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OECD Business and Finance Outlook 2018

image of OECD Business and Finance Outlook 2018

The OECD Business and Finance Outlook is an annual publication that presents unique data and analysis on the trends, both positive and negative, that are shaping tomorrow’s world of business, finance and investment. Using analysis from a wide range of perspectives, this year’s edition addresses connectivity, both among institutions within the global financial system and among countries. Almost a decade on from the 2008 financial crisis, the Outlook examines new risks to financial stability that will put financial reforms to the test, focusing in particular on the normalisation of monetary policy, debt problems and off-balance sheet activity in China. With respect to connectivity among countries, the Outlook examines the new phase of globalisation centred on Asia/Eurasia, using China’s Belt and Road Initiative as a case study. It argues that this ambitious development plan has a number of economic issues to look out for, and that it would be best carried through with transparent “rules of the game” that will help ensure a level playing field for all.

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Reaping the full benefits of large infrastructure projects

This chapter focuses on ways to help economies linked to the Belt and Road Initiative (BRI) to maximise the longer-term benefits of infrastructure projects as recipient countries and to ensure an open and transparent environment for international investment. This means ensuring a level playing field for investors from both emerging and advanced economies. Asia’s longer-term infrastructure needs will require much more investment than any one country can ultimately provide (USD 26 trillion to 2030, according to the Asian Development Bank) so efficient and cost effective solutions are essential. Host countries are likely to benefit most, with positive spill-over effects resulting for other economies when the process is based on level playing field considerations. Five broad areas that could benefit from the implementation of, and wider adherence to, international standards for promoting a level playing field have been identified: the role of SOEs, given their growing presence in the international market; competition and the integrity of processes in procurement; mitigating corruption risk and ensuring responsible business conduct; incorporating environmental impact assessments in projects; and ensuring openness to international investment. In all areas, OECD standards provide useful guidance for both infrastructure-recipient economies and supplying economies.

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