Romain Despalins, OECD Directorate for Financial and Enterprise Affairs
In 2016, private pension assets reached their highest-ever level at over USD38 trillion in OECD countries, according to Pensions Markets in Focus. Investment losses resulting from the financial crisis have been recouped in almost all reporting OECD countries. However, the low-interest rate environment continues to exert pressure on pension providers through lower yields on the bond portion of their portfolio investments, which may affect their ability to maintain promises to plan members. This has given rise to concerns that pension providers could increase their exposure to riskier investments in a search for potential higher yield.
Funded and private pension arrangements continued to expand in countries such as Australia, Canada, Denmark and the Netherlands where pension assets exceeded the size of the GDP. This reflects a trend which has seen pension assets grow faster than GDP in most countries over the last decade. This trend is most pronounced in countries with large private pension markets.
Pension providers experienced positive real investment rates of return, net of investment expenses, in 2016 in 28 of the 31 reporting OECD countries and 25 of the 32 reporting non-OECD jurisdictions. These rates of investment return were above 2% on average both inside and outside the OECD area. Annual returns were also positive over the last decade in most countries, with the highest average annual real investment rates of return (net of investment expenses) observed in the Dominican Republic (6.3%), Colombia (5.8%) and Slovenia (5.2%).
This new OECD report on trends in the financial performance of private pension plans covers 85 countries. It assesses the amount of assets in funded and private pension plans, describes the way these assets are invested in financial markets, and looks at how investments have performed, both in the past year and over the past decade.
References and links
Read the report at www.oecd.org/pensions/pensionmarketsinfocus.htm
Read the OECD Observer’s roundtable on pensions at http://oe.cd/25M
Cynthia Ohayon, West Africa analyst, International Crisis Group
The question of the place and influence of religion on society and politics is delicate. In Mali, a West African country in which 95% of the population is Muslim, Islam is a fact of life. Fears are growing in some quarters that religion could expand to occupy more space as a driver of social norms and wield undue influence. It does not have to be so, for rather than being a danger, religion can serve as a stabilising force in this crisis-ridden country.
Mali is still reeling from the 2012 crisis when self-proclaimed jihadi armed groups took centre stage. The 2012 events, compounded by other atrocities committed in West Africa and further afield, have quite understandably heightened the debate about the place of Islam in the state and society. Some Muslim leaders insist they have the right, and even the duty, to engage in major public debates and even to get involved in politics, including giving voting instructions and standing for office. This is causing concern among some Malians and certain Western partners too.
For now, the perception that Muslim leaders have an excessive influence over political life in Mali is somewhat exaggerated. Religious groups undeniably have become powerful lobbyists, using their important role within society and capacity to mobilise to their advantage. Their motives are diverse, from promoting moral values to defending financial interests in a quest for power or influence. But so far, religious leaders have not taken Malian politics hostage, and the country’s political class and non-Islamic civil society show little or no sign of ceding too much political space to religious groups.
Mali’s collapse in 2012 calls for serious rebuilding of the state, which the country has so far failed to engage. Defining the place of religion in society and politics is a delicate challenge but one that must be faced up to in this endeavour. The crisis highlighted the lack of regulation of religious activities, which many Malians deplore. But the need to better regulate religion’s role should be balanced against heavy-handed government involvement as this could backfire. Official religions that co-operate with a state perceived as being in the pay of the West could find themselves discredited. It could drive more support behind informal, non-regulated, religious movements.
Instead, the answer may lie in minimum regulation of the religious sphere, focusing on two areas where there appears to be consensus: outlawing hate speech and improving the training received by imams. The government should also work towards a more constructive partnership with religious authorities by bringing their representatives into Mali’s reconstruction in the areas of social regulation and conflict resolution. With the credibility they enjoy among the population, religious leaders can play a mediation role, especially when social crises or intercommunal violence erupt. They can also help fight dangerous radical ideology: religious authorities should be viewed as partners, working not just alongside the authorities, but at the heart of strategies to counter extremism.
In Mali, the challenge is to define and delimit the place of Islam in the state and society so that it can serve as a force for stability and progress. It is up to Mali’s people to work together and find ways to meet the challenge.
The views expressed are the author’s only, and do not necessarily reflect the views of the OECD or the Sahel and West Africa Club.
