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In 2020, the Azerbaijan Investment Holding (AIH) was established to professionalise and improve the governance and performance of Azerbaijan’s key state-owned enterprises (SOEs). This review describes and assesses the corporate governance framework of AIH and its portfolio companies against the OECD Guidelines on Corporate Governance of State-owned Enterprises. It makes recommendations to help the Azerbaijani authorities reform their state-owned sector and align the exercise of state ownership and the governance of SOEs with international best practices.
The OECD’s Development Assistance Committee (DAC) conducts peer reviews of individual members once every five to six years. Reviews seek to improve the quality and effectiveness of members’ development co-operation, highlighting good practices and recommending improvements.
Slovenia's official development assistance to Gross National Income ratio increased from 0.16% in 2017 to 0.19% in 2021, with a temporary uptick to 0.29% in 2022. This increase was mainly due to in-donor refugee costs related to Russia's war of aggression against Ukraine. Slovenia punches above its weight as it influences decision-making in multilateral organisations in line with its priorities, notably on water and gender. Partners value its strong support to the Western Balkans, anchored in its European Union accession experience, as well as its support to demining efforts around the world. This peer review provides a set of recommendations to focus its approach, ensure cross-government co-ordination, match financial and human resources to ambitions, and build stronger relationships with partners.
The global economy remained resilient in the first half of 2024, and inflation has continued to moderate. These trends are projected to continue into 2025, with global growth stabilising at a moderate pace and inflation returning to target in most countries by the end of 2025. Key near term risks include persisting geopolitical and trade tensions, the possibility of a growth slowdown as labour market pressures fade, and potential disruptions in financial markets if the projected smooth disinflation path does not materialise.
The Interim Report says that policy interest rates should be lowered as inflation declines, though the timing and pace of rate reductions should be judged carefully to ensure that inflation returns durably to target. Stronger efforts to contain government spending, enhance revenues and improved budgetary frameworks are needed to ensure fiscal sustainability. Reinvigorating product market reforms to strengthen competition is an essential step to turn the corner on growth and help alleviate fiscal pressures.
The Interim Report is an update on the assessment in the May 2024 issues of the OECD Economic Outlook (Volume 2024 Issue 1).
Belgium’s economy has been relatively resilient to recent shocks and is expected to continue to grow steadily. Public finances have deteriorated though. In absence of fiscal consolidation, the debt-to-GDP ratio is projected to rise fast. Cutting ineffective public spending and reforming the budgetary framework to increase accountability across governments would help ensure public finances are on a sustainable path. Reforms to taxes and benefits could foster labour market activation and expand the tax base. Strengthening prevention and return-to-work programmes could contribute to tackling the high and increasing take up of disability benefits and better support employment of people with reduced work capacity. A coordinated strategy to reduce administrative costs and facilitate small firms’ access to training could increase business dynamism and productivity. Targeted support for female entrepreneurs could also unlock additional potential of the SME sector. Achieving the green transition requires setting up binding targets and improving coordination of climate policy across federal and regional governments. Easing procedures and improved financing schemes would help deploy renewable energy production. Transparency in future environmental standards with adequate and well-targeted financial incentives would sustain household investment in energy efficiency and electrification, particularly in the transportation and building renovation sectors.
SPECIAL FEATURES: LABOUR MARKET, CLIMATE POLICY, SMALL- AND MEDIUM-SIZED ENTERPRISES
After a robust recovery from the COVID-19 crisis, Colombia's economic growth is returning to a low potential. Medium-term growth prospects depend on maintaining Colombia's strong macroeconomic framework and enacting reforms to create a business-friendly environment which can attract high levels of investment. Implementing fiscal consolidation and adhering to fiscal rules would prevent rising financing costs and safeguard debt sustainability. Reforms to raise tax revenues and improve spending efficiency are needed to create fiscal space for social and productive investment needs. Enhancing the investment climate requires reducing regulatory uncertainties and tackling corruption. Creating connected transport infrastructure, strengthening subnational government capacities and improving equalisation mechanisms in the fiscal transfer system would foster balanced development across the country. Addressing informality, gender gaps, and improving education quality would boost productivity and reduce social disparities. Investing in climate adaptation, renewable energy, and establishing stable regulatory frameworks are key for a climate-resilient economy and achieving carbon neutrality by 2050.
