The OECD has called on governments to tackle reforms at a G20 meeting of finance ministers in Shanghai. Germany's Wolfgang Schäuble weighed in, saying continued regulation was needed to make markets less volatile.
The Organization for Economic Cooperation and Development (OECD) told policymakers in Shanghai that reforms at home must be tackled in order for countries to experience a rise in economic growth.
"Global growth prospects remain clouded in the near term," it said, adding that "the case for structural reforms, combined with supporting demand policies, remains strong."
In its "Going for Growth" interim report, the OECD proposed several reforms to policymakers at the start of a G20 finance ministers and central bank governors meeting in Shanghai. It added that many of the recommended proposals could kickstart growth in their countries.
Promoting entrepreneurship, labor mobility and higher productivity were said to be among the OECD's proposals. Attracting private investment for public infrastructure and changing unemployment benefits were also on OECD's list.
The OECD added that promoting entrepreneurship and making good use of knowledge and technology were a "reform priority," acknowledging that many of the reforms could improve growth quickly, save governments money and improve the global economy.
Failure to promote growth
The group then criticized governments for failing to reverse a slowdown in reforms in 2013 and 2014, adding that many countries had not done enough to promote growth. It added that Japan, China, India and Mexico had fared well in tackling reforms, but said that Northern European countries weren't as proactive as Southern European countries.
However, OECD did acknowledge the budget restraints of the governments present at the meeting, saying again that the proposals for growth could also improve the employment situation in many of the countries.
"Countries with very limited budgetary room may have to prioritise on high short-term returns or on low-cost measures," it said, admitting that many of the reforms would need upfront investments, which many of the governments are said to not be able to afford.
'Monetary policy is exhausted'
Germany's Minister of Finance Wolfgang Schäuble had similar words, calling for structured reforms and continued financial regulations.
"We must make clear that the room for monetary policy is exhausted...and we have to think about how to get reforms implemented," Schäuble said, while at the G20 meeting.
Schäuble added that stopping financial regulation "would be a terrible mistake."
smm/jr (AFP, dpa, Reuters)