Charlotte Moreau

Water holds huge potential for economic, social and individual betterment. There are challenges to confront, but also opportunities. With the right approach, water could be a harbinger of progress. 

©OECD

This is my last editorial for the OECD Observer before I step down as secretary-general in May 2006. Nevertheless, I will focus on the future, rather than dwell on the past. That is not to say that we should ignore John Maynard Keynes’ advice that we should examine the present, in light of the past, for the purposes of the future. But sometimes the present and the future cannot draw many useful lessons from the past.

©Oswaldo Rivas/Reuters

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 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.

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.

Click to enlarge.

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.

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.

A global recovery is in progress, but growth is uneven, while emerging markets slow down, G20 finance ministers and central bank governors said after their meeting in Istanbul 9-10 February. 

©WorldBank

This will be “the mother of all years for summits on international development,” says Kevin Watkins*, Executive Director of the UK’s Overseas Development Institute (ODI). He’s not wrong.

Since 2009 the French government launched a new “auto-entrepreneurs’’ status to help small, often one-person, businesses below a certain earnings threshold to bypass many formalities of registration, in an effort to stimulate entrepreneurial activity and jobs. By mid-2014, the number of auto-entrepreneurs reached nearly 1 million, according to a French business creation agency, APCE. However, according to the national statistics office, INSEE, most of these businesses have made little if any money at all. The crisis has hardly helped, but is there a recipe for success?

©Stefano Guzzetti/Under licence from Shutterstock

In a time of economic turmoil, global tourism is still faring well: over 1.1 billion tourists traveled abroad in 2014, according to the World Tourism Organization (UNWTO). This is almost 5% more than in 2013, the organisation said in a press release.

©OECD

Star economist Thomas Piketty presented the English version of his global bestseller, "Capital in the Twenty-First Century", at the OECD on 3 July 2014 as part of The Coffees of the Secretary-General series. Read the complete transcript of Mr Piketty's presentation below.

What are the main threats to the world’s stability in the 10 coming years? Geopolitical risks as well as a water crisis have become a bigger threat than an economic breakdown, according to the World Economic Forum.

Trade Minister of Costa Rica, Anabel González, and OECD Secretary-General, Angel Gurría. ©OECD/Herve Cortinat

Costa Rica became the 45th country to adhere to the OECD Declaration on International Investment and Multinational Enterprises, an OECD instrument designed to help the country attract more and better foreign investment and promote responsible business conduct.

Prime Minister of Latvia, Valdis Dombrovskis ©Reuters/Ints Kalnins

On 19 September the OECD set out a clear path for Colombia’s accession to the organisation, reinforcing its commitment to further extend its global membership to include more emerging economies. On 16 October the OECD issued an accession roadmap for Latvia too.

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.

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?”

Classrooms need to be places for teaching creativity, as well as basic competence. Can it be done? 

How do our young students perform at school compared with their peers in other countries? Are they ready and equipped to take on the world of tomorrow? The OECD’s Programme for International Student Assessment (PISA), which surveys competence among 15 year olds around the world, gives ground for encouragement. 

When G20 regulators met in Pittsburgh in September 2009–it had taken them a full year to react to the collapse of Lehman Brothers–they set out an ambitious financial reform agenda. No stone would be left unturned, no shadow in the banking system unexposed. Action would cover all financial market segments and players, and lessons would be learned from the crisis to ensure that the 2008 debacle never happened again.

©Jackie Naegelen/Reuters

The car industry has taken a dent since the recession started to bite in 2008, but even before then, new patterns were emerging that would reshape the sector for a long time to come. 

© Aly Song/Reuters

In a global economy, the benchmark for educational success is no longer improvement by national standards alone, but the best performing school systems internationally. Latest results from the PISA assessment, the world’s metric for evaluating learning outcomes at school, issued 3 December, show striking changes in the world’s talent. 

The vision of a world without extreme poverty is not a utopia, but a reachable goal. Yet realising the vision demands that we meet urgent challenges, and that includes overhauling our development goals.

Developing countries are a broad group. At the top of the pile are emerging powerhouses such as Brazil and China. At the bottom are a poor group called fragile states, such as Afghanistan and Somalia. Fragile states lack capacity to carry out basic governance functions and are unable to develop constructive relation with society. They are home to half of all children not in primary school and half of all children who die before reaching their fifth birthday. In the next decade, these countries will be the main battlegrounds in the war against global poverty, breeding instability with regional and sometimes global consequences.

Dignity is all about people. Dignity is intrinsic–we’re all born with it. But dignity is also relational and is created among, and between people. Many of us don’t think about this, or notice it in our daily lives. But that’s only because we, our families and friends are fortunate enough to live relatively privileged lives. And because it can be difficult to establish the number of people living in difficult conditions–and their voices are less often heard.

Development aid fell by 4% in real terms in 2012, following a 2% fall in 2011. Though this decline must be reversed, it is not the only issue to address. Also being questioned is how that aid is measured in the first place. As Jon Lomoy explains, while it is high time to revisit the concept of official development assistance, the outcome of the discussion will influence the effectiveness of development policy over the next decade or more.

©Reuters/Lucas Jackson

Fixing finance

There are good reasons why the public has lost confidence in banking and finance. Two issues in particular must be addressed before it can be restored– moral hazard and conflict of interest. Reforms should ensure that banks and bankers–not taxpayers–pay the price of failure and are held fully accountable for their actions.

More...

©Mario Tama/Getty Images/AFP

Give youth a chance

Young people are being excluded from economic life by a combination of joblessness and barriers to the creation of start-ups. Unleashing the energy, entrepreneurial spirit and technological genius of the young is not just a moral imperative, but an economic necessity.

More...

The current crisis has continued to affect people’s lives across the world, and nowhere is this more evident than in the deteriorating labour market in many countries. Young people have been hit particularly hard and risk being permanently scarred from joblessness and even exclusion.

©Norwegian government

Ultimately the economic crisis is about people, says Espen Barth Eide, Norway’s minister of foreign affairs. That is why respecting human rights and adherence to democratic principles are fundamental when addressing the current economic crisis. We are in this together, so we need multilateral solutions more than ever.

Economic data

GDP : +0.5%, Q4 2014
Employment rate: 65.9%, Q4 2014
Annual inflation : 0.57% Feb 2015
Trade : -3.0% exp, -3.7 imp, Q4 2014
Unemployment : 7.022% Feb 2015
More moderate expansion ahead? Composite leading indicators
Updated: 23 Apr 2015

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