Dynamic countries tend to have a fast-growing and competitive city at their hub, even if cities accumulate social and economic disorders as well. San Francisco is the wealthiest in a new OECD ranking of 78 metropolitan regions, with income of $62,350 per head, adjusted for purchasing power parity.

Can taxation help governments achieve environmental goals with respect to energy use and emissions? Yes, with conditions.

Global warming, finite fossil fuels and geopolitical risks make a shift to renewable energies inevitable. Though it is a challenge fraught with uncertainties, no action would be worse. An alternative, workable energy strategy is within reach.

A decade ago, used tyres ended up mostly in stockpiles, as an eyesore for landfill. Some 62% of old tyres went that way in 1994. Today, more are recycled for use in adhesives, insulation, brake linings, and conveyor belts, for instance.

Are we about to switch to new energy sources? Grandiose plans are being drawn up for installing veritable forests of giant wind turbines, turning crops and straw into fuel ethanol and biodiesel, and for tapping solar radiation by fields of photovoltaic cells. As with most innovations, there is excitement and high expectation. Will these developments and other renewable energy conversions one day replace fossil fuels? Eventually they will have to, but a reality check is in order.

Energy has moved to the top of our policy agendas, and with good reason. First, there is the price of oil, which though easing a little in recent months, remains historically high. This has pushed up costs for producers and consumers alike.

OECD countries share the same goals of sustainable development, but differ in their views on the role of nuclear energy in achieving those goals. Indeed, few energy sources have been scrutinised in the public spotlight over the years quite as much. The question is simple: is nuclear really a sustainable energy?

The Newsletter has been prepared by the Public Affairs Division of the OECD for the purpose of informing the public of OECD cooperation with civil society. The Public Affairs Division acts as a clearing house for information about OECD dialogue with civil society. OECD staff who are in contact with civil society through consultations, workshops or other activities contribute to this newsletter.

The Doha round of trade negotiations was launched in November 2001, but stalled in July this year. It should be relaunched. International trade may be stronger today than ever, but the global marketplace remains littered with barriers and restrictions that hold back potential, not least in developing countries.

The possibility of using renewable energy to produce electricity on a significant scale is a heated debate. The potential of hydropower is well established, and other sources such as geothermal, biomass, solar and wind, even ocean energy, now hold promise. Moreover, they are attractive because they reduce reliance on imported fossil fuels and help cut CO2 emissions. On a micro-scale, to heat home water for instance or run farms, these sources are starting to prove themselves.

Globalisation brings costs and benefits, even for the tax professional. The move towards a borderless world has opened up new opportunities for taxpayers to minimise their overall tax liabilities. Much of this tax planning is legitimate. Good tax planning is driven by the reality of businesses having to operate with increasingly complex laws, particularly affecting international activities, while at the same time wanting to legally minimise their costs, including tax costs.

The OECD's core mission is to help make the world economy work better, Secretary-General Angel Gurría said in a keynote address to the meeting of the Parliamentary Assembly of the Council of Europe Strasbourg, 4 October 2006. While the organisation's work is well known, stronger partnerships with parliamentarians are needed to strengthen its impact and influence, Mr Gurría said.

Governments around the world need to be better prepared for large-scale catastrophes and take a more proactive role in working with the insurance industry and other players, OECD Secretary-General Angel Gurría told participants at the inaugural meeting of the OECD International Network on Financial Management of Large-Scale Catastrophes in Paris, 8 September 2006.

Many earlier civilisations at some point found themselves on an economic path that was environmentally unsustainable. Some understood what was happening and were able to make the needed adjustments and survive, even flourish. Others either did not understand the gravity of their situation or, if they did, could not adjust in time. They collapsed. Our global civilisation today is also on an economic path that is environmentally unsustainable, a path that is leading us toward economic decline and collapse.

Jannat Bibi, who lives in a village in south Pakistan, was engaged to an older man at the age of three. In the circumstances, that would normally be the end of her story. Yet when she was 16, Jannat participated in the Girl Child Project, an initiative of UNICEF and the Swiss Agency for Development and Cooperation (SDC), whose workers encouraged Jannat not to rebel against her family but to convince her elders to support her own choices.

The Chernobyl accident was the worst in the history of commercial nuclear power and contaminated large territories in the former Soviet Union and Europe. Twenty years later, its consequences still affect the daily lives of many people.

