Taking an important step towards greater transparency and putting an end to banking secrecy in tax matters, the OECD today released the full version of a new global standard for the exchange of information between jurisdictions.
The Standard for Automatic Exchange of Financial Account Information in Tax Matters calls on governments to obtain detailed account information from their financial institutions and exchange that information automatically with other jurisdictions on an annual basis. The Standard, developed at the OECD under a mandate from the G20, endorsed by G20 Finance Ministers in February 2014, and approved by the OECD Council.
The Standard provides for annual automatic exchange between governments of financial account information, including balances, interest, dividends, and sales proceeds from financial assets, reported to governments by financial institutions and covering accounts held by individuals and entities, including trusts and foundations. The new consolidated version includes commentary and guidance for implementation by governments and financial institutions, detailed model agreements, as well as standards for harmonised technical and information technology solutions, notably a standard format and requirements for secure transmission of data.
State of the World’s Forests 2014
Source: Food and Agricultural Organization of the United Nations
Across the world, forests, trees on farms, and agroforestry systems play a crucial role in the livelihoods of rural people by providing employment, energy, nutritious foods and a wide range of other goods and ecosystem services. They have tremendous potential to contribute to sustainable development and to a greener economy. Yet, clear evidence of this has been lacking. This evidence is critical to inform policies on forest management and use, and to ensure that the benefits from forests are recognized in the post-2015 development agenda, not only with respect to the environment, but also for their contributions to broader social issues. This edition of State of the World’s Forests addresses this knowledge gap by systematically gathering and analysing available data on forests’ contributions to people’s livelihoods, food, health, shelter and energy needs. Crucially, the report also suggests how information might be improved and policies adjusted, so that the socioeconomic benefits from forests can be enhanced in the future.
Impact of Fed Tapering Announcements on Emerging Markets
Source: International Monetary Fund
This paper analyzes market reactions to the 2013–14 Fed announcements relating to tapering of asset purchases and their relationship to macroeconomic fundamentals and country economic and financial structures. The study uses daily data on exchange rates, government bond yields, and stock prices for 21 emerging markets. It finds evidence of markets differentiating across countries around volatile episodes. Countries with stronger macroeconomic fundamentals, deeper financial markets, and a tighter macroprudential policy stance in the run-up to the tapering announcements experienced smaller currency depreciations and smaller increases in government bond yields. At the same time, there was less differentiation in the behavior of stock prices based on fundamentals.
International Migration: The Relationship with Economic and Policy Factors in the Home and Destination Country
Unfavourable demographic trends in many OECD countries threaten the sustainability of potential labour resources, GDP growth and fiscal positions. One factor that is expected to mitigate these trends is continued inflows of migrant workers from low income economies. However, a rapid catch-up in productivity and wages in these traditional source countries vis-à-vis the OECD may weaken economic incentives for migration and imply a transition away from current migration patterns. This paper uses data of the high-skilled and low-skilled migrant stock between 92 origin and 44 destination countries to highlight the relationship between economic factors and migration. The paper also attempts to uncover links with policy and demographic factors prevailing in the origin and destination countries. The analysis suggests that higher skill-specific wages in the destination country are associated with more migration. This relationship appears to be particularly strong for migrants from middle-income countries, supporting theories of an inverted-U relationship between origin country economic development and the propensity to migrate. Policy differences between the destination and origin also appear important, for example in terms of regulations on businesses and labour markets, along with the relative quality of institutions. In some instances, the effects on high-skilled and low-skilled migrants differ markedly. Combining the estimated coefficients from the model with the skill-specific wage profile from the OECD long-term growth projections highlights the potential for weaker future migrant flows to OECD countries than implied by past trends and embedded in official projections.
