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Resolution 2074 (2015)
The activities of the Organisation for Economic Co-operation and Development (OECD) in 2014-2015
1. The Parliamentary Assembly of the
Council of Europe, enlarged to include the delegations of national parliaments
of the Organisation for Economic Co-operation and Development (OECD)
member States which are not members of the Council of Europe, as
well as a delegation of the European Parliament, is once again considering
the activities of the OECD.
2. The debate in last year’s enlarged Assembly on the activities
of the OECD in 2013-2014 was for the first time held on the basis
of a report presented by the Secretary-General of the OECD, Mr Angel
Gurría. The exercise was considered a success by all those who took
part. The enlarged Assembly congratulates Mr Gurría on his re-appointment
at the head of the OECD for the next five years.
3. For this year’s debate, the enlarged Assembly has reviewed
the activities of the OECD in 2014-2015 on the basis of a biennial
report prepared by the Committee on Political Affairs and Democracy
and on the basis of selected reports by the OECD, in particular
the final synthesis report of the OECD’s New Approaches to Economic
Challenges (NAEC) initiative, which in 2013 was described by the
OECD’s Secretary-General as “one of the most obvious, most visible,
and most productive results of the dialogue between the Council
of Europe and the OECD”. The enlarged Assembly looks forward to
continuing such dialogue.
4. The enlarged Assembly takes into account the context of the
global economy in which the activities have been conducted in 2014-2015.
Projections for 2015 were lowered following the outcome of the first
quarter of 2015, which was the weakest quarter since 2009. Forecasts
for 2016 are slightly better, but rely strongly on a progressive
acceleration in the growth of investment after years of sluggishness.
This acceleration will nonetheless remain milder than in previous
cyclical recoveries, reflecting the weak growth of productivity, lingering
uncertainty, remaining excess capacity in many areas and the drag
on investment engendered by lower oil prices.
5. The enlarged Assembly also takes note of some long-term, so-called
megatrends, as reflected in the NAEC synthesis report, such as slowing
total-factor productivity (TFP) and economic output, rising inequality and
unsustainable development, leading to “environmental pressure”.
6. The enlarged Assembly notes that the OECD’s flagship publications,
promoting green and inclusive growth, are addressing these long-term
trends and are fully in line with the first objective of the OECD,
as stipulated in Article 1 of its convention: to promote policies
“to achieve the highest sustainable economic growth and employment
and a rising standard of living in member countries”.
7. Together with the OECD Ministerial Council, the enlarged Assembly
recognises the important role of the OECD in the international policy
landscape, including its contribution to the work of the Group of
7 (G7) and the Group of 20 (G20). The Assembly welcomes the ongoing
efforts of the OECD to enrich its analytical frameworks and methods,
including its tools for long-range analysis. It also welcomes the
“Final NAEC Synthesis” report and recognises the importance of indicators
beyond Gross Domestic Product (GDP), as well as the OECD’s work
on “How’s Life?” and “Green Growth” indicators. The enlarged Assembly
calls on the OECD to further mainstream multidimensional analysis,
including the work on inclusive growth and gender equality, in OECD
flagship publications.
8. The enlarged Assembly recommends including one additional
dimension in the multidimensional NAEC framework, namely the effect
of cross-border externalities and the trade-offs between national
policies and international developments.
9. The enlarged Assembly notes that promoting sustainable growth
has not had enough impact on the ecological sustainability of economic
development, as species are being driven to extinction at a rate
not seen since the age of the dinosaurs. Water, soil and many natural
resources are structurally overexploited by our economic activities.
Our global carbon emissions have the potential to cause catastrophic
climate change.
10. Member and non-member States are taking steps towards green
growth, but much more determined efforts are needed to integrate
environmental priorities into economic agendas to promote sustainable
growth and well-being. The OECD report “Towards Green Growth? Tracking
Progress” aims to accelerate countries’ implementation of green
growth policies by providing more targeted and coherent policy advice.
