Part V of the Special Series for Global Organization and Function: a collaboration between WGI.WORLD (World Geostrategic Insights) and CGPS (Center for Global Peace and Security).
By Sunny Lee – Founder and President at CGPS (Center for Global Peace and Security), and Director at IKUPD (Institute for Korea-U.S. Political Development), Washington DC.
Currently, the global economy is inflamed in a humongous turmoil with a prolonged crisis. The OECD seriously warns that the world economy might face worse recession than the 2008 global financial crisis.
President Trump’s tariff policies on trade are vastly damaging economic growth not only in the U.S. but also around the world. Fast growing uncertainty in open markets caused by threats of new tariffs has stagnated in variable investments for economic growth. Moreover, fears of rebounding inflation from overwhelming tariffs would drag down consumer’s environment, impacting on general human life.
Mathias Cormann, Secretary-General of the OECD (Organization for Economic Cooperation and Development) introduces such a prominent purpose and essential function through collective responsibility. He emphasizes that the OECD aims not only to preserve individual liberty but also to increase economic and social well-being of general people in the global society. As the practical process, it promotes stronger, cleaner, and fairer economic growth by raising employment and living standards as remining as a mission for the future.
The OECD’s slogan as an international organization with 38 member countries is better policies for better human lives. It signifies that a life of well-being comes from not only economic prosperity by market economy but also a social environment based on human rights, welfare, and democratic value.
The world would dramatically face significant and abrupt challenges which require global cooperation and practical action. For example, the global financial crisis and COVID-19 pandemic have accelerated critical crises, underscoring the inter-dependency and complexity of the contemporary world. These two disasters are wholly involved in not only economic distress but also the general human environment so that the international society has to make out an ultimate solution.
The OECD has three critical committees to conduct such missions. Furthermore, as an organization of market-based democracies, it successfully engages with other international groups to reinforce its function, such as the WTO, G7, G20, UNCTAD and APEC.
First, it is the Economic Policy Committee (EPC) to increase economic growth, employment and living standards. The EPC works to monitor economic policies of member countries through macroeconomic and structural analyses. It provides trustworthy business views on global macroeconomic trends and projections, addressing the impacts of global economic challenges and promoting structural reforms for productivity growth.
Second, it is the Development Assistant Committee (DAC) in the fair process of economic development to promote cooperation and relevant policies for the sustainable development of developing countries. It mainly includes inclusive and sustainable economic development, the advancement of equalities, poverty eradication and the improvement of living standards. The DAC’s ultimate goal is to be a world free from economic discrepancy, where no country depends on aid.
Third, it is the Trade Committee (TC) to expand global trade without discrimination. It focuses on raising not only awareness about barriers but also fair international competition. Building on evidence-based analysis, the TC provides substantial policy recommendations through trade ministers and senior officials, influencing the world’s most important economies.
Leverage of Human Life and Global Society
The priority agenda in the global society is economic growth and well-being from developed countries to developing countries, from the East to the West, and from the North to the South. In 1961, the OECD started with 16 European countries from OEEC, where the United States and Canada participated in free trade and equal economic cooperation. But its membership was extended to Asia and communist countries in Europe in 1964. Finally, new industrial powers such as Korea and Eastern Europe’s countries joined the membership after the communist bloc collapsed in the 1990s. Mexico, Chile, Colombia, and Costa Rica became member countries in Latin America starting in the 2010s. Now, the OECD goes through all the areas of the global society that it drives and anchors reform in more than 100 countries around the world.
The OECD has focused on three fundamental values to leverage human life by achieving financial stability and welfare promotion through economic growth and employment. It mainly contributes to world economic growth and sustainability, economic development and support for developing countries, and expansion of world trade. Nonetheless, without conducting critical values in the global society, general human life wouldn’t be leveraged toward a higher level.
First, it is the priority of an open market economy and global trade. Globalization creates more opportunities for workers, consumers and business companies that have helped millions of people out of poverty. Especially, open markets become a source of economic resilience and diversification along supply chains because open economies grow faster than closed ones. The OECD supports open markets as a rules-based international trading system, making trade work for global society.
Second, it is the favorable recommendation of plural democracy. As long as governments struggle with environmental and digital transitions as a new global syndrome and even an erosion of trust in public institutions, it is very important to build up people’s trust and strengthen democracy. Under such a stressful global phenomenon, the OECD launched the Reinforcing Democracy Initiative in 2022, especially enhancing participation, representation and openness in public life. It also includes a focus on gender equality and stronger open democracies in a globalized world as governing green and digital democracy. The RDI provides variable data to assess such progress, identifying gaps in actions to a set of common priorities for moving forward together.
Third, it is the basic principle related to respectable human rights to leverage human life. Especially the OECD Guidelines demand business companies respect all internationally recognized human rights and address human rights harms in which they are involved. It avoids reprisals against people opposing the business activity while preventing or mitigating human rights harms directly linked to their business companies. The OECD protects individuals facing heightened risk due to marginalization or vulnerability and makes necessary adaptations to eliminate barriers so that people can safely engage in the human rights environment.
