OECD official on Australia’s standing in the global recovery
JUST over two years on from the collapse of Lehman Brothers the recovery is slow, but international policy-shapers maintain economic rebuild and reform efforts are on track.
“Globally we’re in a recovery phase, a very mild one. We’re seeing modest recovery in consumption with very high levels of unemployment and limited increases in wages.” Jonathan Coppel economic counselor to the Secretary-General of the Organisation of Economic Development (OECD) said.
“At the moment we are looking at frameworks for strong, sustainable and balanced growth. We are looking at what contributed to the GFC and what can create growth, including the impact of different structural policies.” He said.
Mr Coppel travelled to Australia from Paris, where his role includes responsibility for preparing the OECD’s contributions to the G20, in September 2010 to deliver the keynote address at the Global Access Partners National Economic Review.
He said while recovery and reform activity may appear slow, progress is being made.
“Our Secretary-General often uses the metaphor of a fire. When the house was on fire everyone knew what to do, just get a bucket and pour water on it. Now it’s the rebuilding stage, and when the house is burnt down what do you do? Do you build a three bedroom house, one or two bathrooms? Do you paint the walls white, or pink or yellow? Everyone has different views on what needs to be done. There are a lot more options on how you go about reforming the international system. So it’s understandable that things are moving more slowly.”
The OECD has tipped growth at less than 1.5 per cent for the G7 in the second half of the year.
“That’s still very weak growth, it’s not going to make inroads into unemployment levels. The emerging market economies are in a different situation. China and India have capacity constraints, so they are actually trying to slow down growth.”
Mr Coppel said Australia is “growing as close to its capacity” and expects a hiccup in the growth of its largest trading partner China.
“China is so large that the rising tide effects all the boats in that region, of which Australia is a part. There are investment linkages and second-round effects. As China grows it has an effect on surrounding economies, and these economies have linkages with Australia.”
“There will be some form of bump along the road in China’s ongoing growth. This longer term trajectory of improvement in China’s growth performance still has a long way to go. But it’s not going to be a straight line trajectory.” He said.
Mr Coppel was interviewed for First 5000 by Editor Virginia Harrison.
