While the world focuses on the ongoing economic crisis, the challenge of climate change grows increasingly desperate. A number of lessons still have to be learned. 

The continuity of our societies and the sustainability of our planet will necessarily depend on how we, as a collective, can devise the solutions to the paramount and multifaceted difficulties that have arisen from the changes wrought by the Industrial Revolution. In fact, if we are to successfully transform these challenges into opportunities, what we need is nothing short of another revolution. And in today’s revolution the bayonets, unquestionably, need to be green. 

What can we do in the years to come to ensure food security? In the opinion of Action contre la Faim, a number of avenues could help promote secure access to food for everyone. 

Hunger affects about 1 billion people around the world, and as the economic crisis continues, the push for growth can actually make matters worse.

Development aid from OECD donor countries totalled $129 billion in 2010, the highest level ever, and an increase of 6.5% over 2009. But despite this record, the 2010 figures confirm that some donors are not meeting internationally agreed commitments.

As efforts to restart the stalled Doha Development Round negotiations intensify, the policy focus on world trade, and, specifically, its relation to development aid and growth in poorer countries, has become more acute. Trade is a powerful engine for economic growth, as the OECD’s founders argued 50 years ago, and, as such, can contribute to reducing poverty. However, efforts to improve trade in developing countries are often hampered by domestic constraints, particularly a lack of adequate economic infrastructures, as well as institutional and organisational obstacles.

How can we all learn from a crisis? Today, we find ourselves in a disappointing, if not altogether unexpected, predicament. The very governments who took bold and decisive action in the period of the financial crisis 2008-09 to bail out banks and keep financial markets alive now find themselves on the receiving end of severe punishment from financial markets. How could this be?

Microcredit has become a popular way to finance small businesses and local development projects, particularly in poorer countries. Economist, author, founder and first chairman of the European Bank for Reconstruction and Development (EBRD), Jacques Attali is founder of PlaNet Finance, which runs microfinance programmes in over 80 countries. In the run up to the OECD Forum in May 2011 where he is due to speak, Mr Attali talked to the OECD Observer.

The financial crisis has taken a heavy toll on government finances and taxpayers are still footing the bill. Could private investors do more to help out? Mohamed El-Erian, CEO and co-CIO of PIMCO, believes they should. He explains to the OECD Observer.

We are celebrating the OECD’s 50^th anniversary during the tail-end of the worst financial and economic crisis of our lifetimes. It’s a good moment to take stock and to ask the right questions. Why couldn’t we avoid the crisis? Were the policies and the policy mix we promoted the right ones, and how can we adjust these polices to new realities? What is more, are we doing enough to prevent another crisis? Are our economic theories, our models and our assumptions still appropriate? How should our organisation’s work be adapted so that we continue fulfilling our founding mission of promoting better policies for better lives?

Tourism is an important player in the worldwide economy. In 2009, it accounted for just over 9% of global GDP and employed about one in 12 workers, according to the World Travel and Tourism Council.

Did globalisation contribute to the economic crisis and if so how? This is one of several interesting questions asked in Measuring Globalisation: OECD Economic Globalisation Indicators 2010. In snapshot mode, this book looks at the financial crisis, trade, technology and multinational enterprises, and asks how these may have influenced the proliferation of the crisis, just as they helped spread prosperity and wealth in the first place.

Slower activity ahead?; Economy; Soundbites; Roundup; Corruption work praised; iLibrary launched; Israel joins the OECD; Secretary-General reappointed; Plus ça change...

As the OECD reaches 50, it must continue to become more relevant, useful and open within a new architecture of global governance, argues Angel Gurría, in this extract from remarks delivered following the renewal of his mandate as OECD secretary-general.*

Can greater use of information technology to manage whole healthcare systems help? The National Health Service Information Centre (NHS IC), England’s central, authoritative source of health and social care information for frontline decision makers, believes it can.

The healthcare sector rarely features prominently in trade policy. This is unfortunate, since the enormous differences in healthcare costs between countries imply that there are large potential gains from increased trade, writes economist Dean Baker.

The number of people worldwide living in absolute poverty–the World Bank defines this as people surviving on less than $1.25 a day–has fallen by about half a billion since 1990. China is a major contributor to the decline: its absolute poverty fell from about 60% in 1990 to only around 16% in 2005. India, too, saw some progress, as poverty there fell from 60% to 42%.

The road from conflict to peace and from destruction to development is far from smooth. In fact, research shows that half of all countries that have been ravaged by conflict are at war again within a decade. Transition Financing: Building a Better Response, part of the OECD’s Conflict and Fragility series of books, examines how the international community can help countries move from resolving conflicts to a lasting peace, grounded in what the authors describe as “sustainable development”. It involves a transition to greater national ownership and a greater capacity to ensure public safety and welfare.