Moreover, to ensure the strongest interpretation of the Universal Declaration of Human Rights, the OECD commentary of the general policies chapter has to be cited through business activities. As such, the global society should surely remind companies of their responsibility related to human rights issues whenever they occur, including other topics in the OECD Guidelines such as environment, corruption, and taxation.
Economic Adventure and International Cooperation
In the 68th Session on July 2, 2021, UNCTAD unanimously changed Korea’s position from Group A of developing countries to Group B of 32 developed countries. Since UNCTAD was established in 1964, Korea became the first country which entered into the level of a developed country as the most successful case through economic growth, investment and trade. Korea was an impoverished country after the Korean War in 1950s, taking humanitarian and financial aid from the international society. But it turned out to be a developed country which provides variable aid to many other countries.
Currently, the standard of a developed country is referred to whether it belongs to the DAC of the OECD or not. A developed country signifies a prosperous economic level, which can regularly assist other countries with practical aid such as Korea which became a member of the DAC with an unanimous agreement in 2010. In addition, the OECD’s statistical index is very trustful when it evaluates a country’s national status in the critical fields: quality of life, education, environment, and birth rate. Working with over 100 countries together, the OECD shapes better policies for better lives through its ratified standards, and trusted statistics and analysis, supporting policy reform in variable fields.
Nonetheless, economic cooperation and development would be more highlighted to reinforce global prosperity as the basic condition to explore general human life. At this point, the OECD is very ambitious to fulfil its economic adventure between developed countries and developing countries by international cooperation. In March 2025, the OECD’s Economic Interim Outlook Report diagnosed that the global economy would grow by 3.1% in 2025 and 3.0% in 2026.
Reflecting the increase in trade barriers and higher policy uncertainty, the report highlights downside risks, including overwhelming inflation and more restrictive monetary policy. For example, annual GDP growth in the United States is predicted to slow pace, to 2.2% in 2025 and 1.6% in 2026. The Euro zone is also projected to be 1.0% in 2025 and 1.2% in 2026 with heightened uncertainty while China would be locked in 4.8% this year and 4.4% in 2026.
The OECD advises that central banks should remain vigilant for higher trade costs and price pressures and on the fiscal side, the report also stresses the need for ensuring debt sustainability. Inflation pressures persist in many economies with an increasing share of headline inflation and services price inflation has also stayed with 3.6% across the OECD economies. As an effective solution, the OECD emphasizes the importance of structural reforms to strengthen the resilience of supply chains and enhance the availability of digital infrastructure to overcome global economic risks.
2025-26 inflation is projected to be higher than expected as economic growth becomes very suspicious with tariff horror. Headline inflation is projected to fall from 3.8% in 2025 to 3.2% in 2026 through the G20 economies. Irresistible inflation is now projected to remain above central bank targets in many countries and in 2026 as well. The OECD underlines that decisive fiscal actions are needed to ensure debt sustainability for governments to respond to additional shocks and control large spending pressures. It suggests that stronger efforts to contain and reallocate spending, and enhance revenues should be conducted to stabilize debt burdens.
At this point, ambitious structural policy reforms are necessary to improve the foundations for growth, ensuring healthy domestic markets. Ongoing international cooperation also confirms that adjustments to trade policies don’t stimulate significant retaliatory trade barriers between countries. Nonetheless, potential output has generally weakened across advanced and emerging economies since the global financial crisis.
Moreover, the global society has faced variable obstacles since COVID-19: rising protectionism, geopolitical uncertainty and weak growth prospects. These economic disasters would propel critical reforms for competitive market dynamics by eliminating excessive regulatory burdens on firm enterprise. Especially, through reforms to enhance policy education and skills development, constraints in labor markets that impede investment and labor mobility can be reduced. It is essential to improve productivity, enhance the spread of new technologies and boost labor force participation.
Economic development and international cooperation would be an inevitable driver of prosperity as a cornerstone of global geopolitical influence and a vital enabler of societal progress. The OECD shows three key recommendations to induce substantial outcomes. Since the tariff challenges of 2025 severely agitated the international economic environment, the OECD has reinforced its role for private sector engagement, market-based initiative, and stronger cooperation to beat global uncertainty and lead economic growth.
First, it is raising the business environment to strengthen business competitiveness and drive sustainable growth. The OECD prioritizes structural reforms, regulatory simplification, and collaboration with the private sector while exploring resilient labor markets, modern infrastructure, and growth-oriented tax policies.
Second, it is shaping industries to gain a competitive edge in future industries and address global challenges. The OECD explores market-based innovation, technology neutrality, and robust frameworks for intellectual property. Health resilience, AI governance, cybersecurity, and sustainable development also come up as key areas.
Third, it is fostering open, fair and competitive markets. The OECD has shown that openness to trade and investment results in higher economic growth rates. Working closely with those which trade and invest, the OECD prevents protectionist measures while policies and regulations are adapted to ensure better outcomes for businesses, workers and citizens. The OECD’s role has been focused on the foundation of global well-being, the essence of connectivity, and enabler of mutual benefit. It becomes more critical than ever by successfully managing increasingly polarized international markets.
