[In-Depth Look] The Path to Recovery from the COVID Crisis According to the OECD

Last week, the Organisation for Economic Co-operation and Development (OECD) held a two-day ministerial meeting attended by finance and trade ministers from its 37 member countries under the theme "The Road to Recovery from the COVID-19 Crisis." This ministerial meeting is the most important among the approximately 3,000 OECD meetings held annually and is usually held in May. However, due to the COVID-19 pandemic, this time it was held in October and conducted via video conference.

The outcome of this meeting, the ministerial declaration (statement), is significant as ministers from various countries presented comprehensive policy directions to overcome the COVID-19 crisis from multiple perspectives amid the spread of a second pandemic wave centered in Europe.

The title of the declaration was set as "A Strong, Resilient, Inclusive and Sustainable Recovery from Covid-19." Even in the current difficult situation, described as the greatest crisis since the Great Depression, it emphasizes not only economic growth recovery but also future crisis responsiveness, equitable distribution, and climate change response.

Regarding policy recommendations by sector, first, expansionary fiscal and monetary policies should continue until the economy fully recovers. While fiscal policy must always consider fiscal soundness, switching to austerity too early is deemed risky. OECD Secretary-General Angel Gurr?a also emphasized expansionary fiscal policy at the start of the meeting, stating, "Now is not the time to look at the rule book."

Second, amid the accelerated transition to a digital economy due to COVID-19, the advantages such as entrepreneurship, job creation, and innovation inducement through data utilization should be maximized, while more actively addressing side effects like job losses among mid-skilled workers, the digital divide, and cybercrime.

Third, to recover employment, emphasis should be placed on retraining and upskilling workers so that labor flows into growing sectors. Indiscriminate approaches that could lead to the persistence of zombie companies should be avoided.

Fourth, efforts to overcome the COVID-19 crisis should align with climate change responses through expanding renewable energy, enhancing infrastructure in software sectors such as digital, health, and education, and complying with the Paris Climate Agreement. This point sparked the most intense debate during the declaration adoption process but was largely reflected due to the firm stance of European countries, making it a key aspect to keep in mind going forward.

Fifth, free and fair trade and investment are essential for economic recovery. To this end, market opening, maintaining value chains, reforming the World Trade Organization (WTO), and correcting market-distorting measures should be pursued. This also included wording emphasizing the importance of cross-border human mobility to maintain business activities, led by our country.

Sixth, support for developing countries through official development assistance (ODA) and debt repayment moratoriums must continue.

The OECD plans to create and present a dashboard of indicators to measure how well member countries implement the policy directions proposed at this ministerial meeting.

So far, our country has been recognized by the OECD as one of the best responders to the COVID-19 crisis and is expected to achieve the fastest economic recovery. The Korean New Deal policies, centered on the Digital New Deal, Green New Deal, and strengthening social safety nets, have also attracted much attention. We must ensure that our policies produce results not only in growth but also in equity, resilience, and sustainability, thereby earning favorable evaluations from a results-oriented perspective.

Ko Hyung-kwon, Ambassador, Permanent Delegation of Korea to the OECD

This content was produced with the assistance of AI translation services.