The opening session on “Innovation, jobs & clean growth” had OECD Secretary-General Angel Gurría and Italy’s Finance Minister Giulio Tremonti on the podium.
The session opened with Angel Gurría revealing that when he was Finance minister in Mexico, he earned himself the nickname Gurría Scissorhands for overseeing six rounds of budget cuts, following the collapse in oil prices. As he pointed out, he’s now in good company, with cuts the order of the day in a number of countries seeking to tackle the legacy of the financial crisis and the Great Recession, not least Italy, which yesterday announced an emergency austerity budget.
Gurría praised the courage of the Italian decision, which includes a public sector wage freeze, a six-month deferment of new state pensions, and raising the retirement age of women to 65. The budget is designed to reassure markets that Italy can support its public debt, which stands at 115.8 percent of GDP.
This desire, or need, to please the markets was the subject of the only intervention from the floor that was applauded. A speaker from Germany echoed the feelings of many, not just in the room, that all the talk last year about taming the markets had come to nothing and that it was back to business as usual. Financial markets were, he said, no longer there to provide a service to actors in the real economy seeking investment capital, but had taken on a life of their own.
Speaking to people after the meeting, none of them were convinced by Giulio Tremonti’s reply about the origins of the problems being accountancy standards and over-reliance on the use of net present value, a measure of cash flows, although there was widespread approval for reforming financial market regulation.
Another theme emerging from the floor was the to give developing countries a greater role in international affairs. One speaker from an unidentified African country said she thought the OECD concentrated too much on South Africa and should be more involved with other nations on the continent.
A speaker from Egypt echoed the concerns that nothing had changed since last year and the same old rules were still being applied despite the promises.
Angel Gurría described how the OECD is engaged with practically every country in Africa through a number of means, not least the African Economic Outlook, and that the Organisation is actively pursuing a programme of enhanced engagement with several emerging economies.
He also pointed out that the World bank had changed the weighting it uses for votes and that the chair of the IMF’s policy steering committee is an Egyptian – Youssef Boutros Ghali.
So, not much about innovation and clean growth so far, but that will no doubt change as the Forum gets in to the sessions on specific aspects such as energy, ethics and what green jobs actually are.