Strengthening Multilateral Economic Policies

OECD-Forum © Business at OECD (BIAC)

Multilateral collaboration is getting up in times of uprising protectionism. Organizations such as the Organization for Economic Cooperation and Development (OECD) as the central platform of the developed countries are getting even more important. On the occasion of the annual OECD Forum of policy leaders, BDI chief economist Klaus Deutsch claims substantial reform efforts in getting a joint growth strategy.

At the annual OECD fora, member states decide on the priorities of the working year. German industry is one of the most influential voices within the OECD and represents German companies’ interests. In the Economic Policy Committee of “Business at OECD - BIAC”, headed by Klaus Deutsch, all participating national business associations contribute to the final outcome.

According to most OECD countries, the main future tasks are education and innovation. Efficient tax systems and research and development must be given priority as well. At the 2018 OECD Forum, Deutsch presented BIAC’s “Economic Policy Survey”. According to the results of the survey, the business climate is positive, even though it is slightly weaker than last year. Hence, investment conditions have not increased substantially due to a lack of both political willingness and coordinated international policies. There are two opposing trends: A group of Asian countries such as India are currently opening their economies for free trade while another group, led by the United States, is closing up, said acting OECD chief economist Alvaro Santos Pereira. Moving away from international free trade to protectionism will constrain global GDP growth. During the global financial and economic crisis, structural reforms often had a negative connotation, although most OECD members have an enormous need for them. Excessive regulation and inefficient administrations represent massive obstacles for investments. Labour market and education policies often do not keep pace with rapidly changing labour markets. Against this backdrop, the OECD is serving as a platform to exchange best practices among the developed countries.

BDI promotes the interests of German industry in the approximately 30 BIAC committees. In this way, almost 100 representatives of German business bring their knowledge and experience to bear in the OECD process. The various committees deal with issues ranging from trade and investment policy to taxation, health, climate change, and policy on small and medium-sized enterprises. Through BIAC, German industry can play an active role in shaping the OECD decision-making process. Currently, the main focus is on digitization and inclusive growth, alongside trade and foreign direct investment. Industry’s input is indispensable to ensure practice-oriented policies and their implementation.