Links and references
See the International Crisis Group’s report, “The Politics of Islam in Mali: Separating Myth from Reality”, published on 18 July 2017 at https://www.crisisgroup.org/africa/west-africa/mali/249-politics-islam-mali-separating-myth-reality
International Crisis Group, (2016), “Central Mali: An Uprising in the Making?” at https://www.crisisgroup.org/africa/west-africa/mali/central-mali-uprising-making
International Crisis Group (2016), “Burkina Faso: Preserving the Religious Balance” at https://www.crisisgroup.org/africa/west-africa/burkina-faso/burkina-faso-preserving-religious-balance
The Social Roots of Jihadist Violence in Burkina Faso’s North https://www.crisisgroup.org/africa/west-africa/burkina-faso/254-social-roots-jihadist-violence-burkina-fasos-north
Visit the Sahel and West Africa Club at www.oecd.org/swac/
Charlotte Petri Gornitzka, Chair, OECD Development Assistance Committee (DAC)
I often wonder how to best show the impact of our combined efforts to eradicate poverty. Having worked on development issues for many years, I have seen the results first-hand. I have listened to women sharing how improved maternal care has improved their family’s lives, and I have seen how access to financial services has turned unemployed youngsters into entrepreneurs who now employ others. While we all have examples of development co-operation that works, we sometimes lack the hard evidence, the facts, the data. When confronted with scepticism, our stories often become anecdotal examples of little value.
Solid data is essential in showing progress towards the UN Sustainable Development Goals (SDGs). We are in the midst of a data revolution where the combination of big data, open data and the rapid proliferation of information technology will radically boost our knowledge and understanding. But what will happen in the least developed and conflict-ridden countries where there are huge data gaps, or data of very poor quality?
While many members of the OECD’s Development Assistance Committee (DAC) provide support for the collection and processing of statistics in developing countries, there is more work to be done. DAC donor countries are only just tapping into the potential of big data for development co-operation.
To focus this year’s report on data for development is both timely and important. We must invest more in data. The global 2030 Agenda for Sustainable Development requires facts and figures to show what works and what doesn’t. We all need statistics to show successes and setbacks in development.
I also like to think that we, by putting the focus on data for development, are paying tribute to Hans Rosling, a legendary professor and statistician. Sadly, Hans passed away earlier this year. No one has shown the importance of combining data sets to uncover new insights better than he did. No one has ever brought statistics to life in the way Hans did. I was fortunate enough to have had the opportunity to discuss development issues with Hans. He was straight-forward. He asked questions like, “Why do you spend so much money on these human rights and democracy programmes when you have no data to show they’re working?” He argued that we should invest more in children’s and women’s health because he could show the data that proved these had the best return on investment. He was also very encouraging and constructive when Sweden embarked on its open data journey (though he thought we should have broken down costs in more detail).
One of Hans’ most poignant messages, which I believe to be both very true and very easy to forget, was, “What you think you know may be wrong because the world is constantly changing. Check the data!” We all tend to stick to what we know and seek information to confirm our beliefs. Data therefore serves as a reality check as numbers do not lie.
We are two years into the implementation of the boldest and most far-reaching development agenda ever. We will end extreme poverty and at the same time stop climate change and the degradation of bio-diversity so that humans and nature can find a new balance. To monitor this, we have agreed to follow progress on more than 200 indicators in every single country even though we still lack much of the data today.
So, we need to keep modernising and improving aid statistics and data on financing for sustainable development. We need to increase our support for statistical capacity where it is needed and make better use of results data for policy and feedback to citizens. From my experience, the hardest part will be getting more investment to boost statistical capacity in partner countries. Donors know this is important but NGOs are not pressuring governments to spend more on this; neither is this an effort ministers will get media attention for.
The challenge is great, but the opportunities and gains are even greater. With more and better data we can show the much needed progress girls, boys, women and men are making around the world. With more and better data we can make better and more informed decisions on how to support families who strive for a decent life. With more and better data we can come closer to what Hans Rosling’s son Ola calls a world of “factfulness”, where opinions, however passionately held and articulated, are supported by facts.
* Hans Rosling was a Swedish physician, academic, statistician, and public speaker. He was Professor of International Health at Karolinska Institutet and co-founder and chairman of the Gapminder Foundation, which promotes the use of data to understand global development. Rosling passed away on 7 February 2017 at the age of 68.
