Two major areas of concern are a crisis of confidence and the loss of jobs, which is becoming increasingly unsustainable in all the 34 member-countries of the Organisation for Economic Co-operation and Development (OECD). While the unemployment rate stands at 11.4 per cent, the youth unemployment rate, which is of far greater concern, is 2-4 times more, depending on the country.
Overall, the eurozone is predicted to remain in recession with the continued possibility of a slightly negative growth. The U.S., by comparison, is looking slightly better and will end 2012 with about 2 per cent growth, but without any serious challenge or job loss, unlike the OECD countries. Growth in the G-7 countries is down from 0.7% to 0.3% on an average as the first part of the last quarter of 2012 is about to begin. Labour markets are seeing the bloodshed. Just to retain the pre-crisis employment figures, the OECD countries will need to add 50 million additional jobs.
The debt to GDP ratio remains equally dangerous at a staggering 100 per cent. In fact, Japan has hit a dangerous 200 per cent. Under the circumstances, all traditional measures of central banks are failing to lift economies in the OECD countries, especially in Japan.
The OECD originated in 1948 as the Organisation for European Economic Co-operation (OEEC) and was rechristened OECD in 1961. It has 34 member-countries, with Estonia, Israel and Chile coming on board in 2010. Along with its five focus countries, the number of countries closely associated with the OECD is 40. These countries account for 80 per cent of world trade, giving it a pivotal role in addressing the challenges facing the world economy.
The OECD has been criticised by several civil society groups and developing countries for the narrowness of its approach since membership was originally limited to a few rich nations. In 1997-98, the OECD’s draft multilateral agreement on investment (MAI) was heavily criticised by several non-governmental organisations and developing countries. Many critics argue this threaten human rights, labour and environmental standards in the least developed countries. The OECD has also been criticised for suggesting harmful tax practices, with the opponents of these measures arguing that tax formulation is the sovereign right of individual governments.
