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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.

Fourteen years after joining the DAC in 2010, Korea is at a pivotal juncture as it rapidly scales up official development assistance (ODA) and assumes more global responsibility. The 2020 revision of the Framework Act signals a more coherent, cross-government approach to implement a larger budget. There is potential to bring greater coherence between domestic and international policies supported by legislation on sustainable development. This peer review provides a set of recommendations for Korea to strengthen strategic partnerships and dialogue with partners, and use the cross-government capacity review and evaluations to prioritise larger ODA volumes to implementers. It recommends that Korea increase the number of qualified staff working in development across government, delegate more authority to partner country offices, and increase its risk appetite to expand private sector operations.

Norway’s economy is slowing as inflation and higher interest rates weigh on consumption and investment. The labour market is tight and wage growth robust, while labour shortages and job mismatches are high and rising. Inflation is falling but still way above the target of 2%. The fiscal stance is expansionary. It should become contractionary to support monetary policy. While Norway is one of the OECD’s most productive countries, productivity growth over the past decade has been weak. Making skills more relevant, notably by strengthening vocational education and training, could help raise productivity and ease tight labour markets. Higher and broader taxation of greenhouse gas emissions and investing in lower‑cost emission cuts would help achieve emission reductions more efficiently. Public spending as a share of GDP is the highest in the OECD, which brings important benefits in the form of high-quality public services. However, oil revenues are set to decline, and ageing costs to rise, foreshadowing strains on public finances in the future. Norway could benefit from applying a medium-term expenditure framework, introducing a spending rule, and establishing a full-fledged fiscal council. Reforming the very generous sickness and disability scheme could help reduce spending pressures and increase employment. Regional policy should become more cost-conscious. Infrastructure investment is very high, and imposing a minimum benefit-cost ratio on individual projects and strengthening ex-post evaluations could help improve its effectiveness.

SPECIAL FEATURE: RAISING THE EFFECTIVENESS OF PUBLIC SPENDING

The United States economy has continued to expand at a solid pace and price pressures have eased somewhat. However, a sustained fiscal deficit has contributed to raising public debt as a share of GDP to its highest level since World War II, with a further substantial increase in prospect over coming decades as the population ages. To put the public finances on a more sustainable path, a multi-year fiscal adjustment should be enacted that achieves savings on pensions and healthcare and raises taxation, including on capital incomes. A more medium-term oriented and less complicated federal budgeting process would support this. At the same time, economic growth would benefit from productivity enhancing reforms that promote competition, including through maintaining international trade openness and reinforcing relevant skills in the workforce. Efforts to reduce greenhouse gas emissions have accelerated, but further policy measures will be needed to achieve emission reduction targets. Policy options include a package of broad-based carbon pricing, taxes and sectoral policies. As the climate transition further progresses, additional measures will be needed to support displaced workers from fossil fuel industries and for climate adaptation.

SPECIAL FEATURE: MANAGING FISCAL PRESSURES IN THE UNITED STATES

The OECD-FAO Agricultural Outlook 2024-2033 provides a consensus assessment of the ten-year prospects for agricultural commodity and fish markets.

This Outlook edition reveals important trends. Emerging economies will be pivotal in shaping the global agricultural landscape, with India expected to overtake China as the leading player. Yet calorie intake growth in low-income countries is projected to be only 4%. Agriculture's global greenhouse gas intensity is projected to decline, although direct emissions from agriculture will likely increase by 5%. If food loss and waste could be halved, however, this would have the potential to reduce both global agricultural GHG emissions by 4% and the number of undernourished people by 153 million by 2030.

Well-functioning international agricultural commodity markets will remain vital for global food security and rural livelihoods. Expected developments should keep real international reference prices on a slightly declining trend over the next ten years, although environmental, social, geopolitical, and economic factors could significantly alter these projections.

More information can be found at www.agri-outlook.org.

Egypt is a rapidly growing emerging economy and a demographic heavyweight on the African continent. High population growth, land-use change, pollution and climate change are increasingly putting pressure on the natural environment, including on its rich biodiversity. Egypt has achieved relative decoupling of greenhouse gas emissions from economic growth, though it needs to further mainstream climate action across sectors and progressively raise ambition. As one of the world’s most water-stressed countries, greater use of economic instruments would help address scarcity and improve water quality. As part of Egypt’s Vision 2030, the government is committed to turning environmental challenges into opportunities. It has taken steps to move towards more sustainable waste management and address air pollution, which remains a health concern. Egypt has significant potential to accelerate its clean energy transition. While environmental information and data have improved overall, public participation in environmental decision making needs to be further enhanced.

This is the first Green Growth Policy Review of Egypt. It examines progress towards sustainable development and green growth over the past decade. The 40 recommendations aim to help Egypt improve its environmental performance, giving a special focus to building climate-smart, resilient and inclusive cities.

The Slovenian economy proved resilient following the energy crisis and devastating floods. Growth is projected to pick up gradually. The labour market remains tight, with widespread labour shortages leading to strong wage growth. Inflation has slowed but remains elevated in services. Fiscal consolidation is needed to rebuild fiscal buffers and address emerging pressures from ageing-related cost, notably on pensions. Productivity growth would benefit from lifting remaining barriers in retail trade and restrictions on professional services. Female labour market participation is high, but the gender wage gap could be reduced further through adjustments in the tax and benefit system. Greater harmonisation of carbon prices, notably the removal of reduced tax rates for fossil fuels, is needed to reach emissions targets. High homeownership rates and a limited rental market, combined with insufficient residential construction, constrain housing options for many, especially the young and vulnerable. Enhancing housing supply can be achieved by streamlining spatial planning and permitting systems, reforming housing taxation, improving rental regulations, expanding access to mortgage finance, and promoting the development of social and affordable housing.

SPECIAL FEATURE: ADDRESSING HOUSING MARKET CHALLENGES

Austria’s economy performed well over the past two decades. The country’s GDP per capita ranks among the highest in the OECD. Income inequalities are relatively low thanks to high redistribution through public transfers, which contributes to a relative poverty rate well below many other OECD countries. The domestic production of energy has a low carbon content largely due to significant hydropower resources. The economy is set to recover from a recession in 2023, but it will do so only slowly and remains fragile. The inflation shock in the wake of Russia’s war of aggression against Ukraine is taking time to subside. Public debt has increased substantially, while the public deficit remains close to 3%. Greater capacity of the economy to adapt to future shocks and address structural challenges is needed. Sound public finances and low government debt provide fiscal space and strengthen a country’s resilience against short- and long-term shocks. Pension system reforms and efficiency measures in health care can help to mitigate long-term fiscal pressures. Public revenues need to be more friendly to sustainable and inclusive growth by shifting away from high levies on labour towards less growth-distortive taxes. Easing regulation, including strict entry requirements for certain professional services will help efficient allocation of resources towards promising activities and firms. Reducing the gap in skills for disadvantaged students and improving the integration of immigrants will be essential to provide equal access to the labour market. Achieving net zero emissions by 2040 will require a clear and comprehensive strategy including higher and more harmonised carbon prices. High exposure to future climate risks, in particular floods, needs to be addressed, and insurance coverage against natural disasters should be expanded.

SPECIAL FEATURE: ACHIEVING A SUCCESSFUL GREEN TRANSFORMATION IN AUSTRIA

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.

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

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