OECD Annual Report · ANNUAL REPORT 2002 ORGANISATION FOR ... Online Ordering: OECD Berlin Centre ... THE OECD GROWTH PROJECT 16 OECD ECONOMIC SURVEYS 17 BRAZIL 18

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OECD ANNUAL REPORT

© OECD 2002

O E C D A N N U A L R E P O R T

THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (OECD) ANNUAL REPORT isprepared by the Public Affairs Division, Public Affairs and Communications Directorate. It is published underthe responsibility of the Secretary-General of the OECD.

Pictures: all pictures are © OECD except: p. 14 top right: Greg Teckless/Health Canada/OECD; bottom left:John Harrington Photography/HKETO/OECD; p. 44 Dubai Press Club/OECD; p. 46 UK Embassy Bangkok.

Publications: Book titles in italics are available for sale via the OECD online bookshop: www.oecd.org/bookshop.


PREFACE 5

ABOUT THE OECD 7

THE CHANGING FACE OF THE OECD 9

FINANCIAL REFORM 9

NEW ANNEX AT LA DÉFENSE 10

OECD IN 2001: SELECTED EVENTS 11

ECONOMIC GROWTH AND STABILITY 15

THE OECD GROWTH PROJECT 16

OECD ECONOMIC SURVEYS 17

BRAZIL 18

PRIVATE PENSIONS 19

TERRITORIAL REVIEWS 21

EMPLOYMENT AND SOCIAL COHESION 22

HUMAN CAPITAL 23

THE OECD HEALTH PROJECT 24

TRADE AND INTERNATIONAL INVESTMENT 27

TRADE IN SERVICES 28

AGRICULTURAL TRADE 30

REGIONAL TRADE AGREEMENTS 31

SUSTAINABLE DEVELOPMENT 32

SUSTAINABLE DEVELOPMENT INDICATORS 33

THE OECD ENVIRONMENTAL STRATEGY 34

SUSTAINABLE DEVELOPMENT ROUNDTABLE 36

GOVERNANCE 38

REGULATORY REFORM 39

HARMFUL TAX PRACTICES 41

BEST USE OF NEW TECHNOLOGIES 44

E-GOVERNMENT 45

BIOTECHNOLOGY 46

DEVELOPMENT 48

UNTYING AID 49

DEVELOPMENT CENTRE 51

SAHEL AND WEST AFRICA CLUB 52

CO-OPERATIVE RELATIONS WITH NON-MEMBERS 53

CHINA 54

THE BALTIC REGION 55

STATISTICS 57

STATISTICS – NEW PUBLICATIONS 58

PUBLIC AFFAIRS AND COMMUNICATIONS 60

FORUM 2001 61

NEW WEBSITE 62

POLICY BRIEFS 63

BUSINESS AND INDUSTRY ADVISORY COMMITTEETO THE OECD (BIAC) 64

TRADE UNION ADVISORY COMMITTEETO THE OECD (TUAC) 64

EXECUTIVE DIRECTORATE 68

HOW THE OECD WORKS 70

THE INTERNATIONAL FIGHT AGAINST MONEYLAUNDERING AND TERRORIST FINANCING:THE FATF 75

NUCLEAR ENERGY AGENCY 76

INTERNATIONAL ENERGY AGENCY 78

EUROPEAN CONFERENCE OF MINISTERSOF TRANSPORT 80

OECD ORGANISATION CHART 82

OECD DIRECTORY 84

OECD COUNCIL MEETING AT MINISTERIAL LEVELCOMMUNIQUÉ: TOWARDS A SUSTAINABLE FUTURE 85

THE OECD SECRETARIAT 94

AMBASSADORS, PERMANENT REPRESENTATIVESTO THE OECD 95

OECD MEMBER COUNTRIES 97


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PREFACEDonald J. JohnstonOECD Secretary-General

We may look back on the year 2001 asa turning point in modern economicand political history. The hype of the“new economy” came back down toearth. Major international meetingswere marred by violent anti-globalisation protests. The tragicterrorist attacks of 11 Septemberinflicted a severe shock to the world.But then, a broad-based alliance wasformed to fight terrorism and its rootcauses. And the world’s major tradingnations put aside differences to launcha new round of trade negotiations.

In this new context, the OECD wascalled upon once again to help tacklethe economic, social and governancechallenges of a globalised worldeconomy. This Annual Report docu-ments our activities in 2001, a few ofwhich I would like to highlight here.

New economy – a realitycheck

The long expansion in manycountries during the 1990s generateda lot of hype about the “neweconomy”. The present economicslowdown has served as a timelyreality check when it comes to someof the more exuberant behaviour andpolicy statements that were made.

If we look beyond the hype to thefundamentals – as the OECD did inits two-year study on the sources ofeconomic growth presented to min-isters in May 2001 – the evidencedoes suggest that something new istaking place. Investments in infor-mation and communications techno-logies (ICT), connectivity and the

growth of electronic commerce havebeen the key elements of the expan-sion of e-business and the digitaleconomy. The use of ICT can boostproductivity right across the spec-trum of industries. However, one ofour key findings is that theseimprovements depend on com-bining new uses of ICT with organi-sational change, effective utilisationof human capital, and strongpolicies for innovation and entre-preneurship.

One challenge of the “new economy”is how to make sure that all countries– developed and less developedalike – use these new technologiesand benefit from them. ICT doeshave the potential to contribute tothe challenge of development for the1.2 billion people who survive onless than US$1 per day and thefurther 1.6 billion on less than US$2.The OECD is exploring ways toensure that ICT can be used to helpachieve the development objectivesfor all countries that we have beenpursuing for over half a century, andnot lead to a “digital divide”.

Sustainable development

The OECD’s report on sustainabledevelopment, submitted to minis-ters in 2001, proposes a comprehen-sive strategy for achieving sustain-able development, which combineseconomic, social and environmentaldevelopment. The report lays outfour broad areas for action: makingmarkets work for sustainable devel-opment; harnessing science andtechnology; strengthening decision-

making; and reaping the full benefitsof international trade and invest-ment.

While many of the required policyoptions are well known, their actualimplementation in OECD membercountries has fallen short. The chal-lenge before us now is to develop areal constituency for our sharedfuture and close the gap betweenlofty rhetoric and actions.

OECD countries bear a specialresponsibility for leadership on sus-tainable development worldwide,historically and because of theweight they have in the globaleconomy and environment. That iswhy ministers of all 30 member coun-tries pledged in May 2001 to havesustainable development strategiesin place by the time of the WorldSummit on Sustainable Develop-ment in Johannesburg in September2002.

Donald J. JohnstonOECD Secretary-General


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The Environmental Strategy adoptedby OECD environment ministers inMay committed them to specificnational actions over the nextdecade to tackle problems such asclimate change and to ensure thatcontinued economic growth is notaccompanied by continued damageto the environment.

Human capital is another keyelement in achieving sustainabledevelopment in an era of knowledge-based economies and societies. Thismeans literacy in the broad sense –problem-solving, team-building andcreativity. The results of the OECD’s“PISA study” provided a snapshot ofcomparative educational achieve-ments in OECD countries and howthey measure up to the needs of aknowledge economy. Good health isalso important, but funding healthcare faces new challenges in comingyears as the population in OECDcountries ages, placing new demandson our systems. That is why we havelaunched an OECD health project tolook at how governments can meetthese new demands. A major confer-ence in Ottawa in November 2001tackled the crucial issue of how wemeasure the results.

Building partnershipsfor global development

Open trade and investment are aproven pathway out of poverty anddespair, and the new global round ofmultilateral trade negotiations can

and should provide a major drivingforce for development based on apartnership between the developingand developed world. But opentrade is not enough. We need to besure that development efforts areefficient and effective. OECD mem-bers reached a landmark agreementin 2001 on untying aid to the leastdeveloped countries that will helpincrease value for money andimprove developing country owner-ship of the development process.OECD countries also reaffirmed sup-port for the international develop-ment goals (Millennium Develop-ment Goals), setting clear targets forprogress in areas such as education,clean water and health care.

I like to think of the OECD as a groupof democratic reformers with a globalresponsibility. But in this era ofglobalisation, with a vast array ofstakeholders and interest groups, theOECD cannot and does not workalone. We share our expertise andexchange views with more than 70states from all corners of the globe – ahighlight of 2001 was when trade min-isters from several non-member coun-tries joined the OECD ministerialmeeting in May. And business, labour,non-governmental organisations andother civil society groups now partici-pate in a wide range of OECD activi-ties, most notably the OECD Forum.These groups make an important con-tribution to the substantive work of theOECD and help strengthen public sup-port for policy reform.

The tragic terrorist attacks of 11 Sep-tember renewed our conviction inthe importance of international co-operation among governments andpeoples. In this regard, the OECD iscontributing to the fight againstterrorism both in terms of managingthe aftermath of the 11 Septemberevents and in reducing the risk offuture attacks. We must also notforget that desperate poverty andlack of opportunities are a breedingground for social instability and canlead to support for terrorist activities.

Placing the world on a path of sus-tainable development – economi-cally, socially and environmentally –is probably one of our best guaran-tees of safe and secure societies. Butit will not happen by itself. FranklinD. Roosevelt once said, “We must layhold of the fact that economic lawsare not made by nature. They aremade by human beings” and this isequally true of policies for sustain-able development, and safe andsecure societies. The OECD is com-mitted to working towards theseobjectives.


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ABOUT THE OECDwww.oecd.org/about/

The Organisation for Economic Co-operation and Development (OECD)groups 30 member countries in aunique forum to discuss, developand fine-tune economic and socialpolicies. It helps member govern-ments identify good practice inmanaging their own economies, aswell as aiding members and non-members to draw up ground rules forthe 21st century globalised economy.

Perhaps best known for its regularreports on the economies of its mem-ber countries, the OECD is also at theforefront of efforts to understand, and

to enable governments to respondto, new developments and concerns.These include misuse of the interna-tional financial system by terroristsand other criminals, the “neweconomy”, electronic commerce, bio-technology and food safety and sus-tainable development.

The OECD’s work includes efforts tofoster prosperity and fight povertythrough economic growth, financialstability, trade and investment, tech-nology, innovation, entrepreneur-ship and development co-operation.It is helping to foster sustainable

First meeting of the OECD Ministerial Council, 17 November 1961.

development, ensuring that eco-nomic and social development arenot achieved at the expense of ram-pant environmental degradation.Other aims include creating jobs foreveryone, social equity and achiev-ing clean and effective governance.

The OECD provides a setting wheregovernments can compare policyexperiences, seek answers to com-mon problems, identify good prac-tice and work to co-ordinate domes-tic and international policies. It is aforum where peer pressure can actas a powerful incentive to improve


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policy and implement “soft law” –non-binding instruments such as theOECD Guidelines for MultinationalEnterprises – and can on occasionlead to formal agreements or treaties.

For 40 years, the organisation hasbeen one of the world’s largest andmost reliable sources of comparablestatistical, economic and social data.OECD databases span areas asdiverse as national accounts, eco-nomic indicators, the labour force,trade, employment, migration,education, energy, health, industry,taxation, tourism and the environ-ment.

OECD countries produce almost 60%of the world’s goods and services, butthe organisation is by no means anexclusive club. A vital aspect of itswork is to share its expertise and thelessons it has learnt, good and bad,with the public and with non-member countries. The OECD nowinvolves in its work some 70 non-member countries, notably Brazil,China and Russia, as well as leastdeveloped countries from Africa andelsewhere, and non-members areinvited to subscribe to OECD agree-ments and treaties such as the anti-bribery convention. Business, labourand civil society representatives also

take part in work on issues from tradeand environment to biotechnologyand food safety.

The OECD was created in its presentform in 1961, but its origins date backto 1947 when, as the Organisation forEuropean Economic Co-operation(OEEC), it oversaw the launch of theMarshall Plan for the reconstructionof war-torn Europe. The core of origi-nal members has expanded fromEurope and North America to includeJapan, Finland, Australia, NewZealand, Mexico, the Czech Repub-lic, Hungary, Poland, Korea and theSlovak Republic.

OECD share of world GDP (PPP): 59%OECD share of world trade: 76%OECD share of world population: 18.5%OECD GDP growth 2001: 0.7%

OECD share of world official development assistance: 95%OECD contribution to world CO2 emissions: 54.6%OECD share of world energy production: 38.8%OECD share of world energy consumption: 53.9%

OECD in the world


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The OECD is responding to thechanging needs of a rapidly-evolvingglobalised economy by continuingreform of its internal organisation andworking methods. In 2001 thisincluded pioneering reform of theorganisation’s accounting proceduresin line with new international stand-ards (see box below). The OECD waskeen to be the first to implementthese standards as part of the organi-sation’s long-standing programme ofreform. Between 1996 and 1999 theOECD budget was cut by around 18%

THE CHANGING FACE OF THE OECD

the completion of the organisation’sfirst project on this theme and on thetheme of the “new economy”. TheOECD also created a new websiteorganised around the main themesof its work, from ageing and agricul-ture to taxation and transport (see boxp. 62). This way of working meets theneeds of member governmentshaving to cope with a host of rapidlyemerging new issues, whether theeconomic and social implications ofevents such as the 11 September ter-rorist attacks in the United States or

The OECD is the first organisation in the world to pre-pare and publish its financial statements in accordancewith International Public Sector Accounting Standards(IPSAS), certified by independent auditors. The full setof statements, based on the accrual method, is availablein a separate report from the OECD budget and financeservice. The accounts are presented in euros and includestatements of financial position, financial performance,changes in net assets/equity and cash flows.

The International Federation of Accountants (IFAC)released the world’s first authoritative set of financialreporting standards for public sector entities in May 2000.These IPSAS standards are derived from the InternationalAccounting Standards (IAS) developed for the privatesector, but adapted for use at all levels of governmentworldwide. This move to global convergence recognisesthat public and private sector accounting disclosure andgovernance share the same fundamental goals of accu-racy, transparency, timeliness and relevance. The OECDis in the public sector and must have the accountinglanguage and reporting most appropriate to its needs.The IPSAS standards provide a common accountinglanguage for countries each with different nationalaccounting standards.

FINANCIAL REFORM

The IPSAS standards for international organisations tookeffect for annual financial statements covering periodsbeginning on or after 1 July 2001. But the OECD chose toimplement them early, starting with the year ended31 December 2000, because it believes that thesestandards are the best available anywhere for its type ofactivity. The certification by independent auditorsPriceWaterhouseCoopers also contributes to good gov-ernance and credibility with the international community.

The OECD budget is divided into two sections. Part Icovers the bulk of OECD activities and accounts for 80%of the total budget. It is funded by contributions from all30 member countries, based essentially on the relativesize of their economies, and ranging from 0.1% to justunder 25% of the total. Part II covers specific programmeswith more limited participation and whose funding isagreed between the participating countries.

Budget and financial management reform continued in2001, including a decision to implement a biennialbudget process from January 2003. A review of the budgetcycle was carried out. The programme of work is now pre-sented on the basis of themes of activity and a priority-setting mechanism was implemented.

in real terms, administrative costsreduced by up to 23% and staffnumbers cut by 15%. There was areturn to budget stability in 2000. Atthe same time the organisationlaunched a major financial manage-ment reform programme anddecided to create a pension reservefund.

Other major developments in 2001included the decision to pursue workon key overarching themes such assustainable development following


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The OECD has signed a lease on office space in the TourEurope at La Défense in northwest Paris, which will allowmore than 700 OECD staff to be transferred from theorganisation’s La Muette headquarters site, once essen-tial installation work has been completed.

This major move will empty some 20 000 m2 of officespace and marks the launch of a multi-year programmeto redevelop the office and conference facilities at theOECD headquarters. Renovation is required primarily forthe main office building which contains asbestos, ispoorly adapted to modern fire safety regulations and nolonger corresponds to the OECD’s functional needs.

Overall planning for work at the headquarters site,including renovation of the main building and theChateau de La Muette, and construction of new perma-nent conference facilities, is already well advanced. Oncethe Council has approved details of the redevelopmentprogramme and its budget, the next step in 2002 will bean international architectural and engineering designcompetition.

Preparations for the move will take place in 2002 andthen many OECD directorates will be transferred fromthe main building to Tour Europe. Completion of reno-vation, and the final return of all staff from Tour Europeto La Muette, is envisaged in 2008.

NEW ANNEX AT LA DÉFENSE

growing concerns over biotechnologyand food safety. A key event for staffin 2001 was the finalisation of plansto relocate many of those working atthe Paris headquarters site to allowessential refurbishing and renova-tion of the main headquarters build-ing (see box below).

The organisation has also trans-formed its relationship with non-members, recognising that in aglobalised economy developmentsin key areas from climate change toinformation technology are trulyglobal and cannot be dealt with byone group of countries. During 2001the OECD revamped its Sahel Clubto reflect the fact that it now alsoencompasses work with countriesfrom West Africa (see box p. 52). The

A highlight of the organisation’s co-operation with civil society in 2001was the second OECD Forum, whichenabled the views of academics,business, labour and civil societyparticipants on sustainable develop-ment and the new economy to feedinto the discussions at the annualministerial meeting immediatelyafterwards.

The guiding principles of all thesereforms are greater responsivenessto member country needs, ensuringefficiency and cost effectiveness anda commitment on the part of thesecretariat to professional and mana-gerial excellence. Continued reformefforts will seek to further improvepriority setting to make best use ofavailable resources.

A view of the Tour Europe.

OECD has a co-operative relation-ship with some 70 countries andnon-members are increasinglyinvited to subscribe to OECDagreements. In areas such as elimi-nating harmful tax practices andcombating terrorist and other illicituse of global financial systems, theOECD is working with non-membereconomies to find solutions accept-able to all. The Centre for Co-operation with Non-Members(CCNM), established in 1998, is thefocal point for these relationships.It manages multi-country pro-grammes linked to core themes ofOECD work such as trade and theenvironment, as well as individualcountry programmes with majornon-member economies such asBrazil, China and Russia.


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OECD IN 2001: SELECTED EVENTS

John Martin, OECD Director for Education, Employment,Labour and Social Affairs, with Edelgard Bulmahn,German Minister for Education and Research, who chairedthe ministerial session.

Ricardo Lagos Escobar, President of Chile, receives OECDSecretary-General Donald Johnston, at the ChileanEmbassy in Paris.

(left to right) Anita Bay Bundegaard, Danish Minister forDevelopment Co-operation, Baroness Amos, Minister,Spokesperson on International Development, House ofLords, UK, and Heidemarie Wieczorek-Zeul, GermanMinister for Economic Co-operation and Development.

Meeting of the OECD Education Committee atMinisterial level, 2-4 April

Visit by Chilean president, 19 April

High-level meeting of the Development AssistanceCommittee, 25-26 April


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OECD Council at Ministerial level 16-17 May

Meeting of the Environment Policy Committee atMinisterial level, 16 May

International Energy Agency Governing Board atMinisterial level, 16 May

(left to right) Long Yongtu, Vice Minister, Chinese ChiefTrade Negotiator, Seiichi Kondo, OECD Deputy Secretary-General, Donald Johnston, OECD Secretary-General, andDonald Evans, United States Secretary of Commerce, atthe session with non-member countries during the OECDministerial meeting.

Robert Priddle, IEA Executive Director, with ChristianPierret, Secretary of State for Industry, French Ministryfor Economy, Finance and Industry.

(left to right) Nino Chkobadze, Georgian Minister ofEnvironment and Natural Resources Protection, BorisYatskevich, Russian Minister of Natural Resources, andWang Xinfang, Chinese Vice-Minister, State Environmen-tal Protection Agency, at the working lunch with non-members during the OECD ministerial meeting.


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Poul Nyrup Rasmussen, Danish Prime Minister, withOECD Secretary-General Donald Johnston, at the OECDForum session on sustainable development during theOECD ministerial meeting.

OECD Council at Ministerial level chaired byDenmark, 16-17 May

OECD Forum 2001 on Sustainable Developmentand the New Economy, 14-16 May

The World Economy, A Millennial Perspective

This pioneering effort to quantify the economic perform-ance of nations over the very long term provides acomprehensive view of the growth and levels of worldpopulation since the year 1000. In this period, worldpopulation rose 22-fold, per capita GDP 13-fold and worldGDP nearly 300-fold. In the year 1000, the rich coun-tries of today were poorer than Asia and Africa. The bookidentifies the forces which explain the success of the richcountries, and explores the obstacles which hinderedadvance in regions which lagged behind.

General view of the members of the OECD Forum panel:“The transition to sustainable development: Are wemaking progress in decoupling economic growth fromenvironmental degradation?”


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Visit by Venezuelan president, 9 October

Conference on Measuring and Improving HealthSystems Performance in OECD Countries, hostedby the Canadian government in Ottawa, 5-7 November

Financial Action Task Force on Money Laundering,Extraordinary plenary meeting on Financing ofTerrorism, Washington DC, 29-30 October

(left to right), standing, Bernard Kouchner, FrenchMinister of Health, John Hutton, UK Minister of State forHealth, Edward J. Sondyk, spokesman for the US Secretaryof Health and Human Services, Julio Frenk Mora, MexicanMinister of Health; seated, Allan Rock, Canadian Ministerof Health, and OECD Secretary-General Donald Johnston,at the Ottawa health conference.

Clarie Lo, Commissioner for Narcotics of Hong Kong,China, Chairperson of the FATF, with Paul H. O’Neill,US Secretary of the Treasury.

Hugo Chavez-Frias, Venezuelan President, pays a visit toOECD Secretary-General Donald Johnston.


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The OECD conducts comprehensiveanalysis and monitoring of economicgrowth and stability, with the aim ofcontributing to better economicpolicy-making. This processincludes broad-based evaluation ofmacroeconomic policies and trends,as well as key structural polices, inOECD member countries andselected non-member economies.Structural analysis across severalcountries is also conducted on keytopics. The results of this work arepresented in several publicationseries: OECD Economic Surveys coverindividual countries and the euroarea, the six-monthly Economic Out-look reviews all OECD members andselected non-members, OECD Eco-nomic Studies and economics depart-ment working papers cover generalissues and there are occasionalspecial publications.

Calculating risks for theeconomic outlook

In 2001, the OECD analysed andevaluated risks for the short-termgrowth outlook, notably the sharpweakening of the global economyexacerbated in the wake of the11 September terrorist attacks in theUnited States. OECD experts studiedthe synchronised nature of the cur-rent cycle and uncertainties overprospects for business and consumerconfidence as well as the volatility inequity markets and the sustainabilityof private savings and investmentbalances. They also looked at thepotentially destabilising over-borrowing of the private sectorobserved in selected large and smalloverheating economies. Policy rec-

ommendations from this analysisincluded a call to governments tosustain their commitment to an openglobal trading system, free competi-tion and strict limits on state inter-vention in the case of market failure,as well as pursuing efforts to increasethe effectiveness of anti-povertypolicies. The OECD also started tolook at area-wide aspects of trans-missions of economic fluctuations,including possible new internationallinkages, a higher degree of synchro-nisation, as well as potentially higherbusiness costs that may arise in anenvironment of heightenedinsecurity.

Structural issues

Three structural issues featuredprominently in reviews of individualcountries in 2001: taxation, environ-mentally sustainable growth and effi-cient public expenditure. The OECDalso published a synthesis of coun-try assessments on tax reforms andon environmental sustainability and

is working on a synthesis of the policyimplications of ageing. Country-related special studies are alsooccasionally carried out, such as onein 2001 on the economic aspects ofthe integration of the new GermanLänder. Previous OECD-wide analyti-cal work on environmental sustain-ability is being used as the basis ofdiscussion for indicators to be usedin peer reviews of country policies(see box p. 33). The work on the growthproject (see box p. 16) is also beingfollowed up, notably the micro-economic evidence of firm dynamicsand productivity, the changing natureof the business cycle, and the roleplayed by barriers to trade andinvestment.

Role of financial marketswww.oecd.org/[email protected]

Financial markets have a key role toplay in economic growth and stabil-ity. The OECD covers the whole rangeof financial issues related to banking,

ECONOMIC GROWTH AND STABILITYwww.oecd.org/[email protected]

At a meeting in Paris with Japanese Prime Minister Junichiro Koizumi (left),OECD Secretary-General Donald J. Johnston (right) expressed support for aJapanese economic reform programme announced in June 2001.


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The OECD Growth Project was launched at the requestof OECD ministers in 1999 to study the causes of growthdisparities between countries and identify factors andpolicies that could strengthen long-term growth perform-ance. At that time, growth was high virtually everywhereand in some countries was seen to be clearly driven byinformation and communication technology (ICT). Butwhen the final report was delivered to ministers in 2001the international economy was in a marked slowdown,driven in large part by weakening in the ICT sector. Thereport entitled The New Economy: Beyond the Hype, attempts

THE OECD GROWTH PROJECTwww.oecd.org/[email protected]

to see beyond these short-term developments and toidentify appropriate policy lessons to boost economicgrowth.

The report, based on a very large body of analytical work,concludes that:

• Growth patterns diverge across OECD countries,reflecting differences in the way they use the labourpool, the dynamism of capital formation and theeffectiveness with which they combine capital andlabour.

• Notwithstanding the cyclical slowdown, ICT invest-ment and use are important drivers of growth, whichcan be facilitated by healthy competition in telecom-munications and technology, by improving skills andby a sound regulatory framework for ICT use.

• Stronger innovation and technology diffusion can beachieved by giving greater priority to fundamentalresearch, improving the effectiveness of publicresearch and development funding, and promotingthe flow of knowledge between science and industry.

• Human capital is a fundamental engine of growth andeducation and training policies are crucial. Reapingthe full benefit of investment in human capital callsfor labour market institutions and regulations to adaptto the changing nature of work.

• Entrepreneurship has always been an importantdeterminant of growth but becomes even more crucialat times of rapid technological change. Open, com-petitive financial markets that facilitate access tocapital for innovators and the avoidance of burden-some administrative regulations help to stimulateentrepreneurship.

But such policies will only be fully effective whencombined with sound economic fundamentals, includinghealthy public finances, low and stable inflation, effectivefinancial systems, well-functioning labour and productmarkets, and open trade and investment policies.

In 2000 commentators everywhere were hailing theboom in some western economies as the dawn of a neweconomy. In 2001, with a slowdown biting in the USeconomy, dot.coms folding and information andcommunications technology firms feeling the pinchglobally, the headline writers swung the other way,saying that it was all a myth. This book looks past theelation and gloom to help policy-makers think and actwith the facts. It explores the causes of the discrepancyin economic performance in the OECD area and showsthat, while technology has had a pervasive andprofound effect on economies and societies, it was notthe only reason for fast growth.


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securities and institutional investors(insurance companies, pension fundsand investment companies) andexercises surveillance over develop-ments, reform measures and changesin structural and regulatory condi-tions in financial markets and insti-tutions. Its key aims are to promoteliberalisation in financial servicesand the development of interna-tional financial best practices(including statistics). The OECD alsoworks to foster the integration of non-member countries into the globalfinancial system.

Monitoring of financial markets wasparticularly active in 2001, notablywith special meetings of the Commit-tee on Financial Markets and theInsurance Committee to discuss theimpact of the events of 11 Septem-ber on financial and insurancemarkets. Activities also included in-depth discussions with the financial

community through special meetingsand the participation of private rep-resentatives. The core analytical workon financial markets focused on thetheory and practice of consolidatedfinancial supervision, trends and pros-pects in electronic finance, and trendsand recent structural changes in OECDpublic debt markets. Policy analysisin the insurance sector focused oninvestment regulation of the two maingroups of institutional investors in theOECD area (insurance companies andpension funds), e-insurance, policyholders’ protection funds and issuesrelated to risk management. Majorachievements included an agreementon new obligations for the insuranceitems of the OECD Code on trade ininvisibles, endorsement at a world-wide level of the OECD 15 principlesfor the regulation of private pensions(see box p. 19) and an agreement on adraft decision on exchange of informa-tion in reinsurance. The Insurance

Committee is contributing substan-tially to the OECD project on health,through its private health insurancecomponent.

The OECD also developed a worldtaxonomy of pensions systems in2001 and analysed the governance,supervision and investment regula-tion of pension funds. It discussednew guidelines for governance ofpension funds. It discussed in depththe International Accounting Stand-ards Board (IASB) draft standards forinsurance accounting. The WorkingParty on Government Debt Manage-ment dealt with risk managementpractices, investor relations and elec-tronic trading systems. Work onfinancial statistics was expanded tocover international direct invest-ment, funded pension schemes andprivatisation. Co-operation withinternational organisations wasenlarged with concrete joint projects

Member countries regularly review each other’s economicsituation and policies as part of the OECD’s multilateralsurveillance. “Peer pressure” is a key ingredient of the pro-cess, with country representatives analysing and question-ing the economic policies of the country being “examined”and indicating where it might do better in the light of theirown and other international experience. The Economic andDevelopment Review Committee (EDRC) reviews eachOECD country every 12 to 18 months and the final report isagreed by all 30 members.

The surveys cover both macroeconomic and structural issues,such as how labour, product and financial markets operate aswell as the role and functions of the public sector. Each surveyusually includes a special, in-depth structural topic. In orderto get the greatest synergy from this work, countries are askedto choose the special topic from a limited list of three or fourwhere the OECD has already presented an analytical frame-work based on cross-country evidence. Once enough

OECD ECONOMIC SURVEYSwww.oecd.org/macroeconomics/about/Country_Surveys/[email protected]

countries – usually 10 or so – have been covered under aparticular topic, it is possible to synthesise their experienceand draw general lessons for future policy.

The special topics evolve over time. The first set coveredageing, taxation and environmentally sustainable growth,for which synthesis reports are now available. Most recently,public expenditure has been added, and frameworks formigration and for product market competition and economicperformance are being developed. Work is also underwayon indicators for sustainable development (see box p. 33).

