Fostering private sector-led economic growth and development
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| BIAC Chairman Charles P. Heeter (center), with OECD
Secretary-General Angel Gurría (left)and BIAC Secretary General Tadahiro Asami
(right) at the 18 Jan 2012 consultation with OECD
Ambassadors. |
Paris, 18 January 2012 – Against a backdrop of deteriorating global growth, weakened trade, and high rates of long-term unemployment
in many countries, BIAC devoted its Annual Consultation with OECD Ambassadors on 18 January 2012 to discuss what is needed to foster private sector-led
economic growth and development.
Led by BIAC Chairman Charles P. Heeter, business leaders highlighted the need for urgent, decisive and collective international policy responses by
governments in order to regain market confidence and private sector investment. At the same time, greater action must be taken to foster development
and to transform developing countries into prosperous and competitive economies, toward achieving stronger, more inclusive, sustainable growth for the
widest number of countries globally. The role played by the private sector in terms of trade, investment and job creation is essential in both cases,
and is supported by closer co-operation among governments (notably at G20 level).
“The immediate economic situation and the long-term development challenges require very different types of policy responses. However, what is clear is
that, as public resources are increasingly scarce, private sector-led growth and job creation is essential for reviving the economic recovery and for
bringing about development that is strong, sustainable and inclusive,” stated Mr. Heeter.
In addition, three BIAC Executive Board members, Mr. Christoph Mäder (Switzerland), Mr. Katsutoshi Saito (Japan), and Mr. Phil O’Reilly (New Zealand),
as well as Mr. Christian Schricke, Senior Advisor to the Chairman and CEO of Société Générale (France), presented their country/regional business views and insights.
Mr. Mäder focused on governance, including competition and open markets issues. “Based on my personal experience not only in my current position for
a multi-national company contributing to the development over all continents but from all business, the key to overcome the current crisis is the enabling
of growth. Transparent and efficient governance and open markets are core elements to that,” said Mäder.
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| BIAC delegation speakers, led by BIAC Chairman Charles
P. Heeter (third from right) |
Mr. Saito spoke on Japan’s experiences over the past two decades and how they relate to today’s problems in Europe and America. “It seems fair to call
the current situation in Europe [a] second round of the crisis. The initial shock resulted in low growth rates, low interest rates, and an excess of liabilities;
this second round features the double punch of severe fiscal strains and a financial crisis,” stated Saito.
“One of the considerations from the Japanese experience is that a short-term solution is unlikely. The problems will probably be prolonged. Fiscal and
monetary policy measures are not useless, but as one crisis follows another over an extended period, the scope for such measures is gradually lost. The
countries in question must co-operate in making determined efforts to deal with the situation, and they also must aim for sustained growth by tapping the
dynamism of the private sector,” he concluded.
Speaking about employment creation, Mr. O’Reilly highlighted that the trends in long-term unemployment and their impacts on youth in particular, are
cause for great concern. “Challenges will vary from country to country but commonly, unemployment will be higher amongst those at the margins of the
work force – the young, the unskilled, and other disadvantaged groups,” stated O’Reilly.
“In thinking about employment creation, [it is a good idea] to put ourselves in the shoes of employers and potential employees, ensuring that their
needs are met and that they both have adequate opportunity and protection.” He noted the OECD’s recent report on income inequality as being particularly
relevant guidance for governments to strengthen strategies and policies that are pragmatic, relevant to national circumstances and well supported by business.
Mr. Schricke emphasised that a strong banking system is essential
for economic recovery. He recognised that the call for regulatory
reforms after the crisis in 2008 was necessary, but he raised the
question: “Have we gone too far to over regulate?” Noting the
regulatory avalanche of the past couple years, he highlighted the
problem that today banks need time to adapt and implement [the
reforms]. The increasing speed by which regulatory measures are
being introduced – a consequence of the current crisis in confidence
– is worrisome. He added that “regulation means new rules, but it
also means a supervisor monitoring the rules and their compliance. The crisis has revealed not a lack of regulation, but a lack of proper supervision [by regulators].”
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| OECD
Ambassadors following BIAC presentation during the 18 Jan
2012 consultation on private sector-led economic growth. |
Discussions then focused on the importance of creating a policy environment that encourages private sector-led economic growth (including policies
for open and competitive markets, innovation, green growth, and employment creation), as well as the need to boost market confidence, the OECD role
vis-à-vis the G20, the need for greater clarity in the updating process of the OECD MNE Guidelines, and the importance of dialogue with social partners.
Many Ambassadors responded to the business presentations,
discussing subjects including: protectionism, trade and regional
trade negotiations, regulatory oversight of markets, innovation, job
creation and employability of labour force, and relations with
non-members. Several OECD Directors then added their comments,
touching on both the issues raised in the consultation as well as in
the BIAC background discussion paper (available online at
www.biac.org/policystatements.htm).
BIAC Environment Committee Chair Mr. Russel Mills responded to several questions from different Ambassadors on innovation and green growth. He highlighted
that if green growth is implemented effectively, it is not a zero sum game. However, he stressed that we “need to begin with [private sector-led] growth,
and then find how to green that growth.”
BIAC Secretary General Tadahiro Asami added remarks on development; highlighting BIAC’s participation at the Fourth High-Level Forum (HLF-4) on Aid
Effectiveness in Busan, which focused on broader partnerships for development, including the private sector. “Development is no longer driven by ODA alone,
but also by FDI and associated domestic private sector growth and job creation,” said Asami. “We are therefore very interested in this concept of development,
and to contributing to the OECD Development Strategy.”
Nearly all OECD national delegations participated in the meeting, including 24 Ambassadors, highlighting the strong government interest in this form
of dialogue with the OECD business community. The LCM was chaired by OECD Secretary-General, Mr. Angel Gurría, who was accompanied by three Deputy
Secretary-Generals, as well as several OECD Secretariat directors and senior counsellors.
The feedback from OECD Ambassadors and Secretariat also provided an important basis for orienting BIAC’s strategic directions in 2012, including
the BIAC General Assembly and the BIAC role in the May 2012 Ministerial Council Meeting (MCM).
For further information contact Jonathan Greenhill at the BIAC Secretariat.
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