“Globalisation, propelled by trade and investment liberalisation, and rapid technological change, has delivered prosperity and reduced poverty for millions of people in recent decades. We have learned, however, that reaping the full benefits of globalisation requires many elements, including good public and corporate governance; policies that promote structural adjustment and social cohesion; greater access to education; efficient financial markets; and sound policies for research, innovation and development. Of course, policies are critical, but implementation is too often undermined by domestic political considerations.

At the end of the 2006 Ministerial Council Meeting (MCM), Donald Johnston will complete his second 5-year term as the fourth secretary-general of the OECD and will formally hand over office to Angel Gurría, who was nominated by OECD member countries last November. A former lawyer and minister in the Canadian government, Mr Johnston took over the reins from Jean-Claude Paye in 1996. We asked the outgoing secretary-general for his reflections on what has proved to be a period of great change in the global economy.

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.

Economic forecasting is a delicate exercise, but having just arrived back from Beijing, I am satisfied that all our predictions about the might of China in the global economy will come to pass, perhaps even sooner than many believe.

The Dark Ages, the Renaissance, the Industrial Revolution: these may be phrases from previous centuries, but they carry a multitude of images, lessons and historical memories that are still relevant today. I believe that the end of the last century and the beginning of this one will be characterised as the dawn of the “Age of Globalisation”.

The Ministerial Council meeting and Forum this year provide a rich menu of issues for consideration including investing in energy, structural adjustment in response to globalisation, development challenges, as well as the progress of trade negotiations under the Doha Round.

The OECD is once again hosting a meeting of social policy ministers. The last meeting took place seven years ago. Then, priorities and challenges were identified that needed to be addressed urgently in OECD countries. Many of these issues are still on the agenda today.

“Nothing exists until it is measured”. This keen observation by the Danish physicist and Nobel laureate, Niels Bohr, has become something of a leitmotiv in the statistics world, but it bears some scrutiny.

Just a few days ago, an article appeared in a major Canadian newspaper deploring the exodus of qualified doctors and nurses from African countries struggling to contain disease, especially AIDS. These highly skilled professionals are being attracted by opportunities in more developed countries, but while they may look forward to better lives, the communities they leave suffer an important loss.

There are large economic forces at work in the world that carry the potential for immense human progress, but that also can make our economies and societies more vulnerable. Despite the fact that we have known this for at least two decades, since the process of globalisation began to take hold, the international community still fails to secure cooperative action on a scale and nature that will allow all nations to reap the benefits of globalisation.

Demography and climate change: as I read the literature and consult the experts, I am increasingly convinced that many of this century’s important challenges, especially for our children and grandchildren, will flow from these two phenomena. Let me sketch some scenarios and questions with respect to each.

The global political calendar for 2004 appears unspectacular compared with recent years. No Monterreys, no Johannesburgs, no Cancúns, no summits on water or the information society. Yet, like all calm waters, looks can deceive.

We live in a multilateral, networked, world. It requires rules, of course, but these will never be strong without a system based on principles and values. Trade, business and science are just a few examples of areas where trust needs to be rebuilt. How ironic that mistrust should develop during today’s age of information, where knowledge and confidence, not ignorance and fear, should be the hallmarks.

After a decade of rising employment, innovative start-ups and widespread business euphoria, unemployment has started to increase again across the OECD. It seems that the rise in unemployment is less pronounced than was the case in previous bouts of economic weakness, and this reflects encouraging improvements in structural employment. Still, it is a stark reminder that the fight against high and persistent joblessness must remain at the top of the policy agenda.

Some commentators say that the divisions over Iraq have put multilateralism in jeopardy. I have also participated in recent days in discussions as to how to heal the transatlantic rift. Relationships are said to be “frayed” or “irreparably damaged”. Really?

The OECD might not be thought of as playing a role in water supply and management, but in fact it has a leading role, as it does in all areas of sustainable development.

In terms of maximising economic growth and wealth creation, the OECD has performed remarkably well, and perhaps better than our founders could have expected. What do the social indicators tell us? Frankly, on this front, we have not been as successful.

We are inundated these days with concerns about corporate governance. Corporate executives are under attack and major auditing firms are worried, as well they might be in the wake of the demise of one of their giants, Arthur Andersen. Enron, WorldCom, Tyco – what should our reaction be to these extraordinary and outrageous breaches of faith with shareholders andemployees?

There seems to be a wide variety of definitions and opinions as to what “sustainable development” really means. One might even be tempted to conclude that sustainable development is in the eye of the beholder!

This is the year of development! The Monterrey Summit on Financing for Development, the OECD Ministerial starting 15 May, the African Initiative of the G8 Summit and the World Summit on Sustainable Development in Johannesburg: all are largely focused on poverty reduction and effective development assistance. This 10-point strategy could help:

It was Louis XIV’s finance minister, Jean-Baptiste Colbert, who claimed that the art of taxation was to pluck the maximum amount of feathers from the goose with the least amount of hissing. Colbert’s view was close to the truth, even in today’s world, but taxation in his day was not used as an instrument to achieve a broad range of economic and social objectives. Rather, it was a tangle of practices and customs designed to finance wars, private and public works, as well as the pet schemes of the royal family – and their aristocratic hangers-on. In fact, until the 20th century, the notion of a progressive tax on income did not strike them as being virtuous.