The OECD carries out occasional reviews of non-membereconomies in the context of co-operation programmes. Thefirst Economic Survey of Brazil was published in 2001 (see boxp. 18) and the fourth Economic Survey of Russia is being pub-lished in 2002. A major OECD study, China in the WorldEconomy: the Domestic Policy Challenges was published in 2002,including a Chinese-language version.


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such as a new foreign direct invest-ment (FDI) survey with the Interna-tional Monetary Fund (IMF), work onprivatisation statistics with the WorldBank and on private pension statis-tics with Eurostat. The insurancestatistics database was expanded tocover statistics on private healthinsurance, which should complementthe organisation’s health database.

Outreach activities on financialmarkets were particularly intensiveand included meetings on a broadrange of topics such as capitalmarkets reform, housing finance,government securities markets,institutional investors, insuranceregulation and supervision, privatepension reform and financial statis-tics. The regions and countries cov-ered included Asia, Latin America,transition economies in Europe andthe Baltic States (see chapter on relationswith non-members, p. 53). There werealso special meetings in China andBrazil.

Financial publications in 2001included the flagship thrice-yearlypublication Financial Market Trends andstatistical yearbooks – for instance,on institutional investors, inter-national direct investment, bankprofitability, or insurance statistics.There were also two issues of a newseries on private pensions, the thirdin a series on insurance policy issues(Insurance Regulation, Liberalisa-tion, and Financial Convergence) anda study on insurance regulation inLatin America and Asia. Last but notleast, a 2 500-page insurance and pri-vate pensions compendium foremerging economies was circulatedto world insurance and pensionssupervisors.

Industry and growthwww.oecd.org/[email protected]

Work on industry examines how eco-nomic developments affect parti-cular sectors, ranging from steel to

The first OECD Economic Survey of non-member Brazil was published in June 2001.It provided a comprehensive review of theBrazilian economy and the key challengesto stabilisation and sustainable growth.The survey also identified possible areasfor future co-operation between the OECDand Brazil (see chapter on relations with non-members, p. 53).

Since the early 1990s an ambitious structural reform pro-gramme, including privatisation, deregulation and phasingout restrictions to foreign trade and investment, has trans-formed the Brazilian economy. The introduction of a newcurrency in 1995 enabled it to achieve a significant breakwith a legacy of high inflation. The macroeconomic policyframework was further strengthened in 1999/2000 throughmeasures such as a floating exchange rate, inflation target-

BRAZILwww.oecd.org/ccnm/[email protected]

ing and a new fiscal responsibility law affecting all levels ofgovernment.

The core issue for Brazil is whether it has indeed crossed athreshold to sustained growth. The Economic Survey’s answeris a cautious and conditional “yes”. It is cautious because ofBrazil’s vulnerability to external shocks, deriving from itsheavy reliance on inflows of foreign capital, high external debtand large current account deficit. It is conditional becausemacroeconomic stability depends on further progress in struc-tural reform, including the fiscal relationship between thefederal government and the states, the civil servants’ pen-sion system and regulatory reform in the financial sector andin product markets. The Survey discusses the links betweengrowth and structural change in agriculture, energy and socialpolicies and stresses that the reform process must be sociallyacceptable, especially in a democratic society with such highlevels of income inequality.

electronics to business services. TheOECD helps governments formulatepolicies to foster the developmentof industries and enterprises,whether large or small firms and atlocal, national and internationallevels.

Entrepreneurship is particularlyimportant in times of innovativechange (see box p. 16). In recent years,new firms have contributed to pro-ductivity growth in emerging indus-tries and to innovation in areas suchas information and communicationstechnology (ICT) and biotechnology.A wide range of factors that maylimit entrepreneurship can beaddressed by government policy,such as regulations and fiscal pro-visions that inhibit the develop-ment of high-risk capital markets. Insome countries, bankruptcy andinsolvency provisions are overlystringent and eliminate the possi-bility for entrepreneurs to have asecond chance.


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Population ageing has raised the profile of privatepension arrangements all over the world. Given theimportant social and economic role of such pension plans,appropriate governance and administration is crucial toensure that they deliver on their promises. Governmentsplay a key role by ensuring that an appropriate regula-tory and supervisory oversight of pension plans andpension funds is in place.

In April 2001, the International Network of Pensions Regu-lators and Supervisors (INPRS, www.inprs.org), groupingmore than 140 regulatory and supervisory institutionsfrom over 65 countries, endorsed the OECD Fifteen Prin-ciples for the Regulation of Private Occupational PensionPlans. The principles are designed to safeguard theinterests of beneficiaries and ensure the efficient run-ning of such plans. They cover areas ranging from super-vision to investment policy and set out the basic objec-tives that the regulatory and supervisory framework ofany private pension system must contain. These objec-tives come under two broad categories:

• The protection of beneficiaries’ rights, including pro-tection against discrimination in access to pensionplans, protection against inflation, protection ofvested rights to pension contributions, and theportability of pension rights.

• The financial security of pension promises and of thepension funds themselves – which includes regula-tions to protect pension plans against fraud and mis-management by pension fund managers and admin-istrators, as well as regulations to protect pensionpromises against the sponsor’s insolvency.

The principles are oriented towards occupational pensionplans but are applicable to any form of private pensionplan, whether defined benefit, defined contribution, orsome hybrid of the two. The principles need to be appliedin a regulatory and supervisory framework that is trans-parent, dynamic, consistent, and effectively enforced.

The endorsement by the INPRS was the first time that aninternational body of this sort has agreed on best prac-

tices in the area of private pension systems. The OECDhas also begun to develop a template for World Bankand International Monetary Fund (IMF) teams to assessimplementation of the private pension principles.

In addition to national regulatory and supervisory bodies,INPRS members include international organisations suchas the OECD (which services the Network), the WorldBank, the IMF, the European Commission, the LatinAmerican Association of Pension Fund Supervisors (AIOS)and the International Social Security Association, as wellas regional INPRS networks for the Asia/Pacific area andCentral and Eastern Europe.

OECD ministers at their annual meeting in May 2001expressed support for the OECD’s work to develop prin-ciples and best practices for the regulation of privatepensions. This work will be conducted in close co-operation with the INPRS.

PRIVATE PENSIONSwww.oecd.org/[email protected]

This book covers administrative issues related toprivate pension systems. It looks at these questions ingeneral as well as examining in detail experience andpractices in a number of countries in Europe, the Asia-Pacific region and America.


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The performance and policy implica-tions of industrial globalisation,trends in cross-border mergers andacquisitions and other types of inter-nationalisation were studied in 2001,as well as the challenges facing smalland medium-sized enterprises.

Steelwww.oecd.org/enterprise/[email protected]

Steel prices remained low in 2001,with over-capacity concerns height-ened by weakening demand and in-creasing trade tensions. Members ofthe OECD’s Steel Committee –representing 81% of world steelproduction and 86% of world steeltrade – agreed on the need to tackleexcess and inefficient steel capacity,with a goal of promoting free andopen trade in steel. A high-levelmeeting of government representa-tives in September agreed to con-sult with steel producers in indi-vidual countries on restructuringefforts and a second meeting inDecember reviewed the results andagreed that all governments mustencourage a market-based reduc-tion of inefficient excess capacity inthe near term. Governments alsoagreed to look further at possiblesolutions for financing the closure ofsteel facilities, which had emergedas a principal factor deterring manyfirms from full restructuring. Meet-ings in 2002 will look at ways tofurther reduce excess capacitythrough market forces, identify bestpractice in restructuring and look atways to help meet the social andenvironmental costs of closures.

Shipbuildingw w w. o e c d . o r g / e n t e r p r i s e /[email protected]

The outlook for the shipbuilding in-dustry is not encouraging, with order

levels expected to fall as a result ofthe events of 11 September and thelikelihood that this trend will con-tinue in the longer term. This raisesconcern that government supportmay grow and trade disputes will pro-liferate. OECD members and non-members between them accountingfor 95% of the world’s shipbuildingindustry met to discuss these issuesin December and to consider waysto bring about a more level playingfield in shipbuilding. Recognisingthat the views of the shipbuildingindustry will be crucial in any agree-ment to bring about more competi-tive market conditions, the OECDdecided to hold a consultation withthe industry in March 2002. TheOECD also regularly produces statis-tics covering 95% of world shipbuild-ing activities. They cover productionfacilities and labour force in bothmember countries and economiessuch as Brazil, China, Chinese Taipei,Croatia and Romania.

Tourismwww.oecd.org/sti/[email protected]

The 11 September terrorist attacksand their aftermath hit the touristindustry hard, compounding an eco-nomic downturn that was alreadyunderway. A meeting of travel andtourism policy experts the followingmonth recommended that govern-ments undertake detailed nationalassessments of the impact on theirnational tourist industries. But theexperts said that long-term prospectsfor the industry in OECD countries,which between them account forabout two-thirds of the global indus-try, remained positive. Work on tour-ism more generally aims to enhancethe capacity of OECD governmentsto adjust their policies and actionsto support sustainable growth in tour-ism, and to better integrate tourismpolicy issues with other policy areas.

Globalisation is accelerating theinternationalisation of industryand reshaping industrial struc-ture, especially through cross-border mergers and acquisitions(M&As) and strategic allianceswhich have become common pathsto internationalising businessoperations, research and markets.An overwhelming share of foreigndirect investment (FDI) is now inthe form of M&As rather thaninvestment in setting up newbusinesses. Strategic alliances arealso a powerful mechanism forindustrial restructuring on aglobal basis. This book presentsthe latest trends and drivers ofglobalisation in major OECDcountries and their implicationsfor industrial performance andgovernment policies. It analysesregional as well as sectoraltrends, including telecommunica-tions, automobiles, steel, pharma-ceuticals, airlines and financialservices. It also assesses theincreasing number of alliances forbusiness-to-business (B2B) andbusiness-to-consumer (B2C)electronic commerce, andglobalisation of small andmedium-sized enterprises (SMEs).


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How and why does economic performance differ within acountry? What are the prospects for a certain territory?Governments attach increasing importance to such ques-tions and in response the OECD is reviewing how mem-ber countries implement territorial policy at nationallevel through territorial policy reviews launched threeyears ago. These reviews contribute to the OECD’s taskof multilateral evaluation of member country policiesaimed at achieving sound economic expansion whileenhancing social cohesion and promoting environmen-tally sustainable development.

Territorial reviews focus on policies to support economicand social development and to reduce territorial dispari-ties by promoting local competitive advantages andunused potential for growth. They also look at ways toimprove the efficiency of governance with special refer-ence to fiscal federalism and to partnerships betweendifferent areas of government such as central and regionalauthorities, or between sub-national authorities.

The OECD has developed a framework and methodol-ogy for the reviews, which set out first to identify thenature and scale of territorial challenges and assess terri-torial policies and governance, then develop specificrecommendations and seek to disseminate best prac-tices through a peer review process exercised by theTerritorial Development Policy Committee. (TDPC).

Italy, Hungary and Korea, then Canada, Switzerland andMexico were the first countries to entrust the Committeewith an examination of their policies. Regional reviewshave been completed for Teruel in Spain, Tzoumerka inGreece, Comarca Centrales Valencianas in Spain,Bergamo in Italy, Champagne-Ardennes in France, Siennain Italy and Morevska-Trebova in the Czech Republic.Reviews are underway for Helsinki in Finland, Vienna in

Austria and Melbourne in Australia, and are due to becompleted in 2002. The first cross-border regional review,of Oresund in Denmark/Sweden, is also due to be com-pleted in 2002 and others are expected to follow.

The reviews have helped member countries and regionsto better address territorial development issues, to en-hance co-operation between the various administrativelevels involved and to improve the efficiency of theirdevelopment policies and institutional framework.

TERRITORIAL REVIEWSwww.oecd.org/[email protected]

Territorial development is the newest policy field in theOECD. It responds to the two most important trends ofthe 1990s, globalisation and sustainability, by helpingall the territories within countries – their cities andregions – to enhance and exploit their assets andendowments. Working within an increasingly decen-tralised governance, the public and private sectors aswell as civil society are concerned to prepare territoriesfor the future.


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The 2001 ministerial communiqué(see p. 85) stressed that “social cohe-sion is a central objective of sustain-able development”. This is whyOECD countries are increasinglycommitted to fighting social exclu-sion by enhancing employment andensuring adequate opportunities tolearn. OECD education ministers alsostressed when they met in April 2001that “sustainable development andsocial cohesion depend critically onthe competencies of all of our popu-lation”. In this respect, equitableaccess to learning opportunities is amajor policy concern. A wide rangeof OECD work addresses theseissues, with the objective of findinga balance between efficiency andequity.

Enhancing employmentopportunitieswww.oecd.org/[email protected]

Despite recent reductions in struc-tural unemployment in the OECDarea, creating greater employmentopportunities remains a major policypriority. The “activation” of labourmarket policies is one way to achievethis and a Policy Brief published in2001 on “Labour Market Policies thatWork” provides a range of good prac-tices in this respect. Some countriesare strengthening the complemen-tarities between private and publicemployment services as part of ef-forts to help the unemployed findjobs. The Australian experience ofsubcontracting employment servicesto private and community organisa-tions provides an interesting innova-tion in this area, examined in 2001 in

EMPLOYMENT AND SOCIAL COHESIONwww.oecd.org/[email protected]

Innovations in Labour Market Policies: theAustralian Way. The 2002 edition ofthe OECD Employment Outlook willexamine a key element of theemployment strategy: the impact onemployment of the interactionbetween product market competi-tion and labour market policies. Itwill also address whether temporaryjobs, interim work and other “atypical”employment contracts – a major sourceof job creation in some countries – area stepping stone to better jobs orwhether there is a risk that people get

trapped in these contracts. Lookingfurther ahead, the OECD is carrying outa major review of policies to improveemployment prospects of olderworkers to help meet concerns aboutthe socio-economic impact of popula-tion ageing.

But emphasis on employment poli-cies is not enough. They need to bebetter integrated with social policiesto reduce social exclusion, as thelatest edition of the Employment Out-look recommends. This encompassesreforms of taxes and social benefitsto make work pay, efforts to upgradeskills and effective ways of helpingpeople keep their jobs. Countries areincreasingly aware that employmentand welfare policies need to be“activated” by making benefits moreemployment-oriented.

To shed further light on how to makesocial policies more employment-oriented, the OECD is reviewing poli-cies to reconcile work with familyresponsibilities and examining poli-cies to help bring disabled peopleof working age into the labour force.

Dr. Seymour Papert, USA, 2001 Nobel Economics Prize winner, with HanWan-Sang, Deputy Prime Minister, Minister of Education and HumanResources Development, Korea, at a forum on Information and CommunicationTechnology and Education, held before the meeting of OECD EducationMinisters in April 2001.


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Education, training and informal learning all contribute tothe development of “human capital” – the skills and attri-butes necessary to human achievement both inside and out-side the workplace. The OECD growth project (see box p. 16)helped to clarify the contribution of human capital to eco-nomic growth in OECD countries, showing that for eachadditional year of education among those in the labourforce, GDP rises by about 6%. An OECD report publishedin 2001, The Well-being of Nations: The Role of Human and SocialCapital, found that better-educated people tend to behealthier, happier and more effective at educating their ownchildren. Human capital also helps to support “social”capital, in the sense that civic and political participationtend to increase with education.

Childhood and compulsory schooling clearly represent acritical phase in human capital formation. The OECD-ledProgramme of International Student Assessment (PISA)survey provides the first direct test-based assessment ofthe mathematical, scientific and reading literacy skills of 15-year-olds. The 2000 survey covered 32 countries includingmost OECD countries and some non-OECD countries suchas Brazil and Russia. A first report, Knowledge and Skills for Life:First Results from PISA 2000, was published at the end of 2001.The report shows considerable differences in levels ofknowledge and skills between students, schools andcountries. It also found that the socio-economic backgroundof students and schools affects student performance to dif-fering degrees. Further reports will use these data to exploreschool and social background factors in depth, particularlythe capacity of schooling to enhance knowledge and skillsand overcome disadvantages of social background. Furtherrounds of the survey will concentrate on specific areas,focusing on mathematical skills in 2003 and scientific skillsin 2006. The survey will also be extended to at least 15 othernon-OECD countries, including China and Indonesia.

Education and training after compulsory schooling are alsoextremely important – roughly half of public expenditureon education and training in OECD countries is devoted tothe post-compulsory phase. A special chapter in theDecember 2001 issue of the OECD Economic Outlook on“Investment in human capital through post-compulsory edu-cation and training” found that the economic returns oninvestment in upper secondary and tertiary education werestrikingly high in many OECD countries, and explored thepotential reasons. It noted that subsidies for post-compulsory education tend to benefit those from more privi-leged backgrounds and whose income and employmentprospects are good. Carefully handled subsidy reductions,

HUMAN CAPITALwww.oecd.org/els/[email protected]

it suggested, have improved equity without significantevidence of large adverse effects. Some further work build-ing on this exercise is envisaged for 2002.

Rigorous measurement of the outcomes of human capitalinvestment among adults remains a challenge, particularlyin respect of the “softer” skills such as problem-solving andteamworking which may be critical to performance in theworkplace. The OECD collaborated in the International AdultLiteracy Survey (IALS) in the mid- and late 1990s, and is nowplaying an active role in the new Adult Literacy and Lifeskillssurvey (ALL). The ALL survey, currently in the pilot phase,has developed and built on the competency measures usedin IALS – particularly through its development of a measureof problem-solving skill. The OECD will continue to under-take development work on the measurement of adult skills.

Much human capital is developed, maintained andexploited in the workplace. Employment policy – includingenterprise training policies and programmes to assistunemployed workers back into work – therefore also playsa large role in the development of human capital.

In a rapidly changing world, the success of nations,communities and individuals may be linked, more thanever before, to how they adapt to change, how they learnand how they share knowledge. The evidence suggests thathuman and social capital can be of key importance incontributing to positive outcomes, including higherincome, life satisfaction and social cohesion. This reporthelps clarify the concepts of human and social capital andevaluates their impact on economic growth and well-being.


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The OECD embarked on a three-year Health Project in2001 to help member governments deal with the grow-ing challenges that face health policy and health caresystems. Health systems are an important element insocial cohesion and represent the largest service sectorin many OECD countries. Their efficiency and equitabledistribution, their impact on public finances, and theirability to meet the challenges of medical advances,ageing populations and rising expectations require crea-tive policy approaches. The Health Project will providepolicy guidance on these matters. The project focuseson measuring and analysing the performance of healthcare systems in member countries as well as the factorsaffecting performance. It will ultimately address the pub-lic policy dilemma of deciding what level of resourcesshould be devoted to health care as well as how theseresources should be financed and allocated.

One of the early contributions of the Health Project wasa major conference in Ottawa in November 2001, spon-sored by the Canadian government, on Measuring andImproving Health Systems Performance in OECD Coun-tries. The conference was designed to allow countries toshare their different experiences of how the key actorsin health systems can best work together in this area.Ministers from several OECD countries agreed thatinternational comparisons can help identify best prac-tices and that measuring performance is a key elementin improving health care systems. A volume of proceed-ings is in preparation, including a report of the discus-sion that took place at the Ministerial Roundtable duringthe meeting. Preliminary synthesis results from the Age-ing-Related Diseases project were presented at the con-ference as an illustration of the way that internationalcomparison and analysis can assist national policy-making. The Ageing-Related Diseases project is analys-ing treatments, costs and outcomes in relation to healthpolicy and economic incentives for major conditionsaffecting older populations across a sample of OECDcountries. A final report is expected in 2002.

Other components of the Health Project will includeprojects on the measurement of performance includingequity, the micro-efficiency of resource use, includingmethods of paying physicians, nurses and hospitals; a

THE OECD HEALTH PROJECTwww.oecd.org/[email protected]

project on excessive waiting times for surgery; reviewsof emerging technologies; work on private health insur-ance; a project on care of frail elderly people, includingthe social implications of dementia; and a series of over-all assessments of health systems.

A synthesis report, to be presented to the 2004 minister-ial meeting, will provide concrete information to nationalpolicy-makers, helping them to improve their systems’performance and make difficult resource allocationdecisions.

OECD publications on health during 2001 included thebest-selling OECD Health Data, which included over1 200 data series and graphic illustrations of how healthcare systems work, all on a CD-ROM, and Health at a Glancewhich presents in a book charts of the variations andtrends in key indicators from OECD Health Data, with acommentary on each.

Science and technology improve human health but thepressure for faster and larger improvements is buildingwith the ageing of the population of many OECDcountries and increased demands for health care. Afundamental starting point for better understanding ofthe impact of innovation on health is the measurement ofR&D. This book looks in detail at measurement practicesacross 10 OECD member countries internationally.


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Investing in humanand social capitalwww.oecd.org/els/[email protected]

Ensuring adequate investment inworkers’ skills and competencies isan important plank of lifelong learn-ing strategy. Unfortunately, as the2001 Education Policy Analysis shows,the unskilled and other vulnerablegroups do not receive enough train-ing. To shed light on how to improvethe situation, a review of adult learn-ing policies due to be published in2002, will examine good practices inthis area. The final report on theOECD Growth Project, The New Eco-nomy: Beyond the Hype, also empha-sised the growth-enhancing role ofthe skills and competencies em-

bodied in workers (see box p. 23). Thiswill be followed up with research onpolicies to improve incentives to in-vest in human capital, as well as therole of labour-management institu-tions vis-à-vis these investments.The main results of this work will bepresented at a meeting of theEmployment, Labour and SocialAffairs Committee in 2002 and sub-sequently published.

Recent research has highlighted theimportance of “social capital” – pri-marily social networks and mutualtrust – in many kinds of social andeconomic endeavour. In 2001 theOECD published a major report, TheWell-being of Nations: The Role of Humanand Social Capital, describing evidenceof the many benefits of social capi-tal, as well as those of human capi-tal. The OECD intends to work withmember countries to improve themeasurement of social capital,enhance international comparability,and share and learn from policyexperience.

Migrationwww.oecd.org/[email protected]

International migration is an integralpart of the globalisation of the worldeconomy. Migration flows help boosteconomic exchanges and movementof human capital between OECDmembers and with non-membercountries. The 2001 edition of theannual Trends in International Migrationconfirmed the global upward trendin migration flows, showing anincrease in the number of sourcecountries of migrants as well as anincrease in the number of destina-tions and a growing trend of femalemigration. The latest issue of thereport also found a significantincrease in the share of immigrantsin the population of a number ofOECD countries.

This study of the material well-being of older people in nineOECD countries uses a wealth ofnew data to shed light on thechallenges that face policy-makers as they anticipate thecoming retirement of the baby-boom generation. In all thecountries surveyed, policies havebeen fundamentally successful:older people at all income levelstend to maintain or even increasetheir material standards of livingonce they stop working, butdemography and changing labourmarket patterns make reforms tothese systems imperative.

The book analyses the social,economic, and educationaltrends of the 21st century,drawing on an extensiveinternational body of statisticaland research evidence. It alsopresents six possible scenariosfor school systems over the next10-20 years.

Economic migration by people seek-ing jobs may be at the heart of theimmigration debate at the start of thenew millennium but the persistenceof illegal immigration and a sharp risein the number of asylum seekersmake it a priority to boost co-operation between the destinationcountries and the migrants’ countriesof origin if the flow is to be bettermanaged. Integration of migrantsinto the host societies and theirlabour markets also remains a keyobjective of migration policies.

The report also includes a specialchapter on student mobility, which isincreasing alongside requirementsfor higher levels of education, formore specialised knowledge and for


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command of foreign languages. Inter-nationalisation of education offershost countries the possibility ofqualified workers from abroad to

ease skilled labour shortages athome. Several OECD member coun-tries have eased regulations for en-try to their labour markets of foreignstudents at the end of their training.At the same time, greater co-operation is needed between thehost countries and the students’countries of origin to limit the risk ofa “brain drain” and ensure a moreequitable sharing of the advantagesof international mobility. An OECDseminar on international labourmobility in June 2001 offered achance to measure the scale andcharacteristics of these flows and toanalyse their impact on the eco-nomies of several host countries andcountries of origin. The meeting alsoexamined various ways of adaptingmigration policies to make it easierfor qualified workers to move aroundto the equal benefit of both hostcountries and countries of origin. TheOECD plans to look at this issue inmore depth in 2002-2003 and to lookclosely at the relationship betweenhuman capital movements andsustainable development in non-member countries.

Studies of the economic impact ofmigration and its links with domes-tic developments and policies inindividual member countries willform part of a number of OECD Eco-nomic Surveys in 2002-2004 and a syn-thesis of the results will be prepared.

Social issueswww.oecd.org/social/[email protected]

The focus of much OECD work onsocial issues is ensuring coherencebetween labour market and socialpolicies.Two major projects in 2002will address this area: one on recon-ciling work and family responsibili-ties and one on policies for the dis-abled.

The reviews of work and family poli-cies will look at how countries haveaddressed the goals of allowingparents to pursue their careers, whilesupporting their role in fostering thedevelopment of their children.Reviews of the Netherlands,Denmark and Australia will be final-ised in 2002 and new reviews willbegin for Switzerland, Spain, Japanand Ireland.

A review of policies for disabledpeople of working age in 20 membercountries will also be finalised in2002. This project explores how coun-tries have addressed the twin butpotentially contradictory goals ofensuring that disabled citizens arenot excluded from employment andsocial life but that they have incomesecurity if their earnings potential isrestricted. This project will try todeduce best practices in addressingthese issues.

This book shows that the migrationflows within and from the Centraland Eastern European countries(CEECs) are much more complexthan a straightforward flow towardsthe European Union and NorthAmerica. It analyses the importantrole the CEECs may play as “bufferzone” between the current EUmember states and the othercountries of Southern and EasternEurope and reveals what theprospective enlargement of the EUimplies in terms of CEECs’ migrationpolicies on such subjects as bordercontrol, the control of flows, labourmigration, family-linked migrations,refugees and asylum seekers.


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TRADE AND INTERNATIONAL INVESTMENTwww.oecd.org/[email protected]

Trade and investment liberalisationhas been a powerful stimulus to eco-nomic growth and a significant factorin integrating an expanding numberof countries into the world economy.OECD work on trade helps forestallthe trade tensions and conflicts thatcan emerge under the pressure ofever-intensifying competition. A keyobjective is to support membercountries’ moves to strengthen themultilateral trading system andfacilitate broad-based multilateraltrade negotiations under the aus-pices of the World Trade Organiza-tion (WTO). The OECD providesanalysis that underpins theseefforts, measuring the impact ofmultilateral trade agreements andassessing the likely outcomes offurther liberalisation.

Work in the run-up to the WTOministerial meeting in Qatar in

November 2001 covered three fronts:strengthening support for free trade,building bridges and helping todevelop modalities for negotiations.

Strengthening supportfor free trade

The OECD recognises the need tostrengthen support for trade liberali-sation and to address the concernsof citizens and developing countriesabout a more liberal trading regime.Work in 2001 covered areas such asservices (see box p. 28), agriculture (seebox p. 30), regional trade agreements(see box p. 31) and the relationshipbetween trade and development.The Development Dimensions of Tradeseeks to foster a better under-standing of the positive linksbetween trade, growth and develop-ment and to establish why develop-ing country interests are best served

in the framework of the multilateraltrading system. The study acknow-ledges the crucial importance ofdevelopment co-operation andcapacity building to support devel-oping countries in reaping thebenefits of trade and investmentliberalisation. The OECD has alsodeveloped a series of guidelines toaddress these challenges and to helpmember countries implement assist-ance programmes effectively. Thistrade and development work was thesubject of a brainstorming session atthe OECD in April 2001, attended byWTO Director-General Mike Moore,and of a roundtable in Santiago inJune 2001.

Building bridges

The OECD also helps bridge the gapbetween countries’ positions onparticularly sensitive trade-relatedsubjects. OECD work in 2001 helpedclarify the debate over internationaltrade and core labour standards,notably through presentations to theInternational Labour Organization(ILO) and to the WTO Secretariat anda workshop of the OECD GlobalForum on Trade on the study Inter-national Trade and Core Labour Standards.This found that countries with lowcore standards do not enjoy betterexport performance than high-standard countries. In the area oftrade and environment, considerableattention was devoted to the OECD’swork on sustainable development(see chapter p. 32). Analytical work isalso proceeding on issues related tothe environmental effects of tradeliberalisation. In the area of trade andinvestment, analytical work con-

(Left to right) Luis de la Calle, Mexican Deputy Minister of Economy, ShigeoUetake, Japanese Senior Vice-Minister for Foreign Affairs, Takeo Hiranuma,Japanese Minister of Economy, Trade and Industry, and Mauro Fabris,Italian Secretary of State, Industry, External Trade and Tourism, at thetrade ministers’ working lunch during the OECD Ministerial Council.


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The General Agreement on Trade inServices (GATS) was one of the majorachievements of the Uruguay Roundof multilateral trade negotiations,establishing a structure and frameworkof rules for global trade in services andfor commitments to liberalise thattrade. While little actual liberalisationwas achieved in those negotiations,

the GATS established a framework for future rounds.Negotiations under this “built-in-agenda” began on1 January 2000 and were given renewed momentum atthe World Trade Organization ministerial meeting in Qatarin November 2001 when ministers undertook to start themarket access phase. They agreed dates of 30 June 2002for initial liberalisation requests and 30 March 2003 forliberalisation offers.

Against this backdrop, OECD work on trade in services iscurrently addressing four core questions.