Last February, some 20 universities, brought together in a task force created by the UN secretary-general, met in Princeton to examine the way in which universities might respond in a new and innovative way to the intellectual, scientific, political and economic changes taking place in our societies. One issue at the fore of these discussions was the social responsibility of universities.

A dangerous new trend is emerging in many industrialised countries. Widespread pockets of anti-globalisation sentiment, furthered by alleged national security concerns and a perceived need to protect “strategic” sectors have led to a resurgence of protectionism. Even in countries that have long promoted and benefited from global markets, politically-motivated barriers are being resurrected. These winds have temporarily chilled economic progress.

You cannot expect someone to be able to build a house just by giving them a saw, a hammer and some wood. Likewise, you cannot expect someone to be able to manage their finances just by giving them an income, a mortgage, a credit card and an insurance policy. People need to be taught how to use these tools in order to succeed.

Imagine a type of nut that could save hundreds of thousands of people in poor countries from starvation. In fact, imagine one that costs about $20 per child for a month, roughly the same as therapeutic milk, but which, unlike most other therapeutic foods, does not require preparation, is packaged, keeps fresh after opening, and can be easily transported and distributed directly to parents and children.

In your article “Virtual solution” (No. 254, March 2006), you write that “any effective policy to encourage efficient use of scarce water resources must be based on pricing.” As you explain, increasing the price of water to better reflect its scarcity would cause low-value, water-intensive crops to become uncompetitive in water-scarce countries, and their imports more attractive. There is no disputing this logic, but any water policy prescription must be based on more than pricing and consider factors other than simply water scarcity if it is to be effective and adopted by governments.

Reconciling environmental conservation and the necessities of development will be very difficult in a developing county like mine. We know that the source of man’s welfare is the biosphere, and so to grow we must use its resources, particularly natural ones.

Cities are economic drivers at the heart of globalisation. Policymakers should look more closely at their potential, too. Here is why.

As hurricane Katrina subsided, the US banking authority, the FDIC, posted a page on its website for survivors looking for financial advice. On the Frequently Asked Questions list was a poignant query: “I received my debit card from FEMA, but I am not sure where I can use it or exactly what it is.”

“Tradition is a guide and not a jailer”, wrote W. Somerset Maugham. Could it be that some traditions, however rooted in great histories and cultures, are now trapping countries in poverty? This certainly appears to be the case when it comes to the influence of social and cultural norms on the status of women.

This is my last editorial for the OECD Observer before I step down as secretary-general in May 2006. Nevertheless, I will focus on the future, rather than dwell on the past. That is not to say that we should ignore John Maynard Keynes’ advice that we should examine the present, in light of the past, for the purposes of the future. But sometimes the present and the future cannot draw many useful lessons from the past.

Every Thursday at noon the Tribunal de las aguas (water court) meets outside the cathedral in the city of Valencia along Spain’s Mediterranean coast. For more than a thousand years, it is believed, the court has ruled on disputes affecting the irrigation of the arable lands known as huertas, which nourish the lemon trees, the oranges and other crops that give this region its distinctive scents and flavours, and for many, livelihoods as well.

When world leaders agreed upon the United Nations Millennium Declaration in 2000, and then staged the 2002 World Summit on Sustainable Development, they set themselves some ambitious world poverty reduction goals: the Millennium Development Goals (MDG). One of the MDGs is to “halve, by 2015, the proportion of the people without sustainable access to safe drinking water and basic sanitation”. That goal is turning out to be a more complicated proposition than many expected.

As the ocean covers three quarters of the surface of the earth, little wonder people see it as a possible source of freshwater. That basically means desalinating it to make it at least clean enough for agriculture and even good enough to drink. How does it work? Distillation is the cheap option, responsible for most desalinised water, but a newer filtering process using membranes, called reverse osmosis, now accounts for nearly half the world’s capacity to turn ocean into freshwater.

Three years ago, before the 3rd World Water Forum in Kyoto, we wrote that while the Millennium Development Goal of halving the population without access to safe drinking water by 2015 was feasible, it would be a tall order, particularly against a background in which bilateral development aid from OECD countries had stabilised or fallen. Have matters improved as we move closer to the deadline? There are some encouraging signs, but probably not where it matters most.