Oversight Issues in Mobile Payments
Source: International Monetary Fund
This paper examines oversight issues that underlie the potential growth and risks in mobile payments. International experience suggests that financial authorities can develop effective oversight frameworks for new payment methods to safeguard public confidence and financial stability by establishing: (i) a clear legal regime; (ii) proportionate AML/CFT measures to prevent financial integrity risks; (iii) fund safeguarding measures such as insurance, similar guarantee schemes, or “pass through” deposit insurance; (iv) contingency plans for operational disruptions; and (v) risk controls and access criteria in payment systems. Such measures are particularly important for low-income countries where diffusion is becoming more widespread.
Turkey’s economy will grow stronger in the coming years, but remains overly dependent on domestic consumption funded by foreign finance, according to the latest OECD Economic Survey of Turkey. Turkey should rebalance growth through monetary and financial policies that keep inflation, exchange rates and credit levels on sustainable paths, the OECD said.
The Survey notes that Turkey’s short-term economic outlook has improved: buoyed by the projected global recovery, growth is set to pick up over the coming two years. Turkey’s longer-term prospects, however, hinge on the authorities’ ability to achieve disinflation and preserve the credibility of public finances, while implementing structural reforms that boost productivity and competitiveness across the economy.
A better overall regulatory framework is essential if the business sector is to remain a driver of strong and inclusive growth. Structural change in the business sector would strengthen competitiveness, exports, employment, income and savings, help rebalance domestic and external demand, and move the economy toward an externally sustainable path.
Turkey should strive to make its product and labour market regulations more growth-friendly while continuing to reduce regulatory obligations related to company size.
Economic recovery in the United States is stronger than in most OECD countries, but it will remain sluggish unless new reforms are launched to boost growth, according to OECD’s latest Economic Survey of the United States.
The U.S. recovery has spread across a wide array of sectors. Most banks have generally returned to health, housing prices are rising and unemployment has fallen. That said, growth could be bolstered by new reforms of taxes, education, training, immigration and working conditions – all of which could improve the economic prospects of middle-class families.
Deposit Insurance Database
Source: International Monetary Fund
This paper provides a comprehensive, global database of deposit insurance arrangements as of 2013. We extend our earlier dataset by including recent adopters of deposit insurance and information on the use of government guarantees on banks’ assets and liabilities, including during the recent global financial crisis. We also create a Safety Net Index capturing the generosity of the deposit insurance scheme and government guarantees on banks’ balance sheets. The data show that deposit insurance has become more widespread and more extensive in coverage since the global financial crisis, which also triggered a temporary increase in the government protection of non-deposit liabilities and bank assets. In most cases, these guarantees have since been formally removed but coverage of deposit insurance remains above pre-crisis levels, raising concerns about implicit coverage and moral hazard going forward.
Around one in seven students in the 13 OECD countries and economies that took part in the first OECD PISA international assessment of financial literacy are unable to make even simple decisions about everyday spending, and only one in ten can solve complex financial tasks.
Some 29 000 15 year-olds in 18 countries and economies* took part in the test, which assessed the knowledge and skills of teenagers in dealing with financial issues, such as understanding a bank statement, the long-term cost of a loan or knowing how insurance works.
hanghai-China had the highest average score in financial literacy, followed by the Flemish Community of Belgium, Estonia, Australia, New Zealand, the Czech Republic and Poland.
The gender gap in financial literacy was much smaller than in OECD PISA tests in maths or reading, with there being no significant difference between the performance of boys and girls, except in Italy.
But the inequality gap mirrors that in key school subjects: more socio-economically advantaged students scored much higher than less-advantaged students on average across participating OECD countries and economies. Non-immigrant students also performed slightly better than immigrant students from a similar socio-economic status. The gap between the two groups is larger than the OECD average in the Flemish Community of Belgium, Estonia, France, Slovenia and Spain.
The survey also revealed that skills in mathematics and reading are very closely related to financial literacy. However, high proficiency in one of these subjects does not always signal strong performance in financial literacy.
Membership in the United Nations and Its Specialized Agencies (PDF)
Source: Congressional Research Service (via Federation of American Scientists)
Since the United Nations (U.N.) was established in 1945, the U.S. government, including many Members of Congress, has maintained an ongoing interest in the criteria and process for membership in the United Nations and its specialized agencies. The United Nations currently has 193 member states and two observer non-member states—the Holy See (Vatican) and “Palestine.”
