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Making globalisation work, the theme for the OECD’s annual Ministerial Council Meeting 7-8 June, is more than the culmination of one of the most debated issues today. It is also a pertinent topic for the OECD in its quest to better integrate policies that deliver growth and the participation of people behind it.
Previous ministerial discussions show we are not starting from scratch: we have addressed how productivity, investment, and resilience should be mutually supportive in the structural reforms governments pursue. And we also have a good understanding of the challenges that come through economic integration.
But as citizens in some OECD countries increasingly question the value and impact of globalisation, we need to review what has changed the ways we live, and reassess how domestic and international policies can be better coordinated. We must reap the benefits from open markets, while ensuring people can actively contribute to them. The key words are growth and participation.
Many policies and events contribute to what we call globalisation. But some people have made of global trade the only proxy. Trade has been taken hostage for various ills and problems we have in our economies and societies, including inequality and wealth distribution. Yet, OECD research shows that salaries and working conditions tend to be better in companies that trade, and that open economies grow faster. The OECD has also helped us understand how globalisation fosters competition, efficiency and innovation. And history tells us that trade has lifted millions of people out of poverty.
Of course, trade cannot be seen in isolation. We are currently having the wrong focus by debating whether trade or trade agreements are good or bad. Both policymakers and the public should recognise it as part of a set of policy levers to boost growth and prosperity. At the same time, it would be naïve to ignore the changes trade brings to societies. This is why governments, in parallel to economic openness, should pursue education policies to help people thrive in the sectors that will create jobs in the future. Governments should equip their societies with the skills to exploit the full potential from digitalisation. And entrepreneurs and small and medium-sized businesses (SMEs) should be empowered by robust policies to help them create employment and innovate in markets.
It is well understood that businesses must move responsibly in domestic and international markets. Business at OECD is very active in promoting the OECD Guidelines for Multinational Enterprises. Adherence to them and a strong infrastructure to support their implementation are a key factor for a better and more levelled global economy. Of course, businesses cannot replace government action to enforce the rule of law and to establish a sound business environment.
In a post-truth world, the OECD can also help us effectively communicate the benefits that our global trading system has brought for each of us. Perhaps we have mainly talked about trade in abstract terms, and we could use more OECD facts that show trade is behind the smartphones we use, the clothes we wear, or the fruit we buy in "local" markets.
As businesses are at the heart of globalisation, the business community has a word to say in this debate. Our annual Business Climate Survey, which takes the temperature of our business federations as they represent thousands of companies across several economic sectors in their respective countries, points to the priority need for policies that strengthen innovation and human capital.
We consulted with our global membership to give advice on what can be done to make globalisation work better. Our five recommendations identify concrete ways in which OECD and governments work can focus. From developing a "Better Business Index", to creating the conditions for people to benefit from trade and investment our recommendations succinctly tell what is on the mind of businesses, big and small, and how the OECD can help.
If we are to leverage the full potential for our economies, government policies should be as interconnected as the world where we are living. Beyond the OECD ministerial meeting, we will focus our efforts with the OECD and governments on finding solutions that can stimulate growth and increase the participation of people. We are convinced this will create a more stable political and socioeconomic environment that will help us drive prosperity.
See 2017 Business at OECD (BIAC) Statement to Ministers: http://biac.org/wp-content/uploads/2017/05/2017-Business-at-OECD-Statement-to-Ministers.pdf
Visit www.BIAC.org
OECD Forum 2017 issues
©OECD Yearbook 2017. See www.oecd.org/forum/oecdyearbook
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