News brief - October 2010
Slower activity ahead?; Economy; Soundbites; Roundup; Corruption work praised; iLibrary launched; Israel joins the OECD; Secretary-General reappointed; Plus ça change...
Slower activity ahead?
Corruption work praised
Israel joins the OECD
Plus ça change...
Slower activity ahead?
A slowing in the pace of activity may lie ahead, the latest OECD composite leading indicators suggest. The leading indicators fell 0.1% in August, marking four straight months of negative or negligible growth. The indicator, which incorporates the likes of new orders, building permits and long-term interest rates, has had a good record of anticipating likely trends and turning points in activity, say, six months in advance. Currently, the leading indicator points strongly to a downturn in Canada, France, Italy and the UK. Crucially, it points to a downturn in activity in the emerging markets of China and India, and a slowdown in Brazil. It also increasingly points to a peak in economic growth for the US. In contrast, the data suggests continued expansion in Germany, Japan and Russia.
GDP in the OECD area increased by 0.9% in volume in the second quarter of 2010 compared with the previous quarter, a stronger pace than the 0.7% previously estimated. Gross fixed investment, which grew for the first time since early 2008, was the main contributor to the GDP increase, which was the fastest since the first quarter of 2000.
An increase in domestic demand was partially offset by negative contributions from net exports, which reduced overall GDP growth by 0.2 percentage points.
Germany grew strongly, at 2.2%, driven by higher investment and net exports, which contributed 0.8 points each. In the UK, 1.2% GDP growth reflected contributions from private consumption and stockbuilding. In Italy, foreign trade added 0.6 percentage points to overall GDP growth of 0.5%, more than offsetting lower domestic demand. In France, the 0.7% increase in GDP growth from the previous quarter is entirely attributed to stock rebuilding. The slower pace of the recovery in both the US and Canada was due to negative contributions from foreign trade, whereas in Japan, GDP growth of 0.4% reflected a positive contribution from the foreign balance.
Consumer prices in the OECD area rose by 1.6% in the year to August 2010, the same inflation rate as in July. Growth in energy prices slowed down to 4.8% in August from 6.2% in July, while food prices rose by 1.4% compared with 1.1% in July. Excluding food and energy, the annual inflation rate held steady at 1.2% in the year to August 2010.
Unemployment in the OECD area fell slightly to 8.5% in August from 8.6% in July and returning to August 2009 levels. Unemployment now appears stable across OECD countries.
E-death of archives?
“Communication via the internet has a transitory, fragmented and cursory quality which seems likely to work against the construction of coherent future archives.”
Editorial, The Observer, 10 October 2010
“I believe the debt crisis affecting Spain and the euro zone in general has passed.”
José Luis Rodríguez Zapatero, prime minister of Spain, quoted in The Wall Street Journal 22 September 2010.
“The fact that I managed to appoint three women out of the five directors of my administration is important. It took a lot of convincing, especially the men! That when a man and a woman are equally qualified, we must choose the woman.”
Christine Lagarde, France’s economy minister, in Le Monde, 14 October 2010
Anyone wondering if environmental taxes can spur innovation should look at recently published OECD analysis. Many governments already apply a range of taxes to energy, air and water pollutants and waste. However, the study shows that much better use could be made of environmental taxes to discourage polluting activities and boost innovative green technologies: “Consumers and businesses respond to green taxes by changing their behaviour, especially if government gives a strong signal that they intend to maintain tax rates and the price of carbon at high levels in the long term.
Meanwhile, 1.2 billion people are in danger of having no access to electricity by 2035, IEA Chief Economist Fatih Birol warned in an interview for the UN Millennium Development Goals summit meeting. Urgent and major action is needed to extend access, he said. An estimated 1.4 billion people worldwide currently lack access to electricity. In mining, efforts to end trade in so-called conflict minerals advanced in September when 11 African countries endorsed an OECD system for responsible sourcing of raw materials. Illegal exploitation of natural resources in fragile African states has been fuelling conflict across the region for more than a decade. Exploited minerals include diamonds, gold and tin. Public and private sector officials agreed that the OECD due diligence system should be part of wider plans to improve transparency and accountability across the central African minerals sector. Also, mining ministers from the International Conference on the Great Lakes Region agreed to forward the OECD’s guidance to heads of state slated to participate in a regional summit in the Democratic Republic of Congo next month.
The Philippines moved up to the list of jurisdictions that “have substantially implemented the internationally agreed tax standard”. After passing legislation earlier this year, the Philippines issued regulations to implement the new legislation. The progress report first issued in connection with the G20 London summit has been updated to reflect this move. See www.oecd.org/dataoecd/50/0/43606256.pdf
Twenty-eight jurisdictions from the Asia-Pacific region have adopted recommendations on fighting domestic and international bribery. The recommendations are made in the newly released Thematic Review on Criminalisation of Bribery. See www.oecd.org/bribery
Visit the newsroom at www.oecd.org/media.
Corruption work praised
The Society of Corporate Compliance and Ethics (SCCE) has awarded its International Compliance Award to the OECD and its Working Group on Bribery. OECD Secretary- General Angel Gurría, who has made the fight against bribery and corruption one of the key pillars of the OECD’s strategic objectives, thanked the SCCE for this recognition saying that: “The Anti-Bribery Convention is the cornerstone of the OECD’s Anti-Corruption Strategy, which aims to fight both the demand and the supply side of corruption. This prestigious award to the OECD and its Working Group on Bribery encourages us to continue this important endeavour”. The award recognises individuals and organisations that have contributed to ethical standards that comply with international codes of corporate conduct. See www.oecd.org/daf/nocorruption
The OECD iLibrary, a new platform giving comprehensive access to statistical data, books, journals and working papers, is now available. It replaces SourceOECD and hosts all content in such a way that users can find and cite individual tables and databases as easily as articles or chapters. The citation tool for datasets and tables is unique to the OECD iLibrary. OECD iLibrary contains all the publications and datasets released by the OECD and its sister bodies such as the International Energy Agency (IEA) and the International Transport Forum (ITF). That’s some 390 complete databases, 2 500 working papers, 5 500 books, 14 000 tables and graphs, 21 000 chapters and articles, though not yet those from the OECD Observer.
Israel joins the OECD
On 7 September 2010, Israel became the OECD’s 33rd member country when it deposited its instrument of accession to the OECD Convention. Israel was invited by OECD countries to open negotiations for membership in May 2007. See www.oecd.org/accession
OECD member countries reappointed Angel Gurría to a second five-year mandate. Portugal’s ambassador to the OECD, Eduardo Ferro Rodrigues, dean of the OECD’s governing council, said the consensus decision reflected the “high regard” member countries had for Mr Gurría’s “energetic leadership” and reflected their confidence in his ability to lead the organisation during the next five challenging years. See Mr Gurría’s remarks p.36-37.
Plus ça change...
“Both surplus and deficit countries are responsible for taking action to prevent imbalances from becoming large or persistent. […] Countries which are in surplus because of a strong competitive position cannot be called on deliberately to adjust their price levels upwards. In practice, however, they cannot isolate themselves completely[…]”
“Minimising balance of payments difficulties”, OECD Observer, No 25 December 1966
©OECD Observer No 281, October 2010
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