References and links
OECD (2017), Development Co-operation Report 2017: Data for Development, OECD Publishing, Paris. http://dx.doi.org/10.1787/dcr-2017-en
Share article at http://oe.cd/25h
Catherine Bremer, OECD Public Affairs and Communications Directorate
The OECD’s just-published Development Co-operation Report 2017 calls on donor countries to invest more aid in improving statistical systems in developing countries, many of which are unable to produce reliable data in even basic areas such as records of births and deaths. A lack of good data makes it hard to measure the impact of development co-operation and see where best to focus future investments.
The report says that channelling just USD 200 million a year in additional development aid into building up poor countries’ statistical systems would make a big difference–a small sum compared to the USD 15 billion of foreign aid that was spent in 2016 hosting refugees in donor countries.
Good quality statistics are vital both to steer government policy in developing countries and to measure progress on the UN Sustainable Development Goals (SDGs). Yet with developing country statistics agencies all too often underfunded and understaffed, 77 countries are found to have inadequate poverty data and there are no data yet for two-thirds of the 232 SDG indicators. Even where data is available it is often not broken down in a way that enables comparisons between different population groups.
Aid providers should help developing countries to adopt digital technologies and non-traditional data sources to collect better statistics, the report says, noting that using computer tablets has improved census and survey data in Ethiopia, South Africa, Sri Lanka and Uganda and anonymised big data helped Brazil overcome the Zika crisis. To get more out of digital data, countries will need to build up digital infrastructure and enforce legal, ethical and quality standards.
A survey in the new report finds that many donor countries are uncomfortable planning development assistance around data that is old, approximate or incomplete. They often resort to conducting their own unilateral and uncoordinated data collection to assess the impact of aid programmes.
A recent report by Open Data Watch, “The State of Development Data Funding 2016” says that, ideally, USD 3 billion should be invested annually for developing countries to meet SDG data demands. According to the “Partner Report on Support to Statistics 2016” by PARIS21, an international partnership hosted by the OECD that helps developing countries improve their statistical data, the amount of official development assistance (ODA) spent on building up poor countries’ statistical capacity was around USD 250 million a year over 2013-2015, less than 0.3% of total ODA.
You can read the report online here.
References and links
OECD (2017), Development Co-operation Report 2017: Data for Development, OECD Publishing, Paris. http://dx.doi.org/10.1787/dcr-2017-en
Open Data Watch (2016), The State of Development Data Funding 2016, http://opendatawatch.com/the-state-of-development-data-2016/
PARIS21 (2016), Partner Report on Support to Statistics, http://www.paris21.org/node/2371
Valerie Frey, OECD Directorate for Employment, Labour and Social Affairs
Though there has been progress, gender equality is still a long way off. That is the key message in our latest report, The Pursuit of Gender Equality: An Uphill Battle, released 4 October. As I write in this OECD Observer article, policies are changing for the better, but much more improvement is needed to close gender gaps in all areas of social and economic life. No country is immune. The challenges are varied: more women should be encouraged to study science, technology, engineering, and mathematics (STEM), for instance, and more men should be encouraged to do their fair share of unpaid caregiving. Women should be better represented as entrepreneurs, in public life, and at the highest levels of the private sector.
There’s a lot to do, but we believe there is cause for optimism. Many countries now understand the importance of fathers in caregiving roles, for example, and now offer paid paternity and parental leave for dads for the time around childbirth. Fathers’ caregiving is crucial for reducing women’s unpaid work obligations and freeing them up to reach their full potential in society and in the economy. Women in the labour force still earn nearly 15% less than their male counterparts in every OECD country, but about two-thirds of OECD countries have introduced new pay equity policies since 2013. Pay transparency tools are being adopted to help nudge more employers towards equal pay between women and men.
But perhaps looming above all these issues is the imperative of preventing and ending violence against women. In fact, our survey data show that violence against women is widely reported by governments as the most urgent gender equality issue among countries adhering to the OECD Gender Recommendations (see chart). Anti-harassment laws are being introduced or reinforced in several countries, and awareness-raising campaigns about sexual harassment and its different manifestations have been launched, but more governments need to tackle violence against women with a multifaceted, whole-of-government approach. Violence affects multiple aspects of victims’ lives – including their education, employment, income, social protection, justice, security, and health – and must be targeted accordingly.
You can read about these issues in more detail in our new book. How can we win the uphill battle for gender equality? We’d love to hear your views on this important challenge.
References and links
Frey, Valerie (2017), More effort needed to make the grade on gender equality, OECD Observer, http://oe.cd/24r
OECD (2017), The Pursuit of Gender Equality: An Uphill Battle, OECD Publishing, Paris.