Most people know the story of the Dutch boy who saved his country by plugging a leaking dyke with his finger until help arrived. For the Dutch, the story had a happy ending, but millions of people living on the world’s coastlands were not so lucky in the past year. First, the tsunami in December 2004 killed over 180,000 people in southern Asia, devastating coastal communities in Indonesia, Sri Lanka, Thailand and the Maldives.

The private water sector is larger than many people think, with thousands of businesses working every day, for the most part, to implement government policies. Are those businesses doing enough and how might they do more?

The county of Kent, known romantically as the “Garden of England”, has suffered its worst winter drought since the 1920s. In response, the UK Environment Agency warned in February 2006 that, unless serious water conservation measures were brought in by April, the county could within months witness scenes of people queueing in the streets for water as domestic supplies were being cut off.

Should water-scarce countries import water-intensive products and cultivate less water-intensive ones? After all, since all goods contain a certain amount of water in their production, exporting farm produce is rather like exporting water, albeit in virtual form. A thousand litres of water may be needed to produce a kilo of wheat, but five to ten times more is needed for a kilo of meat.

An anti-globalisation activist took the microphone at a 1999 protest in Washington and, after decrying corporate greed and forced child labour in third world sweatshops, she demanded, “Who made your T-shirt?” One of the observers, Pietra Rivoli, an economics professor at Georgetown University in the US, chose to pick up that gauntlet. She expected to prove both “the undeniable benefits of global free trade and the misguided tenets of the anti-globalisation movement”.

The global meat sector has suffered from bad press in recent years, with sales affected by trade bans and consumer caution in light of scares from the likes of mad-cow disease (BSE) and avian flu.

The impact of science on society, though a much-discussed question, received special attention in 2005, which to mark the hundredth anniversary of Einstein’s discovery of the Theory of Relativity, has been designated the International Year of Physics.

Energy planning is not easy, and when governments shop around for energy sources, they must balance costs and benefits of available options.
Whether fossil fuels, nuclear energy or alternative sources, a sensible energy policy must also take into account a reliable mix of energy generation to support economic growth, promote the environment and also reduce dependence on imported fuels from possibly unstable exporting countries.

The current round of trade negotiations, which are shaped by the development agenda set at Doha in 2001, hang in the balance. This should not be so. Naturally, after collapsed talks in Seattle in 1999 and Cancún in 2003, people are asking uneasy questions. Will Hong Kong, China be another failure? And if the talks collapse, will the multilateral trading system under the WTO survive?

Even sceptics would agree that corruption, quite apart from being anti-democratic, distorts markets and chokes development. That is why the OECD leads the fight against corruption in international business, notably through its renowned Anti-Bribery Convention.

The 2005 UN World Summit achieved some notable breakthroughs for development. All countries committed themselves to the Millennium Development Goals (MDGs), and Australia announced new aid targets to add to those of the EU and the G8 in the run up to the summit.

In September world leaders made the journey to the UN headquarters in New York. Statements were made; a much-contested declaration was painfully agreed. People get cynical about international summits. What should those concerned with ending global poverty make of this one?

Port cities can benefit from leisure cruises to boost their economies, while at the same time avoiding pitfalls and safeguarding the environment.

Developing countries and OECD countries have seen a boost in foreign investments, as FDI outflows from the US hit a record US$252 billion in 2004.

Insurance policies, whether covering travel, housing or business, increasingly carry fine print that carefully spells out whether or not they cover or exclude losses due to terrorism. Acts of “mega” terrorism, like the 9/11 attacks, or the bombings in Bali or Madrid, have overwhelmed insurance companies with claims, and insurers have since waived sole responsibility.

Private investment is a dominant force driving globalisation. Cross-border investment flows have tripled over the last decade alone and foreign capital stocks are now twice the size of global GDP. Private investment is acting as a powerful catalyst for growth and, as emerging economies from Asia to South America have shown, is one of the surest ways to sustained poverty reduction. But this requires having the right policies in place.

I am happy to see the efforts made by the OECD and other international agencies to bring forth suggestions to streamline the global oil shocks (No. 245, November 2004 and various editions). We at The Indian Institute of Finance (IIF) have been working extensively to provide possible solutions to economies and international agencies since 1987. Some of our suggestions and research forecasts have been very apt and have helped nations to build shields against oil shocks.

Can biofuels truly compete with petrol? Recent projections suggest that ethanol could represent up to 5% of the world’s transport fuel by 2010. That figure may seem modest at first glance, but it is significant, considering no other alternative fuel has had an equivalent impact on the gasoline market in over 100 years.