Growth is picking up in the OECD area–at different speeds across regions–and at a faster pace than expected in the previous Economic Outlook (November 2009). Strong growth in emerging-market economies is contributing significantly. However, risks to the global recovery could be higher now, given the speed and magnitude of capital inflows in emerging-market economies and instability in sovereign debt markets.

“Special drawing rights”, a little-known quasi-currency, are important for developing countries and could become one of the world’s reserve monies.

As an OECD “veteran”, I was delighted to see that “human progress” is now on the OECD agenda (see www.oecd.org/progress). If you compare the OECD strategy to emerge from the oil-shock recessions of the 1970s (the McCracken Report) to the OECD Strategic Response to the Financial and Economic Crisis of today, you can see that in three decades the OECD has been transformed.

As biofuel production grew fourfold from 2000 to 2008, criticism of the industry seemed to increase nearly as dramatically. Production of these transport fuels, which are based on food crops such as grains, sugar cane and vegetable oils, competes with food crops and drives up food prices, experts argue. Also, from land-clearance needed for cultivation, production and use, these biofuels may actually increase, rather than reduce, greenhouse gas emissions.

Despite the repeated warnings about its effects on climate change, as well as resource depletion, the most recent projections from the World Energy Outlook 2009 show that coal will still remain the principal powergenerating fuel for decades to come. In fact, its usage is set to double by 2030, 5% more compared with pre-existing projections. The adjustment takes into account a projected 10% consumption increase in non-OECD Asia, as well as an 8% decrease in the OECD area. Nowadays, an additional 217 GW of coalfired capacity is being developed throughout the world, over 80% of which is located in non-OECD countries, mostly in China.

Has gender equality improved since International Women’s Day was first launched a century ago? The answers heard during this year’s global events on 8 March were mixed. Yes, progress has been made, but discrimination continues everywhere, which not only harms women but holds back society’s potential too.

Biotechnology has steadily evolved to become a potential motor of environmentally sustainable production and a proven source of a diverse range of innovations in agriculture, industry and medicine. Could we be at the dawn of a new bioeconomy? Public policies will influence the answer.

Could country-by-country tax reporting help boost revenue for development? The answer is not that simple.

Now for sustaining growth–; –as China sets the pace; Greening Greece; Soundbites; Economy; Aid shortfall; Chile's new president; Tax watch; Plus ça change...

Development aid for water supply and sanitation projects has risen in recent years after a decline in the late 1990s. Considering the importance of safe water, perhaps it hasn’t risen far enough. In 2007-08, OECD Development Assistance Committee countries committed on average $5.1 billion in bilateral annual aid to the water supply and sanitation sector, 50% up on 2003-04 in real terms. When combined with aid from multilateral agencies, the total was $6.6 billion. Over the 2003-08 period, bilateral aid to water increased by an annual average of 15%, while multilateral aid rose 3% annually. Still, for DAC countries, aid to the water supply and sanitation sector rose to just 7% of all aid commitments in 2007-08, only slightly up from 6% in 2003-04.

World agriculture faces an enormous challenge over the next 40 years: to produce almost 50% more food up to 2030 and double production by 2050. With pressure from increasing urbanisation, industrialisation and climate change also rising, proper water management will be vital.

Can global agriculture and food systems provide for the predicted 9 billion people living in the world in 2050? Predictions of global famine are not new, but recent setbacks in the fight to eradicate hunger have brought agriculture back to centre stage in international discussions.

In the years ahead, the global food and agriculture system will have to provide sustainably for billions more people and meet greater demands on quality, affordability and availability. Farming will be competing with other sectors for land, water and investment, while climate change adds new pressures.

Ministers and stakeholders from OECD member countries and key emerging economies gather in Paris on 25-26 February to discuss how best to respond to the challenges. We asked ministers from five of them–Austria and New Zealand as co-chairs, Canada, Germany and Chile–and leading representatives from Concern Worldwide, the International Federation of Agricultural Producers, John Deere, and the World Trade Organization:

“What actions are you prioritising to prepare the food and agriculture system for the needs of a rapidly changing world?”

Global electricity demand declined in 2009 for the first time since the end of World War II according to OECD estimates. Electricity demand experienced a constant climb over the second half of the 20th century through the oil crises of the 1970s, the Black Monday crash of 1987, and on through the dot-com bubble bursting at the turn of the millennium as development countered all downward forces. The credit crunch of 2008 though, has resulted in a drop of as much as 1.6% based on OECD figures derived from the IMF’s latest GDP growth forecast for 2009.

Has the crisis affected remittances from migrants abroad? One survey has found that migrants from Latin America based in the US are still sending money home even if that means cutting expenses, taking second jobs, working more hours or, if they have lost their jobs, dipping into their savings.

Just like R&D, researchers are vulnerable to economic downturns. R&D in industry is closely linked to creating new products and production techniques and to a country’s innovation effort. In 2006, before the current recession hit the global economy, around 2.6 million researchers, or about 65% of all researchers, including those in the government and education sectors, were employed by businesses in the OECD area.