• Making the case for continued services trade liber-alisation: The OECD in 2001 completed a study, OpenServices Markets Matter, as a resource for governmentsin consultations with domestic stakeholders. Thestudy focuses on three main areas, starting with theeconomy-wide benefits of trade and investment lib-eralisation in services in both developed anddeveloping countries, identifying practical examplesand drawing on available empirical research. It alsodeals with criticism of the GATS, including chargesthat the GATS threatens the provision of essentialpublic services and governments’ legitimate right toregulate service activities, and key negotiating chal-lenges, especially for developing countries. A PolicyBrief summarising the study’s main findings was madeavailable at the WTO ministerial meeting in Qatar. Thefull study will be published in 2002.

• Labour mobility: The GATS also covers the temporarymovement of people across borders to deliver servicessuch as technical training. This issue is increasinglyimportant to globally active firms and is a key area ofexport interest for many developing countries. Ongoingwork is focused on approaches to the movement of

TRADE IN SERVICESwww.oecd.org/[email protected]

service suppliers in selected regional trade agreementsand available statistics (both trade in services andlabour market/immigration). It also covers the eco-nomic effects of temporary foreign workers on host andorigin countries as well as the issues surrounding andbarriers to such trade, and how these might beaddressed in negotiations.

• Domestic regulation: This project, undertaken withthe World Bank, concerns the relationship between acountry’s right to regulate in pursuit of a range of socialand economic objectives and good regulatory prac-tice in relation to the liberalisation of trade in serv-ices. The project is examining how improved domes-tic regulation is necessary for successful tradeliberalisation and how GATS rules can promote regu-latory reform and efficiency without unduly limitingregulatory freedom. It is also looking at how to pro-mote greater regulatory transparency and whetherpossible new disciplines should apply to all sectors,or be developed on a sectoral basis, as well as howthe GATS can best promote the adoption of interna-tional standards to facilitate services trade. Theproject aims to produce cutting-edge policy analysison what is widely seen as the most complex aspect ofongoing GATS negotiations. The results will be pre-sented in a joint publication with the World Banktowards the end of 2002.

• Request-Offer Template: This project aims to enableWTO members, in particular developing countries, tomake a success of the market access stage of the GATSnegotiations. It outlines best practice and lessonslearnt in consultation with domestic stakeholders andnecessary intragovernmental co-ordination as well asproviding a practical checklist for negotiators of themeasures and policies that may affect the value of aliberalisation offer.

Trade in Services: Negotiating Issues and Approaches, publishedin 2001, brought together a number of studies completedunder the services project during 1999-2000. Ongoingwork on services is discussed each year in a meeting ofservices experts which includes senior services negotia-tors from selected non-OECD members.


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tinues on the effects of trade agree-ments on governments’ ability to useinvestment incentives. OECD bridge-building activities in all these areashave benefited from extensive dia-logue with non-member countries.

Negotiating methods

The OECD is also helping to developbroader consensus on the modalitiesfor multilateral trade negotiations. ACD-ROM, Tariffs and Trade, was devel-oped to help trade negotiatorsformulate their objectives and stra-tegies on customs tariffs and theOECD also produced a study, Tradein Services: Negotiating Issues andApproaches. OECD work on labourmobility and the General Agreementon Trade in Services (GATS) was pre-sented to the WTO in December.

Export creditswww.oecd.org/trade/[email protected]

Governments provide official exportcredits to help national exporterscompeting for overseas sales. OECDwork on export credits seeks to buildinternational consensus on rules andguidelines that will eliminate tradedistortions and reduce the potentialfor subsidies. In 2001, this workfocused on the environment, unpro-ductive expenditure in the HeavilyIndebted Poor Countries (HIPCs),agriculture and developments in theWTO.

Discussions on export credits and theenvironment progressed and by theend of 2001 most OECD membersdecided to implement unilaterally aset of common approaches to screenand review the potential environ-mental impact of projects benefitingfrom official support. This representsthe first common “greening” of offi-cially supported export credits; it isan important first step and improve-

ments are foreseen through ongoingdiscussion and review. The OECDWorking Party on Export Credits andCredit Guarantees also adopted astatement of principles designed toensure that officially supportedexport credits are not provided forunproductive expenditure. Thismeans non-essential capital goodsand projects that do not contributeto the social and/or economic devel-opment of HIPCs but increase theirexternal debt burdens.

The participants to the Arrangementon Guidelines for Officially Sup-ported Export Credits also negoti-ated an Understanding on exportcredits for agricultural products whichmost could agree and considered theimpact on the Arrangement of recentdevelopments in the WTO. Finally,much progress was made in negotia-tions to revise the 1981 Understand-ing on Export Credits for Ships,

resulting in a Sector Understandingthat is under consideration bymembers for adoption and imple-mentation in 2002.

Agriculturewww.oecd.org/[email protected]

The OECD carries out a wide-rangingprogramme of analytical work on theimpact of domestic agriculturalpolicy reform and agricultural tradeliberalisation on OECD and non-OECD countries (see box p. 30). A high-level meeting in September 2001 onEffective Policies for Agriculture andFood: Domestic and InternationalDimensions included dialogue withcivil society organisations and recog-nised the need for greater civilsociety involvement as well as theneed to integrate non-membercountry interests into the OECDpolicy debate.

Trade and competitionw w w. o e c d . o r g / r e g r e f o r m /[email protected]

The OECD carries out analytical workon trade and competition issues inco-operation with internationalorganisations, particularly the WTOand the United Nations Conferenceon Trade and Development(UNCTAD) and suggests variousoptions to resolve them. Since therenewal in 2000 of its two-year man-date, the OECD Joint Group on Tradeand Competition has worked on therelationship between intellectualproperty rights and trade and compe-tition policies, as well as on the de-velopment dimension of trade andcompetition policies. Key topics forstudy included the effect of paralleltrade in goods protected byintellectual property rights, the tradeand competition aspects of electroniccommerce, with a roundtable held in

This book retraces the Com-munity’s external liberalisationefforts, discusses the repercussionsof internal liberalisation on foreigncompetitors and aims to clarify andto quantify the economic effects ofthe EU’s trade policies.


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The OECD is carrying out anextensive programme of work onthe impact of domestic agricul-tural policy reform and trade lib-eralisation, which supports on-going multilateral negotiationson trade in agriculture that weregiven new momentum at theWTO ministerial meeting inQatar in November 2001. A keyelement of the OECD work

involves monitoring and evaluating trade and tradepolicy developments under the Uruguay Round agri-culture agreement and estimating the likely impact offurther liberalisation. OECD experts are also analysingissues arising at the interface of domestic and trade poli-cies, in particular the environment and the multi-functionality of agriculture, with a view to helping gov-ernments design policies that do not have unintendedconsequences for trade.

The trade-related work is underpinned by two annualpublications, Agricultural Policies in OECD Countries: Moni-toring and Evaluation which contains comprehensive esti-mates of support and protection in agriculture and theAgricultural Outlook which analyses topical trade issuesagainst the background of the medium-term outlook formarkets and trade. The OECD published an in-depthevaluation of the implementation of the Uruguay Roundagreement on agriculture in the run-up to the Qatar WTOmeeting, The Uruguay Round Agreement on Agriculture: AnEvaluation of its Implementation in OECD Countries, and willcontinue to monitor the agreement and its impact. Ananalysis of the likely impact on domestic and inter-national markets of further improvements in marketaccess will be published in 2002. This report comple-ments two studies produced in 2001 – “A Forward-lookingAnalysis of Export Subsidies in Agriculture” and “AnAnalysis of Officially Supported Export Credits in Agri-culture.” A report on the rationale and implications offuture domestic and agricultural trade policy reform isdue for release in 2002. It will synthesise results from

recently published studies as well as ongoing work onagricultural trade issues.

The Agricultural Market Access Database or AMAD(www.amad.org) is also an important resource for agri-cultural trade policy research. This co-operative effortbetween the OECD and a number of other internationalorganisations and national agencies was updated in2001.

Much of the work on agricultural trade deals with the con-cerns of non-OECD economies. Two reports in 2001looked at the concerns of emerging and transition eco-nomies. “Uruguay Round Agreement on Agriculture: thePolicy Concerns of Emerging and Transition Economies”examined how they would be affected by reforms inmarket access, export competition and domestic support,while Agricultural Policies in Emerging and Transition Economies2001 investigated the implications of increases in the useof non-tariff measures. The OECD is now analysing thelinks between agricultural trade reform worldwide andabsolute poverty in emerging and developing eco-nomies. State Trading Enterprises in Agriculture was issued in2001 and work is continuing to determine the impact ofstate trading enterprises on domestic and internationalmarkets. The OECD is also working on the likely effectson food security in non-member economies of furthertrade liberalisation in OECD countries over the mediumterm, with a report on due for release in 2002.

The OECD has also started work to quantify the effectson agricultural production and trade of domestic policymeasures whose primary aim is to decouple economicgrowth from environmental degradation, following a con-ceptual framework defined in 2000 in “Decoupling: AConceptual Overview”. Non-trade concerns have alsobecome a major issue in ongoing multilateral negotia-tions. Multifunctionality: Towards an Analytical Framework setsout to evaluate the multifunctionality of agriculture – itscontribution beyond food production in areas such aspreserving rural lifestyles and environment – includingthe domestic and trade policy implications.

AGRICULTURAL TRADEwww.oecd.org/agriculture/[email protected]


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May 2001, and the potential relevanceof “special and differential treatment”for developing countries in referenceto trade and competition.

International investmentwww.oecd.org/daf/[email protected]

The OECD promotes co-operationamong governments concerningcapital movements, internationalinvestment and trade in services (seebox p. 28). It aims to improve theforeign investment climate andencourage the positive contributionof multinational enterprises to eco-nomic and social progress whilehelping to minimise and resolve diffi-culties that may arise from theiroperations. It does this by carryingout analysis and developing and

monitoring rules to promote interna-tional co-operation as well as throughconsultations with representatives ofnon-member economies, business,labour and other groups.

A key area of current work is an in-depth survey of the benefits andcosts of foreign direct investment(FDI) for development and a broadanalysis of incentives- and rules-based competition to attract FDI.Results of the survey are due to bepublished in 2002.

The first annual report on implemen-tation of the revised OECD Guide-lines for Multinational Enterpriseswas also published in 2001 and na-tional contact points in participatingcountries held their first annualmeeting. The Guidelines, recom-

Regional trade agreements (RTAs) have increasedsharply in recent years, sparking lively debate as towhether they push countries further down the road oftrade liberalisation or act as a brake on multilateral tradeefforts. An OECD study in 2001,“Regional Integration:Observed Trade and Other Economic Effects” found thatresults from empirical evidence so far have not provedmore conclusive than theory, which sees RTAs asentailing both benefits and disadvantages. The studyfound that while some RTAs significantly boosted tradewithin the regional trading bloc, others did not. Therewas also some evidence that trade with countries out-side the RTA is smaller than it otherwise might havebeen in at least some of the agreements considered,but the picture is mixed and it is not possible to con-clude whether this is a major problem. The study alsofound that RTAs have been welfare-improving for parti-

cipating countries and trading arrangements as a whole,but the variation in simulated economic gains is widedepending on the model used.

Given the large and increasing number of studies in thisarea, the OECD is developing a database to facilitate amore comprehensive analysis of the effects of RTAs.

Analytical work was initiated in 2002 with a view to deep-ening understanding of the symbiotic relationshipbetween RTAs and the multilateral trading system. Thiswork aims to answer the question of whether, and to whatextent, RTAs take trade liberalisation beyond the levelsagreed in the WTO. It will also look at whether, and howfar, rules and provisions in RTAs go beyond what has beenachieved in the WTO or what might be possible anddesirable multilaterally.

REGIONAL TRADE AGREEMENTSwww.oecd.org/[email protected]

mendations by the 35 signatory gov-ernments to multinational enter-prises on their conduct in such areasas labour, environment, consumerprotection and the fight against cor-ruption, are not binding on enter-prises, but governments are commit-ted to promoting their observance.The report gave an account of whatgovernments have been doing toimplement the guidelines and pro-vided a comparative analysis of theguidelines and other global instru-ments for corporate responsibility.Other work in 2001 looked at thechallenges posed by local conflictsand widespread human rightsabuses. Future work will includeanalysis of corporate responsibilityin the supply chain and exchangesof experiences on measures to pro-mote the MNE Guidelines.


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For development to be sustainable,societies must invest in physical,human, social and environmentalcapital. Preserving adequate stocksof such capital is essential to ensurethat the capacity of future genera-tions to meet their own needs is notdiminished, whether by exhaustingresources, destroying the environ-ment or creating untenable socialand economic conditions. OECDcountries committed themselves toachieving sustainable developmentalmost a decade ago at the 1992 UNConference on Environment and De-velopment (UNCED) in Rio. Yet asleaders prepare themselves for aWorld Summit on Sustainable Devel-opment (WSSD) in Johannesburg inSeptember 2002, progress in protect-ing the environment and reducingpoverty worldwide falls short of whatis needed.

This was the conclusion of a three-year project on sustainable develop-ment launched by ministers in 1998.The final report entitled SustainableDevelopment – Critical Issues was pre-sented to OECD ministers in May2001. It spelled out the organisation’sapproach to sustainable develop-ment and identified some of the con-ceptual and practical barriers toprogress. A companion volume, Poli-cies to Enhance Sustainable Development,offered concrete policy recommen-dations to make markets work forsustainable development, forstrengthening decision-making, forharnessing science and technologyand for managing links to the globaleconomy. The reports drew onmultidisciplinary work involvingexperts across the OECD as well as

SUSTAINABLE DEVELOPMENTwww.oecd.org/sustainabledevelopment/[email protected]

affiliate organisations such as theInternational Energy Agency (IEA),the OECD Nuclear Energy Agency(NEA), the European Conference ofMinisters of Transport (ECMT), andthe OECD Development Centre.

OECD ministers for economics,finance and environment endorsedthe key recommendations at a jointmeeting in Paris in May 2001 andfirmly established sustainable devel-opment as a priority. They asked theorganisation to intensify its work onindicators to be used in future peerreviews (see box p. 33) and to under-take further work on overcomingobstacles to reform, on the socialdimension of sustainable develop-ment, and on ways to improve policyintegration and coherence. At a semi-

nar on Improving Governance forSustainable Development inNovember, international experts dis-cussed the challenges of policycoherence drawing on a number ofconcrete experiences (Governance forSustainable Development. Five OECD CaseStudies – Canada, Germany, Japan,Netherlands and United Kingdom).

Environmentwww.oecd.org/environment/[email protected]

OECD environment ministers met inParis in May to discuss how to ensurethat economic growth is not accom-panied by increased environmentaldegradation. They considered whysuch decoupling is necessary, how toachieve it and how to measureprogress. The ministers adopted an

Laurent Fabius, French Minister of the Economy, Finance and Industry, andDominique Voynet, French Environment Minister, at the session on sustainabledevelopment during the OECD Ministerial Council.


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The desire for sustainable development implies a needto be able to measure progress towards achieving it.Realising this, OECD ministers at their annual meetingin May 2001 asked the organisation to develop indica-tors of sustainable development and to use these in itsregular peer reviews of government policies.

Member countries’ policies are already reviewed by theirpeers in separate processes covering each of the threedimensions of sustainable development: economic,social and environmental. But progress on sustainabledevelopment is not always easy to identify. For example,is it progress if a change in regulations brings environ-mental improvement at the price of lower material stand-ards of living? This is clearly a value judgement wheredifferent people and different governments may havediffering but equally legitimate answers. To avoid purevalue judgements, sustainable development measure-ment in peer reviews will focus on identifying policieswhich can ensure progress in one dimension with mini-mal deterioration in the other two.

All of this has implications for the choice of indicators.The purpose of the indicators is not to compare countries’performance, except insofar as this tells something aboutwhich policies work best. But clearly the peer reviewsare aimed at providing policy recommendations. There-fore the indicators should provide information to judgewhich policy settings could improve performance in termsof sustainable development.

Because country reviews in the economic field are morefrequent than environmental or social reviews, sustain-able development will be included in economic reportsfor all OECD countries before such full coverage in envi-ronment or social reports. By 2004, economic surveys ofall OECD countries should have covered sustainabledevelopment issues.

OECD peer reviews focus on policies. Country representa-tives discuss and criticise each other’s policies and inthe process acquire useful input for the domestic policydebate. The basic question to be answered about sus-tainable development in such reviews will be whetherdifferent policy settings could help a country to achieve

SUSTAINABLE DEVELOPMENT INDICATORSwww.oecd.org/sustainabledevelopment/[email protected]

progress in this area. This question cannot be answeredin the abstract. It will depend on the specific policysettings in the country concerned and can only be tackledfor a limited number of policy issues where enoughconcrete evidence is available to identify better policies.

This means that comparable indicators of sufficientquality will only be available for a limited number ofissues. The choice will also be influenced by the need tobe able to compare discussions and policy recommen-dations across countries, as indicators suitable for justone country are not really viable. So a menu of impor-tant policy issues will be drawn up from which a few areaswill be selected for each country peer review, based ontheir relevance to that country. The first step in this workwill be to establish the menu and the indicators that gowith each policy issue. The second step will consist ofthe actual peer reviews, with the process taking abouttwo years, at least for the full coverage of OECD coun-tries in regular economic surveys. A synthesis of the mainlessons learnt will be prepared for the OECD annualministerial meeting in 2004.

How to meet the needs of today without diminishing thecapacity of future generations to meet theirs is thecentral question posed by this book. OECD countriescommitted themselves to sustainable development at the1992 UN Conference on Environment and Developmentin Rio. Yet almost 10 years later, progress remainspartial and uneven. This report stresses the urgency ofsome of the most pressing challenges and analysespolicies designed to address them.


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OECD environment ministers agreed an ambitious Environ-mental Strategy for the first decade of the 21st century inMay 2001 and the annual OECD ministerial council meetingapproved it the following day. The development of the stra-tegy had been a key element of the environment work ofthe organisation over the previous two years, along with theproduction in April 2001 of the first OECD EnvironmentalOutlook, which provided the analytical underpinning for thestrategy.

The strategy outlines five key objectives for realising envi-ronmentally sustainable development in OECD membercountries:

1. Maintaining the integrity of ecosystems through theefficient management of natural resources, particularlywith respect to climate, fresh water and biodiversity.

2. Decoupling environmental pressures from economicgrowth, particularly in the agriculture, transport andenergy sectors.

3. Improving information for decision-making: measuringprogress through indicators.

4. Enhancing the quality of life: the social and environ-mental interface.

5. Improving governance and co-operation: globalenvironmental interdependence.

The strategy identifies 17 specific challenges and 71 nationalactions to be taken by OECD countries to achieve theobjectives in areas such as greenhouse gas emissions, over-fishing, tropical deforestation, urban air pollution, emissionsfrom motor vehicles and planes, groundwater pollution,municipal waste generation and toxic chemicals in theenvironment. It also calls for indicators to measure progressand makes 55 requests for further work in the OECD.

Several over-arching criteria are necessary for achievingenvironmentally sustainable development, the report said.For a start, renewable resources such as trees, plants,animals, water and soil should be used efficiently, and at alevel that is compatible with their regenerative capacity overthe long term. Use of non-renewable resources such as min-erals and fossil fuels should be limited to levels where theycould be replaced by renewable resources or other formsof capital. The release of hazardous or polluting substancesinto the environment must not exceed its capacity to assi-milate them, and concentrations must be kept belowestablished critical levels for protecting human health and

the environment. Finally, irreversible adverse effects ofhuman activities on ecosystems such as species extinctionshould be avoided, and the natural processes capable ofmaintaining or restoring the integrity of ecosystems such asthe carbon, nitrogen and water cycles should be safe-guarded.

The Environmental Strategy emphasises that whendesigning policies for environmental sustainability, coun-tries should apply precaution as appropriate in situationswhere there is a lack of scientific certainty.

Following the adoption of the Environmental Strategy, theOECD is moving to support its implementation by membercountries. This will include expanding existing work ordeveloping new activities examining the lowest cost adap-tation to climate change, monitoring the extent to which therisks of genetically modified organisms (GMOs) are assessedin OECD countries and developing regional implementa-tion plans for environmentally sustainable transport. Workis also planned on the social aspects of water pricing andassessing the environmental costs and benefits of trade lib-eralisation. In addition to undertaking specific analyticalwork of this type as requested in the Strategy, the OECD islooking at changes that might be required to its work onenvironmental data and indicators and at how environmen-tal performance reviews can be used. A new project hasbeen launched on the use and development of indicatorsto measure the decoupling of environmental pressures fromeconomic growth, with a report due in 2002.

THE OECD ENVIRONMENTAL STRATEGYwww.oecd.org/environment/[email protected]


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Environmental Strategy for the FirstDecade of the 21st Century (see boxp. 34) and endorsed OECD Guide-lines for Environmentally Sustain-able Transport, as well as the use ofkey indicators to measure progresstowards environmental sustain-ability. Ministers are to meet againin early 2004 to review their coun-tries’ performance in implementingthe Strategy.

The OECD also produced its firstEnvironmental Outlook in 2001, identi-fying the drivers of environmentalchange (the economy, population,globalisation, etc.), the sectors thatput the greatest pressure on the en-vironment, and the likely resultingimpact. The most critical concerns forOECD countries are the unsustain-able use of renewable naturalresources, the degradation of ecosys-tems and the disruption of the envi-ronmental systems that supporthuman life. The Outlook suggestspolicy options to address the mostpressing problems and analysestheir potential environmental andeconomic effects.

A key policy study published in 2001,Environmentally Related Taxes in OECDCountries: Issues and Strategies, bringstogether the main findings of twoyears of work and draws on data fromthe OECD/EC online database of en-vironmentally related taxes. DomesticTransferable Permits for EnvironmentalManagement: Design and Implementationexamined the practical issues con-nected with such schemes. Two prac-tical handbooks on biodiversity, oneon valuation methods and one onmarket creation, were released inlate 2001. Work is also underway onpolicies and actions to tackle climatechange, notably work related toimplementation of the Kyoto Proto-col. OECD analysis covers reportingand compliance procedures, green-house gas emissions trading and the

calculation of “standard baselines”for the clean development mecha-nism, which allows developed anddeveloping countries to worktogether to reduce emissionsthrough project-specific investments.

A prominent message of the Environ-mental Outlook and the Environmen-tal Strategy is the need for sustain-able consumption and productionpatterns if decoupling is to beachieved. The main results of threeyears of work on sustainable con-sumption will be published in 2002.They include studies of householdconsumption patterns and their

effects on food, tourism, energy,water and waste; case studies ofpolicies such as information-basedinstruments and eco-labellingschemes; and sustainable consump-tion indicators. The results show theneed to address both productionand consumption patterns. On theproduction side, policies areneeded to promote efficient use of

resources and reductions in environ-mental pollution. “Green” productsand the right infrastructure for sus-tainable consumption are alsoneeded. On the consumption side,consumers need to receive consist-ent and clear policy signals to makebetter choices for the environment.The OECD Control System for wastedestined for recovery, created in1992, was partially harmonised withthe Basel Convention of the UnitedNations Environment Programme inJune 2001, a major step towards aglobal control system for wastemovement.

Another key element of the Strategyis the interface between social andenvironmental policy issues. In addi-tion to ongoing work on environmentand health issues – such as foodsafety and safe use of chemicals –future work is likely to include linksbetween environment and employ-ment, the effects of environmentalpolicies on specific groups in society,

(left to right): Fidele Hien, Minister of Environment and Water, Burkina Faso,Siv Fridleifsdottir, Minister of Environment, Iceland, and Maciej Rudnicki,Secretary of State for the Environment, Poland, at a working lunch with non-members during the OECD environmental ministers’ meeting.


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The OECD roundtable on sustainable development wasestablished in 1998 to address the economic, environ-mental and social issues commonly grouped under theheading of sustainable development. Its membershipwas broadened in 2001 and now all OECD ministers cantake part according to the subjects under discussion. Asa result, ministers dealing with a broad range of subjectshave taken part, including finance, economy, labour anddevelopment assistance as well as environment. In viewof the importance of sustainability to developing coun-tries it was also decided in 2001 to invite the maindeveloping country players on to the roundtable. Otherintergovernmental organisations also participated in theroundtable’s work in 2001 including the UN EnvironmentProgramme (UNEP), the UN Conference on Trade andDevelopment (UNCTAD), the World Trade Organization(WTO) and the World Bank as well as NGOs and businessgroups.

Work in 2001 was tailored to help members prepare forthe OECD annual ministerial meeting in May, wheresustainable development was a major theme ahead ofthe World Summit on Sustainable Development to beheld in Johannesburg in 2002. The roundtable held aministerial-level meeting in January 2001 to discuss theOECD’s draft policy report on sustainable development.

After the May ministerial meeting, the roundtable focusedon supporting work related to key ministerial requests,such as developing agreed indicators of sustainabledevelopment and filling gaps in the statistical andscientific data. The roundtable in June chaired technicaldiscussions for OECD members on statistical and

SUSTAINABLE DEVELOPMENT ROUNDTABLEwww.oecd.org/[email protected]

modelling problems inherent in measuring sustainabilityand in September held a meeting on the scientific diffi-culties. This was followed in December by a ministerialmeeting on measuring sustainability which discussedreports from the OECD, the World Bank and the World-wide Fund for Nature on work in progress.

The roundtable also scheduled a ministerial meeting inlate February 2002 to consider ways to improve synergiesbetween official development assistance and foreigndirect investment in developing countries, ahead of aUN conference in Mexico in March on financing fordevelopment. Other subjects for discussion in 2002 willinclude the relationship between eco-labelling andsustainable development and preparations for theJohannesburg summit.

Simon Upton, Chairman, OECDRoundtable on Sustainable Development


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access to environmental services,and environmental awareness andcommunication strategies.

Sustainable agriculturewww.oecd.org/[email protected]

Analysing the impact of agriculturalreform on the environment is anintegral part of OECD work. A keyconcern is to identify and analyseenvironmentally damaging subsi-dies, which OECD countries haveagreed to phase out by 2010. Envi-ronmental Indicators for Agriculture –Volume 3: Methods and Results pub-lished in 2001 takes stock of theimpact of agriculture on the environ-ment across OECD countries.

Work is also underway on an inven-tory of the subsidies and taxes, regu-lations and co-operative approachesused by OECD countries to addressenvironmental issues in agriculture.The inventory, to be completed in2002, will help evaluate policies andrecommendations on the best mixesof policies and market approaches toensure the least trade-distorting sus-tainable agriculture.

Links between agriculture, trade andthe environment were the subject oftwo studies released in 2001. Impro-ving the Environmental Performance ofAgriculture: Policy Options and MarketApproaches showed that trade liberali-sation will, in general, benefit theenvironment, but the effects willdepend on the state of the environ-ment, the impact on production andthe regulations in place. “ProductionEffects of Agri-Environmental Policies:Reconciling Trade and EnvironmentalObjectives” indicated that environ-mental standards and agri-environmental programmes do not ingeneral have a significant effect onfarm competitiveness or international

Corporate Social Responsibility(CSR) is business’s contributionto sustainable development.Corporate behaviour must notonly ensure returns to share-holders, wages to employees, andproducts and services to custom-ers, it must also respond tosocietal and environmentalconcerns. The struggle betweenthe forces of global commerce andthe interests of local culturesbrings with it new politics. Thisbook provides a comprehensiveoverview of corporate socialresponsibility experiences andpractices at the local level.

context of economic, environmentaland social issues and identifiesindicators for measuring how thesector might contribute to sustain-able development.

agricultural trade. Further work isunderway to analyse these issues inmore detail. A workshop on organicfarming in 2002 will examine the con-ditions under which organic agri-cultural systems are sustainable.

Fisheries policies have to address therelationship between sustainablemanagement of resources and tradeliberalisation, the causes of unsustain-able fishing, and the need to avoidharmful subsidies. OECD monitoringof member countries’ fisheries poli-cies included the publication in 2001of a new edition of the Review of Fish-eries in OECD Countries: Policies andSummary Statistics along with its com-panion volume Review of Fisheries inOECD Countries: Country Statistics.Special studies are also being carriedout on the costs of fisheries manage-ment, the effects of market liberali-sation on fisheries trade and produc-tion and fisheries sustainabilityindicators, with reports due to becompleted in 2002.

[email protected]@nea.fr

The International Energy Agency(IEA) (see box p. 78) during 2001continued work on action to curbenergy-related greenhouse gasemissions. It submitted its mem-bers’ interpretation of their role inensuring sustainable developmentat a meeting in April of the UN Com-mission on Sustainable Develop-ment.

The Nuclear Energy Agency (NEA)(see box p. 76) presented its report,Nuclear Energy in a SustainableDevelopment Perspective at the OECDForum 2001 (see box p. 61). The reportassesses nuclear energy in the


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Governments need to rethink theirrole to meet the challenges ofglobalisation, decentralisation, newtechnologies, and the changingneeds and expectations of citizens.The OECD carried out significantwork in 2001 on the efficient func-tioning of government and the pro-motion of good governance in boththe public and corporate sectors.This included areas such as trans-parency, accountability and fairnessin dealing with citizens. Work alsofocused on fighting corruption, citi-zen participation in policy-making,promoting good practices and en-couraging high standards of ethicalbehaviour.

Corporate governance is also anissue for governments and policy-makers as they play a central role inshaping the legal, institutional andregulatory framework within whichcorporate governance systems aredeveloped. If the framework condi-tions are not in order, the governanceregime is unlikely to be either.

