1 ROBLEMS FACING THE MODERN SOCIETY (IGHLIGHTS OF ECONOMIC POLICY IN OECD JOUNTRIES THE IMPACT ON C(_MP__TITION OF JEFUSAL TO SELL INTEGRATED TRANSPORT ^STEMS NEW MANPOWER LiW IN AUSTRIA' INLAND: THE NEW OECD MEMBER COUNTRY1 ? '?rb f ^ f * pk f ______£ I iiSl OECD OBSERVER CONTENTS N° 39 APRIL 1969 3 STATEMENT BY THE OECD MINIS¬ TERIAL COUNCIL Published bi-monthly in English and French by THE ORGANISATION FOR ECONOMIC 5 PROBLEMS OF THE MODERN SO¬ CIETY CO-OPERATION AND DEVELOPMENT by Thorkil Kristenseiu Secretary General of OECD EDITORIAL OFFICES OECD Information Service, Château de la Muette. 7 ECONOMIC POLICY CONSIDERA¬ 2 rue André Pascal, F 75 Paris 16e. TIONS FOR OECD COUNTRIES 10 NEW LEGISLATION TO PROMOTE AN ACTIVE MANPOWER POLICY IN Individual articles not copyrighted may be reprinted provi¬ AUSTRIA ding the credit line reads "Reprinted from the OECD Observer", plus date of issue, and two voucher copies are 12 TRENDS OF RESEARCH AND DEVE¬ sent to the Editor. Signed articles reprinted must bear LOPMENT IN THE IRON AND STEEL author's name. INDUSTRY The Organisation cannot be responsible for returning unsolicited manuscripts. 15 INTEGRATED TRANSPORT SYS¬ Signed articles express the opinions of the authors and do TEMS : A FACTOR IN TRADE EXPAN¬ not necessarily represent the opinion of OECD. SION 19 FINLAND - OECD S NEW MEMBER Annual Subscription Rates : F 12.00. FS 12.00, DM 10.00. COUNTRY 20s., S 3.50. Single copies : F 3.00, FS 3.00, DM 2.50, 4s. 6d., $ 0.75. 27 REFUSAL TO SELL 31 THE USE OF " GAMING " AS A Editor : Anker Randsholt TECHNIQUE FOR TRAINING EDUCA¬ Assistant Editors : Peter Tevvson and Jane Bussière TIONAL PLANNERS Production and Layout : Marc Delemme 36 FIFTY YEARS OF THE INTER¬ NATIONAL LABOUR ORGANISATION All correspondence should be addressed to the Editor. Co-operation on a world-wide scale 38 CO-OPERATION : ESSENTIAL TO PHOTOS : Cover : Lehtikuva oy, Helsinki ; pages 3-4-9 : L. Jouan - PROGRESS IN EUROPEAN PRODUC¬ OECD; page 11: Nora Schuster - Wochenpresse - Photo ; page 14 TION OF HEAVY EQUIPMENT FOR Japanese Delegation to the OECD; page 15: U.S. Lines; page 17 POWER STATIONS Fotowerken Frans Claes ; page 20 : L. Jouan - OECD ; page 21 B. Môller ; pages 24-25 : (1) (4) (7) Lehtikuva oy (2) E.M. Stâf Kuva (3) Finnish Foreign Affairs Ministry (5) Hede Foto (6) Pietenen : page 35 : L. Jouan - OECD ; page 37 : 1LO. 42 NEW OECD PUBLICATIONS Left to right : Dr. von Dohnanyi, State Secretary, Ministry of Economic Affairs (Germany); and Dr, Karl Schiller, Minister of Economic Affairs (Chairman); Mr. Thorkit Kr/stensen (OECD Secretary-General); Mr. Pierre-Paul Schweitzer (Managing Director, International Manetary Fund); Mr. J. -J. Polak (Economic Counsellor, IMF). STATEMENT BY THE OECD MINISTERIAL COUNCIL The Council of the OECD met at Ministerial level in towards a more balanced position and short-term capita! Paris on 13th and 14th February, 1969, under the Chair¬ movements should be less disturbing than last year. manship of Dr. Karl Schiller, Federal Minister of Economic Having in mind the work done by the OECD on the Affairs (Germany). Ministers first noted with satisfaction development of capital markets. Ministers noted the the accession of Finland to the OECD Convention and expansion of international capital markets in 1968 and welcomed the Finnish Minister, Mr. Jussi Linnamo. welcomed this development. They then reviewed the work of the Organisation in the Ministers felt that a major objective of the OECD light of the current economic situation and future pros¬ countries should be improved co-operation with respect pects, the changes being brought about in the structure of to economic policies. They recalled the commitment of modern economy and society, and the needs of the Member governments to promote the highest sustainable » developing countries. growth of their economies, with financial stability, and Economic growth was faster than expected in the they noted that this required harmonisation of national OECD area in 1968, partly because the high level of policies. To this end, they asked the Organisation to demand which persisted in the United States and the review, and if possible improve, the effectiveness of its United Kingdom indirectly supported expansion in other consultative procedures. countries. Because of measures taken to restrain demand Particular attention was given to the need for a timely in these two countries and in France, a certain slowing application of domestic policies to regulate demand. down has now started. Total expansion for the OECD Experience in 1 968 showed once again that demand mana¬ area, which was above 5 per cent in 1968, may therefore gement measures need time to take effect. The rising be somewhat lower in 1969. trend of interest rates in the