OECD: Group of 20 must focus on productivity and competitiveness

http://www.arabnews.com/economy/news/701956

ISTANBUL: The worlds 20 biggest economies must

focus on higher labor productivity and become more
competitive and innovative if they want to deliver on a
pledge to boost economic growth, the OECD said
ahead of a G20 meeting.
Leaders of the worlds top 20 economies (G-20) agreed
last year to launch new measures to raise their
collective gross domestic product growth by an
additional 2 percentage points over the next five years
above the level projected in 2013.
The pledge, called the Brisbane Action Plan, entails
about 1,000 commitments. G-20 finance ministers and
central bank governors meeting in Istanbul will discuss
ways to prioritise and implement them.
Labour productivity remains the main driver of longterm growth, the Organization for Economic
Cooperation and Development (OECD) said in a report
prepared for the meeting.
The OECD, together with the International Monetary
Fund, is likely to be tasked with negotiating with
individual countries on which reforms to choose first.
Priority should be given to reforms aimed at
developing skills and knowledge-based capital. Raising

the quality and inclusiveness of education systems will

underpin this, it said.
Governments need to improve policy settings in
competition and innovation to facilitate the entry of new
firms and the smooth reallocation of capital and labor
toward the most productive firms and sectors, the
report said.
Structural reforms have slowed in most advanced
economies in the last two years after a flurry of activity
at the height of the financial crisis while big emerging
economies were speeding up changes, it said.
Overall, structural reforms implemented since the early
2000s have contributed to raising the level of potential
gross domestic product per capita by around 5 percent
on average across countries, with most of the gains
coming from higher productivity, the OECD said.
Further reform toward current best practice could raise
the long-term level of GDP per capita by up to 10
percent on average across OECD countries, the report
said.
This is equivalent to an average gain of around $3,000
per person.
The OECD said governments should ensure that
women, young people as well as low-skilled and older
workers also get jobs and earn decent salaries.