unemployment rate Interest rate

Q2-2014 -19.6 -19.9 Q3-2017 -6.7 -5.5 .. .. .. .. .. .. .. ..

1 China

Gross domestic product Industrial production Consumer price index

.. .. .. .. Q2-2014 -0.4 2.2 Q3-2017 0.3 1.6

Interest rate

Q2-2017 42.3 Q2-2013 54.2 58.1 57.7 .. .. .. .. 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 Q2-2017 2.5 1.8 Q2-2014 2.5 6.9 Q3-2017 2.4 2.4

Current balance Unemployment rate Interest rate

Q2-2017 -14.9 .. .. -1.4 .. .. .. .. Q3-2017 6.1 .. .. 6.6


Gross domestic product Industrial production Consumer price index

Q3-2017 1.2 5.0 Q2-2014 1.2 5.1 .. .. Q2-2014 0.4 3.8 Q3-2017 0.8 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 Q3-2017 -0.9 Q2-2014 0.9 1.6 1.3 Q2-2014 2.6 3.4 Q3-2017 0.2 7.6

Q2-2017 -3.8 Q4-2013 -3.5 -7.3 -4.1 .. .. Q3-2017 6.5 .. .. 6.9 Q2-2014 8.5 5.7 Q2-2017 5.3 4.5

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 Q3-2017 0.6 4.6


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 Q3-2017 8.7 .. .. 11.0 Q2-2014 8.8 7.4 Q2-2017 -1.8 -2.3

.. .. .. .. Q3-2017 7.2 .. .. 7.3 ..=not available, 1 Key Partners. Source: Main Economic Indicators.

OECD Observer No 311 Q3 2017




30 25 20 15 10


The deep recession of 2007-08 hit young people hard, but it hit foreignborn youth even harder. While 13.9% native-born 15 to 29-year-olds in OECD countries were neither employed nor in education or training (NEET) in 2015, the rate for foreign-born in that demographic was 21.5%. That said, foreign-born young people comprise very different populations: some are recently-arrived migrants while others arrived as children with their parents and have been educated in the host-country. However, when comparing NEET rates of foreignto native-born young people, language difficulties are often, if not always, a problem for the latter. And though the recently-arrived may be skilled, their qualifications may be unfamiliar to potential employers. Now, 10 years later, foreign-born young people are finding themselves not only still unemployed, but increasingly unemployable. In most OECD countries, the gap between the average rate of foreign-born compared to native-born youth that are NEET has increased to 30%, or six percentage points. No wonder a lot

Outlook gap Difference in NEET rates (share of 15-24 year olds “not in employment nor in education or training”) between foreign-born and native, selected OECD countries, 2016 or latest year 50



45 40 35 30 25 20 15 10 5 0

Lu Po xe lan m d bo No urg rw Ice ay lan d Cz H U ec un K h ga Re r p y De ubli nm c Th e N Sw ark et ed he en rla n Ca ds na d Sw Is a itz rae er l lan d Fin US la Ire nd la Es nd Ge toni rm a an O y Po ECD rtu Au gal s Be tria lgi M um ex Fr ico a Sl nce ov en Sp ia a Gr in ee Sl ov c ak It e Re aly pu b Tu lic rk ey

Don’t give up



Source: OECD Migration Outlook 2017

of foreign-born young people are simply giving up. In the US, the number of foreign-born 15 to 24 year-olds who are continuing to look for work has fallen by over two percentage points. In Australia, the drop is 3.7 percentage points.

OECD Observer Crossword

Policymakers must do more to improve their outlook, so that foreign-born workers can also contribute more, and look forward to a future of better pay, a quality job, and better health.

No 3, 2017 Across 1 It evaluates educational systems worldwide by testing 15-year-old students of different nations 3 ___ equality 7 Computer connections 9 Site of the International Court of Justice, with The 10 Word describing the trading of human beings for the purpose of slavery 13 Cap or limit, sometimes used to try to enforce gender or racial equality 14 Vote of support 15 Bank’s automated teller 17 Asylum seeker 19 Inert gas symbol 20 Kind of school for young children, in USA and Japan, abbr. 22 Mechanical workers being used in factories 23 Word with income or sales

© Myles Mellor/OECD Observer

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


Down 1 Initial test, as in OECD’s project to assist formulation of policy to improve eductional facilities 2 Top country in collaborative problem solving per tests in 1 across 4 Suffix of most ordinal numbers 5 Slavery has always been a severe violation of a man or woman’s _____ 6 Montmartre or Saint Antoine 8 Bulgaria’s capital 11 Economic bloc 12 Scored, as in an educational test 13 Process of ensuring product quality, for short 15 Long time periods 16 Keep up with 17 The “Christ the Redeemer’’ statue overlooks it 18 To and ____ 21 Italian “but”


Asian Development Bank Institute adbi.org

Profile for OECD

OECD Observer No 311 Q3 2017  

OECD Observer No 311 Q3 2017