5. The enlarged Assembly is worried that, according to the OECD, in the wake of the Covid-19 pandemic, the Russian Federation’s war of aggression against Ukraine, and the related energy and cost-of-living crisis, most OECD countries were grappling with fiscal deficits, elevated public debt levels and a subdued outlook for economic growth. In 2022, across the OECD as a whole, the total general government spending was estimated to be close to 43% of GDP, about 2,5% higher than the 2017-19 average. The public debt/GDP ratio is estimated to have increased by almost 6% over the same period. The recent increases in public sector wages and welfare benefits to reflect high inflation introduced further pressure on public spending. Medium and longer-term trends such as population ageing and the rising relative price of services will continue to put additional pressure on government spending on pensions, public health, and long-term care.

6. The enlarged Assembly is further worried that the compounding effects of the Covid-19 pandemic, global conflicts, the climate crisis, and rising inequalities have reversed global progress on poverty reduction. The number of people living in extreme poverty, which had markedly fallen for almost 25 years, is now on the rise. In 2020, 700 million people were living in extreme poverty and nearly half of the world was living with less than US$6.85 a day. With a full-scale military invasion of the sovereign territory of Ukraine and the destruction of traditional food supply chains, the Russian Federation has put at least 70 million people worldwide on the brink of starvation. The Human Development Index value is declining for the first time on record, with 9 out of 10 countries globally registering a backslide in health, education, and standard of living. In this framework, democracies are under unprecedented levels of pressure from within and without. The polarisation of political discourse, geopolitical tensions, rising inequalities, public health and economic crises, and creeping foreign interference in democratic processes – all also fuelled by mis- and disinformation – have tested citizens’ trust in public institutions and are driving many governments to strengthen and protect democratic values and processes. The enlarged Assembly urges the OECD to put forward strong policy measures to help its member States and developing countries reverse the backslide in poverty reduction and human development.

7. Inflation pressures emerged in nearly all OECD economies at an unusually early stage during the recovery from the pandemic in 2021, pushed up by supply bottlenecks and a rapid rebound in the demand for goods. With the Russian Federation’s war of aggression against Ukraine in February 2022 disrupting food and energy markets and the Russian Federation intentionally weaponising food and energy supplies, inflation around the globe has increased to levels that many economies had not experienced since the 1970s. High inflation has generated a cost-of-living crisis, eroding households’ real disposable income and living standards and slowing consumer spending growth, with strong distributional effects. Low-income households and rural households are typically hit the hardest by higher food and energy prices given the composition of their spending. Nominal wages have not kept up with inflation and real wages have declined in virtually every OECD country. The Covid-19 crisis affected the economic well-being of vulnerable groups, such as youth and children from disadvantaged households, much more than other groups. Low-skilled workers and low-income families are also more likely to be hit in the current environment of high inflation, economic slowdown and the Russian Federation’s war of aggression against Ukraine.

8. In this framework, the enlarged Assembly recalls its Resolution 1899 (2012) “The activities of the Organisation for Economic Co-operation and Development (OECD) in 2011-2012”, where it noted the urgent need for policies which promote cohesion of our societies and tackle social inequalities, in line with the suggestions of the International Labour Office (ILO), inter alia in the fields of youth employment, education, public health, training and adequate pensions. The enlarged Assembly once more urges the OECD to intensify its work in these areas and to seek synergies with relevant international partners, notably the European Union and the ILO in order to improve public response on fiscal, labour and social challenges. In the medium to longer term, governments would need budget frameworks to ensure fiscally responsible spending levels, by reallocating resources from low-valued areas to those where they are most socially needed, as encapsulated in the OECD Spending Better Framework.

9. The enlarged Assembly notes that in 2021, the inaugural OECD Trust Survey of 22 OECD countries found that four in ten respondents trusted and four did not trust their national government. Fewer than one-third of respondents, cross-nationally, thought the political system in their country allowed them to have a say in government decision making, and a similar share believed that the government would adopt opinions expressed in a public consultation. Younger people, those with lower levels of education and lower incomes on average trust government less than other groups do. These trends demonstrate the need for OECD countries to reinforce their democratic governance systems, through measures that strengthen citizens’ participation in the political process and confront the spread of mis- and disinformation, which can discourage democratic engagement, distort policy debates, and undermine societal resilience. In this vein, the enlarged Assembly welcomes the OECD Declaration on Building Trust and Reinforcing Democracy, adopted by Ministers in November 2022 during the OECD Public Governance Ministerial meeting, which includes

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