Beyond the haves and have-nots of mobile handsets, PCs or hand-held IT devices, there is a deeper, and perhaps more debilitating, layer to the digital divide. And that is the availability (or lack) of basic network infrastructure in low-income economies.

Can the Kyoto protocol, which came into force on 16 February this year, work? Although natural phenomena such as large volcanic eruptions, ocean currents, the likes of El Niño or even changes in the earth’s tilt might all be contributing factors, carbon dioxide (CO2) generated by human activity–whether running homes and factories or driving cars and lawnmowers–is cited as a major culprit in the rise of global temperatures.

The Dark Ages, the Renaissance, the Industrial Revolution: these may be phrases from previous centuries, but they carry a multitude of images, lessons and historical memories that are still relevant today. I believe that the end of the last century and the beginning of this one will be characterised as the dawn of the “Age of Globalisation”.

How can we feed future generations without causing significant environmental damage? This was the challenge agricultural, food and fisheries scientists grappled with at a meeting in Rome in May to launch the next phase of the OECD’s Co-operative Research Programme, which contributes to providing the scientific knowledge needed for effective food and agriculture policies.*

Cancelling debt for poor countries is all very well, but the role of soft loans in spurring development and eradicating poverty should not be overlooked.

The earthquake and resulting tsunami that struck south and southeast Asia in late December caused massive destruction and left more than 300,000 persons dead or missing, and many more injured. An estimated $7.76 billion will be required for rehabilitation and reconstruction in India, Indonesia, the Maldives and Sri Lanka.

The 21st century had just begun when something new came into the world: the World Social Forum, which met for the first time in Porto Alegre, Brazil in 2001, to coincide with the already well-established World Economic Forum in Davos. Since then it has gone from strength to strength and it is now a permanent fixture on the international calendar. What is it about?

The momentum of the recovery projected in our Economic Outlook last spring has been only marginally dented so far by higher oil prices. By and large, the recovery continues to unfold as forecast at that time, with real GDP set to expand by around 3.5% in 2004 in the six largest OECD economies as a group.

Socially responsible development is becoming a buzzword among private equity funds. But can this business community reconcile commercial and developmental objectives in investment? Yes, though there are certain conditions.

The newly revised OECD Principles of Corporate Governance were released on 22 April. The result is a stronger OECD instrument to help improve boardroom behaviour globally. And that means better business and stronger markets for everyone.

Ten years have passed since the United Nations Framework Convention on Climate Change (UNFCCC) entered into force on 21 March 1994. It is thus most appropriate to review what has happened since then in what is an enormously complex field. One thing has become very clear, namely that climate change touches upon virtually every sphere of life, and almost every human activity either contributes to climate change or is affected by its impacts.

Remember the Johannesburg World Summit on Sustainable Development? Norway's minister of the environment, Børge Brende, chair of the UN Commission on Sustainable Development since May 2003, is determined to make sure that commitments made at Johannesburg and at other meetings are not mere souvenirs. We interviewed Mr Brende ahead of the Round Table on Sustainable Development at the OECD in March.

It is rare that I see my family's situation reflected perfectly in an article in a journal such as the OECD Observer. However, this came to pass in your 40th anniversary edition (No. 235, December 2002).

Full convergence with international accounting and audit standards, better protection of minority investors, stronger enforcement of existing laws and regulations, and improved bank governance: these are some of the key recommendations in the white paper on corporate governance in Asia, published by the OECD in Tokyo in June.

Voluntary approaches in environmental policy are increasingly popular in a number of countries, but a new OECD report, Voluntary Approaches for Environmental Policy: Effectiveness, Efficiency and Usage in Policy Mixes, questions their environmental effectiveness and economic efficiency.

World sugar prices are likely to remain low over the next few years due to increased exports from low-cost producers and continuing high support and protection in many OECD countries, the latest issue of the OECD Agricultural Outlook found.

While bemoaning the global impact of rich countries’ subsidies on poorer economies, environmentalists are taking a closer look at how the elimination of some subsidies may be detrimental to the environment.

Hammering out the multilateral negotiations at Cancún in September will take the present WTO trade round only halfway to its January 2005 deadline. Meanwhile, the percentage of world trade accounted for by preferential regional trade agreements (RTAs) is expected to grow from 43% at present to 55% by 2005 if all expected RTAs are realised. The EU, NAFTA, APEC and MERCOSUR are all examples of regional initiatives. Is smaller better?