International mergers and acquisitions have registered a decline of 56% in 2009 over 2008, latest estimates show. This is the largest year-on-year decline in recent history. Much of this decline was due to the 60% plunge in M&A activity by firms based in the OECD area, from over $1 trillion to $454 billion. But major emerging economies, which enjoyed strong international investment performance in 2008, also suffered their first sharp declines in 2009 with respect to both outward and inward M&As.

European businesses were disappointed with the climate change agreement hammered out in Copenhagen. Here’s one way forward.

As the financial storm recedes the full cost of the damage is being assessed. According to Financial Market Trends, from the start of the crisis to October 2009 governments and central banks in the US and Europe had provided over $11 trillion in support to banks and other financial firms, made up of capital injections, asset purchases, debt guarantees and facilities, and so on. This total does not take account of other wider social and economic costs incurred by way of losses in business, jobs and other fallout from the crisis. Still, as a Dow Jones journalist pointed out in seeing the figures, it amounts to a contribution of over $1,600 for every person on the planet. The question is: are policymakers doing enough to tackle the root of the problem and prevent the worst crisis in 50 years from happening again?

The world economy has hit a wall over the past 12-18 months. This was the opening message from INSEAD's Soumitra Dutta in a panel debate at OECD Forum 2009 to discuss the OECD's latest economic forecasts launched moments earlier (OECD Economic Outlook No 85, June 2009).*

Environmentally-friendly investments form part of many recently launched recovery programmes. With the right policies, they could achieve growth and a cleaner planet as well.

In the current financial crisis, risk-weary investors worry more about keeping their own boats afloat than in pumping money into a sector noted for high upfront costs, long pay back periods and low rates of return.

Water, is as essential to human activity as air. When cities or societies neglect water, they face collapse. The discussions and analyses emerging from the current economic crisis focus on what went wrong, how to stop the downward spiral, and how to create a better society in the future. But one thing is missing in all the talk of short-term stimulus packages and developing “green growth” economies and that is water.

In your article “Virtual solution” (No. 254, March 2006), you write that “any effective policy to encourage efficient use of scarce water resources must be based on pricing.” As you explain, increasing the price of water to better reflect its scarcity would cause low-value, water-intensive crops to become uncompetitive in water-scarce countries, and their imports more attractive. There is no disputing this logic, but any water policy prescription must be based on more than pricing and consider factors other than simply water scarcity if it is to be effective and adopted by governments.

The county of Kent, known romantically as the “Garden of England”, has suffered its worst winter drought since the 1920s. In response, the UK Environment Agency warned in February 2006 that, unless serious water conservation measures were brought in by April, the county could within months witness scenes of people queueing in the streets for water as domestic supplies were being cut off.

Every Thursday at noon the Tribunal de las aguas (water court) meets outside the cathedral in the city of Valencia along Spain’s Mediterranean coast. For more than a thousand years, it is believed, the court has ruled on disputes affecting the irrigation of the arable lands known as huertas, which nourish the lemon trees, the oranges and other crops that give this region its distinctive scents and flavours, and for many, livelihoods as well.

When world leaders agreed upon the United Nations Millennium Declaration in 2000, and then staged the 2002 World Summit on Sustainable Development, they set themselves some ambitious world poverty reduction goals: the Millennium Development Goals (MDG). One of the MDGs is to “halve, by 2015, the proportion of the people without sustainable access to safe drinking water and basic sanitation”. That goal is turning out to be a more complicated proposition than many expected.

As the ocean covers three quarters of the surface of the earth, little wonder people see it as a possible source of freshwater. That basically means desalinating it to make it at least clean enough for agriculture and even good enough to drink. How does it work? Distillation is the cheap option, responsible for most desalinised water, but a newer filtering process using membranes, called reverse osmosis, now accounts for nearly half the world’s capacity to turn ocean into freshwater.

Most people know the story of the Dutch boy who saved his country by plugging a leaking dyke with his finger until help arrived. For the Dutch, the story had a happy ending, but millions of people living on the world’s coastlands were not so lucky in the past year. First, the tsunami in December 2004 killed over 180,000 people in southern Asia, devastating coastal communities in Indonesia, Sri Lanka, Thailand and the Maldives.

The private water sector is larger than many people think, with thousands of businesses working every day, for the most part, to implement government policies. Are those businesses doing enough and how might they do more?

The county of Kent, known romantically as the “Garden of England”, has suffered its worst winter drought since the 1920s. In response, the UK Environment Agency warned in February 2006 that, unless serious water conservation measures were brought in by April, the county could within months witness scenes of people queueing in the streets for water as domestic supplies were being cut off.

Should water-scarce countries import water-intensive products and cultivate less water-intensive ones? After all, since all goods contain a certain amount of water in their production, exporting farm produce is rather like exporting water, albeit in virtual form. A thousand litres of water may be needed to produce a kilo of wheat, but five to ten times more is needed for a kilo of meat.