Editor's note
International Internet Magazine. Baltic States news & analytics
Wednesday, 02.07.2025, 01:52
New trends in economic policy: OECD outlook

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The OECD
ministerial council meeting, MCM (6-7.06.2017) discussed the need for inclusive growth
to improve well-being for all in open, digitally advanced economies. The
message was easy to formulate but it seems quite difficult to implement. Formulating
a “more people-centered approach” both at the national level and in international
regulations faces constant resistance from the liberal market itself, national
protectionist measures and powerful elites, to name a few.
Though the MCM highlighted
the importance of continuing countries’ focus on developing more integrated,
and inclusive economies and societies, it is going to be seen how good
intentions can turn into practical results. More states are already adopted
so-called sustainability plans according to the pledges of the UN-2030 Agenda
for Sustainable Development aimed at “leaving no one behind”. But making globalisation work for “better lives
for all” seems to be in constant confrontation with existing economic policies’
structures. Some of them can be highlighted below.
Changing course
All three Baltic States are the OECD members; that means they have “to
stick” to the organisation’s opinion. OECD quite rarely takes a
“soul-searching” path and change old-aged development course aimed at liberal
market activity; this time it’s an exception… And therefore it is good enough
to consider well-formulated OECD opinion.
Shortly, the arguments are actually known to the civil society: most
people are already aware of that present “western system” is not fair and it
does not make them happy. Examples abound: enough to mention that the so-
called free trade creates more inequality and unemployment.
See for example: www.oecd.org/economy/economicoutlook.htm
Eternal question:
“what’s to be done”? According to OECD, protectionism is in no way a solution, though
a “free trade” is still the background for increasing welfare. The way out is
that of “political choice”: e.g. more equal distribution of all the wealth, which free trade creates. That
could be done through different means: re-assessment of taxation, investing in
education new skills, adequate health system, modern infrastructure and, of
course, new and active employment market.
Sounds quite
familiar!? Yes, it’s something that the Nordic system of political economy is
built on; the principle is called “flex-security”, which means, flexible job
market and secure means of subsistence for re-trained workers.
However positive,
the message can came true only through a new consensus, argued OECD officials,
between/among economic and political decisions, so-called political economy.
That recipe can
be used for regulating globalization processes as well!
Lessons for the Baltic States
This is how we
enter the issue of political economy for the Baltic States: i.e. from the
globalisation angle. There are, in fact, presently two main approaches to
globalisation from a nation standpoint: one, the “liberal” approach is based on
countries’ liberalisation and deregulation process of all traditional “market
forces”. Another, “populist” approach is based on national protectionism behind
“closed doors” with export-import restrictions/subsidies, customs barriers and
other protectionist tools. Both ways, actually are leading to nowhere: we can see
the “strange” outcomes of national-protectionist measures and public
dissatisfaction resulted in present social changes on both sides of the
Atlantic.
What OECD
suggests is the “third way”:
creating a political superstructure on the global markets’ functioning. The
idea is to turn “all the goods” created globally by the global free market
instruments (free movement of workforce, capital and production, etc.) for the
benefit “of us all”! And OECD correctly underlines that this can be done ONLY
through a responsible political economy.
Probably the same
recipe is true for the present EU of which all three Baltic States are members:
isn’t it time to re-assess and truly implement not-so-old basic EU market
principle: social market economy
voiced some decades ago (around 1980s) by the then Commission president Jacques
Delors. The pronouncement was good enough, but in has never materialised…
It’s the policy,
stupid, correctly argued Danish daily Politiken’s
lead recently (Ref. “OECD’s U-vending”, 6.06.2017).