Nanotechnology – the science of the small – is becoming a big priority in the policy agendas of many countries. Nanotechnology refers to a range of new technologies that aim to manipulate individual atoms and molecules in order to create new products and processes: computers that fit on the head of a pin or structures that are built from the bottom up, atom by atom.

Through the latter part of the 20th century, many of the world’s high-income countries embraced a market-centred approach to economic and social policy. Many low-income countries embraced the same approach, somewhat less willingly, as a condition of loans from the IMF or the World Bank.

Small may well be beautiful in the business world, but being small can also be tough going, in good as well as turbulent times. Red tape, taxes and other charges, capital costs, employment regulations, legal costs: issues such as these absorb a lot of small-company time and money, and can, in the end, become a barrier to either going into business, or surviving in it. Still, small and medium-sized enterprises (SMEs) account for over 95% of all firms and for 60%-70% of employment in the OECD area.

Rachid is the first in line to apply for work when the factory comes to town. He is hired, along with a few of his friends. So far so good.

In some circles, these days, it is fashionable to blame globalisation for all manner of ills. Critics hold it responsible for everything from poverty and inequality to environmental pollution.

4 September 2003* – Next week, trade ministers will gather at Cancún to advance the Doha Development Agenda. They carry with them the aspirations of millions around the world whose hopes for economic advancement rest on opportunities in the global economy.

A cry for transparency always accompanies any WTO trade round, and Doha is no exception. Yet trade talks remain clogged with terms of reference, jargon and ambiguities. Trade and Competition: From Doha to Cancún tries to respond to this problem, coming as it does out of a meeting of trade and competition experts from developed and developing countries who met to explore and clarify some key themes in the Doha Declaration.

Interplanetary space is not entirely empty. As the Earth orbits the Sun, it encounters particles and objects ranging from microscopic dust to large asteroids and comets. The tiniest particles are numerous and harmless; they cause flashes of light, and are known as meteors or “shooting stars”. The large asteroids and comets are very rare; the chance that one might hit the Earth during our lifetimes is extremely small.

Is there light glimmering on the economic horizon? Phil Swan, chief economist at IBM and prominent member of the Business and Industry Advisory Committee of the OECD, searches for what he sees as being the tenets of global growth and prosperity. And that includes making Doha work.

Food security seems to have improved on average, over the past four decades, with food availability in terms of daily calories and protein per capita rising some 30% in developing countries between the 1960s and the 1990s. The number of malnourished children under five fell by about 37 million between the 1970s and the mid-1990s, and the incidence of malnutrition dropped from 47% to 31%.

Donor countries in the OECD Development Assistance Committee (DAC) increased their official development assistance (ODA) by almost 5% in real terms in 2002 to US$57 billion, raising ODA to 0.23% of gross national income (GNI). This marked the beginning of a recovery from the all-time low of 0.22% of GNI seen in each of the past three years.

Further liberalisation of the world’s fish markets must first be led by effective management if the sea is to have plenty of fish for everyone. This has long been the mantra of the OECD Fisheries’ Committee and was confirmed at a press briefing by OECD fisheries experts in March to mark the launch of a new report, Liberalising Fisheries Markets: Scopes and Effects. The OECD maintains that both developed and developing countries stand to benefit from additional tariff and subsidy reductions, but cautions governments to ensure that their trade and fisheries management policies are mutually supportive.

Is the world heading on a path of diverging economic destinies? Could these developments undermine global security and stability? How should we respond to such dangers? These were just some of the issues debated by the more than 1,000 people gathered at the fourth edition of the OECD Forum, on the theme “Grow, develop and prosper”, and as ever held in conjunction with the OECD Ministerial Council.

“Agenda for growth and development” was the theme of this year’s annual OECD Ministerial Council. The meeting was chaired by New Zealand’s prime minister, Helen Clark. Here are some key points from the chair’s summary, issued after the meeting.

Some commentators say that the divisions over Iraq have put multilateralism in jeopardy. I have also participated in recent days in discussions as to how to heal the transatlantic rift. Relationships are said to be “frayed” or “irreparably damaged”. Really?

