OECD faces a huge challenge of image. You insist that the organisation, known for its in-depth analyses and reliable statistics, aims to represent all relevant economies. Emerging countries, however, cultivate the impression that the OECD, despite its co-operation and development efforts well beyond its membership, is still the voice of "rich nations" only.

Growth has continued to slacken to under 8% by the second quarter of 2008. Inflation is high, driven by commodity prices, but the peak appears to have passed. The current account deficit has risen substantially and there is downward pressure on the exchange rate. The economy is projected to slow further over the next year and to recover in tandem with the world economy in 2010.

Can cutting down on sugar subsidies lead to healthier trade competition and trimmer prices? The 2005 European Union market reforms aim to thin EU farmers’ sugar subsidies and cut out obsolete sugar mills. Sugar Policy Reform in the European Union and in World Sugar Markets maps out how this might work.

One of the main challenges for the future will undoubtedly be the migration of a highly skilled workforce from Asia (see for instance, “Globalisation and Labour Markets: Policy Issues Arising from the Emergence of China and India”, OECD Social, Employment and Migration Working Paper No 63, November 2007, www.oecd.org/migration).

The world economy faces challenges from the new powerhouses of China and India (see Nos 263 and 264/265, 2007). In order to compete, there is a case for closer co-operation between developed countries and, in particular, tighter integration in Europe.

The emergence of China and India on the world economy still unfolds. Lifestyles are evolving fast, and that means more demand, more energy consumption and more greenhouse gas emissions. But what of the impact on climate change?

Innovation has played a modest role in explaining growth in both China and India in recent years, but both countries have work to do to sustain their promising growth paths. Moreover, there are important differences between the respective challenges that each country faces.

The economy grew rapidly in the fiscal year (FY) 2006, expanding by 9.4%. Strong growth was fuelled by a good performance of the agricultural sector and continued strength of industrial output. In the first half of FY 2007, investment remained buoyant, leading to improvements in the supply potential of the economy. With higher  interest and exchange rates, output growth is projected to gradually slow to 8.4% by 2009. The current account deficit is likely to widen from 1.1% of GDP in FY 2006 to 2% by 2009. Inflation, as measured by the GDP deflator, is expected to ease back somewhat over the projection  horizon as increases in food prices moderate.

Strong economic growth has given India’s people much to smile about as their country celebrated its 60th anniversary of independence this year. They could achieve much more still, though changes would be needed.   

As political leaders gathered in Heiligendamm in northern Germany this June and before that at the OECD in Paris in May, the concern on everyone’s minds was the future shape of the global economy.

Announcements about enlarging the OECD’s membership and strengthening co-operation with other countries took much of the limelight at this year’s annual ministerial meeting. Below is an extract on enlargement from the Chair’s summary, followed by some selected highlights of the meeting.

The global economy is into its fifth year of growth. The expansion enjoyed in the OECD area has benefited from the dynamism of large non-member economies, especially in Asia. Globalisation has helped these countries raise living standards and reduce poverty. Indeed, the participation of China, India and other non-OECD nations in global economic flows has been increasing at a remarkable pace, now representing around half of total world GDP (measured by purchasing power parities), about 40% of world exports and nearly half of the world’s energy consumption. They have become massive outward investors, too.

League tables of competitiveness give an easily comparable ranking of the global economic performance, but they leave underlying questions unanswered. Why are the “poor” countries four times less productive than the “rich” ones, for instance? And what do these rankings say about the role of human capital, or financial markets or physical infrastructure?

Could nuclear fusion solve the world’s future energy problems? Scientists believe it could. Experiments have been taking place for years to show how a fusion reaction, rather than splitting a nucleus in the way fission does, forces two atomic nuclei together to form heavier ones. That process releases energy.

An assessment of India’s short-term economic prospects appears for the first time in the latest OECD Economic Outlook, so adding to the coverage in this report of key non-OECD economies Brazil, China and the Russian Federation. India has been one of the most rapidly growing economies in the world over the past five years. Nonetheless, with a slightly lower population than China and significantly lower average incomes, the economy is only half the size of China’s, though double that of Brazil and Russia.

We all now know that weak corporate governance can have a real impact on investors, savers, retirees, creditors, employees and consumers, as well as on entire economies. Corporate failures from the US to Italy have demonstrated this. But what would the effects be on developing countries?

India’s electricity supply industry is mainly owned and operated by the public sector, and is currently running a growing risk of bankruptcy. While India is the third-largest producer of hard coal after China and the US, it imports around 1.4 million barrels of oil per day, 60% of its total needs. According to the US Energy Information Administration, India has a shortfall of roughly 13,000 megawatts of electricity.

India became the 27th member of the OECD’s Development Centre in February, joining other non-OECD members Argentina, Brazil and Chile. India has had a co-operation programme with the OECD since 1997. India’s external affairs minister, Jaswant Singh (see photo), said his country’s membership of the Development Centre would strengthen this dialogue.