OECD Scenarios: Global Integration Is Key to Prosperity in Twenty-First Century

• Pages: 30-32

Page 30

Over the past decade, the process of global integration, which effectively began over a century ago, has picked up speed. The globalizing world economy, according to the Organization for Economic Cooperation and Development (OECD), in The World in 2020: Towards a New Global Age, provides a "historic coincidence of interests" for OECD and non-OECD countries (see box, page 31). Closer linkages between these economies are beneficial for sustaining economic growth. There is now a "window of opportunity" for improving living standards, eliminating poverty, promoting environmental sustain-ability, and moving along an accelerated path toward sustainable development in all areas of the world by shifting economies onto a higher performance growth path.

Several major challenges need to be met, however, to achieve these goals, including:

- further progress in liberalizing trade, investment, and financial flows, and in strengthening multilateral systems, to facilitate deeper economic integration among the world's economies;

- domestic policy reforms to counteract the backlash in some OECD countries against globalization, which is sometimes blamed for persistent unemployment, widening income inequality, and deindustrialization;

- the need for some dynamic and emerging economies to open their markets further to imports from both industrial countries and the lower-cost developing countries;

Organization for Economic Cooperation and Development

Established in 1961, the OECD's original membership included Austria, Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States. The following countries have joined the OECD since 1964 (in chronological order): Japan, Finland, Australia, New Zealand, Mexico, the Czech Republic, Hungary, Poland, and Korea.

- far-reaching policy changes in non-OECD countries, particularly those where the transition from a developing to a more advanced economic structure has just begun (in particular, sub-Saharan Africa).

The OECD study presents two alternative visions of the world economy in 2020: a slow-track reform and adjustment scenario ("business as usual") and a high-performance vision ("the new global age"). The high-performance vision is not a forecast, the OECD...