The OECD Forum starting today will bring together around 2000 people in over 20 sessions, but the main question will be how to make sure the economy is a firm foundation on which to build our societies’ goals.
As OECD data on rising inequality show, the benefits of growth do not automatically trickle down to generate more equal societies. The most immediate challenge is to ensure that growth benefits everyone – women, men, children, the elderly – providing not just income, but access to the goods and services such as housing, health care or education vital to personal well-being and development.
That means we need to adopt a new, inclusive approach that looks at the social as well as the economic aspects of growth. “Inclusive growth” is already happening at the level of national economies, with countries linked together by global value chains (GVCs). And not just in the OECD area. One of the most striking features of the 21st century economy is how the economic centre of gravity is shifting towards Asia, and surprisingly for many, Africa, home to six of the world’s ten fastest growing economies in Africa.
These trends make old ideas of development partnerships obsolete. Large emerging economies now have their own international aid programmes. The private sector is funding major global health, education and other projects. Civil society is increasingly shaping policy and not just working in the field.
However, government policy has not always kept up with the deepening and widening of globalisation and the pace it’s happening at. For example, some multinationals may pay as little as 5% in corporate taxes in a given country when smaller businesses are paying up to 30%. But this is perfectly legal, and exploits the fact that tax systems are still essentially nation-based and were designed for the “old” economy.
Even so, public opinion and the media are outraged, especially given the efforts demanded of ordinary citizens to help cut budget deficits, and the suffering caused by austerity programmes in certain countries. There is a feeling that tax is not the only area where businesses are not acting ethically. Banks manipulating interest rates or food manufacturers deceiving consumers about the ingredients in their products destroy confidence and reinforce mistrust. Government responses to these issues are often perceived as too lenient, and encourage the feeling that there is one law for the rich and powerful, another for the rest.
Many are saying that the social contract – the agreement between citizens and their government, defining the rights and duties of each – is now broken. In the face of unprecedented unemployment levels, governments have cut expenditure. As a consequence, more and more people cannot afford health care, and many young people in particular are giving up trying to find jobs or investing in further education. This is a personal tragedy, and it also weakens social cohesion and the future prospects of the economy, given the growing need for workers with new skills.
The ability of advocacy groups like unions to protect core rights and promote social change is in question, especially if they neglect newer forms of informing, mobilising and campaigning around issues such as social media. At the same time, there are doubts as to whether “social media based” movements are anything more than a passive expression of opinion, and whether protest groups that reject the usual structures of leadership and policymaking can stay together long enough to bring about lasting change in the face of opponents organised in a more traditional way.
There is consensus though that access to information and the ability to exploit it will play an increasing role in the economy and society in the future, with both benefits and dangers. Business models and personal behaviour and attitudes are already changing. But once again, policy is not evolving as quickly as the trends and technologies it is supposed to respond to, or even guide. Massive amounts of personal data are being collected, often with little or no consultation or consent, or debate as to who has the right to know what.
The fact that so many of the phenomena being discussed are immaterial (data, intellectual property, the financial system) can blind us to the fact that we still depend on physical, material, resources to live full lives. Beyond the immediate and pressing concerns linked to the situation today, we have to look to the future. Growth will come to a halt if it destroys the very natural bases on which it ultimately depends. And growth as such will not solve our problems if it is not sustainable as well as equitable and inclusive.
The links below are grouped around the main themes of the Forum. Click to read an article presenting the topic itself, and giving access to dozens of articles providing background data, analysis and opinion.