SPECIAL FEATURES: RAISING PRODUCTIVITY; REDUCING LABOUR INFORMALITY; REGIONAL CONVERGENCE
The OECD Inventory on Export Restrictions on Industrial Raw Materials reveals a concerning trend in which export restrictions are becoming at once increasingly prevalent and more prohibitive. Given the high degree of interdependency in the global economy and many countries’ reliance on international trade for access to critical raw materials, the imposition of export restriction on raw materials risks negative spillover effects cascading down global supply chains. It is therefore important to better understand the motivations of countries using export restrictions, as well as the impact on trading partners and global markets. The OECD Inventory is a unique, freely accessible, source of qualitative and quantitative data which can serve as a foundation for these efforts.
Growth has rebounded from the pandemic and the energy crisis, despite the 2023 earthquake and droughts. Morocco has benefitted from a stable macroeconomic regime and the deficit is narrowing following the pandemic and energy crisis with the government debt ratio is around 70% of GDP. Morocco has embarked on major reforms to encourage investment and to extend health insurance and social protection, but a stronger convergence path will be needed to achieve the vision in the New Development Model. Morocco’s labour productivity gap with the frontier remains large, although it has narrowed. FDI flows have been strong, but domestic private investment is low, and Moroccan firms face obstacles in performing better. Morocco’s young population is an asset, but the labour market suffers from high youth unemployment and low female employment. Emigration is significant. Widespread informality leads to low wages, poor-quality jobs and weak skills. Morocco has made an ambitious commitment to reduce carbon emissions by 45% by 2030 compared to 2010 and to net zero by 2050, benefiting from the country’s potential for renewables-based generation. The country is vulnerable to climate change and already faces significant water stress.
SPECIAL FEATURES: BOOSTING INVESTMENT, FIRM PERFORMANCE AND PRODUCTIVITY; CREATING MORE AND BETTER JOBS
Economic growth is resuming, but challenges remain. Gradual fiscal consolidation is required over the short term to support the return of inflation to target and rebuild fiscal space, following substantial support during the pandemic and the energy crisis. Growing spending needs due to ageing and investment necessary to support the green transition call for tax reforms to strengthen revenues. Supply-side reforms are needed to sustain growth, including by providing businesses with certainty regarding taxation and land use planning to boost investment, and by strengthening work incentives to reduce economic inactivity. The United Kingdom is a front runner in the progress to reach net zero by 2050, but more effort is needed to accelerate emission reductions in residential housing, including a clear long-term strategy, pricing signals, regulatory timelines, and financial support to stimulate the market for decarbonised heating solutions.
SPECIAL FEATURES: BOOSTING LABOUR SUPPLY; ENHANCING BUSINESS INVESTMENT TO LIFT PRODUCTIVITY; GREENING THE RESIDENTIAL HOUSING SECTOR
This review assesses the climate for domestic and foreign investment in Mauritius. It discusses the challenges and opportunities faced by the government in its reform efforts. Capitalising on the OECD Policy Framework for Investment and the OECD Foreign Direct Investment Qualities Policy Toolkit, this review explores trends and qualities in foreign investment, development successes and productivity challenges, investment policy, investment promotion and facilitation, and investment incentives. The review highlights potential reform priorities to help Mauritius fulfil its development ambitions that align with its commitment to comply with the principles of openness, transparency and non discrimination. This report also helps Mauritius, as a new Adherent to the OECD Declaration on International Investment and Multinational Enterprises, to promote greater investment policy transparency, as well as responsible business conduct.
