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A-»Fr3?»Vv N°60 /OCTOBER 1972 OECD OBSERVER

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A-»Fr3?»Vv N°60 /OCTOBER 1972 OECD OBSERVER rhe Future of European The Rey Report Intercity Transport onTrade and Related Problems Two Successful Approaches to Solving Economic Problems Towards Equal Educational 9 Opportunity m 1*41 : OECD's Action on iffljj^'l" Mill nil rj^jjlijii "'' Consumer Policy I The Use of Economic Theory for Environmental Problems New Social Responsibilities for Scientists a-»fr3?»Vv N°60 /OCTOBER 1972 OECD OBSERVER N° 60 OCTOBER 1972 CONTENTS POLICY PERSPECTIVES FOR INTERNATIONAL TRADE AND ECONOMIC Published bi-monthly in English and RELATIONS French by THE ORGANISATION FOR ECONO¬ MIC CO-OPERATION AND DEVE¬ ECONOMIC SURVEYS OF OECD: LOPMENT How Austria has Avoided Stagflation : Belgium-Luxembourg : Foreign Investment and Export Performance EDITORIAL OFFICES OECD Information Service, Château de POLICIES FOR EDUCATIONAL EQUALITY: la Muette, 2, rue André-Pascal, F 75775 Particularly of the socially underprivileged Paris, Cedex 16. SCIENCE AND SOCIETY Individual articles not copyright may be Follow-up to the Brooks Report 13 reprinted providing the credit line reads "Reprinted from the OECD Observer", CO-OPERATION BETWEEN OECD MEMBER COUNTRIES IN THE FIELD plus date of issue, and two voucher copies OF CONSUMER POLICY 14 are sent to the Editor. Signed articles reprinted must bear author's name. The Organisation cannot be responsible MERCURY USE AND SOCIAL CHOICE 15 for returning unsolicited manuscripts. Signed articles express the opinions of the THE OUTLOOK FOR TRADE AND INTERNATIONAL ECONOMIC RELA¬ authors and do not necessarily represent TIONS the opinion of OECD. The Rev Report 1 g Annual Subscription Rates : £ 1.15. THE FUTURE OF EUROPEAN INTERCITY TRANSPORT 27 S 3.50, F 15.00, FS 13.00, DM10.50. Single copies : £0.27, S 0.80, F 3.50, FS 3.00, DM 2.50. ENVIRONMENTAL POLICY: THE CONTRIBUTION OF ECONOMICS by Wilfred Beckerman 34 Editor : Anker Randsholt Assistant Editors: Peter Tewson and INTERNATIONAL TOURISM: THREE YEARS' STEADY PROGRESS 37 Jane Bussière Production and Layout: AT OECD : Marc Delemme Meeting of the Committee for Scientific and Technological Policy 40 All correspondence should be addressed NEW OECD PUBLICATIONS 42 to the Editor. PHOTOS : Cover : L. Jouan-OECD and Japanese Delegation to OECD ; page 1 1 : Gerald Blon- court ; page 13 : Jacques Robert ; page 14 : Marc Delemme ; pages 17-26 : L. Jouan-OECD ; page 27 : Messerschmitt-Bôlkow-Blohm ; page 31 : Bri¬ tish Railways Board ; Rohr Industries, Inc ; Messer¬ schmitt-Bolkow-Blohm ; Kraus-Maiïei ; Société COVER: New technologies and the need to expand Bertin ; Japanese Delegation to OECD ; SNCF ; intercity transport make coordinated planning a neces¬ page 35 : US1S ; page 37 : Compagnie Générale sity. A new OECD group will encourage such efforts Transatlantique ; page 39 (top) 1LO ; (bottom) : Robert Mottar-OECD ; pages 40-41: L. Jouan- in Europe. OECD. The Report of the OECD High- Level Group on Trade and Related Problems, which was published at the beginning of September, has attracted considerable public attention. This is not surprising, given the fact that the members of the Group are eminent personalities and that they have treated a subject area which is of great importance to governments and business circles all over the world. The members were appointed after their names had been put forward Policy by their respective governments and, in one instance, by the Commission of the European Communities. They have all acted in their personal capacity, while being well aware of the policy line of their home coun¬ Perspectives tries. Thus, they were not " wise men " carrying out a purely academic exercise, nor were they government representatives with the task of for negotiating an agreement. In fact, the expertise and experience of the members of the Group and the inspiring chairmanship of Mr. Jean Rey meant that all these various aspects were brought to bear upon the report International and added to the interest of it. This document was written in a period of preparation for new world¬ Trade and wide negotiations with regard to both trade and the international mone¬ tary system. Trade policy forms part of a wide framework where it has to be considered in conjunction with balance-of-payments adjust¬ Economie ment and other monetary issues. The Report by the High-Level Group is the first document of an inter¬ national character which sets all these problems in a long-term perspec¬ Relations tive and considers their interrelationships. Not surprisingly on matters of such importance, differences of opi¬ nion were recorded and the Group was careful not to prejudge the nego¬ tiations that are to follow. Nevertheless, the Group was able to define the options and to formulate conclusions which will provide a realistic basis for future efforts in the field of international co-operation. This is important and encouraging. The Group was originally cre¬ ated out of a strong feeling among OECD Member countries that trade policy and international economic co-operation in general were entering a new phase. The Report clearly expresses the opinion that further lowering of barriers which hinder the development of international trade is just as important as it ever was and that it should be accompanied by appro¬ priate adjustment policies. The Report also emphasises that with such lowering of traditional trade barriers formulation of most domestic policies agricultural, fiscal, regional, environmental, consumer policies, etc. will, since they may entail new distortions in international competition, require an increasing degree of co-operation and permanent consultation among governments. This fact is of particular interest for OECD, which has already been characterised on several occasions as an international eco¬ nomic conference in permanent session. 