Since late last year we have watched the steady march towards war in Iraq with a mounting sense of horror and disbelief. This has stemmed in part from deep concern about the immediate destructive consequences of war upon the Iraqi population and the further inflammation of the Middle East, but also from a belief that the situation in Iraq is symptomatic of a larger global crisis that has immense implications for human rights, civil liberties, and social and economic development.

It has now been more than twenty years since the GATT, and in turn the WTO, altered the nature of the multilateral trade system, shifting the focus from strict negotiation of customs tariffs to the formulation of rules to promote and oversee the liberalisation of trade.

War, terrorism, political instability and disease: these have affected the entire sector, adding to structural problems in areas like the airline industry. Yet travel and tourism are important parts of the global economy, in small and less-developed countries just as in major developed ones. What is the outlook for tourism and how can it respond in the present circumstances? We interviewed Peter Keller, Director for Tourism at the Swiss Secretariat of State for Economic Affairs, and President of the OECD Tourism Committee.

Space is very much a reality in our lives, even if we are not always aware of it. And it is likely to grow in importance in the future, with far-reaching national and international implications, not least because of the dual nature (military and civilian) of most space technologies.

Ukraine is no longer subject to special counter measures imposed by the Financial Action Task Force (FATF) on money laundering and terrorist financing after enacting comprehensive legislation to combat money laundering. But it will remain on the FATF list of non-cooperative countries and territories until it has effectively implemented the new legislation.

The OECD may be seen by some as a “rich countries’ club”, yet for four decades it has devoted considerable resources and effort to the global task of promoting development in non-OECD countries. It is home to the Development Assistance Committee (DAC), which is responsible for over 90% of global official development assistance (ODA) to developing countries, as well as home to the regionally focused Sahel and West Africa Club. And celebrating its 40th anniversary this year is the Development Centre, which has been an active forum for professional consultation, intellectual exchange and policy advice between the OECD and the emerging and developing economies of Africa, Asia and Latin America.

Progress has been made at the steel talks that took place at the OECD on 18-19 December, including a decision by participants to undertake work immediately on the elements of an agreement for reducing or eliminating steel trade-distorting subsidies at all levels of government. For background, read the interview below. For more on the agreement, please click LATEST PROGRESS in the references.

By 2020 transport will account for more than half the world’s oil demand, and will generate nearly a quarter of the world’s energy-related CO2 emissions. According to projections in this book from the International Energy Agency, a sister organisation of the OECD, the rate of increase in transportation oil use is expected to be three times higher in developing countries than in the OECD, though the latter will still account for the lion’s share of emissions.

Developing countries want to boost their income through exports. Importers, particularly industrialised countries, want to ensure that imported goods meet their own domestic requirements for health, safety and the environment. Their consumers may also want to minimise the environmental impact of producing and using those goods. In theory, these goals are compatible. In practice, however, it can be more complicated, as there can be different ways to reconcile these objectives, some of which affect developing countries more than others.

Can anything be done to tackle transport problems and steer them to a more manageable level? There has been no shortage of trying. Whether to curb pollution, discourage cars, boost public transport use, or simply reconquer civic space for cyclists and pedestrians, initiatives abound. Yet, the car remains triumphant. Ownership is climbing, and the pressure on local authorities to yield more space to the needs of the car is unyielding. As for aviation, high-speed trains in Europe and Asia show that rail can compete with short-haul flights, but long-haul air trips continue to rise.

“Bye-bye, Miss American Pie” may be how critics see the woes of the US economy right now, but was the longest boom in recent history really just pie in the sky? Pie can be confused with motherliness and apples and its homely connotations may be a clue to why politicians are so fond of wanting to slice it up and share it around. Indeed, ugly battles are fought in legislatures all over the world regarding what public priorities should receive the largest pieces.

Global agricultural commodity markets have taken a long time to recover from a precipitous drop in prices during the second half of the 1990s, caused by slack demand and trade in the wake of a general downturn in world economic growth, as well as continued high levels of government spending on farm support. However, according to the OECD’s Agricultural Outlook 2002-2007 published on 16 July, world agricultural prices should gradually rise from their current weak levels as the economic recovery strengthens at the end of this year and into 2003. It forecasts a more marked increase in prices for certain meats and dairy products than for cereals and oil seeds.

