The Organisation for Economic Co-operation and Development (OECD)
The organisation for economic co-operation and development (OECD) has the objective of making improvements in the social well-being and economic growth of people across all regions in the world. OECD partners with different government bodies to determine the best policies to implement in various countries that can foster economic growth. Different regions have different levels of economic growth and the help needed differs based on the current situation. Such help is mainly focused on the developing countries through encouraging developed countries to set more investments and infrastructure in developing countries. Common solutions to the economic challenges are a major topic set up with different governments in the world by the OECD. The OECD was created to offer a higher and sustainable economic growth in employment creation with an aim of improving people’s living standards. An expansion of world trade to multinational under a non-discriminatory manner in compliance with international policies and obligations.
OECD Policies
Investing in a smarter future
Getting a better world with competent skills requires people with knowledge and information that can help move nations forward in innovation and technology. Different levels of education offer different skills and attaining to specific levels can help in managing resources and making the best of the available resources. The OECD has ensured that it has partnered with governments in the provision of education and the results have so far been positive where education has been considered by many people and attaining to set lower limits has helped bring awareness (Mishel and Eisenbrey 2015) A statistical representation of the population that has attained at least tertiary level education is indicated below.
Boosting jobs and skills
Unemployment is a major factor that affects economic growth because a few people have enough finances at their disposal to spend and invest hence leaving a wide gap between the rich and the poor. A contribution to employment creation among developing countries has been fostered by encouraged investment by governments and other foreign investors to regions with resources and potential to help create a source of income to the people. The push for increasing job opportunities is a way of increasing personal income that can be used in discovering other potential sectors that have not been explored due to lack of capital (Schneider 2015). “Lifelong employability and lifelong learning” are the core drivers of OECD in encouraging the creation of jobs and improving skills.
Supply Side Policies
Supply-side policies are means of increasing the aggregate supply hence casing a supply curve shift from the left to the right. Under such policies, enhancement of productive capacities within given economies towards improving quality and quantity of other factors of production is given an upper hand. Some of the supply side policies include labour market, capital market, competition " efficiency, entrepreneurship, and education. A successful supply-side policy creates impacts such as lowering of inflation, improving economic growth, lowering unemployment rates, and improving trade " balancing payments. A successfully implemented supply-side policy ensures a shift in the supply curve from one point to another in a progressive direction. For example, a shift from point ‘A’ to point ‘B’ as shown in the diagram below will indicate an increased production of goods and services under the utilization of available resources.
Economic Growth
Economic growth is when the number of services and goods increase within a region for a single person within a population under a certain set period of review. An economic growth can be measured in terms of real or nominal times under the influence of inflation rates. An increase in the gross domestic product of a nation is used to determine an aggregate economic growth where the national product metrics are used. An effect of economic growth attracts a surge in profits and expanded economy. Stock market prices grow and businesses and companies raise more money through the sale of shares for more investment. Through the coming up of more investments, more job opportunities are created where labour is needed to work on the started projects that have no employees. Increased projects mean more activities have been set up for more production and increased income from the sale of such products and services. Consumers are made to feel free in making such purchases through promotions and advertisements that use a convincing language and presentations mad to increase the desire of purchasing such products or services that are intended to satisfy customer needs. Increased production and sales figure demonstrate a growing economy. When countries and nations start producing more services and products than previous periods, economic growth is deemed to have occurred. An increase in production can be either productive or not depending on the value it adds to the current state of the economy. The value of a service or product determines the level of economic growth (Molle 2017). OECD has enabled many countries to discover and better economic resources in many ways that help in the growth of an economy. For example, some of the developing countries will fuel minerals have been helped to mine and supply the energy products to the world hence earning more income that increases the gross domestic product and the same converts into better living standards by increasing the per capita income.
Infrastructure
Investing in infrastructure is a major way towards making businesses easier to conduct through improved transport network and buildings. Examples of economic infrastructure include communication, water supply, energy, transport, and irrigation. Moving towards a green environment offers more opportunities because less pollution is caused and more benefits generated from the invested projects (Millner and Dietz 2015). For example, semi-arid and arid areas can be irrigated with the help of OECD and other organisations to help produce food for subsistence use and export to generate revenue. Investors like regions with a well-established network of infrastructures such as roads, energy, communication, water supply, and more to set up investment projects that can help improve the living standards of the people within such regions through the provision of job opportunities and increase the general income of a nation through the payment of taxes from conducting such businesses. Some of the major factors of economic growth I many regions include the prices of products, political stability, and the weather conditions for agricultural products. For example, the UK is currently struggling in economic growth due to the lack of enough and consistent electricity generation to sustain the needs of its industries and household consumption. Lacking the energy infrastructure in any region leads to a slow-down in the production industries and firs due to lack of enough power to help producers to the set maximum potential of industries. Upon investigation, the UK has indicated a poor performance among the G7 countries. The exhibit below illustrates the performance of the UK among other nations (Arezki, Bolton, Peters, Samama, and Stiglitz 2016).
Alternative policies to achieve economic growth
Making changes in the manner of saving is a major guide towards improving an economy that is lagging behind. However, taxes may seem to be high but also, payment of taxes does not indicate a destruction of personal and business income but a way of ensuring that they are kept alive. Governments can affect national having habits when they make poor decisions on expenditure and payment of certain bills. An example of a way a governed can affect the saving power of a nation can be through the payment of higher salaries to civil servants when the income collected from the public through taxes is lower or not enough to finance projected budgets. Governments should determine the most needed items and services to pay before releasing funds to projects that can affect the living standards of the people (Pettinger 2013). For example, infrastructure should be done progressively from the most urbanised regions to remote so that enough time and accumulation of resources can be done.
Conclusion
OECD has helped nations realise their potential in making better use of the available resources. Apart from using the available resources, more assistance has been provided in ensuring that more resources are invested in areas with more minerals to mine and supply to the world hence generating income. For example, irrigation and fuel mining have been major projects conducted by the OECD in various nations that have indicated progressive results. It can, therefore, be agreed upon on the use of supply-side policies in improving and boosting economic growth among nations that have potential but lack financial help. Control over inflation and investing for the future through education and innovation offers better chances of creating a better economic status in the future. Some of the OECD policies may be simple but in the long run, can yield fruits through improving the per capita income.
References
Arezki, R., Bolton, P., Peters, S., Samama, F. and Stiglitz, J., 2016. From global savings glut to financing infrastructure: the advent of investment platforms.
Millner, A. and Dietz, S., 2015. Adaptation to climate change and economic growth in developing countries. Environment and development economics, 20(3), pp.380-406.
Mishel, L. and Eisenbrey, R., 2015. How to Raise Wages: Policies That Work and Policies That Don't. Stetson L. Rev., 45, p.43.
Molle, W., 2017. The economics of European integration: Theory, practice, policy. Routledge.
Pettinger, T., 2013. How does the stock market affect the economy? Retrieved from.
Schneider, F., 2015. Size and Development of the Shadow Economy of 31 European and 5 Other OECD Countries from 2003 to 2014: Different Developments. Journal of Self-Governance " Management Economics, 3(4).