3 ECONOMIC SURVEYS OF OECD Among the latest of the annual economic surveys of OECD Member countries carried out by the OECD Economic and Development Review Committee, two are of special interest for widely differing reasons: A USTRIA, because rapid growth over a long period has been accompanied by relatively little inflation. BELGIUM, whose encouragement of foreign direct investment has stimulated a marked improvement in the economic situation particularly with regard to exports. These striking aspects of the two Member countries' economic performance are summed up in the following pages. BOWAUSTRIA HAS AVOIDED "STAGFLATION" During most of the late 1960's Austria's economy was in The current upswing in Austria's economy is cha¬ a sort of lull. Formation of the Common Market had not racterised in a new OECD survey (') of that country's only weakened Austria's traditional export markets but had also created an unfavourable impact on business expectations economy as "remarkable, both in its strength and which was not conducive to economic growth, and by 1968 indus¬ duration". It began in 1968 and is still continu¬ trial investment had been on a declining trend for seven straight ing. In 1970, Austria's real growth rate of 7.8 per years. cent was only surpassed by Japan, and the 5.2 per With the 1968 upswing in Germany, Austria's largest trading partner, exports began to pick up, and this trend was reinforced cent rate achieved in 1971 was still significantly by Germany's decision to revalue its currency and Austria's higher than economic growth in Austria's main decision not do so in 1969. Tourism, which is more important trading partners and the OECD area as a whole to the Austrian economy than to that of any other OECD country (Table 1 ). Yet, despite severe pressures on re¬ (see Table 2) was also favourably affected. sources, price rises have been among the lowest in The export boom and the need to extend and refurbish tourist facilities helped to stimulate a new dynamism in industrial invest¬ European OECD countries (though there has been ment and capital outlays in the service sector. The revival of concern recently at its accelerating rate). Un¬ industrial investment was actively promoted by the trade unions: employment is at historically low levels and the talk of a "second wave of industrialisation" originated in trade recessionary tendencies that affected the economies union circles and the unions showed themselves willing to restrain wage demands and to let profits rise in order to bring about a of most other European countries beginning in 1970 revival and restructuring of Austrian industry. (The share of did not spread to Austria. wages and salaries in national income dropped for two consecutive years during an advanced stage of economic upswing.) In addi¬ The question asked by OECD's Economic and Deve¬ tion, business fixed investment was promoted by the Government. lopment Review Committee's 1972 study of Austria, Domestic consumption and construction also picked up and published in September, is how that country has have continued strong into 1971 and 1972. Thus domestic demand replaced exports as the main dynamic element in the second phase been able to avoid the "stagflation" (combination of the boom. of low rate of resource utilisation and high rate In the course of the upswing Austria has diversified its exports, of inflation) experienced by so many other OECD reducing its dependence on Common Market countries and moving Member countries in recent years. away from semi-manufactured goods towards manufactured products, many of them with a high technological content. Ex¬ (1) OECD Economic Surveys, Austria, 1972. ports (goods and services) have increased from 25.5 per cent of 4 1. GROWTH AND PRICE PERFORMANCE IN AUSTRIA AND SELECTED OECD COUNTRIES 1968-1971 Annual rates of change in per cent 1968 1969 1970 1971 GNP Real GNP Real GNP Real GNP Real deflator GNP deflator GNP deflator GNP deflator GNP Austria 2.4 4.4 3.4 6.1 4.4 7.8 5.6 5.2 Belgium 2.7 3.5 3.9 6.7 5.1 6.1 5.1 4.2 Netherlands 3.6 6.6 5.6 5.7 4.7 5.6 7.8 4.0 Sweden 2.3 4.1 3.4 5.0 6.5 4.7 7.3 0.3 Switzerland 3.5 4.2 2.7 6.2 5.0 4.5 8.0 4.3 Germany 1.6 7.3 3.4 8.0 7.3 5.5 7.7 2.8 Italy 1.5 6.0 4.2 5.9 6.7 5.0 6.8 1.2 United Kingdom 4.0 2.8 5.0 2.1 7.1 2.2 9.0 1.7 OECD Europe 3.1 4.8 4.7 6.2 6.5 5.1 7.2 3.1 GNP in 1966 to 33 per cent in 1971 and the economy is now in a plant with which to produce them.
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