Webcast Recap

Along with the progress credited to globalization we also see many new challenges that require global cooperation. Gurria noted that under the current wave of globalization, the world economy has grown 20% in the last five years. Millions have been lifted out of poverty due in large part to international trade and investment flows and the ability this has afforded developing countries to connect to the global economy.

Yet, globalization has made the world and its problems more complex. Gurria cited the current credit crisis as an example. "Today, domestic shocks cross those same borders faster and more potently than in the past," Gurria said. Sustainable development and climate change are also challenging policymakers as oil prices rise and growth in energy and transport use is resulting in more global pollution, resource depletion, and greenhouse gas emissions. Efforts to tackle climate change will demand a shift away from carbon-intensive activities and even in the structure of the economy. This requires the design of global solutions that all countries are willing to implement. "The OECD has been working actively in this area to come up with new analyses and proposals to provide a solid economic and financial footing to the post-Kyoto architecture," stated Gurria.

Population aging and international migration are two other global challenges that must be addressed sooner rather than later. Rising longevity and low or declining fertility are causing a sharp rise in old-age dependency ratios. According to Gurria, this demographic transition will have significant macroeconomic effects notably on labor supply, growth, financial markets, and international capital flows. Gurria cites migration as part of the answer and notes that the number of immigrants entering OECD countries has more than tripled over the past two decades. But there is a flip side to migration—through migration, poor countries lose their most hard-working, entrepreneurial people. "In some African and Caribbean countries, up to 50% of all health professionals emigrate, while being desperately needed at home." The OECD is working on this problem.

While globalization has facilitated the creation of wealth, inequality has increased and poverty continues to be widespread and deep rooted. "The stubborn persistence of poverty and inequality creates the conditions for the expansion of terrorism, armed conflict, environmental degradation, cross-border diseases and organized crime," warned Gurria. The solution, noted Gurria, depends on a variety of multilateral tools and the synchronization of national policies. To that end, the OECD is coordinating a global Partnership for Poverty Reduction with developing countries and other multilateral economic organizations.

In order to harness the power of truly global solutions, the OECD has begun to initiate a process of enlargement and enhanced engagement with 10 new countries that account for nearly half the world's population, 15% of global exports, and a combined GDP of 5.8 trillion dollars. These countries include Chile, Estonia, Israel, the Russian Federation, Slovenia, Brazil, China, India, Indonesia, and South Africa.

The OECD is also focusing more on relations with the 60 other non-member countries. According to Gurria, "The OECD is gradually turning into a genuine vector of convergence between developed and developing economies." Gurria concluded his remarks by affirming the rapidly changing global economy and the need to adapt. "Multilateral organizations are the best tool we have to transform globalization into prosperity."