This report focuses on the effects of climate change impacts on economic growth. Simulations with the OECD’s dynamic global general equilibrium model ENV-Linkages assess the consequences of a selected number of climate change impacts in the various world regions at the macroeconomic and sectoral level. This is complemented with an assessment of very long-run implications, using the AD-RICE model. The analysis finds that the effect of climate change impacts on annual global GDP is projected to increase over time, leading to a global GDP loss of 0.7% to 2.5% by 2060 for the most likely equilibrium climate sensitivity range. Underlying these annual global GDP losses are much larger sectoral and regional variations. Agricultural impacts dominate in most regions, while damages from sea level rise gradually become more important. Negative economic consequences are especially large in South and South-East Asia whereas other regions will be less affected and, in some cases, benefit thanks to adjustments from international trade. Emissions to 2060 will have important consequences in later decades and centuries. Simulations with the AD-RICE model suggest that if emissions continue to grow after 2060, annual damages of climate change could reach 1.5%-4.8% of GDP by the end of the century. Some impacts and risks from climate change have not been quantified in this study, including extreme weather events, water stress and large-scale disruptions. These will potentially have large economic consequences, and on balance the costs of inaction presented here likely underestimate the full costs of climate change impacts. More research is needed to assess them as well as the various uncertainties and risks involved. However, this should not delay policy action, but rather induce policy frameworks that are able to deal with new information and with the fact that by their nature some uncertainties and risks will never be resolved.
World of Work Report 2014
Source: International Labour Organization
This year’s edition focuses on developing countries and argues that quality jobs are a key driver for development. It draws on evidence from over 140 developing countries and finds that a common factor amongst those countries that have achieved higher per capita income and sustained growth was quality jobs.
Drug use prevalence is stable around the world, according to the 2014 World Drug Report of the United Nations Office on Drugs and Crime (UNODC), with around 243 million individuals, or 5 per cent of the world’s population aged 15- 64 having used an illicit drug in 2012. Problem drug users meanwhile numbered about 27 million, roughly 0.6 per cent of the world’s adult population, or 1 in every 200 people.
From Decline to Recovery: A Rescue Package for the Global Ocean (PDF)
Source: Global Ocean Commission
From Report Summary (PDF):
The compelling evidence of ocean decline, in the high seas and as a result of high seas resource extraction, has fired our conscience and concern. The Commission was determined to identify solutions that will directly and effectively put us on track to shifting from a vicious cycle of decline to a virtuous cycle of high seas recovery. Our drive to turn things round – our imagination and our commitment – has been fired by good and sometimes inspiring examples of sustainable and even rejuvenating practice. We are confident about and encouraged by the availability of viable solutions stemming from the huge advances in marine science and understanding; the growing awareness and engagement of global citizens in ocean issues; and the new focus on the ocean within the global climate change and UN post-2015 global development debates. We believe that the opportunity and time to address the threats facing the global ocean is now.
In the following pages we set out our proposals for reversing the cycle of decline. The eight proposals provide a carefully targeted rescue package for the high seas. The proposals form a coherent whole. They specifically address the weaknesses in governance, the lack of equity and sustainability regarding the use of high seas resources, and the new and emerging pressures that need to be pre-empted before undue harm is caused. In each case, we have seen what works and have been inspired by it.
There are clear economic incentives for both the public and private sectors to take their responsibilities in the high seas more seriously. Without stronger governance and regulation, uncertainty will continue to pervade ocean-related industries and reduce profits. Without globally agreed standards and guidelines in the emerging sectors such as offshore oil and gas and deep sea mineral extraction, the risks and liabilities will be hard to assess and control. Most of all, without urgent global action to prevent climate change, and efforts to build resilience against its impacts, the cost to the global economy will rise exponentially. We can continue to lay cables and ship containers across a dead ocean, but without paying attention to sustaining the life within it, we put our own lives and those of every living thing in peril.