Sustained rapid and inclusive economic growth for half a century has brought Malaysia close to the threshold of high-income status. Growth is now accelerating, driven mostly by domestic demand. Exports are also set to rebound amid stronger external demand. The economy has been resilient to recent shocks, and inflation has remained contained. A new fiscal framework provides a good basis for the needed fiscal consolidation, but rising spending needs will require mobilising additional tax revenues. Improving the targeting of social protection while raising social assistance coverage and benefit levels would allow stronger reductions of poverty and inequality. Better access to childcare and a better alignment of tertiary education curriculums with labour market needs would allow more workers, especially women, to participate in the labour market and find jobs that match their skills. Addressing climate change requires phasing out fossil fuel subsidies and a stronger role for carbon pricing, complemented by stricter regulations. Better disaster risk financing and insurance could bolster adaptation efforts.
SPECIAL FEATURES: SMALL AND MEDIUM-SIZED ENTERPRISES; BOOSTING PRODUCTIVITY; SOCIAL PROTECTION; GREEN GROWTH
Public administration reforms can lead to a more accountable and effective civil service, better organisation of the administration, and higher quality public services for citizens and businesses. This report analyses the institutional and strategic framework for public administration reform in the Palestinian Authority. It includes recommendations for improving this framework as well as the co-ordination mechanisms, systems, and processes for public administration reform.
The report describes some of the key developments in international tax reform since February 2024, including on the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy and on the implementation of the BEPS minimum standards. It also covers progress made in tax transparency and on tax and development, tax administration and consumption taxes, as well as dedicated segments on tax and inequality and tax policy developments. This report was prepared by the OECD ahead of the third meeting of G20 Finance Ministers and Central Bank Governors held under the Brazilian G20 Presidency from 25-26 July 2024, in Rio de Janeiro, Brazil.
The “OECD Review of Resourcing Schools to Address Educational Disadvantage in Ireland” provides an independent analysis meant to support Irish authorities in identifying ways to strengthen the resources and supports provided to students at risk of educational disadvantage in both DEIS and non-DEIS schools. The report serves three purposes: i) to provide insights and advice to Irish education authorities; ii) to help other countries understand the Irish approach to equitable education; and iii) to provide input for comparative analyses of the OECD Education for Inclusive Societies project. The scope for the analysis in this report covers primary and post-primary education. The focus areas of the review in Ireland are: i) governance, ii) resourcing; iii) capacity building; iv) school-level interventions and v) monitoring and evaluation. This report will be of interest in Ireland and other countries looking to improve the equity of students at risk of educational disadvantage in their education systems.
OECD Contributions to the 2030 Agenda and beyond: Shaping a sustainable future for all provides a roadmap, based on OECD knowledge, data, tools and best practices, for national and international action to prepare for future challenges and opportunities. It examines the critical role of robust governance in protecting our planet and ensuring a prosperous future for all. The report outlines five key priorities for achieving a sustainable and equitable future, including effective institutions, effective policies, innovative solutions, harnessing the power of science and technology, and navigating the complexities of financing sustainable development. It shares practical insights and explores strategies for empowering youth and future generations as key stakeholders in building a resilient world. The report provides a comprehensive resource for national and international policymakers seeking to translate the Sustainable Development Goals into concrete action.
This report provides an in-depth analysis of Peru’s justice system and offers concrete recommendations, based on OECD countries' experience and best practices, for how to make it more effective, efficient, transparent, accessible, and people-centred. Building on the OECD’s Recommendation on Access to Justice and People-Centred Justice Systems, the report suggests how Peru can best implement its challenging justice reform agenda so that access to justice is available to all, including the most in need. In particular, it proposes actionable solutions for modernising Peru's institutional and functional arrangements to improve the administration of justice and people-centred service delivery, bringing it closer to OECD standards and best practices in this area.
GDP growth in Korea has recovered, supported by strong exports. Employment remains stable at a high level, while unemployment is low. Interest rates have likely peaked and housing prices have stabilised, all of which should support consumption going forward. Household debt remains high, and construction-related project finance has become a financial stability concern. Reforms to ensure fair competition in the domestic market would increase productivity in the SME sector. Reducing greenhouse gas emissions in line with the 2030 target requires tightening the emissions trading scheme and reforming energy markets to incentivise clean electricity supply and energy savings. The Korean fertility rate has fallen to the lowest in the world, which will put labour supply and public finances under pressure. A large career cost for women who become mothers holds back female employment and fertility, and underpins the widest gender pay gap in the OECD. Improving the work-life balance for both genders, closing remaining gaps in family policies, addressing high housing and education costs, and tackling labour market dualism are key to reverse the trend. Such reforms, combined with increasing the legal retirement age, reducing the high significance of seniority in determining wages, and a more welcoming regime for work immigration, would also boost labour supply and tax revenue.