Semiconductors are the building blocks for the electronic revolution that we are living. But their production and use is largely driven by a limited range of electronic products such as PCs and mobile phones. If we can keep making faster, smaller and cheaper chips, we can produce better IT goods and services. Therein lies a problem: lately, falling demand led to oversupply in the semiconductor industry where rapid innovation is the key; stock goes out of date quickly, becoming virtually unusable.

Can the public help in the fight against terrorist financing? This is the hope of the FATF as it reviews its Forty Recommendations, the global anti-money laundering standard, to bring them up to date as an effective tool in combating money laundering and terrorist financing and is inviting public comment on the proposed changes. These are focused on three key areas: customer identification, suspicious transaction reporting and proper supervision; information on the true beneficial owners of corporate entities; and the use by criminals of non-financial businesses and professions such as lawyers in laundering funds.

Prospects for the information technology industry remain strong despite the recent downturn, the latest OECD Information Technology Outlook says. New products and services such as broadband will continue to drive demand from firms, households and governments, and falling costs and technological developments will help. And despite the slowdown, markets for information and communications goods and services were equivalent to 8.3% of total GDP of OECD countries in 2001, compared with less than 6% in 1992. Just as the information technology sector was affected by, and contributed to, the current downturn, there is strong reason to believe it will have a significant role to play in the next recovery, the report says.

The fall in merchandise trade in OECD countries levelled off in the first quarter of 2002 after nine months of accelerating decline, but remained at a low level compared with last year. In value terms and at current prices, merchandise exports increased by 1.1% in the first quarter of 2002 compared with the fourth quarter of 2001 while imports fell by 0.4%. On a year-on-year basis, trade was still sharply lower. Compared with the first three months of the previous year, exports in the first quarter of 2002 were down 8.9% and imports dropped 11.0%.

The article, “Tackling some myths about temporary jobs” (OECD Observer, No. 231/232), seeks to “re-balance” a debate which you consider to have been distorted by unfounded assertions. It appears to be based on the assumption that no one has a good word to say for temporary employment. But on the contrary, the view that temporary work is of some advantage, to employers at least, is commonplace. As you note, it increases labour market flexibility by making it easier for employers to hire and fire workers in line with shifting demands. You also refer to the scope for employers to screen possible long-term recruits while they are temporarily employed.

Sustainable development is not about the environment or the economy or society. It is about striking a lasting balance between all of these.

Energy security is also about energy access. And that means equity, since energy is vital for human survival. About a third of the world’s population do not have access to electricity and rely almost exclusively on fuelwood, agricultural residues and animal dung to meet their energy needs. (The outlook for energy demand in the poorest developing countries and for the rate of electrification over the next three decades will be analysed in detail in the forthcoming World Energy Outlook 2002 – see Books section.) There is a clear link between poverty and low electricity access, as the graph shows.

Energy production and consumption patterns are shifting. So are the challenges for investment and global energy policy.

Diamonds may enjoy a romantic image as a girl’s best friend, but the precious stones also play a far less appealing role in helping to finance some of the world’s bloodiest conflicts. The trade in illicit rough diamonds funds and prolongs conflicts in Angola, Sierra Leone, Liberia and the Democratic Republic of Congo, and is also being accused of funding international terrorism. Recent reports suggest that Al Qaeda terrorists have raised money through the purchase and sale of illicit diamonds.

Slovenia has been invited to adhere to the OECD Declaration on International Investment and Multinational Enterprises, in recognition of its success in establishing a stable and non-discriminatory business environment, and has accepted the invitation.

Net official development assistance (ODA) remained stable in 2001, in both constant dollars and as a share of gross national income (GNI), as increases in the United States and many EU member states compensated for a decline in Japan's ODA, figures published on May 13 showed. As a proportion of Development Assistance Committee (DAC) members' combined gross national income the ratio remained unchanged, at 0.22%, as compared to 0.33% in 1990 to 1992. In current dollars, ODA from DAC member countries to developing countries was US$51.4 billion in 2001.

Globalisation, of course, is not new. In fact, some would argue that it even dates back at least to Marco Polo’s voyages in the 1300s. But what is new is the qualitative nature of the recent big wave that began in the 1990s, signifying a new stage in the evolution of the global economy. The implications for public policy — and thus international institutions — are immense. Indeed, countries, more than ever, need to work together in supranational efforts to successfully navigate the challenges of an increasingly globalised world.

The world’s population has risen 22- fold since the year 1000, while per capita gross domestic product has increased 13-fold and world GDP nearly 300-fold, with the biggest gains occurring in the rich countries of today (Western Europe, North America, Australasia and Japan).