Bribery and corruptionwww.oecd.org/[email protected]

Fighting corruption is a major policychallenge for developed and devel-oping countries. By October 2001,33 of the original 34 signatories(including four non-member coun-tries) had ratified the OECD Conven-tion on Combating Bribery of ForeignPublic Officials in International Busi-ness Transactions (as of 15 January2002, Ireland had not yet depositedits instrument of ratification) and thepractice of allowing tax deductions

GOVERNANCEwww.oecd.org/[email protected]/[email protected]

for bribe payments to foreign publicofficials has been all but eliminatedin OECD countries. The OECD is nowdetermined to ensure that countriesenforce laws adopted in line with theconvention and use them to pros-ecute bribery cases. Evaluations oflegislation in Argentina, Italy, Luxem-bourg, the Netherlands, New Zea-land, Poland and Portugal were car-ried out in 2001, bringing the totalnumber of country examinations to29. The OECD will review revised UKlegislation in 2002. Enforcement oflegislation in Finland was looked atin 2001 and three countries are duefor examination in 2002, with plansto increase this to 5-7 countries peryear thereafter. The private sector,trade union associations and civilsociety are indispensable partners inthe anti-bribery campaign. TheOECD is also working with non-member economies to combatbribery and corruption.

Corporate governancewww.oecd.org/corporate/[email protected]

The OECD works with governmentsand the private sector to improve cor-porate governance by designingeffective regulatory and institutionalframeworks for public policy in thecorporate sector as well as encour-aging private sector practices thatfacilitate sustainable corporate de-velopment and finance (see trade andinternational investment chapter, p. 27).

Corporate entities (corporations,trusts, foundations and partnerships)have contributed immensely to grow-ing prosperity worldwide, but are

Corporate entities underpin mostcommercial and entrepreneurialactivities in market-basedeconomies and have contributedimmensely to growing prosperityworldwide over recent decades.Increasingly, however, govern-ments and regulatory bodieshave realised that they are oftenmisused for money laundering,bribery and corruption, taxevasion, market fraud, and otherillicit activities. This reportsuggests ways to prevent andcombat the misuse of corporateentities and shows that thecorporate entities misused mostfrequently are those that providethe greatest degree of anonymityto their beneficial owners.


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Regulatory reform is increas-ingly a global policy theme.Globalisation, greater struc-tural interdependence ofeconomies and businesscycles, security concerns anda general trend towardsmodernising governmentmean that policy-makers andparliaments need to revisitand upgrade the frameworkof regulations as well as theinstruments and institutions

used to implement them. Experience in OECD and non-OECD countries demonstrates that clarifying the roles ofthe state and the markets can generate substantial bene-fits for consumers, the private sector, the environmentand social welfare more generally. Mistakes in the designor implementation of regulatory systems, which havecontributed to some recent failures in public infrastruc-ture network industries such as transport and energy, arepowerful incentives to scrutinise and evaluate past poli-cies to provide better guidance in the future.

OECD work on regulatory reform is adjusting to thesechanging needs and has widened its focus beyondreviews of regulatory performance in OECD countries topay more attention to emerging themes of the regula-tory reform agenda and to develop stronger links withnon-member countries.

Country reviews

Regulatory reform reviews in individual membercountries consider the regulations that govern competi-tion policies, trade and investment, the governmentmachinery and selected industries, and produce a set ofdetailed policy recommendations for improvement. Theanalysis is carried out using regulatory reform recommen-dations drawn up in 1995 and 1997. The reviews follow a

REGULATORY REFORMwww.oecd.org/regreform/[email protected]

multidisciplinary approach with OECD experts and com-mittees working with the countries under review. TheOECD is finalising reviews of regulatory reform in Canada,the UK, Poland and Turkey in 2002 and will launch newreviews for Germany and Finland. By 2003 nearly twothirds of all OECD countries will have been examined,providing a unique source of statistical information,knowledge and analytical capacity.

Thematic approach

From 2002 the OECD will provide the opportunity formember countries to exchange experiences, compareapproaches and discuss the reasons for regulatory reformfailures in particular areas. Themes for discussion includethe development of objective and efficient instrumentsto assess a country’s regulatory performance and thegovernance of independent regulators and their relation-ship to competition authorities. These debates will alsolook at the challenges of ensuring compliance with newregulations, the refinement of statistical indicators tomeasure regulatory quality, and the impact of regulatoryreform on economic and social welfare.

Dialogue with non-members

The move towards regulatory reform as a permanentfeature of policy is not limited to the OECD. Under theumbrella of the OECD Global Forum on Governance, co-operation with the Asia-Pacific Economic Co-operationforum (APEC) is moving into its second year in 2002, withworkshops scheduled in Mexico in the spring and inKorea in the latter part of the year. A regulatory reformprogramme with Russia was launched at a conference inMoscow in November 2001. And in the framework of theStability Pact for South-East Europe, a regional initiativeon regulatory reform was launched at a seminar in Greecein October 2001. Results of these regional efforts will beconsidered when the Global Forum meets in late 2002to discuss regulatory governance and open markets.


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often misused for illicit activitiesfrom tax evasion and market fraud toterrorism and money laundering. In2001, Behind the Corporate Veil: UsingCorporate Entities for Illicit Purposes,looked at the various ways of misus-ing corporate entities and proposed

policy options to combat such prac-tices. A number of roundtables aredeveloping regional White Papers forpolicy reform, using the OECD Prin-ciples of Corporate Governance as abasis for dialogue but tailored to par-ticular local needs and issues. A newroundtable for South-East Europeheld its first meeting in Bucharest inSeptember 2001 and plans to issuea white paper with detailed reformproposals in 2003. The third meetingof the Asian roundtable in Singaporein April 2001 focused on expandingthe role of company boards while thesecond meeting of the Latin Ameri-can roundtable in Buenos Aires inMarch concentrated on the impor-tance of shareholder rights. A whitepaper for Russia is due to be pub-lished in 2002.

Competitionw w w. o e c d . o r g / r e g r e f o r m /[email protected]

Domestic competition laws areincreasingly recognised by countriesat all levels of development as a keycomponent of growth. At the sametime globalisation increases theimportance of international co-operation and convergence in enfor-cing competition laws, particularly inthe case of international mergers.

A number of bilateral law enforce-ment co-operation agreements weresigned in 2001 and work on hard corecartels intensified in a new phase ofthe anti-cartel programme endorsedby OECD ministers in 2000. The busi-ness community participated ac-tively in the work on competition,focusing particularly on the burdenimposed on international mergers bythe need to submit them for reviewin several jurisdictions.

Roundtable discussions led to theidentification of best practices in a

number of areas including pricetransparency, portfolio effects in con-glomerate mergers, competitionpolicy, subsidies and state aid. Sub-jects for best practice debate in 2002include merger assessment inemerging markets and competitionin the electricity sector. The resultsof such best practice discussionsare available via the Internet(www.oecd.org/daf/clp). Reviews ofnational competition policies andsector-specific regulation were car-ried out for Poland, Canada and theUK in 2001. Turkey is being reviewedin early 2002. The OECD alsoadopted a set of recommendationson the restructuring of public utilityindustries in April 2001.

Taxationwww.oecd.org/taxation/[email protected]

Tax systems, particularly inter-national taxation arrangements, havenot always kept pace with global-isation. Most of today’s tax arrange-ments were developed in an erawhen authorities could rely onexchange controls and regulatedcapital markets for information oncross-border transactions and whentechnological constraints limited thedevelopment of truly global acti-vities. These barriers isolated taxauthorities from the full implicationsof the interaction between nationaltax systems. Corporations have beenable to globalise, but tax authoritiesremain constrained by nationalborders.

Governments need to demonstratethat national tax systems canrespond to challenges such aswhether it is possible to devise a fairsystem of taxing capital and highly-skilled professionals in a world of lib-eralised markets. Other questionsinclude how to tax enterprises orcross-border savings and to enable

Public utility industries, onceregarded as monolithic mono-polies, are made up of manyseparate activities, many ofwhich can sustain effectivecompetition. Experience showsthat introducing competition intothese industries leads toenhanced efficiency and greaterinnovation as well as benefits forconsumers such as lower prices,better service and greatervariety. But there is a growingrealisation that fundamentalstructural changes are oftennecessary if the full benefits ofcompetition are to be achieved forusers and consumers.


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The more open and competitive environment of recentdecades has had many positive effects on tax systems,including the reduction of tax rates and broadening oftax bases that have characterised tax reforms over thepast 15 years. However, some tax and related practicesare anti-competitive and can undercut the gains gener-ated by tax competition. This can occur when govern-ments introduce practices designed to encourage non-compliance with the tax laws of other countries.Ultimately, taxpayer confidence in the integrity and fair-ness of the tax system, and in government in general,declines as honest taxpayers feel that they shoulder agreater share of the tax burden and that governmentcannot effectively enforce its own tax laws.

Since 1998, the OECD has provided co-ordinated actionso that countries – large and small, rich and poor, OECDand non-OECD – can work together to eliminate harmfultax practices. This is a key element in the OECD’s effortstowards greater international co-operation and trust inthe area of taxation. It is not just about government’sability to collect taxes that are legally due, but is an inte-gral part of the global effort to promote and preserveintegrity and stability in the international financial systemand to widen the community of nations that subscribe tointernational standards.

The work focuses on geographically mobile activities,such as financial and other service activities. The OECDhas provided guidelines for dealing with harmful prefer-ential tax regimes in member countries, sought commit-ments from tax havens that they will abide by the prin-ciples of transparency and the effective exchange ofinformation in tax matters and broadened its dialogueto seek the co-operation of other non-member eco-nomies.

In 2001, the OECD received commitments from Aruba,Bahrain, Isle of Man, Netherlands Antilles and theSeychelles to co-operate in the effort to eliminate harm-ful tax practices. Added to previous commitments fromBermuda, Cayman Islands, Cyprus, Malta, Mauritius andSan Marino, this gives a total of 11 jurisdictions that havepledged to eliminate by 2006 those aspects of their tax

systems which result in a lack of transparency or lack ofeffective exchange of information. The OECD is confidentthat similar commitments will be made by other juris-dictions.

The OECD has also intensified its work to help membercountries identify and eliminate harmful aspects of theirown preferential tax regimes. Work is underway to iden-tify which of 47 potentially harmful regimes identified in2000 are actually harmful. Member countries are to elimi-nate harmful aspects of preferential regimes by April2003, although there is a provision that extends that dateto December 2005 in certain limited cases.

The OECD has had discussions with a very large numberof non-OECD economies in Asia, Latin America and else-where and has held multilateral regional meetings inAfrica, Asia and South America. The work with non-OECDeconomies will continue so that the problem of harmfultax practices is effectively addressed. In addition, theOECD continued during the past year to seek the viewsof the business and labour communities through discus-sions with the Business and Industry Advisory Commit-tee and the Trade Union Advisory Committee to theOECD.

HARMFUL TAX PRACTICESwww.oecd.org/taxation/ctpa/[email protected]


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fair tax competition to flourish whileeliminating unfair competition (seebox p. 41). And how do taxes fit intothe “new economy”?

The OECD helps in setting inter-national tax standards through instru-ments such as its Model Tax Conven-

tion, the basis for a global networkof tax treaties, and its Transfer Pric-ing Guidelines, used when drawingup legislation in OECD countries andin an increasing number of non-OECD economies.

Electronic commercewww.oecd.org/ecommerce/[email protected]

The global nature of electronic com-merce is such that no one group ofcountries can act unilaterally withoutincreasing the dangers of doubletaxation. Work is being carried outunder the Ottawa Taxation Frame-work Conditions agreed by 30 OECDand non-OECD countries in 1998. Themost urgent issue is that of consump-tion taxes, where enterprises need tomake immediate decisions. TheOECD published agreed principleson consumption taxes and e-commerce in 2001 and expects topublish model guidelines for theirimplementation in 2002. Progress isalso being made in the applicationof existing tax treaties to e-commercetransactions and an update to theOECD’s Model Tax Convention in2002 will include the outcome of thiswork. A conference on Tax Adminis-tration in an Electronic World in Mon-treal in June 2001 enabled repre-sentatives from 100 revenueauthorities worldwide to shareknowledge and experiences in areassuch as electronic tax returns andimproving taxpayer service.

Public governancewww.oecd.org/[email protected]

Public governance underlies gov-ernment efforts to produce and im-plement policy, provide efficientservices and respond to new chal-lenges. Focus on governance notonly serves to make policies workbut ultimately to strengthen trust in

government. Strengthening effec-tive and coherent public governanceis a priority on the policy agenda.Governments need to create a qual-ity public service that can innovatein response to changing situationsand is firmly focused on serving thepublic interest. Governance is alsoan issue in territorial development(see box p. 21) and in conflict preven-tion and resolution (see chapter ondevelopment, p. 48).

Strong leadership is essential to aneffective public service, and PublicSector Leadership for the 21st Centurypublished in 2001 discusses thestrategies and practices governmentsare adopting in this area. The OECDis also examining how to make pub-lic administrations more competitiveemployers so that they can attractand retain high-quality personnel. Itlaunched a survey of knowledgemanagement practices in ministriesin late 2001.

Work on public sector budgeting andmanagement included an exami-nation of how countries can improvethe quality of their public expendi-ture by systematically providingdecision-makers with credible infor-mation on the efficiency and impactof policies. The OECD also looked athow national budget systems canhelp politicians take more account ofthe future consequences of thepresent situation, such as ageingpopulations and environmentalclean-up costs. A searchable data-base of budgeting systems and prac-tices in OECD countries will be avail-able on the Internet in 2002.

While governments adapt to a chang-ing world, they must avoid losingpublic trust. Work in 2001 focused onhow to create a public service envi-ronment where transparency and ac-countability reinforce each other.Building on its work on promoting

In an era of globalisation,decentralisation, and knowledge-based economies, governmentsare having to reshape publicsector leadership to cope withnew challenges. This requiresnew roles for public sector leadersand many governments of OECDmember countries are developingnew public sector leadershipmodels. This is the first report toexamine key leadership issuesacross OECD member countries,including the strategies andpractices governments areadopting, and the lessons fromcountry experiences so far.


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non-member countries. The OECDalso looked at how governments areusing new technologies to providebetter services to citizens (see boxp. 45).

Governments are also looking forways to reduce the burden of govern-ment formalities on businesses. Busi-nesses’ Views of Red Tape presented theresults of the first comprehensivesurvey of its effect on small andmedium-sized enterprises. Some8 000 businesses in 11 OECD coun-tries answered questions on theimpact of taxes, environment andemployment regulations.

All governments must anticipate andmanage a wide variety of risks,whether security threats, natural dis-asters or risks to public health. Ameeting of senior officials from OECDgovernments in Reykjavik in October2001, focused on how governmentscan anticipate, limit and react to risk,and how to strike a balance betweenan immediate response and the long-term outlook. It also looked at how,

ethics and fighting corruption in thepublic sector, the OECD is develop-ing best practices for preventing con-flicts of interest and resolving themwhen they do arise.

Making government more account-able requires better disclosure ofhow government resources are used.The OECD Journal on Budgeting waslaunched in early 2001 and includedthe OECD Best Practices for BudgetTransparency. The Journal will appearfour times a year.

Greater transparency and policycoherence mean strengthening rela-tions between government and civilsociety, but also enhancing the roleof the legislature in holding theexecutive branch of governmentaccountable. In January 2001, anOECD symposium at the FrenchSenate brought together heads ofparliamentary budget committees todiscuss the role of the legislature inthe budget process, the first eventof its kind. This is to be an annualevent. A report on “ParliamentaryRelations and Procedures” pub-lished in May 2001 provides a reviewof relations between the executivebranch, the legislature and civilsociety.

Work is also underway on improvinggovernance of the more autonomouspublic bodies created during devo-lution of power from the traditionalministry-based vertical structure.

Citizens as Partners: Information, Consul-tation and Public Participation in Policy-Making offers a comparative review ofOECD country policies and practicesfor strengthening government-citizenrelations, including the use of infor-mation and communications tech-nologies (ICTs). An accompanyinghandbook provides practical guide-lines for putting these policy lessonsinto practice in both member and

when and what governments shouldcommunicate to the public in a crisissituation. Further work on this sub-ject in 2002 will contribute to build-ing expertise in government policycoherence. Senior officials will meetin 2002 to discuss the public-privatesector interface, in particular thechanging role of the state.

Work to improve the quality of regu-latory systems and policies in 2001looked at designing regulations thatare “compliance-friendly” – tailoredto achieve their stated intentions –and on how to improve the institu-tional basis for regulators of variousspecific sectors such as the telecom-munications or energy industry. Alsoin 2001 work was finalised on a reviewof regulatory policies in OECD coun-tries ahead of the planned publica-tion in 2002 of a report on regulatorymanagement and reform drawing on10 years’ experience and analysis.The report draws heavily on 16 coun-try reviews under the regulatoryreform programme since 1998 (see boxp. 39).

Owen Arthur, Barbados Prime Minister & Minister of Finance and EconomicPlanning, and Tony Hinton, Australian Permanent Representative to OECD,co-chairs of the OECD-Commonwealth Working Group on Tax Co-operation.


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Rapid technological advancespresent new opportunities and chal-lenges to government and society inall countries and regions. Fast-changing information and communi-cations technologies (ICTs) are trans-forming markets and require newmethods of organising work, busi-ness and trade to harness the bene-fit of globalisation. The “dot-comcrash” in 2001 was accompanied byalmost as much hype as the “dot-commania” which preceded it and hascaused a much-needed reality check.But while economic slowdown mayhave put an end to some over-exuberant behaviour of markets ithas scarcely dented the continuedexpansion of the Internet. Nor has itchanged the need to address theconcerns felt by many at the eco-nomic and technological changesthat are transforming the globaleconomy.

BEST USE OF NEW TECHNOLOGIESwww.oecd.org/science/[email protected]

The OECD provides policy advice oncoping with the challenges arisingfrom developments in new science-based industries, notably biotech-nology (see box p. 46) and leads in thedevelopment of indicators to bench-mark member countries’ innovationperformance.

Harnessing ICTwww.oecd.org/ict/[email protected]

OECD work in this area covers ICT usein areas such as e-commerce, whereit is preparing guidance for smalland medium-sized enterprises, e-government (see box p. 45) and corpo-rate governance, as well as how to pro-tect against cyber-crime. Throughout2001 the OECD worked intensively onbuilding consumer trust through effec-tive authentication and privacy pro-tection, combating hacking and

viruses. It is also studying cyber-terrorism and the vulnerability of oureconomies and societies because ofa growing dependence on ICTs. Thisis part of a wider review of the OECDGuidelines on the Security of Informa-tion Systems. Also in 2001 the OECDreported on the impact of ICT on com-pany law and corporate governance.Work on ICT for the OECD GrowthProject (see box p. 16) found that poli-cies to increase competition in thetelecommunications industry are key,as they help lower costs and enhancethe uptake of ICT. It also found thatthe long-term impact of ICT on a parti-cular economy depends on its use,not whether it is produced in thatcountry.

Measuring progress

The leading OECD publications inthe technological field highlightedthe organisation’s strength in innova-tive quantitative data and analysis.The two-yearly OECD CommunicationsOutlook 2001, released in March, pro-vided definitive comparable data onthe performance of the communica-tions sector and mapped the first twoyears of competition for many OECDcountries that fully opened theirmarket in 1998. The accompanyingOECD Telecommunications Data-base provides over 100 time seriesof data of indicators such as networkinfrastructure, revenues, expensesand investment of operators, tradein telecommunications equipmentfrom 1980. The OECD Science, Tech-nology and Industry Scoreboard: Towardsa Knowledge-based Economy 2001,released in September, featuresmore than 160 internationally

His Highness General Sheikh Mohammed Bin Rashid Al Maktoum, Crown Princeof Dubai and Minister of Defence of the United Arab Emirates, with DonaldJohnston, OECD Secretary-General, at the OECD Emerging Market EconomyForum on Electronic Commerce jointly organised with Dubai in January 2001.


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E-government, in particular the networking potentialoffered by the Internet and related technologies, has thepotential to transform the structures and operation ofgovernment, from electronic tax returns to online voting.Ministers from OECD countries endorsed the importanceof e-government at their annual meeting in May 2001 andwelcomed work to date, particularly the third GlobalForum on E-Government, held in Naples in March 2001which looked at ways of fostering democracy and devel-opment through e-government. The ministers askedOECD experts to further explore the “challenges andopportunities” it offers (see full text of ministerial communiqué,p. 85).

As a result, the OECD has launched an e-governmentproject that will look at the longer-term impact of e-government on the structure, operations and capacity ofpublic administrations in a number of areas. Starting fromthe premise that e-government could be a major factorin the adoption of good governance practices, the projectwill consider questions such as:

• How can governments meet future challenges? Whatare the evolving characteristics, needs andexpectations of society, and how can the greater inte-gration of information and communications techno-logy (ICT) within government increase administra-tions’ capacity to respond?

• What can we learn from experience so far? Whatprogress has been made with e-government to date;what are the challenges and dangers in the provisionof e-government; and what good practice strategiesand solutions are emerging?

E-GOVERNMENTwww.oecd.org/[email protected]

• What are the prospects for the longer term? Whatgroundwork needs to be laid; what does planningneed to take into account now to achieve the desiredlonger-term outcomes?

The key factors that will differentiate this project fromother work on e-government are the focus on the longer-term picture and the grounding of the work in the broaderdebate on good governance and modernisation of pub-lic administration.

The project is receiving close guidance and review froma working group of member state representatives. Anassociates group comprising government and otherexperts, private sector firms, academic institutions andcivil society organisations will also advise on theproject.

The OECD’s overarching perspective on governanceactivities across all member countries means it isuniquely placed to address e-government in the contextof modernising government and developing citizen-centred reforms. The public governance focus will enableit to address key aspects of e-government such as safe-guarding citizens’ interests, reconciling the search forbetter knowledge management with the demand for dataprivacy and responding to pressures for greater trans-parency and disclosure at reasonable cost.

The project will produce research papers, policy briefs,and specific reports, with a flagship report to be final-ised by the end of 2002. A major conference to considerthe findings of the e-government project is planned forMay 2003.


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Biotechnology is of growing importance to our societiesbecause of its far-reaching consequences for human health,health care, agro-food production, and sustainable develop-ment. Used responsibly, it can contribute to economic andhuman development in many spheres of modern life.

The completion of decoding the human genome created aworldwide sensation in 2001 and prompted the realisationthat the practical applications of biotechnology for humanhealth will be far-reaching both in OECD countries andbeyond.

Biotechnology offers a new generation of sustainable indus-trial technologies that promise to help ensure that industrialdevelopment does not go hand in hand with environmentaldegradation. It can provide improved food quality and pro-duction levels with the potential to contribute significantlyto food supply and security challenges, perhaps particularlyin developing countries. And in health care, new diagnosticsand treatments for human diseases, including some of themajor scourges of mankind, are being developed.

Advances in the understanding of genetics, genomics (thebranch of genetics that studies organisms in terms of theirfull DNA sequences or genomes) and informatics (informa-tion science) are underpinning the development of second-generation biotechnologies.

The OECD has provided a focal point for international dis-cussion on the various aspects of biotechnology for twodecades, initially focused on the safety aspects which areparamount in harnessing the considerable potential of thistechnology. But the OECD is also devoting significant effortto developing international infrastructure, to measuringperformance and to addressing barriers to technologydiffusion. In its work on regulatory issues the OECD isextending debate and consensus to include a growingnumber of non-member countries.

Future advances will depend increasingly on reliable accessto high-quality information and materials. Advances ingenomics and informatics are generating vast amounts ofnew information on living processes. To better harness thisinformation and resources OECD members and non-members are working together under French and Japaneseleadership to develop a global system of BiologicalResource Centres based on common principles andpractices of access.

BIOTECHNOLOGYwww.oecd.org/biotechnology/[email protected]

This work has been brought into sharp focus by the recentuse of biological materials as weapons of terror. Access tomaterials and information for such purposes clearly needsto be controlled, yet this must be balanced against the needto ensure continued access for legitimate research, much ofwhich is targeted on combating infectious diseases.

Major events in 2001 included a conference on new bio-tech food and crops, and food safety in Bangkok in July. Itrecommended that all stakeholders commit to greatertransparency on genetically modified organisms and thatgovernments increase their support for independent, pub-licly-funded scientific research into the risks and benefitsof genetically modified food and crops. The conference,organised with the UK government and other internationalorganisations, brought together more than 300 participantsfrom 50 countries including scientists, government officialsand representatives of industry, agriculture, civil societyand the media.

A conference in North Carolina in November, organised withthe US government, discussed the underlying science forassessing transgenic organisms in the environment.

OECD work addresses a range of other policy issues raisedby developments in biotechnology, including ethical ques-tions, the potential impact on agricultural markets and ofcourse food and feed safety. The OECD provides a forum forcountries to take a comprehensive look at the scientific, regu-latory and other policy issues raised by the increasing paceof discovery and innovation in biotechnology. This roundedapproach will continue to be essential if the considerablepotential of this technology is to be harnessed and contri-bute fully to the knowledge economy in the 21st century.

(Left to right) John Prescott, UK Deputy Prime Minister, SuvitKhunkitti, Thai Deputy Prime Minister, and Kim Hak-su,Executive Secretary of the UN Economic and Social Commis-sion for Asia and the Pacific (ESCAP), at the Conference onNew Biotech Food and Crops, held in Bangkok in July 2001.


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comparable indicators focused onbenchmarking all aspects of theknowledge-based economy. Some60% of the indicators in 2001 coverednew areas such as mobility of humancapital, skills in the informationeconomy, diffusion of the Internetand electronic commerce. It alsomeasured the resources devoted toinnovation in emerging areas such asbiotechnology, environment, healthand ICT for the first time.

Bridging the digital divide

The digital divide and electroniccommerce are high priorities forOECD activities with non-membereconomies. A major focus in 2001 waswork on bridging the “digital divide”to ensure that developing countries,and the disadvantaged in the indus-trial world, have access to the newtechnologies. The OECD worked withthe Digital Opportunities Task Force(DOT Force) set up by the G8 thatreported to the G8 annual summit inGenoa in July. The main showcase forthe OECD’s work in this area was aconference in Dubai in January on e-commerce and emerging markets,the first event of its type held in anon-OECD country. Participants fromNorth and South included govern-ment representatives, businessorganisations and civil society as wellas other international organisations.A conference on Exploiting DigitalOpportunities for Poverty Reductionwas held in Paris in March.

Fostering innovation

Research and development (R&D) isimportant for productivity growth.The experience of OECD countriessuggests that policy can foster anenvironment conducive to innova-tion. OECD work in this area hasfound that innovation increasinglydraws on scientific research, but inmany countries, barriers continue to

impede the flow of knowledgebetween science and industry. Aspecial edition of the OECD Science,Technology and Industry Outlook: Driversof Growth: Information Technology, Inno-vation and Entrepreneurship publishedin 2001 looked at the impact of infor-mation technology, innovation andentrepreneurship on economic per-formance. It looked at policies toincrease returns from ICT investment,software, telecom reform, raisingreturns from R&D, industry-sciencerelations, and policies to facilitatethe entry of new firms. The reporthighlights a number of issues, whichrequire international solutions thatcan only be implemented throughimproved international co-operation.

Future studieswww.oecd.org/[email protected]

The OECD’s International FuturesProgramme seeks to assess thetrends shaping the long-term futureby providing early warning of emer-ging issues, pinpointing major devel-opments and possible trend breaks;offering analytical appreciation ofkey long-term issues; and promotingbetter dialogue and information-sharing to help set policy agendasand map strategy.

Key activities in 2001 included a con-ference in Luxembourg in July on thefuture of money that discussed howsoon, if ever, hard cash would dis-appear in favour of “virtual payment”whether by cheque, credit card orsome new method. And would thisput central banks out of business?The possible answers and majorthemes for discussion will be pub-lished in 2002.

The Futures Trends series of CD-ROMs, updated annually, providesinformation on key trends anddriving forces that will shape tomor-

row’s business and policy environ-ment. It covers a broad range oftopics from demographic develop-ments and the world economy to theenvironment, employment and long-term prospects for particular coun-tries and regions.

But forecasting the future is nevereasy, and a brochure “Looking Backat Looking Forward: Foresightthrough the centuries” offers a salu-tary lesson in the pitfalls of predic-tions. From pioneering film-makerD. W. Griffith’s confident assertionthree years before the release of thefirst “talkie” that “speaking moviesare impossible” to the IMF’s some-what premature declaration in 1959that “in all likelihood, world inflationis over,” this collection shows thathistory abounds in apparently logicalconclusions that never came to pass.

The 2001 CommunicationsOutlook presents the mostrecent comparable data on theperformance of the commu-nication sector in OECDcountries and on their policyframeworks. The data map thefirst two years of competition formany OECD countries. The2001 edition analyses majorchanges and trends in thecommunications sector andexplores future developments.


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OECD member countries are majoraid donors, accounting for more than95% of total official developmentassistance (ODA) which amounted to$53.7 billion dollars worldwide in2000. Much of the organisation’sdevelopment work is focused on howto spend and invest this aid in themost effective manner, so as toreduce poverty and ensure sustain-able development in developingcountries.

Major new developments in 2001included a milestone agreement onuntying aid and the adoption of newguidelines on poverty reduction,conflict prevention, sustainabledevelopment and capacity buildingfor trade.

New guidelines

Development co-operation ministersand heads of aid agencies met in April2001 and adopted four new sets ofguidelines for development issues, aswell as endorsing recommendationson untying ODA to the world’s poor-est countries (see box p. 49).

