Determined and systematic action to implement a wide-ranging reform agenda in a wide range of areas is the best way for governments to stimulate sluggish demand, return to robust economic growth, create jobs and ensure that the fruits of these measures are widely shared in society, according to the latest edition of the OECD publication. Targeting growth.
This report assesses and compares the progress of reforms in different countries since 2013, and identifies from new priorities for action aimed at boosting growth while making it more inclusive. The OECD shows that the pace of economic reform has slowed in most advanced economies, after accelerating significantly during the global economic crisis. In the emerging economies, however, the pace of reform has increased.
"An ambitious reform agenda can help to stimulate job creation, enhance productivity and sustain demand, which is crucial to prevent a vicious circle in which sluggish demand and rising inequality undermine potential growth and confidence, leading to persistent stagnation.said OECD Secretary-General Angel Gurría at the launch of the report in Istanbul.
"We understand the difficulties that many governments face in advancing reforms in a context of low demand, limited fiscal space and high unemployment. Nevertheless, we still see structural reforms - combined with effective fiscal and monetary policy - as part of a trilogy that is essential to boosting growth".he added.
2015 Growth Target provides an assessment of the effects of growth-enhancing structural reforms on income inequality. The report stresses that advanced and emerging economies are encouraged to make their growth more inclusive by removing obstacles to raising employment and participation rates among under-represented groups such as women, youth, the low-skilled and older people.
"The implementation of comprehensive reform strategies can be one of the remedies to the rising inequalities and persistent social consequences of the crisis".said Mr. Gurría. "Implementing reforms that improve employment opportunities and the earnings potential of low-skilled workers, help young people enter the labour market and improve the employment prospects of women will unlock the growth potential of our economies and ensure that everyone benefits. »
The Secretary-General of the OECD presented Targeting growth with Turkish Deputy Prime Minister Ali Babaçan ahead of the Group of Twenty (G20) Finance Ministers' meeting on 9 and 10 February. He said that implementing the report's recommendations for economic growth by liberalising trade and investment, investing in people's skills and stimulating innovation would strengthen growth while sustaining demand in both OECD and G20 countries. To this end, it is essential to improve product and labour market regulations, while reducing barriers to international trade and investment.
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Analyses ofTargeting growth form the basis for the OECD's broader contribution to the G20 Framework for Strong, Sustainable and Balanced Growth and for its National Growth Strategies. The recommendations in this publication have contributed to the development of these National Growth Strategies endorsed by G20 Leaders at the Brisbane Summit in November 2014. These strategies aim to increase the gross domestic product (GDP) of all the countries concerned by 2 % over the next five years. They can also help to provide clearer guidance on the direction and sustainability of policy decisions, which is important for confidence-building.
"The experience of the Great Recession illustrates the critical importance of structural reforms to restore growth, where fiscal and monetary policies are reaching their limits in most countries.said Mr. Babaçan. "We need to understand that accommodative macroeconomic policies cannot solely and permanently preserve growth. Therefore, accelerating structural reforms must be our priority and, as such, the G20 Growth Strategies are key to achieving our goals. I am convinced that the Going for Growth 2015 report will be useful for many countries to set a reform agenda for strong, sustainable and balanced growth. »
2015 Growth Target highlights the main reform trends and areas where further progress is needed:
- Reform intensity remained strong, albeit declining, in Spain, Greece, Ireland and Portugal, while it increased in Japan. In contrast, the intensity of reform remained low and even declined in most of the Nordic countries and the core euro area.
- The pace of reform has accelerated in most major emerging economies, particularly China and Mexico, as authorities have recognized the existence of bottlenecks and other constraints on growth, as well as the need to reduce their vulnerability to fluctuations in commodity prices and capital flows.
- Labour productivity remains the main driver of long-term growth. In the OECD area, countries are giving priority to education and active labour market policies (ALMPs), given the importance of intellectual capital and skilled labour as complementary sources of growth and the worrying persistence of unemployment.
The report also examines the pressures on the environment from economic growth and the role of structural reforms and environmental policies. Evidence on the importance of proper design of environmental policies and their impact on productivity gains is presented.
