MEXICO CITY, Feb. 27 -- Structural reforms can make a difference as countries seek to rebound from the crisis, boost growth and create jobs, said the secretary-general of the Organization for Economic Co-operation and Development (OECD) here on Friday, ahead of a Feb. 25-26 meeting of G20 (Group of 20) finance ministers and central bank governors.
"The crisis has acted as a catalyst for reforms. While they are sometimes unpopular, painful or both, they are necessary to make longer-term growth stronger, more sustainable and more equitable," said Angel Gurria while presenting the OECD's latest Going for Growth report.
"We know that these efforts will pay dividends in the future, which is why governments must keep up the reform momentum," he added.
Since it was launched in 2005, the annual OECD report has identified key reform priorities to boost economic activity and raise living standards in OECD countries. Starting 2011, the report also addresses reform potential in Brazil, China, India, Indonesia, Russia and South Africa, and has been a key part of the OECD's contribution to the G20 Framework for Strong, Sustainable and Balanced Growth.
The report also assesses and compares progress that countries have made on structural reforms since the start of the crisis. It shows that the pace of reform has accelerated in the European countries hit worst by the sovereign debt crisis, including Greece, Ireland, Portugal, Spain and Italy.
According to the report, the new European reform agenda has been spurred by the need to consolidate public finances and better manage pressures from the sovereign debt crisis. This had led governments to announce and begin implementing reforms in such areas as pension scheme, labor market policies and product market liberalization.
"Structural reforms now underway in Europe will eventually help reduce the economic imbalances that contributed to the debt crisis, " Gurria said.
The report encourages governments to push forward with policies to boost job creation against a background of continuing fiscal consolidation, which include sheltering active labor market policies from budgetary cuts, easing regulatory barriers to firm entry in markets with strong, short-term job-creation potential like retail trade or professional services, and reforming tax systems in ways that are less harmful to employment and growth.