The OECD also continues to include green growth in its work. Its
report “Aligning Policies for a Low-carbon Economy” identifies the
misalignments between climate change objectives and policy and regulatory
frameworks across a range of policy domains (investment, taxation,
innovation and skills, trade and adaptation) and activities at the
heart of climate policy (electricity, urban mobility and rural land
use). Relevant green growth insights are now regularly included
in its economic surveys, environmental policy reviews, investment
policy reviews and green cities reports. However, there is more
to be done to achieve an integrated approach.
11. The enlarged Assembly therefore calls on the OECD and its
member States to:
11.1. support an
ambitious outcome at the United Nations Conference on Climate Change
(COP21);
11.2. set CO2 emission and climate finance
targets with the objective of maintaining a global average temperature
increase below 2°C;
11.3. set equally ambitious and specific targets to keep the
use of water, soil and other natural resources at sustainable levels;
11.4. protect endangered species and halt the process of the
loss of biodiversity;
11.5. support a “just transition” for workers and economic sectors.
12. The enlarged Assembly recognises the importance of addressing
inequalities and of the value of social dialogue in achieving more
inclusive growth and quality jobs. The work on job quality, part
of the NAEC initiative, already provides a framework for measuring
job quality according to three key dimensions: earnings quality,
employment security and quality of the work environment. This work
will identify the key policy levers for improving job quality with
a view to the development of a new OECD Jobs Strategy.
13. The enlarged Assembly notes that since 1980 the share of world
labour income has dropped dramatically, and that it has fallen in
most OECD countries. Meanwhile, the share of capital income has increased.
The stock of cross-border portfolio investment holdings marked more
than 20% annual growth on average in the ten years before the crisis.
Investment incomes more than tripled during the same period. Total assets
of multinational enterprises (foreign affiliates) rose from 18%
of global GDP in 1990 to 130% in 2013.
14. The enlarged Assembly notes that domestic income inequality
is at its highest level in OECD countries in half a century. Inequality
in market incomes rose as much between 2007 and 2011 as in the previous
twelve years in most advanced economies. It notes that inequality
in wealth distribution has also shown a similar increase.
15. The enlarged Assembly takes note of recent studies that associate
excessive growth of the financial sector, relative to GDP, in advanced
economies with slowing economic growth and widening economic inequalities,
while excess in credit extension has increased the vulnerability
of the economies to crises.
16. The enlarged Assembly calls upon the OECD to provide member
States with tailored policy advice to:
16.1. curb unproductive financial activities and reform the
financial sector to serve sustainable and inclusive growth of the
real economy;
16.2. increase the labour share of GDP;
16.3. halt rising inequality and promote sustainable and inclusive
growth and a more equal distribution of income, wealth and well-being.
17. The enlarged Assembly notes that the Initiative on Inclusive
Growth will be the linchpin for the OECD’s horizontal analysis and
advice on well-being and the response to the challenge of inequalities.
The enlarged Assembly calls on the OECD to apply the Inclusive Growth
policy framework throughout its work. The enlarged Assembly calls
on OECD member States to:
17.1. take
action to raise middle and lower household incomes to boost demand
and purchasing power;
17.2. strengthen collective bargaining and (minimum) wages,
keeping pace with increased productivity;
17.3. halt the increase in precarious, informal or irregular
work.
18. The enlarged Assembly calls on the OECD to use the forthcoming
(January 2016) ministerial meeting of the Employment, Labour and
Social Affairs Committee to include these points in the revision
of the 1994 OECD Jobs Strategy.
19. The enlarged Assembly recognises the opportunities offered
by a new production revolution, but also the challenges for inclusiveness,
for employment and for economic distribution. As the International
Labour Organization (ILO) has already warned of a further increase
in formal unemployment, more non-standard work in the formal sector
and a growing informal economy, the enlarged Assembly calls on the
OECD to co-operate closely with this institution, where a high-level
commission on the future of work will prepare a report for the ILO’s
centenary conference in 2019.
20. Global private and public investment still remains below pre-crisis
levels. The enlarged Assembly acknowledges the essential role of
productive investment to promote sustainable and inclusive growth,
drive job creation and support the transition to a low-carbon, resilient
economy. It underlines the need to unlock investment. To enhance
confidence, targeted public investments for the creation of green
and decent jobs are needed. It recognises that innovation is critical
to increasing productivity and creating new jobs and that investment,
especially in research and development, contribute to total-factor
productivity growth.