OECD area stresses the need High rates of growth in production in 1 968 were accom¬ for balance between fiscal and monetary measures in panied by strains in the monetary field. These strains demand management. Ministers felt that the OECD were partly due to differences in the level of demand in study on fiscal policy was a useful basis for further action various countries and were characterised by exceptionally in this field. There was also general agreement that overall large capital movements and rising interest rates. demand management must be supplemented by measures In 1969 the measures taken should cause a substantial of structural policy aimed at correcting regional or sectoral improvement in the current balance of the United Kingdom imbalances. Such measures, among which active man¬ and the United States as well as a reduction in the large power policies play an important role, would enable German surplus. The Italian surplus had remained large, Member countries to approach full resource utilisation but, thanks to the measures taken, should begin to dimi- without the reappearance of inflationary price and cost inish. Current transactions should on the whole move increases. (continued on page 4) Finland : Mr. Tankmar Horn. Ministry of Foreign Affairs ; Mr. Jussi Linnamo, Minister in the Council of State ; Mr. R.R. Seppala. Head of the Permanent Delegation. Prompt and balanced demand management measures ations and valuable exchanges of experience in the will have a beneficial influence on international capital OECD, both at meetings at ministerial level on science and flows. Ministers recognised that other factors may also agriculture and in the competent committees of the Orga¬ influence capital movements and agreed that national nisation dealing with education, air and water pollution authorities should co-operate to counteract disequilibrat- and other aspects of the environment, as well as various ing capital flows. branches of industry. Ministers stressed the importance Ministers recalled the OECD's continuing concern with of this work and asked the Organisation to pursue its the balance of payments adjustment process and the basic efforts, taking into account the work of other Organisations in these fields. report on this subject in 1966. They instructed the Orga¬ nisation to intensify its efforts, in consultation with other Ministers noted that the problem of aid and trade bodies, to ensure the effective functioning of the adjust¬ relationships between the developed and the developing ment process. countries were being reassessed, both by international Problems relating to international trade and invisible agencies and by individual governments, and expressed transactions, including tourism, were reviewed. Minis¬ the hope that these reviews would contribute to more ters referred to various measures, including those excep¬ effective national and international policies and actions. tional measures taken recently with a view to helping to Ministers received a progress report on the work of improve certain balance of payments situations. They the Organisation on preferential tariff treatment for exports considered it desirable that disturbances likely to hamper of developing countries. They instructed the Organisa¬ the expansion of foreign trade and other transactions tion to bring this work to the stage needed in time for the should wherever possible be avoided. Substantial consultations to be held with developing countries. advances in the liberalisation of trade have been achieved in recent years. These advances should be maintained Ministers had in mind the need to expand the volume and carried to completion, thus making it possible to of aid as steadily as possible towards the target fixed by undertake new efforts in the same direction at the appro¬ the UNCTAD Conference in New Delhi in 1968 while priate time. Ministers agreed that new developments in avoiding placing excessive debt burdens on the developing these fields and problems resulting therefrom should be countries which might hamper the progress of their efforts studied by the Organisation. for economic development. Some Ministers considered The rapid rate of technological progress is transforming that medium-term planning of development aid expendi¬ the social and economic structures of highly industrialised ture would be useful in this respect. They re-affirmed the societies. The effects of this transformation extend into importance of aid programmes addressed to the problem agriculture, industry, education, and the human environ¬ of meeting educational and agricultural requirements in ment. Although it has brought an unprecedented rise in developing countries. national and personal wealth and well-being, it has created Ministers expressed