Poverty Reduction (www.oecd.org/dac/poverty): The new DevelopmentAssistance Committee (DAC) guide-lines on Poverty Reduction reaffirm thecommitment to internationaldevelopment goals such as halvingthe proportion of people in extremepoverty and hunger by 2015. Theyaim to clarify concepts and defini-tions of poverty and its effects,suggest priorities for action anddescribe best practice in policies,programmes, instruments and chan-nels for reducing poverty. They set

DEVELOPMENTwww.oecd.org/dac; www.oecd.org/[email protected]@oecd.org

out new directions in a number ofareas, including policy coherenceamong aid donors, partnerships thatstrengthen local ownership ofpoverty reduction programmes andthe institutional change in develop-ment agencies that this new relation-ship implies.

Conflict prevention (www.oecd.org/development/governance/conflict):The April meeting also adoptedguidelines on Helping Prevent ViolentConflict: Orientations for External Partners.These suggest how donors can makeconflict prevention part of the main-

stream of development policies aswell as how firms working with localactors can make positive economicand social contributions to prevent-ing violence. The guidelines alsolook at ways of involving donors inwork to build legitimate and account-able security systems in developingcountries.

Sustainable development (www.oecd.org/dev/growth): Strategies for Sustain-able Development: Practical Guidance forDevelopment Co-operation, also adoptedin April, seeks to clarify the purposesand principles underlying effective

(left to right) Charles Goerens, Luxembourg Minister for Development Co-operation and Humanitarian Action, Eveline Herfkens, Netherlands Ministerfor Development Co-operation, and Guido Van Hecken, Director, Private Officeof the Belgian Secretary of State for Development Co-operation, at the DAChigh-level meeting in April 2001.


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Members of the Development Assistance Committee(DAC) spent US$53.7 billion in 2000 on Official Develop-ment Assistance (ODA) to developing countries. Abouttwo-thirds of it was given bilaterally and the rest throughmultilateral development banks such as the World Bank.Total bilateral aid to the least developed countries standsat around US$8 billion a year (some 17% of total bilateralaid); about half of this is “tied”, meaning it must be spenton procurement of goods and services in the donorcountries.

Proponents of untied aid emphasise that it is a moreefficient way to deliver development assistance (aDevelopment Centre study found that tied aid raises thecost of many goods and services by an estimated 15-30%).Tied aid also increases the administrative burden on bothrecipients and donors and tends to favour projects thatrequire capital intensive imports or donor-based techni-cal expertise rather than smaller, more poverty-focusedprogrammes.

After intensive discussions, the DAC reached agreementat a high-level meeting in April 2001 on a Recommend-ation to untie ODA to the least developed countries (for alist of these countries see www.oecd.org/dac/stats/dac),with effect from 1 January 2002. The recommendation aimsto promote and ensure adequate ODA flows and achievebalanced efforts among DAC members in untying aid.

Coverage: As of 1 January 2002, ODA to the least devel-oped countries was untied in the following areas: balance-of-payments and structural adjustment support; debt

forgiveness; sector and multi-sector programmes assist-ance; investment project aid; import and commodity sup-port; commercial services contracts; and ODA to NGOsfor procurement-related activities.

Effort-Sharing: Promoting a reasonable balance amongDAC members in implementing the untying aid initia-tive is an integral part of the Recommendation. The issueof balanced effort-sharing arises because the Recommen-dation applies indiscriminately to all members’ aid pro-grammes, regardless of the variations in the volume,structure and geographical orientation of assistance fromdifferent countries. Members have agreed to identify andimplement additional actions to promote effort-sharingand to regularly review their progress. They have alsosaid they do not intend their aid to the least developedcountries to decline over time as a result of the Recom-mendation.

Transparency and Monitoring: The Recommendation setsout strong transparency, implementation and review pro-cedures to ensure a level playing field, monitor compli-ance with the Recommendation and assess its effective-ness. Notifications of untied aid offers will be madepublicly available so that companies in donor andrecipient countries will be aware of the possibility ofbidding for the contract. Bidding will take place accord-ing to the 1986 DAC Good Procurement Practices for ODA.Donors will also inform the OECD Secretariat which com-pany has been awarded the contract. An electronic infor-mation exchange system will allow members to ask eachother for additional information or to clarify ambiguities.

UNTYING AIDwww.oecd.org/dac/[email protected]


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These Guidelines provide ways fordonor governments to honourtheir commitment to conflictprevention as an integral part ofthe quest to reduce poverty. Theycover key issues such as: security,development and dealing withsmall arms; regional co-operation;peace processes, justice andreconciliation; engaging inpartnerships for peace; workingwith business; and grappling withthe political economy of war.

national and local strategies for sus-tainable development and describesthe various forms they can take indeveloping countries. It also offersguidance on how development co-operation agencies can supportthem. The guidelines are based oninternational experience and multi-stakeholder reviews in developingcountries.

Trade capacity (www.oecd.org/development/trade): The fourth newset of guidelines, Strengthening TradeCapacity for Development, offers acommon reference point for thetrade, aid and finance communities,as they develop more coherent strat-egies to help developing countriesintegrate with the global economy.They also show how donors can helpdeveloping countries build theircapacity for trade.

In 2002, work will focus on imple-menting and disseminating DACdecisions and on promoting coher-ence between development co-operation and other policy areassuch as trade, environment andfinancial governance, as well as onthe Millennium Development Goals.

Millennium DevelopmentGoalswww.oecd.org/dac/[email protected]

The OECD welcomed the MillenniumDevelopment Goals included in the“road map” for the MillenniumSummit laid out by UN SecretaryGeneral Kofi Annan in September2001 and will work with other inter-national organisations to achievethem. Adopted by the internationalcommunity in 2000, the goals build oninternational development goalspublished by the DAC in 1996 in itsreport Shaping the 21st Century: The Roleof Development Co-operation. The goalsinclude eradicating extreme poverty

and hunger; achieving universal pri-mary education; promoting genderequality and empowering women;reducing child mortality; improvingmaternal health; combating HIV/AIDS,malaria and other diseases; ensuringenvironmental sustainability; anddeveloping a global partnership fordevelopment. The OECD will beworking with the United Nations, theInternational Monetary Fund and theWorld Bank in regular reporting on, andmonitoring progress towards, them.

The OECD is also deepening its workon policy coherence and develop-ment in order to create opportunitiesfor better growth in developingcountries.

Regional issueswww.oecd.org/development

Regional development was high onthe agenda in 2001, with annualforums organised jointly with theregional development banks. Tech-nology was the hot topic for Asia andLatin America. The seventh AnnualForum on Asian Perspectives, organ-ised with the Asian DevelopmentBank, focused on technology and pov-erty reduction while the twelfth Inter-national Forum on Latin AmericanPerspectives, organised with theInter-American Development Bank,looked at Competitiveness and NewTechnologies. The second AnnualForum on African Perspectives,organised with the African Develop-ment Bank, focused on regionalintegration. The OECD also organiseda policy dialogue on corporate gov-ernance in emerging economies anddeveloping countries in co-operationwith the European Bank for Recon-struction and Development (EBRD).Expert workshops covered issuessuch as how e-commerce can contri-bute to development, and the impactof foreign direct investment on edu-cation in developing countries.


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The Development Centre carries out comparativeresearch and policy dialogue with developing countries.Its mission is to help promote a better understanding inthe OECD of the economic and socialproblems of developing countries and totransfer to them the knowledge, informa-tion and experience gained in the devel-opment process. It serves as a meetingplace and a forum where individuals fromdeveloping as well as OECD countries, bethey researchers, representatives of theprivate sector or NGOs, civil servants orhigh-level government officials, can freelyexpress their views.

The Development Centre draws on theOECD’s multidisciplinary expertise andexperience of member country policyanalysis to enrich its own work on devel-oping countries. For example, the Centre is publishingin early 2002 in collaboration with the African Develop-ment Bank the first African Economic Outlook. The AfricanEconomic Outlook, modelled on the OECD Economic Out-look. comprises country notes on 22 African states plus acomparative statistical annex.

The Development Centre’s 26 member countries includeseveral developing economies (Argentina, Brazil, Chileand India, which joined in March 2001).

A highlight of work on globalisation, development andgovernance in 2001 was the publication of The WorldEconomy, A Millennial Perspective. This pioneering effort toquantify the economic performance of nations since theyear 1000 offered a reminder that different countries andregions have taken the lead in the performance stakesover the centuries. Don’t Fix, Don’t Float looked at ques-tions pertaining to changes in the international financialarchitecture from the perspective of developing coun-tries. And research in Argentina, Brazil, Chile, China, India,Malaysia and South Africa concluded that appropriateattention to corporate governance during the develop-

DEVELOPMENT CENTREwww.oecd.org/[email protected]

ment process helps a country earn policy credibilityabroad while signalling a commitment to transparencyat home.

Work on poverty reduction and skills build-ing looked at ways to develop better indi-cators to measure human capital in devel-oping countries and to explore how foreigninvestors can contribute to education andtraining policies to help build the skills oflocal residents. Case studies of Indonesia,Madagascar, Peru and Tanzania demon-strated how institutional and policy reformcan enhance the effectiveness of educationand health spending in reducing poverty.

Emerging Africa, an analysis of the possibili-ties for sustained economic take-off for sixAfrican countries, was completed in 2001

and the Centre also produced or prepared 12 other pub-lications on Africa including Policies to Promote Competitive-ness in Manufacturing in Sub-Saharan Africa (co-publishedwith the IMF and the African Economic Research Consor-tium), Towards Arab and Euro-Med Regional Integration andwork on reforming the financial sector in Africa and oncorruption in Mozambique. A series of papers on regionalintegration in Africa explored the idea that regionalismcan create a springboard for progressive insertion intothe global economy.

Case studies on the costs and benefits of measures toreduce greenhouse gas emissions in China and Indiashowed that implementing policies to prevent climatechange are less costly at national level than often antici-pated by governments of developing countries.

The successful Directory of NGOs Active in Sustainable Devel-opment and Public Attitudes and International Development Co-operation are being updated. The latter update is basedin part on the results of an experts meeting held in Dub-lin, supported by the Swedish International DevelopmentAgency (SIDA) and Ireland Aid.


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The OECD also participated in andcontributed to preparations for theUN conference on Financing forDevelopment held in Mexico inMarch 2002.

Statistical capacitybuildingwww.paris21.org/

PARIS21 (Partners in Statistics forDevelopment in the 21st Century) isan international initiative by a global

number of task team meetings on ad-vocacy, indicators of statisticalcapacity, statistical strategic planning,and population censuses. The futurework of the consortium will concen-trate on broadening coverage of theinitiative beyond anglophone Africa;encouraging bilateral donors and trustfunds to help countries implementthe action plans developed at thesub-regional workshops; and com-pleting and disseminating the mater-ials resulting from the task team work.

The Sahel and West Africa Club is an informal forum forreflection and exchanging views with and about Africancountries and working to improve development aid. Itcreates and facilitates links between OECD member coun-tries and West Africa and between the public and privatesectors. The Club’s programmes are approved by a policyorientation group comprising donor agencies as well asleading West African networks and partner institutions.

The Sahel Club was created in 1977 to facilitate co-operation among aid donors following massive droughtin the African region. It has changed over the years inresponse to changing regional needs and in 2001 itextended its mission to the whole of West Africa and wasrenamed the Sahel and West Africa Club. It also decidedto increase the involvement in its work of civil societyfrom both OECD and West African countries and toencourage greater participation in its structure by thesouthern partners.

The Club’s work programme for 2001-2003 is focused onthree main areas: local development and decentralisa-

tion in West Africa; regional dimensions of development;and future studies.

Highlights of the work in 2001 included distribution of anECOLOC (programme to revive local economies) Manualon local economies and training for African experts inmunicipal development. Experimental work on localparticipatory development is underway in Ségou andSikasso in Mali.

In the area of regional dimensions of development,studies are being finalised of the financial mechan-isms of integration and on regional trade. Work is alsounderway on the S.K.Bo area (Sikasso in Mali,Korhogo in Ivory Coast and Bobo Dioulasso in BurkinaFaso).

Work on future studies included an assessment of existingfuture studies for West Africa and the establishment ofresearch themes for the Club’s future studies, such aseconomic competitiveness, the regional dimension ofdevelopment and socio-political risks.

SAHEL AND WEST AFRICA CLUBwww.oecd.org/sah

[email protected]

consortium of policy-makers, statisti-cians, and users of statistical informa-tion that aims to build statisticalcapacity as the foundation for effec-tive development policies by helpingdevelop well-managed, appropriatelyresourced statistical systems. Activi-ties in 2001 included two sub-regionalworkshops covering 20 African coun-tries and a follow-up workshop inZambia; a one-day workshop at theUN Economic Commission for Africacovering some 40 countries; and a


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The OECD maintains co-operativerelations with a wide range of transi-tion and emerging market economiescovering topics of mutual interest.OECD member country officials andexperts engage their non-membercounterparts in policy dialogue andconduct peer assessments whilesharing each other’s rich and variedpolicy experiences.

The year 2001 saw a major restruc-turing of the activities of the Centrefor Co-operation with Non-Members,grouping its work around GlobalForums in eight policy areas wherethe OECD has particular expertiseand where global dialogue can havean important impact on policy-making. The programmes for regionsand countries were also reorganised.This strengthened the focus on keyareas of institutional and policyreform to ensure that the benefits ofglobalisation are fully shared world-wide.

Global forumswww.oecd.org/ccnm

The Global Forums aim to achievesustained results and to developstable active networks of policy-makers in OECD member and non-member economies in eight keyareas: sustainable development, theknowledge economy, governance,trade, agriculture, taxation, interna-tional investment and competition.

The Global Forum on SustainableDevelopment focused on associatingnon-members with the OECD sus-tainable development project andproviding contributions to the World

CO-OPERATIVE RELATIONS WITH NON-MEMBERSwww.oecd.org/[email protected]

Conference on Sustainable Develop-ment scheduled for September 2002in Johannesburg.

The Global Forum on the KnowledgeEconomy concentrated in 2001 onindicators of the knowledge eco-nomy, innovation policy, skills andeducation, e-commerce and biotech-nology. The Global Forum on Gov-ernance held meetings in Paris, Italy,Brazil, South Africa and the SlovakRepublic to discuss ways to enhanceefficiency, openness, transparencyand accountability of member andnon-member governments.

Trade and development in non-OECD countries, as well as thelabour, environmental and competi-

tion dimensions of trade policy werethe subjects of meetings in Chile andParis of the Global Forum on Trade.

The Global Forum on Competition,which held its first meeting in Parisin October 2001, offers a venue fornon-OECD members to contributeto the formulation of an OECD anti-cartel programme. It also offers achance for members and non-members to discuss internationalmerger control. The inaugural meet-ing of the Global Forum on Inter-national Investment in Mexico Cityin November discussed ways forgovernments to attract foreigninvestment in order to promote sus-tainable development and reducepoverty.

Adrian Nastase, Romanian Prime Minister, and Seiichi Kondo, OECD DeputySecretary-General.


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The year 2001 marked a milestone in the building of acloser relationship between the OECD and China. China’schief trade negotiator and chief co-ordinator for co-operation with the OECD, Vice-Minister of Foreign Tradeand Economic Co-operation Long Yongtu, played a majorrole in this development. He came to the OECD Parisheadquarters three times in 2001 for ministerial and otherhigh-level meetings and opened the first informal con-sultation between China and OECD member countriesat the Beijing headquarters of China’s Ministry of ForeignTrade and Economic Co-operation (MOFTEC) inSeptember.

China’s accession to the World Trade Organization (WTO)


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The Global Forum on Agriculturefosters dialogue with non-memberson agricultural policies includingtrade and market policies to evalu-ate and strengthen the process ofpolicy reform and trade liberalisa-tion. A meeting in April in Paris gath-ered representatives of more than40 economies. As a regular agendaitem of these meetings, Brazil, China,and Russia presented their latestpolicy developments.

ting best practices in tax policy andadministration.

Regional and countryprogrammeswww.oecd.org/ccnm/[email protected]

The regional and country pro-grammes provide for more targetedco-operation with non-members inthree areas: Europe and Central

The Baltic Regional Programme, established in 1998, isthe OECD’s main vehicle for co-operation with Lithuania,Latvia and Estonia. Several northwestern regions of theRussian Federation also participate in some of theactivities.

The overall aims of the programme are to support theBaltic countries in completing their transition to marketeconomies, to promote their stable integration into theglobal economy and to encourage them to use best prac-tices developed by the OECD in various areas. The pro-gramme also seeks to associate the Baltic countries moreclosely with OECD instruments in areas including foreigninvestment, competition, bribery, taxation, insurance andentrepreneurship. The detailed work programme isdeveloped in close consultation with the Baltic counties.

Much of the work consists of policy reviews and policydialogue. Work on foreign direct investment, education,insurance and pensions reform, taxation and statistics aswell as social and labour markets has been completedor is ongoing. New work on trade and on combating bri-bery was launched in 2001.

Since the establishment of the programme, the Balticcountries have made significant progress in aligning their

THE BALTIC REGIONwww.oecd.org/ccnm/[email protected]

policies with OECD instruments and standards. Estoniaand Lithuania signed the OECD Declaration on Inter-national Investment and Multinational Enterprises inSeptember 2001. Lithuania became an observer in theCommittee on Competition Law and Policy in 2001. TheBaltic countries have been actively involved in thedevelopment of the Baltic Anti-Corruption Initiative(BACI) which was launched in 2001.

All activities in this programme depend on voluntarycontributions from OECD member governments as wellas the Baltic countries for their implementation.

(left to right) Gita Kalmet, chargée d’affaires, Estonia,Donald Johnston, OECD Secretary-General, and AstaSkaisgiryté Liauskiene, Ambassador of Lithuania toFrance, on the occasion of an exchange of letters by whichEstonia and Lithuania adhere to the OECD Declaration oninternational investment and multinational enterprises.

The Global Forum on Taxation heldtwo meetings in Paris in September2001 focused on the application oftax treaties and counteracting harm-ful tax practices (see box p. 41). Morethan 80 economies were representedas well as major international organi-sations. The aim is to assist in elimi-nating tax measures that distort tradeand investment flows, preventingdouble taxation, counteracting taxevasion and avoidance and promo-


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Asia; Asia; and South America. Thereis a general programme for eachregion, as well as a specific pro-gramme for a particular country –Russia, China (see box p. 54) and Brazil(see box p. 18). There are also sub-regional programmes for SouthEastern Europe and the Baltic region(see box p. 55).

The third annual meeting of theAnti-Corruption Network for Trans-ition Economies in Istanbul inMarch 2001 agreed on the need forfuture work on the role that the ruleof law and the use of legal instru-ments, good governance, civilsociety and regional networkingcan play in combating corruption.The OECD also completed a reviewof Ukraine’s foreign direct invest-ment policies that led to the estab-lishment of a Ukraine Forum onInvestment and Enterprise Devel-opment. The Investment Environmentin the Russian Federation: Laws, Poli-cies and Institutions was one of severalpublications dealing with Russianissues.

The OECD/World Bank Roundtableson Corporate Governance confirmedtheir role in 2001 as the leading forafor promoting good corporate govern-ance in Russia, Asia, Latin Americaand Eurasia. Several publicationsduring the year contributed to thiswork, including Corporate Governance inAsia. The OECD also launched a Forumfor Asian Insolvency Reform (FAIR) inco-operation with the Asian Develop-ment Bank (ADB) and the Asia-PacificEconomic Council (APEC). Given therelevance of the OECD’s work on pub-lic governance to non-members, thepublic governance outreach pro-gramme was extended in 2001. Itincluded a number of global andregional events, such as a meeting inJohannesburg in November to helppromote institution building andpolicy reform.

SIGMA, a joint initiative of the OECDand the European Union principallyfinanced by the European Commis-sion continued to support publicmanagement reform in 15 countries.

Exploratory work for possible futureco-operation in regions outside the

current programmes focused pri-marily on South Africa.

In addition to specific regional andcountry programmes, non-membereconomies may also participate byinvitation in OECD bodies and legalinstruments. For example non-members Argentina, Brazil, Bulgariaand Chile have adhered to the OECDConvention on Combating Bribery ofForeign Public Officials in Interna-tional Business Transactions andmore than 20 non-members parti-cipate in over 30 committees andother subsidiary bodies of theorganisation.

In 2001, the OECD invited Brazil andChile to participate in the PublicManagement Committee, China inthe Committee for Scientific andTechnological Policy, Chinese Taipeiin the Committee on CompetitionLaw and Policy, and Argentina in theCommittee on Fiscal Affairs. Estoniaand Lithuania adhered to the OECDDeclaration on International Invest-ment and Multinational Enterprises.Slovenia became a full participant inthe work on bribery in internationalbusiness transactions of the Commit-tee on International Investment andMultinational Enterprises as well asan observer in the Education Com-mittee, the Working Party of SeniorBudget Officials and standing com-mittees of the Nuclear EnergyAgency.

Partnershipswith other internationalorganisations

The OECD further expanded andfocused its relationship with otherinternational organisations in 2001notably with the World Bank. Pos-sible partnerships with other inter-national and regional organisations,as well as regional developmentbanks are being explored.

The Russian Federation facesimportant economic and socialchallenges. By 1998 nationalincome was little more than halfits level in 1990. Life expectancyfor men is now about 61 years,compared to 65 years a decadeago. More than a quarter of theRussian population is poverty-stricken according to officialcriteria. This book provides adetailed analysis of the socialproblems facing the RussianFederation, and developsproposals for continuing reformto improve the economic funda-mentals, including productivity,while at the same time ensuringthat social and labour marketpolicies become more effective inhelping the poorest Russians.


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Statistics are a key element of theOECD’s work and the organisationhas a high reputation for the qualityof its statistical output. The OECDsecretariat and committees requirea wide range of reliable statistics tomonitor developments in membercountries and in key non-membercountries. The OECD also producesan extensive range of specialist sta-tistical publications and databasesfor government agencies and thepublic. These range from annual andhistorical data to a “hot file” of keyeconomic indicators for the 30 mem-ber countries updated weekly on theOECD website.

To ensure comparability and reliabil-ity of these statistics the OECD alsopromotes the adoption of interna-tional statistical standards and bestmethodological practice. One of themain responsibilities of the StatisticsDirectorate is to co-ordinate thesestatistical activities with other direc-torates of the organisation. TheOECD launched a project for the re-form of its statistical system in 2001in order to improve this co-ordination and the statistics opera-tions at the OECD. This, along withan improved presentation of statis-tical activities on the Internet via anew Statistics Portal and increasedtransparency of OECD statistics inSourceOECD, the organisation’sonline library, will provide a clearerpicture of the quality and breadth ofOECD statistics.

In 2002, the OECD will work towardsthe full implementation of the statis-tical system from a technical point ofview; the definition of the main

STATISTICSwww.oecd.org/[email protected]

guidelines for the development ofstatistical activities; and an agree-ment on specific rules for the man-agement of the system. It is expectedthat the statistical programme will befully implemented by 2003.

Short-term indicators

The OECD publishes an extensiverange of short-term economic indi-cators on a weekly, monthly andquarterly basis, including nationalaccounts, production, compositeleading indicators, retail prices,financial, international trade andbalance of payments. The indicatorsare disseminated online, on CD-ROMand on paper. The OECD’s principalshort-term indicator database, themonthly Main Economic Indicators (MEI),was significantly enhanced in 2001with the inclusion of detailedbalance-of-payments series for mem-ber countries and a range of indi-cators for non-members Brazil andIndonesia. A monthly press releasefor the OECD composite leadingindicator began in November. At theend of 2001, the first of a series ofmethodological analysis publica-tions was released, comparingcompilation practices of membercountries for industrial productionindices, retail trade and constructionindicators. Similar analyses will bepublished in 2002 for other key short-term indicators.

National accounts

The OECD plays an important role inproviding timely, reliable nationalaccounts data for OECD membercountries ensuring methodological

soundness and comparability. Newmethodological work in 2002 willfocus on issues related to informa-tion and communication technology(software measurement) and onselected service activities. The data-base on capital stocks and capitalservices will be updated andexpanded, using work completed in2001. A new data set on productivitymeasures and unit labour costs willbe developed in 2002.

New departures

The OECD also develops new indi-cators in response to changing eco-nomic patterns and concerns and isaiming to provide a comprehensivereport on OECD agri-environmentalindicators by 2004. The report willprovide information to policy-makerson the evolution, state and possiblefuture changes in key environmentalareas in agriculture, to help themunderstand the links with policiesand contribute to the monitoring andevaluation of policies in achievingsustainable agriculture. In the scien-tific field, a revised Frascati Manualof guidelines for measuring researchand development (R&D) is sched-uled for publication in 2003. Topicsbeing studied include service sectorR&D, the improvement of compara-bility with national accounting sys-tems and methodologies for the bet-ter derivation of R&D data onhospitals and clinical trials.

Other new developments in 2001included a draft statistical definitionof biotechnology to help countriesinterested in indicators to measurebiotechnology. A decision was taken


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Two new publications, the Statistics Newsletter and theStatistics Brief, were launched in 2001 to help raise aware-ness of the wide range of statistical work being carriedout at the OECD and help users to understand it better.

The Statistics Newsletter (http://www.oecd.org/statistics/newsletters), a monthly publication launched in May2001, is already reaching more than 2 000 readers innational statistical agencies, government ministries,international organisations, the private sector andacademia. Its mission is to raise awareness in membercountries of the wide range of important statistical workbeing conducted throughout the organisation and tostrengthen the extended OECD statistical network.

The Statistics Brief (http://www.oecd.org/ statistics/news-letters), launched in October 2001, is intended to helpgovernment statisticians, economists, policy-makers andresearchers understand important statistical questions.The first issue dealt with measurement challenges intrade in goods and in services. It will be produced severaltimes a year.

Other new statistical publications in 2001 include theOECD Manual on Measuring Productivity, the first com-prehensive guide to the various productivity measuresinvolved in constructing industry-level productivity indi-cators. This manual presents the theoretical foundationsto productivity measurement, and discusses implemen-tation and measurement issues. The OECD Manual onMeasuring Capital serves to clarify the conceptual issuesconcerning stocks and flows of fixed capital, and providespractical guidelines for estimation. The Manual also dealswith the definition and measurement of “capital services”which measure the contribution of capital assets to theproduction process.

There have also been two new CD-ROM products thisyear: OECD Agricultural Databases, a unique, reliable andup-to-date source of international statistics on agriculture,and Tariffs and Trade, providing a unique and compre-hensive data set on market access issues. The three agri-

culture databases cover commodities outlook, agri-cultural policies in emerging and transition economiesand agricultural support estimates. The Tariffs and TradeCD-ROM provides access to pre-Uruguay Round MFNtariffs, bound tariff levels negotiated during the Round,and corresponding data on the value of imports and ex-ports by partner country. The database covers all OECDcountries. Several databases previously published ondiskette were also made available on CD-ROM in 2001.They include Indicators of Industry and Services, provid-ing an overall view of short-term economic developmentsin a number of industrial and services branches for OECDcountries and main economic groupings and StructuralStatistics for Industry and Services. The InstitutionalInvestors database of statistics on institutional saving andinvestment in the OECD area since 1980 was also madeavailable on CD-ROM.

STATISTICS – NEW PUBLICATIONSwww.oecd.org/statistics/newsletters


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to develop “model” surveys, one forR&D surveys and one for special bio-technology surveys, to help membercountries undertaking work in thisarea and to ensure a high level ofinternational comparability. And theWorking Party on Indicators for theInformation Society (WPIIS) approveda model questionnaire on ICT use inthe business enterprise sector,intended to provide guidance toOECD countries for the measurementof indicators of ICT, Internet use andelectronic commerce.

The OECD is also working to im-prove international harmonisationof environmental data and indica-tors, and to strengthen the capacityof member and selected non-member countries in the field of in-formation and reporting concerningthe environment and sustainabledevelopment. The 2001 Compen-dium of OECD environmental data,a report on environmental de-coupling indicators, as well asupdated key environmental indica-tors and information on environ-mentally related taxes are due forpublication in 2002. The OECD isalso reviewing with Eurostat theOECD questionnaires on the stateof the environment and on environ-mental expenditure and revenues.

Most internationally comparablelabour force statistics come fromlabour force surveys and consistlargely of information on outcomes(unemployment and participationrates, employment-to-populationratios, etc.). What is not generallycompiled and published is informa-tion on the institutional and regula-tory framework that affects the func-tioning of the labour market. In 2002,the OECD will be preparing a publi-cation which will include such infor-mation alongside the usual labourforce statistics. It will also includedata on minimum wages, unionisa-

tion, taxation of wages, unemploy-ment insurance wage replacementrates and employment protectionindicators. This will be the first timethat such information will be com-piled and published systematicallyfor OECD countries. It should be anasset to analysts interested inassessing the impact of differentpolicy and regulatory environmentson labour market outcomes.

Non-observed economy

The OECD is developing interna-tional standards for measuring the“non-observed economy” (NOE) toensure that national accounts pro-vide a comprehensive picture of eco-nomic activity. The non-observedeconomy includes underground andinformal activities, as well as activi-ties that are missing from GDPbecause of inadequacies in data col-lection procedures. The OECD is pro-moting best practice in the measure-ment of the NOE through workshops,training and publications. A team ofexperts drawn from the OECD, inter-national agencies including the Inter-national Labour Organization, IMFand Eurostat, and the Dutch andItalian statistics offices is developing“A Handbook for Measurement of theNon-Observed Economy” to be pub-lished in early 2002.

Development indicatorswww.developmentgoals.org.