21. The enlarged Assembly notes the political debates and controversies
concerning new types of free trade and investment treaties. Recognising
the past gains from the comparative advantages of opening up to international
trade, it also underlines that an open, rules-based multilateral
trading system is a key driver for private sector development, sustainable
economic growth and job creation. On the other hand, some studies suggest
that further trade liberalisation will reduce the labour share even
further and increase inequalities. The enlarged Assembly calls on
the OECD to thoroughly investigate the trade-offs in this area of
continued global economic integration, as well as potential risks,
costs and benefits from further elimination of non-tariff barriers, in
particular in services and investment.
22. The enlarged Assembly calls on the OECD member States to avoid
rushing into trade and investment deals that are not likely to deliver
tangible and substantive benefits to our economies as a whole and
to first look into the effects of trade-offs between growth, stability,
sustainability, inclusiveness and equity. It also calls on the OECD
to propose policy packages for trade and investment policies that
address these trade-offs and maximise well-being in member countries,
as well as in countries that are trade and investment partners.
23. To increase resources for public investments and ensure that
policy outcome is inclusive and sustainable, governments, including
those of emerging countries, must also tackle tax evasion and tax avoidance.
The enlarged Assembly therefore:
23.1. welcomes
progress on the OECD/G20 Base Erosion and Profit Shifting (BEPS)
project and on the automatic exchange of information;
23.2. calls on all States and jurisdictions to join and implement
the OECD and Council of Europe multilateral Convention on Mutual
Administrative Assistance in Tax Matters (ETS No. 127), in order
to improve the availability, quality and accuracy of beneficial
ownership information;
23.3. calls on all States to enact the necessary domestic legislation
in order to achieve the commitments to implement the Common Reporting
Standard by 2017 or 2018.
24. The full package of BEPS measures will be finalised in 2015.
To ensure that this landmark initiative has the intended impact,
future work must focus on supporting countries in the effective
and consistent implementation of the BEPS outcomes, through the
development of model legislation and technical guidance and monitoring
of the impact of the BEPS measures in addressing both double non-taxation
as well as double taxation.
25. The enlarged Assembly encourages the OECD to continue its
work on responsible business conduct in its current multi-stakeholder
setting, building from the Guidelines for Multinational Enterprises,
and calls on the OECD to continue its efforts to further strengthen
the performance of National Contact Points foreseen in the guidelines
and improve the guidelines by revising procedural guidance, approving
budget allocations, accelerating the peer review programme and strengthening
policy coherence.
26. Bribery of foreign public officials in international business
transactions remains a widespread phenomenon, which raises serious
moral and political concerns, undermines good governance and economic development
and distorts international competitive conditions. The enlarged
Assembly recognises the critical role of the OECD and its Convention
on Combating Bribery of Foreign Public Officials in International
Business Transactions (Anti-Bribery Convention) in combating bribery
of foreign officials, in particular through its rigorous, peer-monitoring
mechanism. The enlarged Assembly encourages the full implementation
and strong enforcement of the Anti-Bribery Convention by all its
parties. It also calls on the G20 members that are not parties to
the convention (China, India, Indonesia and Saudi Arabia) to participate
in the OECD Working Group on Bribery and explore possible accession,
in line with the G20 Anti-Corruption Action Plan.
27. The enlarged Assembly notes that the current international
migration crisis is of an unprecedented scale and complexity. It
recognises the potential contribution of international migration
to growth, especially where admission is well managed and integration
is achieved. It calls on the OECD to continue its work in providing facts
and analysis on migration flows and integration and on policies
in these fields and to advise countries in finding a response to
the current crisis.
28. The enlarged Assembly calls for an ambitious post-2015 development
agenda, the integration of “decent work”, responsible business conduct
and social dialogue into the OECD Strategy on Development, and action to
support domestic resource mobilisation with knowledge sharing and
capacity building.
29. Finally, the enlarged Assembly invites the OECD to provide
participants in the enlarged debate with information on the follow-up
given to the issues referred to in this resolution in a suitable
manner either prior to or during the next enlarged debate.