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The First OECD-SouthEast Asia Regional Forum Jakarta, 23-24 January 2007

Belgium’s experience with Peer Reviews By Patrick van Haute, Belgian Ambassador to the OECD. The First OECD-SouthEast Asia Regional Forum Jakarta, 23-24 January 2007. Belgium’s experience with Peer Reviews. Contents Historical background Today The 2007 Belgian economic review in detail

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The First OECD-SouthEast Asia Regional Forum Jakarta, 23-24 January 2007

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  1. Belgium’s experience with Peer Reviews By Patrick van Haute, Belgian Ambassador to the OECD The First OECD-SouthEast Asia Regional ForumJakarta, 23-24 January 2007

  2. Belgium’s experience with Peer Reviews • Contents • Historical background • Today • The 2007 Belgian economic review in detail • Pro’s and Con’s

  3. Belgium’s experience with Peer ReviewsHistorical Background (1) • 1914-1929-1945: Two World Wars, one Big Depression. • World War I: 6 to 10 millions dead • 1929 depression: • Governments try to isolate their economy from external shocks with competitive devaluations, withdrawal from FDI, tariffs increases, creation of trade preferences… • Failure of uncoordinated solutions • World War II: 62.5 millions dead: 23 in Soviet Union, 20 in Asia, 19 in WE and 600.000 in the US. The European economy is destroyed.

  4. Belgium’s experience with Peer ReviewsHistorical Background (2) • 1945-1961 • Multilateral reaction to rebuild the European economy: Marshall Plan (1947), OECE (1949), OECD (1961) • European reaction: ECCS (1951), Common Market (1957), EC, EU • OECD Convention Article 5 In order to achieve its aims, the Organisation may: (a) take decisions which…shall be binding on all the Members (b) make recommandationsto Members; and (c) enter into agreements with Members, non-member States and international organisations. • Commitment by Member States to accept being reviewed.

  5. Belgium’s experience with Peer ReviewsHistorical Background (3) • 1961-2007 • 45 years of experience, changes, evolutions, … the peer review system is tailormade for the OECD countries. It is not a one-size-fits-all system. • Started with review of economic policy. During 45 years, extended to many other areas: energy, environment, regulatory reform, competition, e-government, development cooperation, … • In 2006, Belgium was under review in six different fields: energy, environment, economic review, anti-bribery, money laundering and development cooperation.

  6. Belgium’s experience with Peer ReviewsToday • Features of the Peer Review process • Checks and balances between 3 parties: the country examined, the Committee and the Secretariat. • The Secretariat drafts, the country replies, the Committee discusses. • Two lead-examiners. • Adoption of the report by the EDRC Committee by consensus (i.e. with the approval of the reviewed country). • One or two visits to the country under review • Publication

  7. Belgium’s experience with Peer ReviewsA detailed example: the Belgian Economic Review 2007(1) • The whole process takes almost 12 months. • Step 1 (End May 06): First questionnaire • 11 pages, 166 questions sent by the ECO Directorate. Questions are precise and targeted. No general political questions. • Topics: financial sector, labour market developments, tertiary education, … • The PM Office in Brussels allocates the questions between the different ministeries and agencies. They prepare written answers. • Step 2 (19-23 June 06): First visit: • a 4 persons team comes to Brussels for a full week of discussions: 5 days, 50 hours, meetings with 103 persons.

  8. Belgium’s experience with Peer ReviewsA detailed example: the Belgian Economic Review 2007(2) • Step 3 (End August 06): Second questionnaire • 4 pages, 60 questions. • The PM Office in Brussels allocates the questions between the different agencies. They prepare written answers. • Topics: fiscal policy, labour market policies, tertiary education, financial markets, consumer policy, … • Prepared answers to the 2 questionnaires amounted 996 pages + 1043 pages of additional documentation. • Step 4 (11-13 September 06) Second visit • A 5 persons team comes to Brussels: 3 days, 30 hours of meetings with 66 persons.

  9. Belgium’s experience with Peer ReviewsA detailed example: the Belgian Economic Review 2007(3) • Step 5 (20 November 06) Draft Report • 135 pages : 1 page executive summary, 6 pages of assessment and recommandaations, 15 recommandations. • Examples: a more ambitious fiscal objective is welcome, the labour market is still not functioning properly, tax incentives to savings should be reconsidered. • Report sent to PM Office which requests the agencies to react by 30 November. • Coordination of reactions by 7 December. 92 pages of redrafting proposals • Step 6 (11 December 06) EDRC session • The Economic Development Review Committee meets to examine the report: 6 hours, 15 Belgian delegation members, lead by PM Economic adviser. • Two lead-examiners: Portugal and Switzerland

  10. Belgium’s experience with Peer ReviewsA detailed example: the Belgian Economic Review 2007(4) • Step 7 (12 December 2006) Session for redrafting the recommandations: 6 hours • Step 8 (During January 07) Written procedure to clear the definitive version by the EDRC committee (consensus) • Step 9 ( February 07) Translation and Printing • Step 10 (13 March 2007): Press conference in Brussels • by the Prime Minister and the OECD Secretary General to present the review

  11. Belgium’s experience with Peer ReviewsPro’s and Con’s (1) • Peer review is not naming and shaming: today’s reviewer will be reviewed tomorrow. All MS must hear the comments and recommandations by others. • The process is important, not just the book: through discussion with OECD staff, the authorities get a neutral and non-political view on their policies. Example: tuition fees for tertiary education. • Long term advice for short term policy makers. • Recommandations not mandatory: since the MS reviewed is free to implement the recommandations, the Secretariat (if followed by the Committee) is also free to make clear recommandations. • Quality: the level of expertise offered by the Secretariat needs to be matched in the capital. Statistics.

  12. Belgium’s experience with Peer ReviewsPro’s and Con’s (2) • Purpose is to help, not to fingerpoint. Avoid counterproductive results (example: the automatic indexation of wages) • Recommandations are based on theory, on expertise, on best practices, on shared experience. They are not based on national politics. • OECD recommandations represent a neutral view, from outside. They carry more weight than national recommandations. • Recommandations get more weigth through publication of the review. • Non members have also been reviewed: China, Chile, Argentina, Russia, … with positive results. For instance, the first Chinese review was concluded last year very successfully.

  13. Belgium’s experience with Peer Reviews • Conclusion: • Governments like the review processes by the OECD because it helps them to convince their public opinion when policy adjustments are necessary. • Thank you

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