The OECD works jointly with theUnited Nations, the World Bank andthe International Monetary Fund onindicators for the Millennium Devel-opment Goals (MDGs) set out in theMillennium Declaration signed in2000 by 189 countries. The 48 indi-cators monitor progress by develop-ing countries towards goals forpoverty reduction, education, healthand the environment, along withactions, mainly by OECD countries,

in providing aid, debt relief andmarket access. Updates to A BetterWorld for All: Progress towards theInternational Development Goals, a jointpublication of the four organisationsin 2000, on progress towards theMDGs will be published annuallyfrom 2002. A partial update isincluded in the Development Co-operation Report 2001 (www.oecd.org/dac). The OECD will continue to workwith the World Bank and the UN toestablish a set of qualitative indica-tors to measure governance in devel-oping and transition countries.

The monthly Main EconomicIndicators (MEI) presentscomparative statistics providingan overview of recent inter-national economic developmentsfor the 30 OECD countries and anumber of non-members. Usingup-to-date, user-friendly graphi-cal and tabular presentation, theindicators cover nationalaccounts, business surveys andconsumer opinions, leadingindicators, retail sales, produc-tion, construction, prices, employ-ment, unemployment, wages,finance, foreign trade and balanceof payments. The series is alsoavailable on CD-ROM and online.


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The OECD has an active policy ofcommunication, dialogue and infor-mation dissemination with a broadrange of stakeholders, whetherpolicy-makers, academics, business,labour, civil society organisations orthe media. Activities with thesestakeholders make an important sub-stantive contribution to the OECD’swork. Transparency and opennessare also important for building trustin public institutions and for promo-ting greater public understanding ofthe benefits and challenges of globaleconomic and social change.

A second-generation website waslaunched in 2001, improving accessto the results of the organisation’swork. The OECD continues topioneer in electronic publishing,building on its important role as aprint publisher.

Publishingwww.sourceoecd.org/[email protected]

The OECD publishes about 250 titlesa year in English and French. Thehighlight of 2001 was the publicationof The World Economy: A Millennial Per-spective by Angus Maddison. Thisanalysis of the world economy overthe past 1 000 years attracted a greatdeal of attention and strong demand.A great number of titles are trans-lated into other languages, oftenthrough co-editions or license agree-ments. In 2001, 180 partial and fulltranslations were published in28 languages.

More than 1 500 institutions sub-scribed to at least one of the 75 parts

PUBLIC AFFAIRS AND COMMUNICATIONSwww.oecd.org/about

of the online library, SourceOECD(www.sourceoecd.org) in 2001, its firstfull year of operation, and nearly 100took the entire service. By the endof 2001, monthly usage exceeded50 000 visitor sessions, and some in-stitutions were using the servicemore than 1 000 times a month. Theonline statistics databases havebeen the biggest draw, accounting forhalf of all usage.

In October the OECD launched itsfirst experimental, web-book, TheOECD Science, Technology and IndustryScoreboard, a long-time best-seller inprint. The key feature is the abilityto select a single graph or table, andthen offer users the ability todownload the underlying data. In itsfirst month more than 5 000 readerstried out this web-book, made avail-

able free of charge via SourceOECD.Feedback has been positive andmore web-books are likely to beintroduced during 2002.

The innovative Browse_it servicelaunched in 2000, which allowsreaders to browse the full text ofmonographs online, free of charge viathe online bookshop (www.oecd.org/bookshop), has been a great successwith more than 8 000 browsing ses-sions registered every month. Salesvia the online bookshop have mean-while risen to an average 1 100 amonth from 900 in 2000.

Media relationswww.oecd.org/[email protected]

Media relations activities support andreflect the priorities of theorganisation. All through the year, theMedia Relations Division is requiredto field journalists’ questions on arange of sometimes thorny issues fromthe new economy to the OECD’s crack-down on tax havens. But it also playsa prominent role in actively dissemi-nating news about the OECD’s workfrom environment policy, economicanalysis and education to regulatoryreform, biotechnology and health.

One of the objectives over the yearwas to deepen relations with direc-torates, to ensure that news materialprovides full and correct informationthat is of use to journalists. The divi-sion organised interviews with andplaced articles by the Secretary-General and other senior Secretariatofficials, in newspapers and maga-zines ranging from Libération (France)

Amadou Cheikh Kanouté, RegionalDirector for Africa, ConsumersInternational, Senegal at the sessionon digital opportunities and thedigital divide at Forum 2001.


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In 2001, the OECD Forum firmly consolidated its posi-tion as an international public conference offering leadersfrom civil society, business and labour an opportunity todiscuss key issues of the 21st century with governmentministers and leaders of international organisations. Whatis unique about the OECD Forum is that it allows parti-cipants to shape the outcome of the OECD annual minis-terial meeting. Indeed, OECD ministers officially“welcomed OECD Forum 2001 as an effective multi-stakeholder dialogue providing a valuable input into ourwork”.

OECD Forum 2001, which tackled the theme of “Sustain-able Development and the New Economy”, broughttogether some 1 500 participants from 80 countries. Theydiscussed issues ranging from the role of new techno-logies to corporate responsibility, agriculture, environ-ment, multilateral trade talks and transport.

Harvard professor E.O. Wilson warned the Forum of theneed to protect biodiversity. Ministers who took part inthe debates included US Commerce Secretary DonaldEvans, French Health Minister Bernard Kouchner andBrazil’s Foreign Minister Celso Lafer. Other key speakersincluded Friends of the Earth Chairman Ricardo Navarro,Secretary-General of the Malaysian Trades Union Con-gress Govindasamy Rajasekaran, France Telecom Chair-man Michel Bon, Merck Chief Executive Officer RaymondGilmartin and WTO Director General Mike Moore.

Svend Auken, Danish Minister for the Environment andEnergy, captured the spirit of the Forum when he saidthat “High hopes of reducing environmental degradationraised at the Rio summit of 1992 have not been borneout ... It is now time to go beyond fine words and intoaction.” He reported back on the conclusions of the Forum

FORUM 2001www.oecd.org/forum/2001

debate to OECD ministers during their session onsustainable development.

At the closure of Forum 2001, Secretary-General DonaldJohnston remarked to participants that the “Forum hasbecome a landmark in the life of the OECD”. Forum 2002,also to be held in Paris, will again take place alongsidethe annual ministerial meetings and will be on the theme“Taking Care of the Fundamentals: Security, Equity,Education and Growth.”

Raymond Gilmartin, Chairman, President & ChiefExecutive Officer, Merck & Co. Inc, United States atthe health session at Forum 2001.


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The OECD made further strides towards its aims of trans-parency, timeliness of information and customisedservice with the launch in September 2001 of a second-generation website that puts OECD data and analysiswithin easy reach of anyone with access to the Internet.With more than 9 million visitors in 2001 and 6 millionpages viewed each month, the website has become areference for international policy-making and analysis.Thanks to the new portal, the organisation’s public know-ledge base is now fully accessible to better serve theinternational community.

Key features of the new website:

Timeliness of information with daily updates.

Statistics portal: a one-stop-shop for statistics and indi-cators, providing governments, institutions and the publicwith a unique facility for analysing key policy issues usingreliable data.

Country-focused documentation: a feature allowingvisitors to search online for OECD expertise on individualcountries.

User-friendliness: users can navigate the site by themeor by directorate.

My OECD: visitors can tailor the site to their specificneeds and sign up for e-mail alerts on topics of interestto them.

NEW [email protected]

Focused searching: a contextual navigation and searchengine that gives only the desired information.

Browsing: a browsing facility for the documents andpublications database.


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and Espresso (Italy) to Nikkei (Japan)and the International Herald Tribune.It also provided TV and photo cover-age of major OECD events for outsidenews organisations and stepped upthe frequency of internally producedCNN World Report items that providenews on the organisation’s work for awide audience around the world.New techniques for internal commu-nications include OECD-TV, pro-viding televised news about OECDactivities.

OECD [email protected]

The OECD Observer is the organisa-tion’s public magazine. Launched inNovember 1962, it offers concise andauthoritative analysis of crucial worldeconomic, social and scientificissues. The Observer is available inEnglish, French and Japanese(limited edition).

The Observer is a window for the workof the OECD and a platform for com-municating the ideas of theorganisation’s experts to the widerpublic. Recently, the magazine haspositioned itself successfully as a

Global Reporting Initiative andGreenpeace as well as leadingacademics.

The online edition, www.oecdobserver.org,has become an important visibilitytool for the organisation since itslaunch in August 1999. Traffic rose byover 100% from January to December2001 and more than 1.3 million pageswere accessed. Visitors come from allover the world and the site figuresstrongly on major Internet searchengines.

OECD in Figureswww.oecd .org/pub l ica t ions/figures/

OECD in Figures is a pocket-sizeddatabook for OECD membercountries covering everything fromeconomics to health, education andscience. It is one of the organisation’smost popular publications and isedited by Public Affairs in coopera-tion with the Statistics Directorate.

OLISnet

More than 8 000 authorised govern-ment officials and representatives ofother concerned agencies in member

POLICY BRIEFS

Part of the task of communicating the OECD’s messageinvolves tailoring information in a form that can conveythe organisation’s analysis and policy conclusions to non-specialist audiences. OECD Policy Briefs are concise(8-12 pages) treatments of major aspects of the organi-sation’s work. Written for a general audience, each Briefexplores a different issue in a question and answerformat. The series was initiated in 1997.

In addition to Briefs covering country economic surveys,themes in 2001 included sustainable development, hardcore cartels, trade and development, and the OECD’srelationship with civil society.

Govindasamy Rajasekaran,Secretary-General of the MalaysianTrades Union Congress (MTUC) atthe trade and development session atForum 2001.

forum of debate for a wide commu-nity of political personalities, expertsand opinion leaders. In 2001 guestwriters included Poul Rasmussen, theDanish Prime Minister, WernerMüller, Germany’s Economics andTechnology Minister, US Health Sec-retary Tommy Thompson and MikeMoore, Director General of the WorldTrade Organization. Contributionsfrom civil society included busi-nesses such as Microsoft and theEconomist Group, and NGOs like


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Administrative CommitteePresident:

Mr. John SWEENEY, President of the AFL-CIO (USA)

Vice-Presidents:

Mr. Luc CORTEBEECK, President of the Belgian Confed-eration of Christian Trade Unions (CSC-Belgium)

Mr. Etsuya WASHIO, President of RENGO (Japan)

Mrs. Evy BUVERUD-PEDERSEN, Secretary of the Nor-wegian Confederation of Trade Unions (LO-N-Norway)

Executive BoardChairman:

Dr. Bruno LAMBORGHINI, Chairman, Olivetti Tecnost,Member of the Olivetti Board of Directors, Chairman,EITO (European Information Technology) (Italy)

Vice-Chairmen:

Mr. Serge GRAVEL, Associé, Gravel, Otto & Associés(Canada)

Mr. Masaharu IKUTA, Chairman of BIAC Japan; Chairmanof O.S.K. Lines, Ltd. (Japan)

Mr. Anders NARVINGER, Group Senior Vice President,ABB Financial Services Ltd. (Sweden)

Dr. Ungsuh K. PARK, Director and Member of the Boardof Directors, Pohang Iron & Steel Co., Ltd. (POSCO)(Korea)

Mr. Jacques SAMPRÉ, Ancien Directeur Délégué, SANOFI(France)

Dr. Josef SIEGERS, Member of the Executive Board, BDA(Germany)

Mr. Edwin D. WILLIAMSON, Partner, Sullivan & Cromwell(United States)

Secretary General:

Mr. Douglas C. WORTH

13-15, chaussée de la Muette,75016 Paris.Tel: + 33 (0) 1 42 30 09 60Fax: + 33 (0) 1 42 88 78 38E-mail: [email protected]: www.biac.org/

TRADE UNION ADVISORY COMMITTEE TO THE OECD(TUAC)

General Secretary:

Mr. John EVANS

26, avenue de la Grande-Armée,75017 Paris

Tel: + 33 (0) 1 55 37 37 37

Fax: + 33 (0) 1 47 54 98 28

E-mail: [email protected]

Internet: www.tuac.org/

BUSINESS AND INDUSTRY ADVISORY COMMITTEETO THE OECD (BIAC)

BIAC SecretaryGeneral Douglas Worth

TUAC General SecretaryJohn Evans


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The Executive Directorate (EXD) over-sees the management of the OECD’sassets and resources – human, finan-cial and information resources, com-munications, conference and officefacilities. It is also responsible for theday-to-day management of theorganisation’s operational activitiesand infrastructure, including procure-ment, OECD meetings and confer-ences, security, interpretation andtranslation. This directorate also co-ordinates the OECD’s reform pro-gramme and elaborates the organisa-tion’s programme of work and budget.

Internal reorganisation of the direc-torate continued in 2001, aiming toconform to best international andmember country practice, as part ofthe OECD’s ongoing reform pro-gramme (see chapter p. 9). A centralstructure was established tostrengthen the organisation’s pro-curement and contract managementactivities and to improve the servicesand guidance available to director-ates in these areas. All activitiesrelating to conference management(welcome, organisation of meetings,receptions and safety) were alsoregrouped into a single division toimprove the preparation and co-ordination of OECD meetings and tomodernise related technologies.

Organisation-wide reform initiativesfocused on ways of improving pro-gramme performance and outputmanagement, better integrating workacross the OECD, improving financialpolicies and procedures and estab-lishing links between staff perform-ance and remuneration. The guidingprinciples of reform are greater

EXECUTIVE DIRECTORATEwww.oecd.org/about

responsiveness to member countryneeds, ensuring efficiency and costeffectiveness and a commitment onthe part of the secretariat to profes-sional and managerial excellence.

In 2002 and following years, a largeshare of Executive Directorateresources will be devoted to the re-development of the OECD’s head-quarters site (see box p. 10).

Programme of work

The programme of work and budgetis the basic charter of the OECD’spriorities, activities, staffing andfinancing. Traditionally, it has beenapproved at the end of each year bythe governing body, the Council, forthe subsequent calendar year. It wasagreed in early 2001 that, from 2003/4, the budget process would becomebiennial.

Over the past few years, manyimprovements have been intro-

duced to both the programme ofwork and the budget process. Theprogramme of work is now basedaround broad themes rather thandirectorates, and a priorities resource

allocation system has been intro-duced. These reforms are part of amajor exercise aimed at improvingthe way the OECD takes decisionsabout resource allocation and how itpresents information to membercountries.

Human resourcesmanagementwww.oecd.org/hrm/

Human resource management imple-ments and consolidates humanresource functions and policies, aswell as providing staff and managerswith high standard administrative,recruitment, training and counsellingservices. Main achievements in 2001and priority activities for 2002include:

(left to right) Herwig Schlögl, OECD Deputy Secretary-General, Toure AlimataTraore, Malian Minister of Industry, Trade and Transport, Donald Johnston,OECD Secretary-General, and Mogens Lykketoft, Danish Minister for ForeignAffairs, at the press conference with non-members during the OECD Minis-terial Council meeting in May 2001.


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• Refinement of the employmentpolicy, including an improvedcontractual framework for tempo-rary staff.

• Continued focus on managementdevelopment, including manage-ment training.

• Complete revision of the OECD’sremuneration policy.

• Review of staff rules to provide amore coherent and simplifiedframework.

• Improved international recruit-ment and gender balance.

• Improved health care, new con-tracts with management andinsurance contractors, new stra-tegies for cost containment poli-cies and extended health carenetworks.

• Development of the humanresources computer system,notably the implementation of anew payroll system.

Financial resourcesmanagement

In the financial area, EXD providesaccounting, treasury, analysis andreporting services to the OECD andmember countries. For 2002, it willcontinue to implement essentialreforms aimed at improving effi-ciency and transparency, notably bydeveloping quality reporting inaccordance with international publicsector accounting standards, and byfurther strengthening internal con-trols over financial transactions.

Information resourcesmanagement

The role of information technologyand network services is twofold: to

deliver and support the informationand communications technology(ICT) systems and services thatunderpin the daily work of the OECD,and to identify and implement inno-vative uses of ICT to help achieve the

medium-term strategic objectives ofthe organisation. This includes, inparticular, systems, facilities andservices for policy analysis, statistics,communications and committeeinteraction, management of corpo-rate information, and administrativeand management reform.

In 2001 the Executive Directorate, inco-operation with the Public Affairsand Communications Directorate,launched a new OECD website. Italso consolidated specialisedExtranet services for member coun-tries and delegations (OLISnet); con-verted all systems to the Euro; andintroduced an integrated onlinemanagement system for OECD meet-ings and conferences.

Infrastructure, space andevent management

The Executive Directorate isresponsible for managing the infra-structure of the headquarters and

annex sites and for providing awide range of related services tosupport the daily functioning of theOECD. In 2001, efforts continued toimprove working conditions for staffand to raise the quality of services

provided to the organisation, withemphasis on quality control. Parti-cular steps were taken to containthe asbestos problem in the mainoffice building, and to assess andimprove fire safety in the variousbuildings and annexes owned orrented by the OECD.

This directorate also manages theOECD’s operational resources intranslation, interpretation and con-ference logistics. In 2001, confer-ences totalling 2 850 days took placeat headquarters and elsewhere(including five meetings at ministe-rial level) and more than 80 000standard pages were translated. TheExecutive Directorate also undertooka complete reorganisation of its con-ference services and, in liaison withthe French police, significantlyreinforced its security measures toaddress the risks associated withincreased terrorist activity followingthe events of 11 September in theUnited States.

(left to right): Metin Bostancioglu, Turkish Minister of National Education andUlrich Stockling, Swiss President of the Conference of Directors of Cantons ofPublic Education at the meeting of OECD education ministers in April 2001.


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tural issues in an economy-wideperspective, drawing on work by anumber of OECD specialised com-mittees. This currently includes workon the economic implications ofageing, labour market policies, envi-ronmentally sustainable growth,public expenditure and tax policies,education and health systems, andgrowth performance.

Twice a year, the Department pub-lishes the OECD Economic Outlook,which presents analysis of recentmacroeconomic developments andnear-term prospects, highlighting keypolicy issues, and includes articles onvarious structural topics. About 20OECD Country Surveys are publishedannually under the responsibility ofthe EDRC, working with the EconomicPolicy Committee on chapters deal-ing in-depth with a structural topic.

Statistics Directorate(STD)www.oecd.org/[email protected]

The Statistics Directorate collectseconomic statistics from across theOECD. These are standardised tomake them internationally compara-ble, and are published in bothprinted and electronic form. Themonthly publication Main EconomicIndicators is one of the principal pub-lications of the directorate. Otherspecialised publications coverforeign trade, national accounts,employment and unemploymentand there are also regular releasesof updated figures, includingmonthly unemployment rates andchanges in consumer prices. Otherparts of the OECD publish indicatorsfor specialised sectors. In collabora-tion with statisticians from membercountries and other internationalorganisations, the OECD has playeda major role in developing new data

systems to respond to new policyconcerns such as national accounts,energy supply and use, research anddevelopment, environment, andservice industries.

Environment Directorate(ENV)www.oecd.org/[email protected]

The Environment Directorateexamines issues such as how tomanage natural resources in a sus-tainable way, the interplay betweenthe environment and trade policy,energy and agriculture, as well asanalysing the economic aspects ofclimate change. It works with otherdirectorates on some issues, such astrade, and is a key contributor to theOECD-wide work on sustainabledevelopment. The EnvironmentDirectorate keeps a permanentwatch on environmental performanceand compiles environmental data,publishing its first EnvironmentalOutlook in 2001. It producesenvironmental assessments ofmember countries, which are pub-lished. The Environment Directorateis also responsible for looking atissues of pollution prevention andcontrol through sensible waste man-agement, less polluting transporta-tion and clean technology. Its workon environmental safety and healthincludes work on chemical products:standardising chemical testing andhazard assessment procedures, co-ordinating data and laboratory prac-tice standards.

Development Co-operation Directorate (DCD)www.oecd.org/[email protected]

The Development Co-operationDirectorate (DCD) helps OECDmember countries with policy formu-

lation, policy co-ordination and infor-mation systems for development. Itsupports the work both of the Devel-opment Assistance Committee (DAC)and of the OECD as a whole, but itsrelationship with the DAC is so closethat the DCD is generally identifiedwith the DAC itself. The DAC meetsat least 15 times a year and the chairis based at OECD headquarters. Itdiffers from other committees in thatit has the power to make recommen-dations directly to countries on thecommittee, as well as to the OECDCouncil, and produces an annualreport on the efforts and policies ofDAC members. Combined OfficialDevelopment Assistance (ODA) ofthese major aid donors was someUS$53 billion in 2000, more than 95%of the world total. DAC/DCD work isabout how to spend and invest thisaid in the most effective manner soas to reduce poverty and ensure sus-tainable development in developingcountries. It does so through guide-lines, recommendations and “peerreviews” of the development co-operation policies of individual DACmembers. DCD also works closelywith other OECD directorates onissues of common interest such astrade, the environment, corruption ininternational transactions, and childlabour.

Public ManagementService (PUMA)www.oecd.org/[email protected]

The Public Management Servicehelps member countries to achievehigh standards of effective and goodgovernance in a quickly changingeconomic and social environment.Under the auspices of the PublicManagement Committee, PUMAanalyses how governments managethe public sector, improve servicedelivery and make policy implemen-


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tation more coherent. It developsrecommendations on best practicesand identifies emerging challengessuch as e-government and riskmanagement.

One of PUMA’s primary functions isto create a forum for the exchange ofexperiences and new approachesamong government representatives.Top officials responsible for thecentral management systems of gov-ernment meet in specialized workinggroups on budgeting and manage-ment, policy-making, regulatoryreform, strengthening government-citizen connections, human resourcesmanagement, and public sectorethics.

PUMA is also responsible in theOECD for the SIGMA (Support forImprovement in Governance andManagement) programme. This is ajoint venture with and principallyfinanced by the European Commu-nity to help the newly democratisedcountries of central and southeastern Europe reform their publicadministration systems, drawing onPUMA’s experience and networks.

Trade Directorate (ECH)www.oecd.org/[email protected]

The work of the Trade Directoratesupports a strong, rules-based multi-lateral trading system that will main-tain momentum for further tradeliberalisation while contributing torising standards of living and sustain-able development in both OECDmember and non-member countries.Its objective is to ensure that theliberalisation flowing from multi-lateral trade negotiations movesahead smoothly and that the multi-lateral trading system, centred on theWorld Trade Organization (WTO),functions effectively and is equipped

to address major trade policy issues.Analytical work undertaken by theTrade Directorate under the auspicesof the OECD Trade Committee seeksto support continued trade liberali-sation and foster an understandingof the links between trade liberali-sation and a range of issues of pub-lic concern. This work advances aninformed debate, helping build con-sensus on a range of pertinent issues.The Trade Directorate is involved inanalysis and preparations for futuretrade negotiations that will coverwhole new categories of trade rules,such as the environment, competi-tion policy, industrial policy andtechnology. At the same time, itsanalysis of trade patterns and poli-cies can help forestall problems thatemerge under the pressure of ever-intensifying competition. And itsunique work in export credits steerscountries away from distortive trade.

Directorate for Financial,Fiscal and EnterpriseAffairs (DAF)www.oecd.org/[email protected]

The prime objective of the Directo-rate for Financial, Fiscal and Enter-prise Affairs (DAF) is to identify poli-cies and best practices designed tokeep markets open, competitive andsustainable while combating marketabuses and economic crime throughinternational co-operation. DAF sup-ports eight main committees andworking groups: the Committee onCompetition Law and Policy; theCommittee on Fiscal Affairs; the Com-mittee on Financial Markets; theInsurance Committee; the Commit-tee on Capital Movements andInvisible Transactions; the Commit-tee on International Investment andMultinational Enterprises; theWorking Group on Bribery in Interna-tional Business Transactions; and the

Steering Group on CorporateGovernance.

DAF works with government officialsthrough these specialised commit-tees and groups to analyse emergingtrends and prepare recommenda-tions favouring policy convergenceand best practices for national actionand international co-operation. Itswork covers many fields includingfinance, insurance and private pen-sions; competition law and policy;taxation; corporate governance; anti-corruption; and foreign direct invest-ment. These activities are often con-ducted in consultation withrepresentatives of business, finan-cial, labour and other non-governmental organisations, andnon-member governments areincreasingly involved. DAF activitiesoften result in recommendations,standards, principles and sometimeslegally binding obligations, which arethen subject to follow-up monitoringor peer review to promote effectiveimplementation.

Directorate for Science,Technology and Industry(STI)www.oecd.org/[email protected]

The Directorate for Science, Tech-nology and Industry and its commit-tees seek to help OECD membercountries adapt to the challenges ofthe “knowledge-based” economy.The Directorate provides analysis tounderpin government policies onemerging scientific, technologicaland industrial issues, and offers aforum for policy dialogue. The Com-mittee on Industry and BusinessEnvironment examines frameworkconditions for industrial competitive-ness in the context of globalisationand the shift towards knowledge-based economies; it addresses poli-


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cies that affect the performances ofeconomies at sectoral and firmlevels. The Committee for Scientificand Technological Policy examineshow to stimulate innovation andeffectively fund and manage sciencesystems; biotechnology, and espe-cially its application to human healthand sustainable development, ispart of the agenda for intense discus-sion. The Committee for Information,Computer and CommunicationsPolicy addresses the many issuesinvolved in promoting the effectiveand socially beneficial application ofinformation and communicationstechnologies, including electroniccommerce, in particular in areas suchas telecommunications policy,Internet governance, information se-curity and privacy. The Committee onConsumer Policy focuses on con-sumer protection in the onlinemarketplace. In areas such as ship-building, steel and tourism, the STIworks with member countries tomonitor developments and encour-age the adoption of OECD-widestandards or “rules of the game”.

Directorate for Education,Employment, Labour andSocial Affairs (ELS)www.oecd.org/[email protected]

This directorate oversees work on themany interrelated policy areas thatcan prevent social exclusion. Itsactivities are focused on five mainareas: education and skills, employ-ment, health, international migrationand social issues. Lifelong learning,from early childhood to adulthood, isconsidered a key to social integrationand a tool in the battle against exclu-sion, both from society and the labourmarket. The issue of health, given theimpact it can have on society’s well-being as well as its cost to govern-ments, is also a priority for ELS.

Education and training systems areanalysed and the picture of progressin education is presented in anannual compendium of facts andfigures, Education at a Glance. Thedirectorate watches employmentand earnings patterns, and theannual Employment Outlook offersanalysis of key labour market trendsand policies. The flows and effects ofhow and why people move betweencountries are studied and summar-ised in Trends in International Migration.The directorate also looks at the ef-fectiveness of health care and socialwelfare programmes, the role ofwomen in the labour force and howtechnology affects workers.

Through the Centre for EducationalResearch and Innovation, thedirectorate focuses on work in newteaching and learning approaches.

Directorate for Food,Agriculture and Fisheries(AGR)www.oecd.org/[email protected]

The Directorate for Food, Agricultureand Fisheries helps membercountries in achieving the sharedgoals and in adopting the policy prin-ciples and operational criteria foragricultural policy reform identifiedby OECD agriculture ministers in1987 and again in 1998. It also aimsto help member countries imple-ment economically efficient, sustain-able fisheries. Its work covers sixbroad areas: monitoring and evalu-ating agricultural policies; assessingfuture developments in agriculturalmarkets and trade; evaluating andstrengthening the process of tradeliberalisation; assessing the chal-lenges to further trade liberalisation;enhancing the environmentalsustainability of agriculture; analy-sing the interface between domestic

and international policies; and fish-eries sustainability and marketliberalisation.

The directorate carries out its workprogramme under the guidance ofthe Committee for Agriculture and itssubsidiary bodies (Working Party onAgricultural Policies, Working Partyon Markets and Commodity Groups)and the Committee for Fisheries. Twojoint working parties, on Agricultureand Trade and on Agriculture andEnvironment, direct the co-operativework involving other committees anddirectorates. The mandates of thesejoint bodies were updated in 2000.The directorate reports on agri-cultural policy reform and markettrends in its annual Monitoring and Out-look of Agricultural Policies and on policydevelopments in fisheries in itsAnnual Review of Fisheries in OECD Coun-tries. It also establishes and managescodes for international quality offruits and vegetables, seeds, forestproducts and tractors in order to pro-mote trade as well as a co-operativeresearch programme betweenresearch institutions to contribute tothe scientific basis for managing bio-logical resources for sustainableagricultural systems.

Territorial DevelopmentService (TDS)www.oecd.org/[email protected]

The Territorial Development Serviceconsiders how urban, regional andrural policies and local initiatives cangenerate employment, raise livingstandards and the quality of life,assist structural change and protectthe environment. Its work is overseenby the Territorial DevelopmentPolicy Committee (TDPC), which wasestablished in 1999 to integrate thework on territorial issues. The com-mittee is served by three working


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parties addressing the specific issuesof urban and rural questions as wellas territorial indicators. One of themajor contributions of the TDPC is todemonstrate how economic competi-tiveness and sustainable develop-ment go hand in hand. The Territo-rial Development Service aims togive practical assistance to govern-ments, encouraging the creation anddevelopment of locally driven initia-tives for economic development, andcombining the best elements from avariety of complementary territorialdevelopment strategies.

Public Affairs andCommunicationsDirectorate (PAC)www.oecd.org/about

The Public Affairs and Communica-tions Directorate contributes totransparency and openness bymaking information about theOECD’s work and its results availableto the public in a timely manner. PACalso presents “work in progress” onthe Internet to elicit public comment.It is responsible for media relationsand handles the publication andmarketing of some 250 books a year,as well as managing a fast-growingonline bookshop and offering accessto OECD publications and informa-tion via the Internet. PAC also pro-duces the Policy Briefs series of bro-chures on key policy issues, theOECD Observer magazine and theannual OECD in Figures compilationof key data for all member countries.The directorate manages the OECD’srelations with the Business andIndustry Advisory Committee (BIAC),the Trade Union Advisory Committee(TUAC), the Council of Europe, andthe Economics and Security Commit-tee of the NATO ParliamentaryAssembly, and is increasinglyinvolved in policy dialogue with civilsociety. It organises the annual OECD

Forum, which brings together repre-sentatives of OECD countries withbusiness, labour, academics andother civil society organisations todebate significant policy issues forthe globalised knowledge economy.PAC is also responsible for OECDcentres in Berlin/Bonn, Mexico City,Tokyo and Washington, and serves asa point of contact with other inter-national bodies, parliamentarians,non-governmental organisations andthe general public.