The Platform of Democracy and Market Economy
North Korea is the top first among the five worst nondemocratic countries with the extreme stage of poverty: North Korea, Somalia, Syria, South Sudan and Sudan in the OECD Human Rights Risk Index. There is a plausible theory that democracy and the market economy of developed countries clarify nondemocracy and poverty with the worst human rights condition. In addition, North Korea’s communist dictatorship has aggravated its national competitiveness in the moment of collapse. Ironically, North Korea stimulates the OECD to reinforce democracy initiative how dictatorship makes an obstacle to impede economic development.
As a similar case, even though China, Russia and India take a top position in military and economy, they are not on the list of developed countries. It obviously signifies that the standard of a developed country by the OECD’s definition comes from social conditions: quality of life, human rights, and educational and medical system, more than simply economic power.
The OECD focuses on stronger open democracies in a globalized world as a platform of democracy and market economy. As a result, most governments are strengthening governance capacities to address global challenges through international cooperation, taking better mechanisms for global commitments.
At the same time, they emphasize that intensifying foreign cooperation is changing the landscape of international relations for the democratic model of governance. In response, the OECD countries are strengthening institutional and regulatory frameworks for lobbying with a prospective vision. They prefer political finance from foreign sources, applying public employment restrictions on senior public officials and ensuring protections for media and civil society organizations.
Greater economic adventure amongst democracies aims to better understand foreign cooperation and design appropriate policy responses by strengthening democratic resilience. These processes include countering corruption, controlling lobbying, and reinforcing information integrity. Further regulating political finance or better screening foreign direct investments also minimize trade and debt dependence on single foreign actors.
Nonetheless, it is important to safeguard legitimate foreign influence efforts to foster transparent international relations. Beyond an impressive array of specific country examples, the monitoring system of the OECD surely underscores the need for continued international collaboration. As the critical case, the OECD Reinforcing Democracy Initiative would bring a wider group of countries, providing evidence-based guidance and favorable international practices to help countries reinforce democratic values and institutions.
In addition to democratic adventure, a competent system and vision for market economy have also been the platform of the OECD which has released a new global tax reporting framework such as Model Reporting Rules for Digital Platforms (MRDP). It was developed in the rapid growth of the digital economy and in respect of activities being facilitated by digital platforms.
The OECD developed such a prominent module for the reporting of sales of goods through digital platforms and moreover, an automatic exchange framework. It has effectively fulfilled that tax administrations easily access information on their taxpayers who have been pursuant to the MDRP.
The Future of Economic and Social Well-Being
The OECD emphasizes that it’s not just about the economy, prioritizing well-being to build resilient societies. ‘How’s Life? 2024,’ the OECD report concludes that progress is not just handling crises but building a foundation for long-term resilience. By adapting a multi-dimensional perspective and prioritizing people’s well-being, policymakers navigate the complicated challenges and address major societal shifts. It ranges from population aging to structural transformation of digitalization and artificial intelligence (AI), and furthermore, the imminent threat of climate change to ensure a sustainable, equitable future. The solution shows how economic and social well-being works together that the global society should reach.
The ultimate achievement of economic prosperity could be well-being life based on equal social conditions. Since well-being has been measured as a statistical agenda in the global society, it has become increasingly a policy compass to guide decision-making and budgetary processes through many countries. In addition, policymakers would focus on better solutions of the linkages between the drivers of well-being and economic growth.
The OECD refers to an economy of well-being for highlighting these linkages and showing how policy can effectively leverage them. Economic growth and well-being simultaneously support and reinforce each other, focusing on the multidimensional impact of policies: education and skills, health, social protection and redistribution, and gender equality.
Especially, COVID-19 pandemic and well-being life as a most critical case would explore the immediate implications for people’s livelihoods in the OECD countries. It charted the course of well-being from jobs and incomes to social connections, health, and work-life balance by using data collected during the first 12-15 months of the pandemic. Such an imminent experience left a stock of what has happened to human, economic, social and natural capital beyond people’s living conditions.
Therefore, an economic and social well-being prospect can prompt policymakers to focus on the outcomes to redesign policy content from a multi-dimensional perspective to realign policy practice. It comes across government systems to reconnect people with the public institutions that serve them. National statistical offices in the OECD area respond with significant innovation, ranging from high-frequency household surveys to internet-based surveys through experimental time-use systems. These innovations deliver important insights that could be further enhanced as a standard of economic and social well-being with more critical prospects and vision in near future.
Author: Sunny Lee – Founder and President at CGPS (Center for Global Peace and Security), and Director at IKUPD (Institute for Korea-U.S. Political Development), Washington DC. Sunny Lee is the author of 115 academic books in politics (original English and in German, French, Russian, Polish, Dutch, Italian, Spanish, and Portuguese). She is a bestseller writer not only in politics but also in literature on Amazon. Her recent book is titled: “The Influence on Humankind’s Peace through Korean Reunification: Creating new paradigm in social science by interdisciplinary research.”
(The opinions expressed in this article are solely those of the author and do not necessarily reflect the views of World Geostrategic Insights).
Image Source: OECD