Resilient Economies and Inclusive Societies

State Secretary Paal Bjørnestad took part in the 2014 OECD Ministerial Council Meeting in Paris on 6-7 May. State Secretary Hans Brattskar from the Ministry of Foreign Affairs also took part. The key theme of the meeting was «Resilient Economies and Inclusive Societies». The ministerial was chaired by Japan to commemorate the country’s 50th year as an OECD member.

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Norway has - like most OECD countries – seen declining productivity growth the last 10 years. Addressing this is essential for our future prosperity.

OECD has a key role in fostering structural reforms through providing comparable statistics, examples of best practices and good advice on structural policy. Circumstances will always differ between countries. But we can still learn from each other. Member countries like my own have benefitted greatly from OECD work in this area.

It is important that advice on structural policy is considered within a broader macroeconomic context. Here the OECD has its comparative advantage. My message is: OECD should do more of what it is good at. And aim to be even better where it is already a leader.

I believe that the NAEC initiative will further improve the OECD’s expertise on structural policy. I also welcome the Secretary-General’s Strategic Orientations.

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The Nordic countries had their own financial crises in the early 1990s. I think we can draw three key lessons from this experience:

• First, a solid macroeconomic framework with sufficient room for manoeuvre when needed
• Second, flexible labour and product markets are necessary to adapt to new realities
• Third, a robust and well-functioning financial sector is crucial to the real economy.

In short, if you are to survive hospitalization, you better be in good health before you go to hospital.

Following the banking crisis we improved our regulation and ensured our banks were well-capitalised. The financial industry is vital both to economic stability and growth.

Norway strongly supports improved regulation and supervision of financial institutions in Europe and elsewhere.  The OECD is well placed to provide independent analyses in this field.

A resilient economy is a flexible economy, an economy that can adjust to economic shocks. Flexible product and labour markets are fundamental. We should foster competition and remove structural impediments and barriers to entry.

We should not fear bankruptcies, as this is part of the “creative destruction” that is so important for innovation, adaptation and productivity growth. Support should be lent to individuals, not to firms.

We should also stimulate competition and trade across borders. Economic openness leads to productivity growth through technology transfer, innovation and specialisation.

An economy’s resilience can be measured by its ability to manage shocks without a sustained increase in unemployment. In particular high unemployment among young people undermines the economy and the society. I am therefore glad to see that the OECD has delivered on its action plan “Giving Youth a Better Start”.

I also welcome further work in the OECD on inequality – growth and stability.