Executive Directorate(EXD)www.oecd.org/about

The Executive Directorate managesthe OECD’s human, financial andinformation resources and overseesall administrative, financial andoperational functions that arerequired for the functioning of theorganisation. EXD groups all supportservices, including budget andfinance, human resources manage-ment, operations, information tech-nology and network services, pro-curement and contract management,conference and security, interpreta-tion and translation. The directoratealso co-ordinates the OECD reformprogramme and is responsible forthe elaboration of the programme ofwork and budget.

Centre for Co-operationwith Non-Members(CCNM)[email protected]

The Centre for Co-operation withNon-Members serves as the focalpoint for the development of policydialogue between the OECD andnon-member economies. It managesa number of programmes linked tothe key themes of OECD work suchas the OECD Global Forums which

cover sustainable development;knowledge-based economy inclu-ding biotechnology and e-commerce;governance; trade; international in-vestment; agriculture; competition;and taxation. The Centre alsomanages regional and country pro-grammes with major non-membereconomies such as China and Russia.

Development Centrewww.oecd.org/[email protected]

The Development Centre is a semi-autonomous body that promotes abetter understanding of the eco-nomic and social problems of devel-oping countries through comparativedevelopment analysis and policydialogue. The Centre acts as a“bridge” between the advancedindustrialised countries of the OECDand the emerging and developingeconomies of Africa, Asia and LatinAmerica. Its activities enable expertsand policy-makers from the devel-oped and developing worlds toexchange ideas and experiences,with the aim of informing the devel-opment communities in membercountries and benefiting developingcountries.


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The Financial Action Task Force (FATF) is an independ-ent intergovernmental body whose Secretariat is housedat the OECD. It expanded its mission in October 2001 tofocus its energy and expertise on the worldwide effort tocombat terrorist financing, in the wake of the 11 Septem-ber attacks in the United States. As a body with consid-erable expertise, authority and credibility in addressingmoney-laundering issues, the FATF is well placed to takeon a significant role in the effort to prevent terrorists freelyusing the financial system. Terrorists use financial net-works in the same way that other criminal groups do, sothat the FATF’s expertise in tracking illicit funds will bekey in combating terrorist financing. FATF membersagreed a set of Special Recommendations on terroristfinancing. These included making the financing of terror-ism, terrorist acts and terrorist organisations a criminaloffence, freezing or confiscating terrorist assets andreporting suspicious transactions linked to terrorism.FATF members agreed to comply with these recommen-dations by June 2002 and invited all countries aroundthe world to join them in their effort. After June 2002, theFATF will start work to identify non-cooperative jurisdic-tions and discuss possible counter-measures.

During the year, the FATF also reported significantprogress in its work on non-cooperative countries andterritories (NCCT) in the international fight against moneylaundering. It took four jurisdictions off the list of NCCTs –the Bahamas, the Cayman Islands, Liechtenstein andPanama. It also added eight jurisdictions to the list(Egypt, Guatemala, Hungary, Indonesia, Myanmar,Nigeria, Ukraine and Grenada) following a review of more

THE INTERNATIONAL FIGHTAGAINST MONEY LAUNDERING

AND TERRORIST FINANCING: THE FATFwww.fatf-gafi.org

[email protected]

territories. It decided to apply counter-measures to Nauruin December because of failure to make adequateprogress.

The FATF annual report for 2000-2001 examined currentand threatened vehicles for money laundering, includingonline banking and Internet casinos, the use of trusts andother non-corporate vehicles to launder money, the useof lawyers, notaries, accountants and other profession-als, and terrorist-related money laundering.

The FATF was established by a G7 summit in Paris in1989. In April 1990, the FATF issued Forty Recommend-ations, a comprehensive blueprint of the action neededto fight against money laundering. Since then the FATFhas continued to examine the methods used to laundercriminal proceeds and has completed two rounds ofmutual evaluations of the anti-money laundering systemsof its members. It has updated the Forty Recommend-ations and has sought to encourage other countriesaround the world to adopt anti-money launderingmeasures. The FATF’s mission is reviewed every fiveyears, so, when its current mission expires in 2004,members will have to decide whether it should continue.

The Task Force’s 31 members are: Argentina, Australia,Austria, Belgium, Brazil, Canada, Denmark, European Com-mission, Finland, France, Germany, Greece, Gulf Co-operation Council, Hong Kong China, Iceland, Ireland, Italy,Japan, Luxembourg, Mexico, Kingdom of the Netherlands,New Zealand, Norway, Portugal, Singapore, Spain, Sweden,Switzerland, Turkey, United Kingdom, United States.


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NUCLEAR ENERGY AGENCYwww.nea.fr/[email protected]

More than 350 nuclear reactors provide almost a quarterof the electricity in the OECD area. For many OECDcountries, nuclear power is an important component inmeeting future electricity requirements. The NuclearEnergy Agency (NEA) helps its 27 member countries tomaintain and develop, through international co-operation, the scientific, technological and legal basesrequired for the safe, environmentally friendly and eco-nomical use of nuclear energy for peaceful purposes.

The NEA pursues a balanced programme of work innuclear safety and regulation, radioactive waste manage-ment, nuclear law and liability, nuclear development andeconomics, radiation protection and nuclear science.Several key areas were emphasised in 2001 and willmaintain high priority over the next two years. Theyinclude the role of nuclear power in the context of sus-tainable development; attention to societal concerns innuclear energy decision-making; modernisation of thesystem of radiation protection; and maintenance ofinfrastructure associated with nuclear power.

Nuclear energy and [email protected]

The NEA presented its report, Nuclear Energy in a Sustain-able Development Perspective, at the OECD Forum 2001 in May.The report assesses nuclear energy in the context of eco-nomic, environmental and social issues and identifiesindicators for measuring how the sector might contributeto sustainable development. A workshop jointly organ-ised with the IEA considered the relevance of externalcosts in assessing the economic competitiveness of elec-

tricity technologies and alternative fuels for the trans-port sector.

Civil [email protected]

The NEA has several activities to identify ways of invol-ving the public more closely in nuclear energy decision-making to imbue a spirit of greater trust, confidence andaccountability. A Forum on Stakeholder Confidence hasbeen established for radioactive waste management toanalyse lessons learnt regarding stakeholder interactionand public participation. A stakeholder workshopanalysed the interaction of different institutions, inclu-ding civil society, in the decision to select a repositorysite for disposal of used nuclear fuel in Finland. The NEAalso sponsored a meeting in Switzerland on The BetterIntegration of Radiation Protection in Modern Society.The NEA will be considering additional activities to sup-port public authorities in their efforts to take account ofsocietal needs in nuclear energy decision-makingprocesses.

Nuclear infrastructure and [email protected]

A major problem facing the international community isageing of nuclear energy personnel. The NEA is workingwith member countries on mechanisms to attract youngprofessionals. The NEA, together with the University ofMontpellier, has established an International School ofNuclear Law whose primary objective is to provide high-quality education to law students at doctoral or masterslevel and to young legal professionals. Students


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from 34 countries attended the first session. The NEAreport Trends in the Nuclear Fuel Cycle: Economic, Social andEnvironmental Aspects, published in 2001, offers a fresh lookat nuclear fuel cycle options and related technologicalchoices.

Nuclear safety, radiation protectionand nuclear waste [email protected]

NEA work continues in traditional technical areas inclu-ding nuclear safety, operating experience, risk assess-ment, and analysis and management of accidents. Headsof regulatory agencies, researchers and industry agreedat a Workshop on the Role of Nuclear Safety Researchthat such research is critical to effective regulation. Twonew international safety research projects are expectedto become operational at the beginning of 2002, investi-gating severe accidents and nuclear piping reliability. TheNEA actively contributes to the review of the principlesand philosophy of the international system of radiationprotection by preparing specific proposals for itsimprovement. In nuclear waste management, the NEAorganised, at the request of the US government, aninternational peer review of the Yucca Mountain Project,the proposed site for US spent nuclear fuel disposal.

Nuclear energy data

Nuclear Energy Data (the “Brown Book”) provides anannual update of statistical information and projections,country-by-country, on nuclear electricity generation andrelated fuel cycle capacities and requirements. All sup-porting stages of the nuclear fuel cycle are included: ura-nium production, conversion, enrichment, fuel fabrica-tion, spent fuel capacities and reprocessing. The forecasts

The role of nuclear energy in a sustainabledevelopment context has multiple facets, asignificant number of which relate to thenuclear fuel cycle. This report provides adescription of the developments and trends inthe nuclear fuel cycle that may improve thecompetitiveness and sustainability of nucleargenerating systems over the medium and longterm. It also presents criteria and indicatorsfor future nuclear energy systems.

“… I think that this year, the debates at the OECD Forum have shown that member countries are now more explicit about theimportance of nuclear energy as an element of the OECD programme of work.”

Luis Echávarri, Director-General of the Nuclear Energy Agency

currently extend to 2015 at 5-year intervals. The 2002 ver-sion will extend to 2020, be more reader friendly andprovide more complete information about each country’snuclear programme, latest developments and trends inthe nuclear energy field.


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INTERNATIONAL ENERGY [email protected]

The International Energy Agency (IEA) is the forum forenergy co-operation among 26 OECD member countries.It maintains a system of co-ordinated responses to oil-supply disruptions. The IEA promotes rational, market-oriented energy policies, the development and deploy-ment of clean energies and enhanced energy efficiency.To this end, the agency conducts regular peer reviews ofthe energy policies of member countries. IEA work alsofocuses on the link between energy and the environment,especially in relation to climate change.

The Czech Republic joined the IEA in 2001 and theRepublic of Korea is in the final stages of finalising itsmembership. Poland and the Slovak Republic are candi-dates for membership.

The Governing Board at Ministerial level met in May todiscuss energy security, market reform and the role ofenergy in achieving sustainable growth. Ministers com-mitted themselves “to strengthen energy security acrossthe full range of primary energies, to continue energymarket and regulatory reform; to expand access to energyservices; to improve energy efficiency; to support thedevelopment and transfer of energy technologies; andto foster a sustainable energy future”.

Oil markets and security

Energy security is, and remains, the IEA’s core mission.The IEA is equipped to act quickly to meet any supplyproblems and renewed its readiness to face any poten-

This volume contains data on the supply andconsumption of coal, oil, gas, electricity, heat,combustible renewables and waste in energybalances. The figures are expressed in milliontonnes of oil equivalent. Historical tablessummarise key energy and economic indicatorsas well as production, trade and final consump-tion data. This book includes definitions ofproducts and flows. There are explanatory noteson the individual country data and conversionfactors from original units to tonnes of oilequivalent. Key indicators have been providedsince 1960. More detailed data in original unitsare published in Energy Statistics of OECDCountries, the sister volume of this publication.


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tial disruptions after the 11 September attacks in theUnited States. Members’ emergency oil stocks are,collectively, well above 90 days of net oil imports.

In 2001, lower global economic growth brought shrink-ing oil demand which producers sought to match withproduction cuts. Non-OPEC production is expected tocontinue to grow through 2002. In response to concernsabout increasing volatility in the market, the IEAlaunched an initiative to improve oil data transparency.The effort involves key international organisations and70 countries. The initial results have been extremelypromising.

Energy and climate change

The IEA continued work on domestic and other action tocurb energy-related greenhouse gas emissions, attend-ing the COP6 meeting in Bonn and the COP7 meeting inMarrakesh. International Emission Trading: From Concept toReality moves the debate from “whether” to trade to “how”it can be done. At the meeting of the UN Commission onSustainable Development in April 2001, the IEA tabledits members’ collective interpretation of their role inensuring sustainable development.

Energy diversification

Analytical work continues on market reform in the gasand electricity industries, including electricity transmis-sion, distributed power and flexibility in gas supply anddemand. The IEA also completed a comprehensive studyof future world energy supply, World Energy Outlook – 2001

Insights: Assessing Today’s Supplies to Fuel Tomorrow’s Growth.Reserves of oil, gas, coal and uranium are more thanadequate to meet projected demand growth until 2020and beyond, but massive investment in energy pro-duction and transportation infrastructure will be needed.

Energy technology

Some 40 IEA international collaborative programmes,involving member and non-member countries, encour-age the development and use of clean, efficient energytechnology. The IEA is host to the secretariat of theClimate Technology Initiative (CTI) which fosters use ofclimate-friendly technologies in developing and trans-ition countries.

The IEA is increasingly active in providing analysis andinternational collaboration for renewable energy issues.All member governments have commitments to expandthe renewable element of their energy supply.

The IEA gave high importance to increasing energy effi-ciency and worked to accelerate the broader commer-cial application of clean-fuel technologies. It spear-headed international co-operation on labels andstandards for electrical appliances and equipment.

Relations with non-members

The IEA strengthened its relationships with China, Indiaand Russia through implementing agreements and othercollaborative efforts and prepared an in-depth review ofRussian energy policies.


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The European Conference of Ministers of Transport(ECMT) is an intergovernmental organisation whereministers responsible for inland transport co-operateon policy development. There are 41 full member coun-tries, six associate member countries and two observercountries. The ECMT is administratively part of theOECD and contributes to many activities within theorganisation.

The annual ministerial meeting in May 2001 in Lisbonendorsed a series of recommendations on transport forpeople with reduced mobility as well as discussing a widerange of other transport issues including sustainabletransport and combating crime in transport.

Accessible transport

The annual ministerial meeting adopted a resolution onaccessible transport for people with reduced mobility,which also takes account of the needs of the elderly. Theresolution brings together in a single document all theECMT’s earlier resolutions regarding access to buses,trains and coaches; transport for wheelchair users; andparking facilities for people with reduced mobility.

With the ageing of populations, transport systems willbecome less safe unless additional measures are taken,not because old people are more dangerous, but becausethey are more fragile. Such measures include design ofinfrastructure and vehicles, the management of traffic andthe infrastructure provided to users.

Sustainable urban transport

The current project on implementing sustainable urbantravel policies began in 1998. The project focused on

EUROPEAN CONFERENCE OF MINISTERSOF TRANSPORT

www.oecd.org/cem/[email protected]

the implementation of sustainable policies for travel incities. Ministers in 2001 approved the project’srecommendations, which included establishing a sup-portive national policy framework and improving insti-tutional co-ordination and co-operation. They endorsedrecommendations to decentralise responsibilities whenpossible and centralise when necessary, as well as toencourage effective public participation, partnershipsand communication. The ministers also called for a sup-portive legal and regulatory framework, comprehensivepricing and fiscal structure, rationalised financing andinvestment and improved data collection, monitoringand research.

Follow-up work will focus on monitoring implementationof these recommendations, in particular by examiningthe implications for specific groups of countries (e.g.central and eastern Europe), and exploring ways toimprove consistency in urban data collection and moni-toring. A guide to good practice will be developed to helpgovernments establish a supportive policy and institu-tional framework and establish positive incentives forsustainable travel in urban areas.

Pan-European integrationof transport

While transport problems are increasingly similar acrossECMT countries, countries in central and eastern Europe,as well as the former Soviet economies, face many parti-cular difficulties in terms of infrastructure and the splitbetween different modes of transport. An ECMT PolicyForum in February 2001 identified several key issuesincluding the problem of priorities in infrastructure plan-ning, financing sources and the need for a clear policyframework.


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Do older road users pose a safety risk to others?Is mandatory testing effective in determiningthe driving competence of older drivers? AreOECD Member countries prepared to meet thesafety and mobility needs of the baby boomgeneration in the 21st century? This reportdispels many of the myths and misperceptionscommonly held regarding elderly road users,and offers policy and research recommendationsto provide for their safe, lifelong mobility.

Combating crime in transport

Two reports were presented to ministers on “Theft ofGoods and Goods Vehicles in Europe” and on “ImprovingSecurity for Road Freight Vehicles”. Further work willaddress issues including illegal immigration, the impli-

cations of electronic tracking of goods and security inpassenger transport.

Road transport

Road transport across Europe continued to grow in 2000,up by 3.93% over 1999 and a threefold increase since1970. Road accident fatalities continue to decline, withthe number of people killed on the roads in 2000 inwestern Europe down by more than 2.6% and in centraland eastern Europe down by 4.9%, the best results since1996. Despite this marked improvement, the number ofdeaths on the European continent at over 100 000 peryear is an appalling and unacceptable consequence ofour mobility.

Research

The ECMT holds regular roundtables, seminars and sym-posia on transport economic issues to support and com-plete its policy work. Their conclusions serve as a basisfor formulating proposals for policy decisions to be sub-mitted to ministers. The introductory reports are thenpublished. Recently published titles are: “Round Table116: Transport of Waste Products” and “Round Table 117:Economic Evaluation of Road Traffic Safety Measures”.“What Role for the Railways in the East?” the result of aroundtable held in September 2001, was published inFebruary 2002. A joint OECD/ECMT seminar on the impactof e-commerce on transport was held in June 2001 with aview to analysing the interaction between e-commerceand transport and assessing the implications for trans-port of the growth in e-commerce. The conclusions areavailable on www.oecd.org/cem/online/ecom01/index.htm.

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EnvironmentEconomics

Counciland

Public Affairsand CommunicationsDirectorate

HumanResource Operations

LegalDirectorate

COUNCIL

SECRETARIAT

COMMITTEES

SECRETARY-GENERALDonald J. Johnston

PRIVATE OFFICE OF THE SECRETARY-GENERAL

DEPUTY SECRETARIES-GENERAL• Thorvald Moe• Herwig Schlögl• Seiichi Kondo

GENERAL SECRETARIAT

• Richard Hecklinger

FinancialControl and

ManagementConsultancy

EXECUTIVE DIRECTORATE

InternationalEnergyAgency

CO

MM

UN

ICAT

ION

S

Budgetand Finance

Management Service Service

StatisticsDirectorateDirectorateDepartment

ExecutiveCommitteeSecretariat

OECD ORGANISATION CHART

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NuclearEnergyAgency

EuropeanConferenceof Ministersof Transport

DevelopmentCentre

Centrefor Educational

Researchand Innovation

Clubdu Sahel

DevelopmentCo-operation

PublicManagement

Directoratefor Financial,

Fiscal and

Directoratefor Science,Technology

Directoratefor Education,Employment,

Labour and

Directoratefor Food,

AgricultureTerritorial

Development

Centre forCo-operation

withNon-members

InformationTechnology

and NetworkServices Interpretation

SEMI-AUTONOMOUS BODIES

Directorate Service and Industry Social Affairs and Fisheries ServiceEnterprise Affairs

OECD ORGANISATION CHART - MARCH 2002

AdvisoryUnit on

MultidisciplinaryIssues

TradeDirectorate

Translation


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OECD DIRECTORY

ECONOMIC GROWTH ANDSTABILITYwww.oecd.org/[email protected] surveyswww.oecd.org/macroeconomics/about/Country_Surveys/[email protected] and growthwww.oecd.org/[email protected]

Tourismwww.oecd.org/sti/[email protected] reviewswww.oecd.org/[email protected]

EMPLOYMENT AND SOCIALCOHESIONwww.oecd.org/[email protected]/Human capitalwww.oecd.org/[email protected]/[email protected]

OECD health projectwww.oecd.org/[email protected]

Migrationwww.oecd.org/[email protected] issueswww.oecd.org/[email protected]

TRADE AND INTERNATIONALINVESTMENTwww.oecd.org/[email protected] creditswww.oecd.org/trade/[email protected] and competitionwww.oecd.org/regreform/[email protected] tradewww.oecd.org/agriculture/[email protected]

Finance and investmentwww.oecd.org/finance/[email protected]

SUSTAINABLE DEVELOPMENTwww.oecd.org/sustainabledevelopment/[email protected]

Environmentwww.oecd.org/[email protected]

Energywww.iea.org; [email protected]; [email protected]

GOVERNANCEwww.oecd.org/[email protected]

Bribery and corruptionwww.oecd.org/[email protected]

Corporate governancewww.oecd.org/corporate/[email protected]

Regulatory reformwww.oecd.org/regreform/[email protected]

Taxationwww.oecd.org/taxation/[email protected]

Harmful tax practiceswww.oecd.org/taxation/ctpa/[email protected]

Electronic commercewww.oecd.org/ecommerce/[email protected]

Public governancewww.oecd.org/[email protected]

BEST USE OF NEWTECHNOLOGIESwww.oecd.org/[email protected]

ICTwww.oecd.org/ict/[email protected]

Biotechnologywww.oecd.org/biotechnology/[email protected]

Food safetywww.oecd.org/foodsafety/[email protected]

Future studieswww.oecd.org/[email protected]

DEVELOPMENTwww.oecd.org/[email protected]

Development Centrewww.oecd.org/[email protected]

Sahel and West Africa Clubwww.oecd.org/[email protected]

CO-OPERATIVE RELATIONSWITH NON-MEMBERSwww.oecd.org/[email protected]/ccnm/chinaRegional and country programmeswww.oecd.org/ccnm/regional

STATISTICSwww.oecd.org/[email protected] indicatorswww.developmentgoals.org

PUBLIC AFFAIRS ANDCOMMUNICATIONSwww.oecd.org/about

Publishingwww.sourceoecd.org/[email protected] relationswww.oecd.org/[email protected]

Forum 2001www.oecd.org/forum/2001OECD [email protected]

Business, labourwww.biac.org/; [email protected]; [email protected]

OECD [email protected]


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The OECD Council at Ministerial level met on 16-17 May2001, under the chairmanship of Prime Minister Poul NyrupRasmussen, Mr. Mogens Lykketoft, Minister of ForeignAffairs, and Ms Marianne Jelved, Minister for EconomicAffairs and for Nordic Co-operation of Denmark, assistedby the vice-chairs from Japan, Mr. Takeo Hiranuma, Ministerof Economy, Trade and Industry, Mr. Heizo Takenaka, Minis-ter of Economic and Fiscal Policy, Mr. Shigeo Uetake, SeniorVice-Minister for Foreign Affairs, Mr. Hisashi Kazama, SeniorVice-Minister of the Environment and from the SlovakRepublic, Mrs Brigita Schmögnerová, Minister of Finance,Prof. László Miklós, Minister of Environment, and Mr. PeterBrno, State Secretary, Ministry of Economy. Consultationswere held with the Business and Industry Advisory Com-mittee (BIAC) and the Trade Union Advisory Committee(TUAC) to the OECD.

We welcome the accession of the Slovak Republic to theOECD. Slovakia’s accession completes more than a decadeof progress on reform that accelerated with the launchingin 1991 of OECD’s Partners in Transition Programme withthe Czech and Slovak Republics, Hungary and Poland.

Our societies, as well as those of all other countries, facemajor transitions. We look to OECD to continue its path-finder role of identifying and evaluating emerging policyissues and developing new policy concepts and approachesin areas where the Organisation has comparative advantage.OECD contributes to deeper international understanding,a more stable international economic system and enhancedprosperity worldwide, through its unique and indispensableintergovernmental process of analysis, dialogue and policydevelopment.

We are committed to shaping globalisation to the benefitof all, and ensuring that the poorest are not left behind. Werecognise the need, nationally and internationally, to bringgreater coherence across the range of policies that impacton the achievement of this goal. Trade, investment anddevelopment policies, in particular, have a vital contribu-tion to make to sustainable development and povertyreduction: strengthening the coherence among these policyareas deserves special attention. We look to OECD to assistus in this task.

OECD and the wider worldOECD’s co-operation and dialogue with countries in all re-gions of the world is a powerful instrument for advancingeconomic, environmental and social progress towards a

more peaceful world. This process is open to the range ofpartners outside the Organisation’s membership who shareour commitment to the development of a rules- and values-based open world economy. We endorse the Organisation’sprogrammes of co-operation with countries outside OECDand welcome the growing interest among Non Members inparticipating in OECD’s work. OECD remains open, on thebasis of mutual interest, to membership by countries sharingthe same values while being selective and pursuing theOrganisation’s tradition of high standards for membershipas well as efficiency and relevance to its Members. We valuethe bridges OECD can build with non-Member countries incommon pursuit of reform and their successful integrationinto the international economic system.

Our discussions with Ministers from Brazil, China, Indonesia,Mali, Romania, Russia, Singapore and South Africa at ourCouncil Meeting this year are a contribution to strength-ened confidence in the multilateral trading system and astep toward the launch of new WTO negotiations in Doha inNovember this year.

OECD’s enhanced co-operation with its long-standing part-ners BIAC and TUAC has been complemented over the lastyear by strengthened co-operative activities with NGOs and

OECD COUNCIL MEETING AT MINISTERIAL LEVELCOMMUNIQUÉ: TOWARDS A SUSTAINABLE FUTUREwww.oecd.org/about

Marianne Jelved, Danish Minister for Economic Affairs andVice Prime Minister, with Donald Johnston, OECDSecretary-General, at the final press conference after theministerial meeting.


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other representatives of civil society. This continuingdialogue builds trust in public institutions and promotespublic understanding of the benefits and challenges ofglobal economic and social change. We welcome OECDForum 2001 as an effective multi-stakeholder dialogue pro-viding valuable input to our work.

Economic perspectivesThe world economy has slowed significantly since we lastmet in June 2000. Growth in the OECD area is now projectedto decline to around 2% in 2001, half the rate achieved lastyear. In addition, some large current account imbalancespersist. However, the foundations are in place for a returnto stronger growth, and inflation is expected to remain low.Macroeconomic policies and structural reforms should aimto enhance productivity growth and increase employmentover the long term.

The United States economy has experienced a significantslowdown. Long-term fundamentals remain strong. Mone-tary policy should continue to aim at sustained non-inflationary growth. Fiscal policy should focus in the mediumterm on economic efficiency and fiscal soundness, includ-ing encouragement of higher private savings.

In Japan, prospects for a self-sustained recovery in the shortterm are uncertain while prices continue to decline andgovernment debt is increasing. Monetary policy needs toprovide ample liquidity until consumer price inflation staysat or above zero. The fiscal policy in place has been gearedto aid recovery, but a credible medium-term strategy forfiscal consolidation and structural reforms must be devel-oped without delay. We welcome the Japanese authorities’strong intent to resolve balance sheet problems in the

financial and corporate sectors and to enhance structuralreform in securities and real-estate markets. Vigorous imple-mentation of this strong intent is essential and regulatoryreform should be quickened.

Growth in Europe will slow this year, but prospects arefavourable. Economic fundamentals remain good and un-employment will continue to decline. Further structuralreforms that increase the efficient operation of labour, pro-duct and financial markets are needed to strengthen long-term growth and reduce unemployment on a durable basis.In the euro area, with upside risks to price stability dimin-ishing, scope for an easing of monetary policy emerged.Fiscal tightening over some years has created room for thetax cuts being implemented in most European countries.These will support demand and improve incentives for workand investment and thus supply-side conditions. Tax cutsin these countries need to be accompanied by firm controlover public expenditure: population ageing will impose alarge burden on public finances and will require thestrengthening of pensions systems and further reductionsin public debt in most countries. The introduction of euronotes and coins on 1 January 2002 will give a further impetusto economic integration, with potentially important benefitsfor both the euro area and the global economy.

Sustainable development: integratingeconomic, environmental and socialobjectivesSustainable development is an overarching goal of OECDgovernments and the OECD. The three dimensions of sus-tainable development – enhancing economic growth, pro-moting human and social development, and protecting theenvironment – are interdependent objectives requiringconcerted international action by OECD, transition anddeveloping countries, based on their common and differ-entiated responsibilities, to deliver essential public goodsof a global nature. We recognise that OECD countries beara special responsibility for leadership on sustainabledevelopment worldwide, historically and because of theweight they continue to have in the global economy andenvironment. We recognise the urgency of the challengeand the gap between policy design and implementation.We are committed to closing this gap and will work ener-getically with countries outside the OECD’s membership toachieve our joint sustainable development goals.

We agree that real progress must be made, nationally andinternationally, in order to succeed at the World Summit onSustainable Development in Johannesburg in September2002. We will ensure that sustainable development strate-gies are put in place in all our countries by the time of theWorld Summit. OECD’s Roundtable on Sustainable Devel-opment should strengthen its role as a forum for interna-tional dialogue among stakeholders. We endorse OECD’sEnvironmental Strategy for the First Decade of the 21st

Laurent Fabius, French Minister for the Economy, Financeand Industry (left), and Poul Nyrup Rasmussen, DanishPrime Minister.


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Century1 , and look to OECD to support and monitor itsimplementation. We welcome IEA Ministers’ Communiqué2

on the place of energy in a sustainable future.

OECD’s report Policies to Enhance Sustainable Development out-lines a policy framework for better integrating economic,environmental and social objectives, and decoupling eco-nomic growth from a range of environmental pressures. Thereport emphasises the need for sound analysis based onstrong science that considers the full range of policy instru-ments and associated costs and benefits. We endorse thepolicy recommendations derived from it:

• Make markets work: All OECD countries should make betteruse of market-based instruments and combine themeffectively with regulation. Measures to encourage vol-untary initiatives and programmes to raise awarenesshave a role to play. The implementation of instrumentssuch as tradable permit systems, environment-relatedtaxes, and the phasing out of support programmes thatare environmentally damaging in agriculture, fisheries,transport, energy, manufacturing and elsewhere, shouldbe pursued, and applied according to national circum-stances. This will contribute to the development of sus-tainable consumption and production patterns.