The emerging digital divide is, unfortunately, a new symptom of some of our oldest global problems – the persistent divides between illiteracy and knowledge, sickness and health, and poverty and wealth. While technology will not solve these basic problems, it can offer powerful digital dividends that enhance sustainable development.

Increased trade plays an important role in integrating developing countries into the world economy. But many complain that current global rules make it difficult for them to compete for much-needed markets. Developed countries counter that the list of developing countries is too long for them to make an exception for everyone. How best can these differing interests be met?

When you buy a business service online, the sales person may be half a block or half a world away. But do the same trade rules apply as when you buy a piece of solid merchandise, and who decides?

As Doha approaches, it is worth reminding ourselves that liberalisation of trade multilaterally, through the WTO, is not the only game in town. Multilateral efforts co-exist with unilateral, bilateral and regional initiatives. Unilateral market opening by developing countries in services has, for example, been widespread as a way to draw in skills and investment and to strengthen the synergies between the service sector and the rest of the economy. But unilateralism can also have a darker side –

Sustainability is good business

Better ways to run the world

Development choices

Nuclear energy could help in the battle to reduce greenhouse gas emissions, but for many the production of nuclear waste outweighs this advantage. One important challenge is to convince an often reluctant public that with new waste disposal techniques, nuclear energy is worth a second look in the interests of sustainable development.

The OECD's chief economist, Ignazio Visco, gives his views on the outlook of the world economy in an interview with the OECD Observer.

Teamwork is as vital for successful companies as it is for successful football teams. But little attempt has been made to measure its contribution to the economy, or the cost of its absence. Perhaps it is time to pay more attention to this invisible asset.

The private sector is a vital component of sustainable economic growth in a global economy. But the freedom multinational corporations have to operate internationally carries with it a responsibility to help ensure that the social and environmental costs of their business activities do not outweigh the benefits.

In a world of volatility, poorer countries should aim for equity inflows – portfolio equity and FDI – if they want growth to last.

The prospect of a new round of multilateral trade talks being launched in November is brightening, though challenges remain.

A high-level meeting of the OECD’s Development Assistance Committee in April adopted a recommendation on untying aid to least developed countries. This means that loans and grants for a wide range of projects will no longer be dependent on the contracts being carried out bycompanies from the donor country. The agreement represents “a very concrete signal… of the DAC’s commitment to the reform of aid practices”, said DAC chairman Jean-Claude Faure. The meeting also adopted a policy statement on poverty reduction, pledging to help developing countries meet the challenge of a comprehensive approach to development and poverty reduction; globalisation; the digital age; and diseases such as AIDS.

Small firms, a critical element of economic growth and job creation, are a particularly strong force when grouped into local networks, or clusters, specialising in compatible industries. Representatives of such networks from 35 countries, many outside the OECD, came together with policymakers in Paris in January for a World Congress on Local Clusters, organised by the OECD’s Local Economic and Employment Development Programme (LEED) and the French Delegation for Territorial Planning and Regional Action (DATAR).

Legal immigration may be desirable, but can illegal immigration be controlled or even eliminated? Jean-Pierre Garson, OECD’s expert on international migration, responded to questions from Marc Semo for the French daily, Libération.*

The OECD will have to find new ways of involving civil society and non-member governments in its work if it is to remain relevant and important in the 21st century, Secretary-General Donald Johnston told the Council of Europe’s Parliamentary Assembly in Strasbourg on September 27.

Poverty in all its forms is the greatest challenge to the international community. Of special concern are the 1.2 billion people living on less than $1 a day and the additional 1.6 billion living on less than $2 a day.

In September 1998, Transparency International (TI) published the most comprehensive index to date on perceptions of corruption in eighty-five countries worldwide. Since its inception in 1995, the Corruption Perceptions Index (CPI) has encouraged debate and provided the basis for substantive anti-corruption reforms in a number of countries.

Evolve or die! A harsh admonition, but a very appropriate one as we contemplate the century and millennium ahead! In 1893, John Hanson Beadle, author and journalist, wrote this epitaph for futurology (reported in New Scientist, October 15, 1994): “All history goes to show that the progress of society has invariably been on lines quite different from those laid down in advance, and generally by reasons of inventions and discoveries which few or none had expected.”