SPECIAL FEATURES: PRODUCTIVITY, CLIMATE POLICY, BOOSTING FERTILITY AND RESPONDING TO AGEING
This report presents the main findings of the second OECD cross-national Survey on Drivers of Trust in Public Institutions, carried out in late 2023. With nearly 60 000 responses, representative of the adult population in 30 OECD countries, the survey investigated how people's expectations and experiences with government influence their trust in public institutions. These experiences and expectations range from day-to-day interactions with public institutions to government decision making on complex policy issues. The report identifies some of the main drivers of trust in government and other public institutions and discusses opportunities for policy action. For the first time, the report also analyses how trust levels and drivers have evolved in the 20 OECD countries that participated in the 2021 survey and how an information environment marked by an increasing amount of polarising content and disinformation affects people’s trust in public institutions.
France has faced two significant, successive shocks: the COVID-19 pandemic and the increase in inflation. Emergency government measures were decisive in protecting business, jobs and purchasing power, but at a high fiscal cost. Efforts to reduce public spending will be key to lower government debt. Lifting productivity growth hinges on a wider diffusion of digital technologies, reduced regulatory barriers and stronger innovation. The effectiveness of carbon pricing could be strengthened by gradually removing subsidies and tax exemptions that certain sectors benefit from.
Students perform at a similar level to OECD peers but the link between socio-economic background and educational outcomes is particularly strong. Spreading the allocation of public support to disadvantaged students more widely across schools would help to avoid threshold effects and to better respond to students’ needs. Rebalancing the distribution of education spending in favour of primary schools could provide greater support to children in the early years of their schooling. The use of modern teaching approaches, including cognitive activation practices, that are associated with better student achievement, could be reinforced.
SPECIAL FEATURE: IMPROVING EDUCATIONAL OUTCOMES
The OECD’s Development Assistance Committee (DAC) conducts peer reviews of individual members once every five to six years. Reviews seek to improve the quality and effectiveness of members’ development co-operation, highlighting good practices and recommending improvements.
France has embarked on an ambitious reform of its development co-operation in institutional, strategic and financial terms. In addition to a substantial increase in the resources devoted to official development assistance and a strengthening of its crisis response instruments, France has championed the linkages between the green and social agendas and the mobilisation of the private sector for sustainable development. The review discusses the difficult balance between the objectives of visibility and development impact, particularly in fragile contexts. It makes recommendations on combining political impetus, steering by objectives and flexibility; deepening the cross-benefits between the social, environmental, and economic dimensions of sustainable development; and, strengthening the contribution of local private sector to poverty reduction by optimising available resources and instruments.
The transition to net-zero emissions by 2050 will have profound impacts on the labour market and the jobs of millions of workers. Aggregate effects on employment are estimated to be limited. But many jobs will be lost in the shrinking high-emission industries, while many others will be created in the expanding low-emission activities. This edition of the OECD Employment Outlook examines the characteristics of the jobs that are likely to thrive because of the transition (“green-driven jobs”), including their attractiveness in terms of job quality, and compares them to jobs in high-emission industries that tend to shrink. The cost of job displacement in these latter industries is assessed along with the trajectories of workers out of them towards new opportunities, and the labour market policies that can facilitate job reallocation. Particular attention is devoted to upskilling and reskilling strategies to facilitate workers’ transition into fast-growing, green-driven occupations. The distributive impacts of climate-change mitigation policies are also examined, with a focus on carbon pricing and options to redistribute its tax revenue to those most impacted. As usual, the first chapter of the Outlook assesses recent labour market developments (including wage trends), but also provides an update of the OECD Job Quality indicators.