21/02/2014 (left/right) - Australian Treasurer Joe Hockey and OECD Secretary-General Angel Gurría presenting the report at the G20 in Sydney
Adopting ambitious and comprehensive structural reform agendas will offer governments the best chance for a return to strong, sustainable and balanced economic growth that creates jobs and reduces inequality, according to the OECD’s latest Going for Growth report.
The report assesses and compares progress that countries have made on structural reforms since 2012 and takes a fresh look at what else can be done to revive growth and make it more inclusive. The OECD shows that most governments have continued enacting reforms, despite the challenges posed by a subdued growth environment, and highlights actions that can still be taken to boost productivity, raise public sector efficiency, improve educational outcomes, and strengthen labour markets.
“Signs of a broad-based recovery are becoming more tangible, but governments of advanced and emerging economies now face the risk of falling into a low-growth trap,” OECD Secretary-General Angel Gurría said during a launch event in Sydney.
“Australia has focused its G20 Presidency on promoting stronger economic growth and employment while making the global economy more resilient to deal with future shocks. The structural reform recommendations the OECD puts forward today offer governments practical ways to boost productivity, lift growth, create jobs and avoid the low-growth trap,” Mr Gurría said.
Mr. Gurría presented Going for Growth with Australian Treasurer Joe Hockey, ahead of the 22-23 February meeting of G20 finance ministers. He said the report’s analysis of potential reforms to product and labour market regulation, education and training, tax and benefit systems, trade and investment rules and innovation policies are applicable to OECD and G20 countries alike. The going for Growth analysis forms the basis of the OECD’s wider contribution to the G20 Framework for Strong, Sustainable and Balanced Growth.
“Progress on structural reforms can boost growth and living standards worldwide,” Mr Gurria said. “Slowing productivity growth and persistently high unemployment in many advanced economies cry out for further reforms. The vulnerability of many emerging-market economies to the ongoing tightening of monetary policy and the cooling of the commodity boom serves as a reminder that the case for structural reforms is also strong there."
Going for Growth 2014 points to countries where reform action has been taken as well as where more needs to be done:
The intensity of reform has remained highest in southern euro area countries like Greece, Italy, Portugal and Spain, which are suffering from high long-term unemployment and youth joblessness. Considerable action to reform the labour market and break down barriers to job creation and mobility has been taken, in particular in Spain in Portugal, which have begun growing again.
Many emerging economies have yet to launch comprehensive structural reform agendas, and should implement wider efforts to improve education, address physical and legal infrastructure bottlenecks and bring more workers into formal sector employment. Mexico stands out among emerging economies for its adoption and ongoing implementation of broad-reaching reforms in competition policy, education, energy, financial services and telecommunications.
In OECD countries which face particularly rapid population ageing, such as Japan, Korea and Germany, bringing more women into the labour market and ensuring that they are fully integrated remains a key challenge.
Advanced and emerging economies are both encouraged to boost competition across their economies. Another country hard hit by the crisis – Ireland - has made the most progress on bankruptcy reform and toward creating a more competitive business environment.
A special feature of Going for Growth 2014 assesses the progress countries have made since 2008 toward reducing regulatory barriers. The new OECD Product Market Regulation indicators show that while governments have continued to move towards more competition-friendly regulation, progress has only been modest in most cases (see data visualisation below).
Competition in network industries and professional services like accounting, architecture, engineering and legal services continues to be held back by regulatory barriers to entry. Where regulatory settings have been improved, the legislated changes need to be fully implemented, to ensure the effective easing of administrative burdens on companies and the entry of new firms.
Further information on Going for Growth 2014 and detailed country notes are available at: www.oecd.org/eco/growth/goingforgrowth.htm.