Ahead of his participation at Finance Malta’s Annual Conference on November 29, Prof Carmine di Noia, Director for Financial and Enterprise Affairs at the OECD since 2022, discusses the OECD’s evolving role in global economic policy, emerging challenges in climate and digital transformation, and engagement with Malta
The OECD has been at the forefront of developing rules and standards in areas such as trade, freedom of capital movement, international taxation and corporate governance. How does the OECD continue to remain relevant in today’s global economy?
The OECD’s work is increasingly vital in addressing global challenges like climate change, digital transformation, and geopolitical tensions through coordinated responses. It helps policymakers understand the interplay between digitalisation, ageing populations, and climate change, identifying synergies and vulnerabilities. Using internationally comparable data, the OECD provides tailored policy recommendations that account for regional specifics. Its engagement with diverse stakeholders – including governments, the private sector, and civil society – enhances its analysis and recommendations. Through platforms and peer reviews, the OECD promotes international dialogue and action, contributing to forums like the G7, G20, APEC, and ASEAN, thus aligning global efforts for economic growth.
How does the OECD influence global economic policies, and can you provide examples of significant policy changes influenced by OECD’s recommendations?
The OECD influences economic policies through detailed analysis, data-driven insights, and recommendations across various areas. Its Economic Outlook provides macroeconomic forecasts on global conditions, inflation, GDP growth, and risks, aiding policymakers in monetary, fiscal, and structural decisions. OECD Economic Surveys offer country-specific analysis and tailored recommendations for national reforms.
The OECD’s broad policy focus ensures a robust approach to economic policymaking. For instance, the Directorate for Financial and Enterprise Affairs leads work on markets and conduct, contributing to policy formation. Key publications like the Global Debt Report 2024 examine financial stability and policy considerations. The OECD’s work on capital markets, anti-corruption, and business conduct drives global policy changes, influencing reforms in countries such as Latvia, Costa Rica, Bulgaria, and Colombia.
Recently, the OECD took the lead in addressing tax avoidance, particularly in calling for a global minimum tax of 15%. Meanwhile, Malta has secured a six-year exemption, allowing it to maintain lower tax rates until the end of this decade. How does the OECD consider Malta’s position?
Malta is recognised as a committed and constructive member of both the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) and the Global Forum on Transparency and Exchange of Information for Tax Purposes. The OECD continues to work closely and constructively with Malta on tax matters, acknowledging its engagement.
What new areas is the OECD focusing on, and how is it adapting its agenda to meet future challenges?
The OECD is intensifying its focus on climate change and digital transformation to promote sustainable and inclusive growth. To support the net-zero transition, the OECD is advancing emission reduction efforts, particularly in hard-to-abate sectors, and fostering international cooperation through initiatives like the Climate Club. Its work on climate finance, adaptation strategies, and the green transition aids countries in achieving climate goals while ensuring economic resilience, supported by projects like Net Zero+ and the International Programme for Action on Climate (IPAC), as well as initiatives such as Inclusive Forum on Carbon Mitigation Approaches (IFCMA).
In digital transformation, the OECD advocates for a rights-oriented, human-centric approach, setting international standards for AI governance with the OECD Principles on AI and promoting responsible AI practices. Initiatives like the AI Policy Observatory and the Global Forum on Technology guide policymakers in managing risks and capitalising on digital innovation. The OECD Directorate for Financial and Enterprise Affairs incorporates these themes, updating instruments and exploring the impact on policy and business through reports on corporate sustainability and generative AI in finance.
What is your assessment of Malta’s financial services sector, the growth it has achieved in the past years and its efforts to renew itself to grow further in the years ahead?
Malta’s financial services sector has significantly contributed to the country’s economy, with the banking sector supporting borrowers during the COVID-19 pandemic and sector employment growing by nearly 6,500 people between 2019-2023. Despite this, challenges like supply chain disruptions, inflation, and geopolitical issues persist. Well-regulated, transparent financial markets are crucial for stability and investor confidence. The Global Debt Report emphasizes investing in productivity and sustainable growth. Malta’s 2023 National Strategy for Financial Services aims to enhance payments infrastructure and expand the talent pool. By improving financial processes and promoting digital finance, Malta can drive efficiency and innovation. OECD tools support high regulatory standards and development in capital markets, sustainable finance, and financial literacy.
We understand that OECD is co-operating with Malta on a project on financial literacy. What are the angles of this project, and how will it help Malta?
Following Malta’s participation in the OECD/INFE 2023 International Survey of Adult Financial Literacy, the OECD is partnering with Malta to enhance financial literacy, addressing gaps identified among youth, seniors, immigrants, and low-income groups. In collaboration with the Malta Financial Services Authority (MFSA) and supported by the European Commission’s Technical Support Instrument, the project includes: data collection and analysis to inform recommendations; reviewing and enhancing Malta’s Financial Capability Strategy; developing educational tools and resources, such as a self-assessment tool and “Train-the-Trainers” module; and working with Maltese authorities to implement these initiatives and ensure project visibility.
Last February, it was announced that Malta was meant to forward its formal application to join the OECD. At what stage are these proceedings and how will Malta be expected to honour its membership?
Following Malta’s announcement to strengthen ties with the OECD, Malta has developed an OECD Action Plan covering key policy areas to enhance alignment with OECD bodies and legal instruments, while supporting domestic reforms. This Plan is a whole-of-government effort led by an Inter-Ministerial OECD Working Group headed by the Ministry of Foreign Affairs, with participation from all line Ministries. We look forward to collaborating with Malta on the implementation of its Action Plan.
This interview was first published in The Corporate Times