OECD (2016), 2015 OECD Recommendation of the Council on Gender Equality in Public Life, OECD Publishing, Paris.
OECD (2017), 2013 OECD Recommendation of the Council on Gender Equality in Education, Employment and Entrepreneurship, OECD Publishing, Paris.
On 2017 International Day of the Girl, 18-year-old Alda from Indonesia took over as secretary-general of the OECD for a day. A youth activist for Plan International, Alda also found time to write a blog about what life is like for girls in her country. She says that teen pregnancy, child marriage and gender discrimination are the everyday reality for too many girls. Statistics show that more women than men do not know how to read or write. In Indonesia, education is the key to making girls’ lives better. Read Alda’s blog here.
Wonki Min, Leading Professor, Department of Technology & Society, SUNY (The State University of New York) Korea, and Chair of the OECD Committee on Digital Economy Policy
In October 2016, “Westworld” topped the charts as the most-watched premiere season of an HBO original series ever. In the series, a science fiction thriller written and directed by novelist Michael Crichton based on a 1973 film of the same name, Anthony Hopkins takes on the role of Dr Ford, who creates a futuristic western-themed amusement park populated by android hosts to cater human guests, with Evan Rachel Wood playing the role of Dolores, the oldest android host working in the park. Further to the great script and the impressive casting, the success of the series is also undoubtedly linked to its timing. Just one year ago, Lee Sedol, 18-time world Go-board game champion, was beaten by DeepMind’s AlphaGo, which was a monumental breakthrough of Artificial Intelligence (AI).
Even before the AlphaGo’s victory over Lee Sedol, there was growing interest in the potential and risks of humanoid robots and of AI, led by the likes of Stephen Hawking and Elon Musk. While the debate remains open on whether, or when, it might be possible to develop the artificial intelligence of Westworld-type humanoid robots, the use of industrial robots (essentially motor functions) and the appearance of autonomous machines with cognitive-type functions have been growing rapidly and raise concerns about job displacements by automation in the manufacturing sectors, including for vehicles.
As countries and international communities grapple with this question and the consequences of the rapid diffusion of AI and industrial robots, the 2017 OECD Digital Economy Outlook takes a timely look at the potential benefits and opportunities offered by AI as it begins to take hold and slowly penetrate, if not disrupt and transform, our economies and societies.
Productivity gains could be achieved in areas ranging from factories to offices and service centres as a result of both the automation of activities previously carried out by people and machine autonomy whereby systems are able to operate and adapt to changing circumstances with no or little human control. But as AI and robotics replace or augment components of human labour in both skilled and unskilled jobs, policies will be required to facilitate professional transitions and to help workers of various backgrounds, ages and levels develop the skills needed to take full advantage of the digital transformation.
Skills are not the only challenge for policy makers to address, as this new report shows: we need to provide access and connectivity, measures to promote innovation, and policies to enhance digital security and trust. Indeed new questions of liability, responsibility, security and safety also come up, notably with respect to autonomous machines. AI-powered decisions that impact people raise questions of transparency and oversight, among other things to prevent algorithmic biases, discrimination and privacy abuses. There is some urgency to act on these policy fronts, since the data show this new revolution to be well under way.
Roughly 750 000 industrial robots were estimated operational in OECD countries in 2014, constituting more than 80% of world stocks. Among OECD countries, Japan, the US, Korea and Germany are the most “robotised” countries in the OECD and together account for almost 70% of the total number of operational robots. In terms of the adoption of industrial robots by sector, the use of industrial robots is the most highly concentrated in transport equipment with almost 45% of the total stock of robots, followed by electronic, electrical and optical equipment, with almost 30%. Rubber and plastics have lower concentration at less than 10% and metal products (5%).
As for the future, expect to see more and more industrial robots replacing human workers in manufacturing facilities along with collaborative robots like “Baxter” that co-work with human workforce and service robots like “Relay”, a robot waiter that delivers food and snacks to guest at Shinagawa Prince Hotel in Tokyo. With AI, expert and high-wage occupations will also be impacted.
In the meantime, the use of AI and industrial robots will no doubt bring new opportunities to raise incomes, create new types of jobs and businesses and improve economic and social well-being. But there will be costs and bumps along the way. It is up to policy makers to play their part by helping make the digital transformation beneficial for all.
OECD (2017), The Next Production Revolution: Implications for Governments and Business, OECD Publishing, Paris.