• Respond to climate change: We recognise that climate changeis the most urgent global environmental challenge,requiring strong leadership and action by OECDMembers, in accordance with their common but differ-entiated responsibilities, and working closely with tran-sition and developing countries under the UnitedNations Framework Convention on Climate Change(UNFCCC). OECD governments recognise the need tosignificantly reduce global greenhouse gas emissions,with developed countries taking the lead, and to pro-tect and enhance greenhouse gas sinks and reservoirsin order to stabilise concentrations in the atmosphereover the long term at a level that would prevent danger-ous anthropogenic interference with the climate system.We will fully implement our national commitments, suchas emission limitation and reduction targets, includingthose established under the UNFCCC. While recognisingour differences over the Kyoto Protocol, OECD govern-ments are determined to work together to addressclimate change and will participate constructively in theresumed COP6 in Bonn. For a large majority of OECDcountries this means seeking entry into force of theKyoto Protocol by 2002, with timely ratification pro-cesses, and with the broadest possible support of theinternational community. We ask OECD to continue tocontribute to the analysis and international dialogue onthese issues.

• Manage natural resources: The market prices of naturalresources must reflect the full environmental and socialcosts and benefits of economic activity, to take betteraccount of non-market values and long-term impacts.Progress requires improving the knowledge basethrough research on environmental thresholds and non-market values, making markets better serve conserva-tion goals, and reducing the net costs of waste flows.

• Harness science and technology: Scientific research and inno-vation can enhance the efficiency of resource inputs andthe environmental quality of growth. The increased useof market signals to achieve environmental objectiveswill boost the contribution of science and technology tosustainable development. New information and com-munications technologies (ICT) offer possibilities for sig-nificant reductions in the use of materials, energy andtransport, and potential new directions in environmen-tal policy design, implementation and monitoring.

• Strengthen decision-making and information: Improved policyintegration and coherence at all levels of government,closer involvement of parliaments, and better mecha-nisms for interacting with citizens and civil societyorganisations, including greater public access to infor-mation and participation in decision-making, arerequired. When designing policies for sustainabledevelopment, countries should apply precaution asappropriate in situations where there is lack of scien-tific certainty.

• Linkages with the global economy: Trade, investment, envi-ronmental and social policies should be coherent andmutually supportive. Ensuring that the benefits ofglobalisation and technological advance are widelyshared requires open world markets. We must alsoencourage environmentally and socially sustainable

(left to right): Didier Reynders, Belgian Minister ofFinance, Geir H. Haarde, Icelandic Minister of Financeand Pascal Couchepin, Swiss Federal Counsellor and Headof the Federal Department of the Economy.1. PAC/COM/NEWS(2001)46.

2. IEA/PRESS(01)13.


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growth in developing countries through improvedmarket access for developing countries to OECDmarkets, and support for capacity building, co-operationin the area of technology, good governance, and povertyreduction.

OECD will continue to assist governments by:

• developing agreed indicators that measure progressacross all three dimensions of sustainable development,including decoupling of economic growth from environ-mental degradation, with a view to incorporating theseinto OECD’s economic, social and environmental peerreview processes, and filling gaps in the statistical andscientific data;

• identifying how obstacles to policy reforms, in particularto the better use of market-based instruments, and tothe reduction of environmentally harmful subsidies, canbe overcome; and deepening its analytical work on theseinstruments;

• analysing further the social aspects of sustainabledevelopment, including work on human and social capi-tal, as well as their interaction with their economic andenvironmental dimensions;

• providing guidance for achieving improved economic,environmental and social policy coherence and integration.

OECD will report progress to us in 2002, in particular on theuse of sustainable development indicators, with a view tocontributing to the forthcoming Johannesburg Summit.

The social dimension of sustainabledevelopment

Social cohesion

Deepened social cohesion is a central objective for sustain-able development. We are thus committed to fighting thecauses of poverty and social exclusion: persistently lowincomes, lack of opportunities to work and to learn, andlack of access to good quality public services affect parti-cular groups and areas and prevent progress toward sus-tainable development. Extending opportunities for workand good careers, to all those who can work, is a key elementin any strategy to combat poverty and social exclusion.OECD unemployment has declined significantly in recentyears, but more needs to be done to reduce long-term un-employment and benefit dependency within the contextof an adequate social safety net. We welcome OECD’s workon employment-oriented social policies to help tackle socialinequalities, facilitate adjustment to rapid economic restruc-turing, and improve growth prospects. The recent UK/OECD

Ministerial Conference Opportunity for All3 , in London on9-10 October 2000, demonstrated how concerted actionacross different parts of government can successfully tackledeprivation.

Ageing

The consequences of population ageing remain a majorconcern for OECD economies. OECD’s review of retirementincome systems shows that countries are putting in placereforms, but more needs to be done to strengthen themand make “active ageing” a reality. Further reforms areneeded to encourage continued labour force participationof older workers and to achieve a better balance, takingaccount of national context, among various forms of pen-sions, to support the fundamental goal of ensuring adequateincomes in old age. We welcome OECD’s work on activeageing, including its contribution to the Turin Charter4 . Wemust urgently address the barriers against hiring, retrainingand retention of older workers, and we look forward toOECD’s work on this topic.

Health

Health is vital to sustainable development. Health systemsare an important element in social cohesion and representthe largest service sector in many OECD countries. Theirefficiency, effectiveness and equity consequences, theirimpact on public finances, and their ability to meet the chal-lenges of medical advances, ageing populations and risingexpectations require creative policy approaches. OECD’sHealth Project will provide policy guidance on thesematters, and we look forward to the Ottawa Conference inNovember 2001 on improving the performance of healthsystems.

Migration

Migration is an increasingly pressing issue, for immigrantand emigrant countries, their governments and the generalpublic. It raises a host of social, economic, developmentand foreign policy challenges and opportunities. OECD is akey reference point for the monitoring of migration trendsand policies. We look to OECD to deepen and extend itsanalysis of the economic and social impacts of migration inboth host and origin countries, including the internationalmobility of workers at different skill levels.

Growth, technology and human capitalAt their May 1999 meeting, Ministers asked OECD to analysethe causes underlying differences in growth performance inOECD countries and identify factors, institutions and poli-cies that could enhance longer-term growth prospects. Wewelcome the report The New Economy: Beyond the Hype andendorse its main conclusions. New technology, in particularICT, is only one factor behind divergences in growth pat-terns over the past decade. Other factors include the useand quality of labour and greater efficiency in the combina-

3. PAC/COM/NEWS(2000)88.

4. Towards Active Ageing, 10-11 November 2000.


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tion of labour and capital. Seizing new growth opportuni-ties requires a set of mutually reinforcing policies:

• Get the fundamentals right. Stable macroeconomic poli-cies are a prerequisite for a successful growth strategy,higher employment and price stability. Fiscal disciplineand productivity-oriented wage developments contri-bute to low inflation, and reduce uncertainty, thusenhancing the efficiency of price mechanisms in allo-cating resources and strengthening consumer and inves-tor confidence. More open, competitive and efficientproduct, financial and labour markets and institutionsspur change and make economies more adaptable.

Favourable macroeconomic conditions and structuraland regulatory reforms reinforce each other, increasingopportunities for innovation and growth potential.

• New technology has heightened the role and importanceof education and the development of human capital. Acomprehensive life-long learning strategy is required,including: access to early childhood education and care;a solid foundation in basic education; a better school-to-work transition with closer links between educationand the labour market; and effective training systemsthat provide lifelong educational opportunities. We re-cognise the need to enhance the capacity of human

resources to cope with new technology and to adaptlabour market institutions to the changing nature of work.We welcome the ambitious framework Investing in Com-petencies for All5 adopted by Education Ministers attheir April 2001 meeting.

• Research, innovation and entrepreneurship are key togrowth. We will sustain our commitment to adequatefunding of basic research and seek to improve the effi-ciency and effectiveness of public money for researchand development, to foster intellectual propertyregimes that promote innovation and ensure its diffu-sion, and to remove barriers to effective interactionbetween science and industry. We will work to ensurean environment favourable to business and risk-taking,and particularly for new firms and SMEs as set out in theBologna Charter. We are committed to improving accessto high-risk finance and reviewing burdensome admin-istrative regulations and bankruptcy provisions.

• Specific policies for the successful use of ICT. We willwork to facilitate the diffusion of ICT by increasing com-petition in the ICT sectors, especially telecommunica-tions and fostering users’ trust in those sectors. Thepublic and private sectors should work together toensure that ICT applications, such as e-commerce,become secure and reliable to use.

The work of the Growth Project is central to our concernsabout improving growth performance. OECD will continueits analysis, to enhance understanding of the roles of ICT,human and social capital, and the factors that promote asuccessful, competitive business environment, including atlocal and regional levels, and will strengthen itsbenchmarking and peer review of structural reform. OECDwill also deepen its work on the relationship between growthand sustainable development. OECD will report to us in2003.

Good progress has been made in fulfilling the 1998 OECDMinisterial Declarations on Privacy, Authentication and Con-sumer Protection in relation to electronic commerce. Workwill continue in these areas to deepen trust in e-commerce.An efficient, effective and transparent fiscal framework fore-commerce is also essential: implementation of the OttawaTaxation Framework Conditions is advancing6 , and will bethe subject of a global conference, Tax Administration in anElectronic World, to be held in Montreal in June 2001.

A “digital divide” has arisen within and among OECDMember countries as well as between the developed andthe developing world, and will widen if countries do not orcannot respond adequately to the new technological oppor-tunities. OECD work shows pro-competitive policies andappropriate regulatory structures are essential elements forbridging this divide. We welcome the results of the DubaiConference on these issues held in January 2001. Weencourage OECD to continue to build co-operation with

Svend Auken, Danish Minister for the Environment andEnergy, at a press conference on sustainable developmentat the ministerial meeting.

5. PAC/COM/NEWS(2001)32.

6. See Taxation and Electronic Commerce : Implementing the Ottawa Tax-ation Framework Conditions, May 2001


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transition and developing countries and with other inter-national bodies, including through its important contribu-tion to the G8 DOT Force initiative to implement theOkinawa Charter. We look forward to the OECD Global Forumon the digital economy in 2002.

Economic and social disparities between regions areincreasing and prospects for prosperity are uneven. OECD’sTerritorial Reviews7 will make an important contribution tothe regional and local dimensions of our policies.

We welcome the success of the two conferences held inNovember 2000: Gender Mainstreaming: Competitivenessand Growth and Women Entrepreneurs in SMEs. We lookto OECD to further integrate gender analysis into its work,and take steps to improve gender balance within theOrganisation.

GovernanceStrengthening effective and coherent public governanceremains a priority on the policy agenda. The effective per-formance of democratic institutions, including legislatures,and the fight against corruption, are central elements of goodgovernance. Enhanced openness, transparency, andaccountability must become guiding principles for govern-ments within OECD’s membership and beyond. OECDshould continue to make a vital contribution through itsdialogue on public governance with Non Members. Wewelcome the conclusions of the Third Global Forum on E-Government held in Naples in March 2001 and ask OECD toexplore further the challenges and opportunities of e-government.

There is increasing public debate about the comparativebenefits and costs of regulation and deregulation in Membercountries. OECD’s continuing analysis of regulatory reformshows that carefully designed policies enhance regulatoryquality, strengthen consumer choice and reduce prices; thereviews of regulatory reform in Member countries8 providesubstantial multidisciplinary guidance on regulatorymanagement. We welcome OECD’s Recommendation onStructural Separation of Regulated Industries which, whilerecognising industry and country differences, provides guid-ance on competition-enhancing reform of public utilities.We support OECD’s work to develop principles and bestpractices for the regulation of private pensions.

Fighting corruption remains a high priority. Further progressin the ratification of the Bribery Convention has been made:32 countries have deposited instruments but implement-ing legislation is lacking or deficient in some. Monitoringimplementation of the Convention and the related Recom-mendations, including the effective elimination of taxdeductibility for bribes, must be rigorously pursued andreinforced. OECD will move ahead on related issues: briberyacts in relation with foreign political parties; advantagespromised or given to any person in anticipation of thatperson becoming a foreign public official; bribery of foreignpublic officials as a predicate offence for money launderinglegislation; and the role of foreign subsidiaries and of off-shore centres in bribery transactions. We encourage effortsto engage a broad range of countries outside OECD in thefight against corruption, including regional initiatives, andsupport accession to the Convention by qualified states.

We note the work undertaken on harmful tax practices andlook forward to the conclusions of the OECD project.

The corporate world: governance and responsibility

We welcome the work of OECD in co-operation with theWorld Bank and in particular the successful corporate gov-ernance roundtables that have been held during the pastyear in Asia, Latin America, Russia, and Eurasia. Theseroundtables are playing an important role in strengtheningcorporate governance worldwide and will assist OECD inpreparation of the first assessment of the OECD CorporateGovernance Principles in 2005. We look forward to analyti-cal work and the exchange of information among Member

Brigita Schmögnerová, Slovak Minister of Finance, withVitor Manuel Silva Santos, Portuguese Deputy Secretaryof State for the Economy.

7. Reviews completed so far: National – Hungary, Italy Korea.Regional – Teruel and CCV (Spain), Tzoumerka (Greece) andBergamo (Italy). In 2001/2, Canada, Mexico, and Switzerland areexpected to be reviewed at the national level, together with anumber of regions in other Member countries.

8. Reviews completed so far: Czech Republic, Denmark, Greece,Hungary, Ireland, Italy, Japan, Korea, Mexico, the Netherlands,Spain and the United States. In 2001/2002 Canada, Poland, Turkeyand the United Kingdom are to be reviewed. There are severalcandidates interested in being reviewed in 2002/3, includingGermany.


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countries on their corporate governance experiences in thepreparation for that assessment. We also welcome OECD’sReport on the Misuse of Corporate Vehicles9 for IllicitPurposes, which will contribute to efforts to combat corrup-tion and money laundering.

Private initiatives for corporate responsibility are alsoincreasing: we invite OECD to build on this positive devel-opment in support of effective implementation of the OECDGuidelines for Multinational Enterprises. We reaffirm ourcommitment to the Guidelines and the need for allstakeholders to pursue the ongoing constructive dialoguethat underpinned the review of the Guidelines in 2000. Wesupport further agreed analytical work in the field of corpo-rate responsibility and expect the forthcoming Annual Meet-ing of National Contact Points to enhance further theimplementation of the Guidelines.

International investment is an important engine for globalsustainable growth and the integration of Non Members intothe world economy. The OECD Global Forum on Investmentin November 2001 and the UN High Level Conference onFinancing for Development, to be held in Mexico in 2002,will benefit from OECD’s analytical work on foreign directinvestment. We welcome the intention of Estonia, Israel,Latvia, Lithuania, Singapore, Slovenia and Venezuela toadhere to the Declaration on International Investment andMultinational Enterprises, and encourage other countriesto do the same.

The multilateral trading systemWe are committed to the launch of a new global round ofmultilateral trade negotiations at the WTO Ministerial Con-ference in Doha in November. We will engage constructivelywith all countries within the WTO to this end. Progress isbeing made in the “built-in agenda” negotiations on serv-ices and agriculture. We recognise that efforts to strengthenthe multilateral trading system require both broad-basedand balanced negotiations and the strengthening of the WTOas a rules-based institution. The broader framework of anew round will contribute to moving forward the “built-inagenda” and will offer the prospect of a wider distributionof the benefits sought by all participants. We renew our com-mitment to the strengthening of the multilateral tradingsystem and our rejection of protectionist pressures.

All WTO members will have to find their concerns and in-terests reflected in the final result, and negotiations willneed to be conducted in a transparent manner. We mustaim for trade liberalisation and strengthened WTO rulesresponding to the needs of the 21st century and our shared

goal of sustainable development. The links between tradeliberalisation and environment, as well as the sustainableuse of natural resources, will need to be carefully clarified.All WTO members will need to be creative and flexible inaddressing areas and modalities of negotiation. Trade andlabour as well as other social development issues raise con-cerns that must be addressed through dialogue that takesinto account the expertise of all relevant internationalinstitutions, including the WTO.

A new round is essential for developing countries given theneed to stimulate their economic growth, alleviate povertyand promote their integration into the multilateral tradingsystem. We recognise that they have a particular interest ina number of areas, including agriculture and textiles andclothing. Some progress has been made to date on UruguayRound implementation issues and we urge all WTOmembers to seek ways to address developing countryrequests and concerns, and to build confidence as prepa-rations for Doha proceed. We welcome recent initiatives byOECD Members to liberalise preferential market access forthe least developed countries, and the moves to incorpo-rate trade into poverty reduction strategy programmes.Enhanced capacity building and technical assistance are alsovital, if developing countries are to benefit from more openmarkets. We support the recently revised Integrated Frame-work Initiative.

Taking into account the strong interest of civil societyregarding globalisation and the process of trade and invest-ment liberalisation, we are committed to transparency andto increased and sustained communication with the public.We are convinced that progressive multilateral liberalisa-tion and strengthening of the rules, in the context of aneffective and predictable governance framework and greatercoherence among international organisations, and whencombined with mutually supportive environmental and

(left to right) Hwang Doo-Yun, Korean Minister for Trade,Pierre Pettigrew, Canadian Minister for InternationalTrade, Lydie Polfer, Luxembourg Deputy Prime Ministerand Minister for Foreign Affairs and External Trade, andGerrit Ybema, Netherlands Minister for Foreign Trade,Ministry of Economic Affairs.

9. Corporate vehicles are legal entities, including corporations,trusts, foundations, and partnerships with limited liability features,through which a wide variety of commercial activities are conductedand assets are held.


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social policies, are fundamental for sustainable develop-ment and a major driving force for innovation, growth andenhanced human welfare worldwide. WTO-consistent pref-erential trade agreements can complement but cannotsubstitute for coherent multilateral rules and progressivemultilateral liberalisation.

We consider that OECD has a major role to play in continu-ing efforts to strengthen the multilateral trading system, andbuild understanding of what is at stake for countries at alllevels of development. OECD will continue to build bridges,through its analytical work and its non-negotiating policydialogue, among its membership and beyond. We welcomeongoing efforts in OECD to promote greater coherencebetween trade and development co-operation policies. Welook forward to a progress report in 2002.

Export credits

Export credit policy can contribute positively to sustainabledevelopment and should be coherent with its objectives.We welcome the substantial progress achieved in the ExportCredit Working Party towards agreement on a Recommen-dation on Common Approaches on Environment and ExportCredits and encourage the Working Party to finalise this workas soon as possible and before the end of 2001, as werequested last year. We also welcome the Working Party’sAction Statement on Bribery and Export Credits and its workon unproductive expenditure in Heavily Indebted PoorCountries, together with the readiness of a number ofMembers to voluntarily extend the latter to other low-income countries. We urge the Working Party to finalise theStatement of Principles on Unproductive Expenditure andExport Credits and to continue to promote enhanced trans-parency in this field. We strongly regret that it has not beenpossible for all Participants to the Export Credit Arrange-ment to reach full consensus on the draft Export Credit

Understanding on Agriculture, and call for urgent conclu-sion of this Understanding. We encourage further work onthe financing provisions of the Export Credit Arrangementin the light of, inter alia, recent developments in the WTO.We ask OECD to continue to work on the export credit pro-visions of the 1994 Understanding on Shipbuilding with aview to implementing these before the end of 2001.

ShipbuildingWe ask OECD to redouble its efforts to explore solutions tobring about normal competitive conditions in shipbuilding,and encourage shipbuilding countries outside the OECD toparticipate in this work.

Agriculture and fisheriesAgriculture and fisheries are key sectors for sustainabledevelopment and the multilateral trading system.

• While decreasing in 2000 following two years of increase,support to agriculture in the OECD area remains high ataround US$ 327 billion, as measured by the ProducerSupport Estimate10 . Despite some shift away frommarket price support and output payments, these con-tinue to be the dominant forms of support in most coun-tries, with consequent adverse impacts on productionand trade, in both developed and developing countries.The WTO negotiations within the “built-in” agenda11 pro-vide an important opportunity for further reform, whichwill bring economic, environmental and social benefits.OECD’s analysis of multifunctionality, decoupling, theimpacts of the Uruguay Round Agreement and varioustrade-related topics, including environmental linkages,is an essential contribution to the understanding ofagricultural policies and their international impacts.

• Fisheries policies have to address the relation betweensustainable management of resources and trade liberal-isation, the causes of unsustainable fishing, and the needto avoid those subsidies that are harmful, to be furtheranalysed by OECD based on its recent study, Transitionto Responsible Fisheries. This study is a valuable contribu-tion, and we look to OECD, in co-operation with the FAOand other international organisations, to deepen itsanalysis in these fields to inform policy development.

Food safetyFood safety continues to be a high priority for consumersand governments. We agree that a science-based andrules-based approach must remain the basis for policy atboth the national and international levels. In cases wherethe scientific evidence is insufficient and precaution is

Hendrik Vygen, Deputy Director-General for ExternalEconomic Policy and European Policy at the GermanMinistry of Economics and Technology (left), with CaioKoch-Weser, German State Secretary for Finance.

10. Agricultural Policies in OECD Countries: Monitoring and Evaluation 2001.

11. Cf. Article 20 of the Uruguay Round Agreement on Agriculture.


93

applied to address risks to food safety, measures takenshould be subject to review and on-going risk analysis,consistent with the WTO Agreement on the Application ofSanitary and Phytosanitary Measures. In co-operation withother international organisations, and in light of its recog-nised areas of expertise, OECD’s programme of work willcontribute to analysis and policy dialogue on wider issuesof food safety.

Life sciences and biotechnologyThe life sciences and biotechnology are increasingly rele-vant for the improvement of the quality of life, human healthand the quality of the environment. These advances alsopose important ethical, social, economic and safety chal-lenges for individuals and societies. We stress the impor-tance of biological diversity – its study, preservation andsustainable use, and the equitable sharing of benefits fromthe use of genetic resources – and of making biodiversitydata available to all. We welcome OECD’s contributions inthese areas, notably on Biological Resource Centers, andthe establishment of the Global Biodiversity InformationFacility (GBIF) endorsed by the OECD Science Ministers’meeting in June 1999. We also look forward to progress inOECD’s work on issues arising from the mapping of thehuman genome.

We welcome the forthcoming conferences which will deepeninternational understanding of biotechnology issues: thejoint UK/OECD Conference New Biotechnology, Food andCrops: Science, Safety and Society to be held in Bangkok inJuly 2001, and The Environmental Impacts of Living Modi-fied Organisms to be hosted by the United States inNovember.

Development co-operationThe International Development Goals12 are at the heart ofdevelopment policy and provide a key common referencepoint. OECD’s new Guidelines on Poverty Reduction andits guidance on Sustainable Development Strategies, Con-flict Prevention and Trade Capacity Development13 areimportant contributions to the achievement of these goals.We are committed to providing effective ODA consistentwith our support for the International Development Goals.We welcome the growing recognition of the importance ofcloser harmonisation of donor procedures and practices.

We welcome the Recommendation on Untying Aid to theLeast Developed Countries which was adopted to contri-bute to aid effectiveness, increase value for money in aidprocurement, improve developing country ownership of the

12. Formulated in DAC’s Shaping the 21st Century (1996) andembedded in the UN Millennium Declaration (2000).

13. Development Assistance Committee High Level Meeting 25-26 April [PAC/COM/NEWS(2001)40].

development process, and promote more equitable effort-sharing among aid donors. This agreement is especiallywelcome at the time of the Third United Nations Confer-ence on the Least Developed Countries currently takingplace in Brussels.

Development issues arise in a very broad range of govern-ments’ policies and actions, and therefore also within thework of the Organisation. The Illustrative Checklist on PolicyCoherence for Poverty Reduction is a useful tool to helpOECD governments in this area. We also encourage theOrganisation to deepen its work on policy coherence anddevelopment and look forward to proposals in this regard.

We congratulate Donald Johnston on his reappointment asSecretary-General. We welcome the progress he has madein modernising the Organisation, and ask him to take forwardthe reform agenda – on financial and management reform,on further prioritisation of the Organisation’s work, and onenhancing the Organisation’s capacity to address theincreasingly complex and interconnected issues ofglobalisation – to equip OECD to respond to the policy chal-lenges of the next decade and beyond. We recognise themajor challenge of renovating the Organisation’s Headquar-ters in an efficient and cost-effective manner, and we arefully committed to the success of this project.


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SECRETARY-GENERAL

Donald J. Johnston

DEPUTY SECRETARIES-GENERAL

Herwig SchlöglSeiichi KondoRichard Hecklinger

PRIVATE OFFICEOF THE SECRETARY-GENERAL

Carolyn Ervin

ROUND TABLE ON SUSTAINABLEDEVELOPMENT

Simon Upton

COUNCIL AND EXECUTIVECOMMITTEE SECRETARIAT

Roger Harmel

ADVISORY UNIT ONMULTIDISCIPLINARY ISSUES

Michael J. Oborne

LEGAL DIRECTORATE

David Small

AUDITOR-GENERAL

(Vacant)

CENTRE FOR CO-OPERATION WITHNON-MEMBERS

Eric Burgeat

EXECUTIVE DIRECTOR

Anthony Hutton

PUBLIC AFFAIRSAND COMMUNICATIONS

Christopher W. Brooks

ECONOMICS DEPARTMENT

Ignazio Visco

THE OECD SECRETARIATFEBRUARY 2002

STATISTICS

Enrico Giovannini

ENVIRONMENT

Joke Waller-Hunter

DEVELOPMENT CO-OPERATION

Michael G. Roeskau

PUBLIC MANAGEMENT

Odile Sallard

TRADE

Jean-Marie Metzger

FINANCIAL, FISCALAND ENTERPRISE AFFAIRS

William Witherell

SCIENCE, TECHNOLOGYAND INDUSTRY

Takayuki Kawabata-Matsuo

EDUCATION, EMPLOYMENT,LABOUR AND SOCIAL AFFAIRS

John Martin

FOOD, AGRICULTUREAND FISHERIES

Stefan Tangermann

TERRITORIAL DEVELOPMENT

Bernard Hugonnier

HUMAN RESOURCEMANAGEMENT

Pierre Lebleu

OPERATIONS

David Johnson

BUDGET AND FINANCE

Normand Saucier

INFORMATION TECHNOLOGY ANDNETWORK SERVICES

Guido Maccari

INTERPRETATION

Thomas Afton

TRANSLATION

René Prioux

****

INTERNATIONAL ENERGY AGENCY

Robert Priddle

NUCLEAR ENERGY AGENCY

Luis Echavarri

DEVELOPMENT CENTRE

José Braga de Macedo

SAHEL AND WEST AFRICA CLUB

Jacqueline Damon

CENTRE FOR EDUCATIONALRESEARCH AND INNOVATION

John Martin

EUROPEAN CONFERENCEOF MINISTERS OF TRANSPORT

Jack Short


95

AMBASSADORS, PERMANENT REPRESENTATIVESTO THE OECDFEBRUARY 2002

AUSTRALIA

His Excellency Mr. Ian K. Forsyth

AUSTRIA

His Excellency Mr. Karl Schramek

BELGIUM

Her Excellency Ms. Régine De Clercq

CANADA

Her Excellency Ms. SuzanneHurtubise

CZECH REPUBLIC

His Excellency Mr. Jaromír Prívratský

DENMARK

His Excellency Mr. Peter Brückner

FINLAND

His Excellency Mr. Jorma Julin

FRANCE

Her Excellency Mrs. Joëlle Bourgois

GERMANY

His Excellency Mr. Hans-Stefan Kruse

GREECE

His Excellency Mr. George E. Krimpas

HUNGARY

His Excellency Mr. Béla Kádár

ICELAND

Her Excellency Ms. Sigridur AsdisSnaevarr

IRELAND

His Excellency Mr. Pádraic MacKernan

ITALY

His Excellency Mr. Francesco Olivieri


96

JAPAN

His Excellency Mr. MutsuyoshiNishimura

KOREA

His Excellency Mr. Kyung-tae Lee

LUXEMBOURG

His Excellency Mr. Jean-Marc Hoscheit

MEXICO

His Excellency Mr. Javier Arrigunaga

NETHERLANDS

His Excellency Mr. Frans Engering

NEW ZEALAND

His Excellency Mr. Adrian Macey(to take up duties in March 2002)

NORWAY

Her Excellency Ms. Tanja H. Storm

POLAND

His Excellency Mr. Jan Bielawski

PORTUGAL

Her Excellency Ms. Ana Martinho

SLOVAK REPUBLIC

His Excellency Mr. Dusan Bella

SPAIN

Her Excellency Ms. Elena Pisonero

SWEDEN

His Excellency Mr. Anders Ferm

SWITZERLAND

His Excellency Mr. Wilhelm B. Jaggi

TURKEY

His Excellency Mr. Uluç Özülker

UNITED KINGDOM

His Excellency Mr. ChristopherCrabbie, CMG

UNITED STATES

Her Excellency Mrs. Jeanne L. Phillips

EUROPEAN COMMISSION

His Excellency Mr. John Maddison


97

OECD MEMBER COUNTRIES

AUSTRALIA

AUSTRIA

BELGIUM

CANADA

CZECH REPUBLIC

DENMARK

FINLAND

FRANCE

GERMANY

GREECE

HUNGARY

ICELAND

IRELAND

ITALY

JAPAN

KOREA

LUXEMBOURG

MEXICO

NETHERLANDS

NEW ZEALAND

NORWAY

POLAND

PORTUGAL

SLOVAK REPUBLIC

SPAIN

SWEDEN

SWITZERLAND

TURKEY

UNITED KINGDOM

UNITED STATES


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