“Look to your health: and if you have it, praise God.” This quotation is drawn from Izaak Walton’s seminal work, The Compleat Angler, a book which is to be found in the library of every fishing aficionado. Walton lived in the 17th century. At that time, the general belief was that health was “a blessing that money cannot buy”. True, we see around us in friends and family a connection between good genes and longevity. But, unlike the days of Walton, we no longer accept the premise that the benefits of health and consequent longevity are left to God and chance.

I confess to being somewhat tired of the term “globalisation” which seems to find its way into the speeches and writings of everyone who has any interest in public policy. Globalisation is alternatively condemned as a worldwide agenda driven by greedy multinational corporations and bureaucrats where the rich get richer and the poor poorer, or praised as the way forward to increased prosperity for all and the answer to the dire circumstances of billions of distressed people on planet earth.

The world is a living biological organism, not just a planetary rock with life somehow superimposed on it. This is the so-called gaia hypothesis developed by James Lovelock and Lynn Margulis. In a recent interview Mr Lovelock noted: “Life clearly does more than adapt to Earth. It changes Earth for its own purposes. Evolution is a tightly coupled dance, with life and the material environment as partners.”

Since I arrived at the OECD in 1996, I have participated in more conferences on more issues than I would have imagined possible. These many and varied meetings focused on almost every area of public policy. Without exaggeration, I can report that in all cases a common thread of consensus was education as the fundamental building block of social and economic progress. Would this have been the case, say, 100 or even 50 years ago? I doubt it.

The dot.coms that were the darlings of the stock markets just a few months ago have gone into hibernation. I say hibernation because I believe that some of them, those that have real value, will return. Others which floated upwards on wishful thinking may never again find their way into serious investment portfolios. Indeed, many of them have already folded. What does this mean, if anything, for the future of electronic commerce?

Poverty in all its forms is the greatest challenge to the international community. Of special concern are the 1.2 billion people living on less than $1 a day and the additional 1.6 billion living on less than $2 a day.

Over several months I have participated in many discussions with experts from all over the world on the issue of the new economy. The question usually raised: is there a new economy? The consensus answer seems to be “perhaps”. There may be an element of media hype about it all, but there is also substance behind the headlines. As OECD chief economist, Ignazio Visco, points out in this special edition of the OECD Observer, trends are finally emerging in the economic data that the new economy might help to explain, especially in the area of productivity.

The 1990s was a busy decade in the fight against international corruption. Several high-profile campaigns were launched, in the world Bank, the Council of Europe, the Organization of American States, to name but a few. In the Clean Hands campaign, the pool of Milan magistrates purged Italy’s public sector with a thoroughness and a forthrightness that inspired other countries to follow suit.

Evolve or die! A harsh admonition, but a very appropriate one as we contemplate the century and millennium ahead! In 1893, John Hanson Beadle, author and journalist, wrote this epitaph for futurology (reported in New Scientist, October 15, 1994): “All history goes to show that the progress of society has invariably been on lines quite different from those laid down in advance, and generally by reasons of inventions and discoveries which few or none had expected.”

On the Eiffel Tower here in Paris where the OECD is based, there is a clock which clicks down the days left to the end of the 20th century and the beginning of the new. It is a large, brightly-lit clock and it can be seen from quite a distance away. At the time of writing there were 178 days to go. Tomorrow it will be 177. Soon it will be 10 and in the blink of an eye, it will be day zero, or is that day 1?

Within the developed world, food has never been safer, life expectancy never longer. Yet scares, recently over mad cow disease and now over genetically modified food, have pushed biotechnology high on the popular and political agendas in several countries, with accompanying regulatory battles, public showdowns and trade disputes. Public opinion appears divided, with all sides making sense and at the same time adding to the confusion. The trouble is that amid all the noise, virtually anything to do with ‘genetic engineering’, whatever the benefits, is in danger of becoming -taboo.

OECD Observer editorials published between December 1996 and January 1999.

The economic environment is changing rapidly. Globalisation is being driven by international trade and investment which, in turn, are spurred on by the borderless world produced by swift advances in communications and transport technologies. The necessary companions are market liberalisation – without which the current expansion of trade and investment would slow dramatically – and new forms of governance to referee the changing rules of the game and ensure effective implementation of public policy.

Fundamental questions about the respective roles of the state and the market lie at the heart of the current debate about regulatory reform. Governments are grappling with a double challenge: they have to reduce obstacles to the dynamic market forces that drive efficiency and innovation in an increasingly competitive, globalising economy; and they have to find more efficient ways to protect and promote important public-policy goals. Regulatory reform helps them deal with both.

The liberalisation of trade and foreign investment has stimulated innovation, encouraged efficiency and promoted growth. Open trade has been a driving force for stability and prosperity. It has been a precondition for the fourteen-fold expansion in world trade in goods since 1950 and a six-fold increase in world production.