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Ukraine war could cut 1% off global growth: OECD

GS Paper: 3

Topic Covered: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Ukraine war could cut 1% off global growth: OECD

Context

The Organisation for Economic Co-operation and Development (OECD) recently reported that the Russian invasion of Ukraine could reduce the global growth rate by a percentage this year and increase inflation by two-and-a-half percentage points.

What were the other important observations made by OECD?

  • War’s impact on European Union could be high because of its high dependence on Russia’s energy imports
  • OECD countries through increased government spending by 0.5% could lessen the impact of inflation on these countries

About OECD

Origin

  • Organisation for European Economic Co-operation (OEEC) was founded in 1948 to help administer the Marshall Plan
  • In 1961, the OEEC was reformed into the Organisation for Economic Co-operation and Development by the Convention on the Organisation for Economic Co-operation and Development and membership was extended to non-European states
  • Headquarter — Paris, France
  • It works through consensus to develop policy recommendations and other “soft law” instruments to encourage policy reform in member countries

Membership

  • Currently, it has 38 members
  • India is not a member but a key partner
  • It is a forum of countries describing themselves as committed to democracy and the market economy
  • Most OECD members are high-income economies with a very high Human Development Index (HDI) and are regarded as developed countries
  • It provides a platform to compare policy experiences, seek answers to common problems, identify good practices and coordinate domestic and international policies of its members.

Resources — funded by contributions from member states at varying rates

Governance

  • OECD Council — provide direction and guidance to the work of the Organisation. Each member country is represented.
  • OECD Substantive Committees — oversee all the work on each theme (publications, task forces, conferences, and so on)
  • OECD Secretariat — led by the Secretary-General provides support to Standing and Substantive Committees

Special bodies and entities associated with OECD

  • International Transport Forum (ITF) (formally known as the European Conference of Ministers of Transport)
  • International Energy Agency
  • Nuclear Energy Agency
  • Partnership for Democratic Governance (PDG)
  • Trade Union Advisory Committee (TUAC)

 

Insta curious

Know how OECD is helping to usher green and sustainable growth

Insta links

  1. Prelims link
  • About OECD
  • What is inflation?
  1. Mains link

How does the Russia-Ukraine conflict impact the global economy and also the Indian economy? Discuss. (15M)