World Economy

Poor Trying to Catch Up With Rich

Poor Trying to Catch Up With RichPoor Trying to Catch Up With Rich

Living standards continue to diverge within many economically advanced countries as poorer regions struggle to catch up with richer ones, according to new research by the Organization for Economic Co-operation and Development (OECD).

Half of the 34 OECD countries have seen the income gap between their best-off and worst-off regions widen since the 2008 crisis, said the OECD Regional Outlook 2014, TradeArabia reported Wednesday.

The report shows that in 10 OECD countries, over 40 percent of the national rise in unemployment since the crisis was concentrated in one region.

Some of the starkest income inequalities show up in big cities.

 Proper Management

The OECD recommends better management of urban areas, where two in three people live, as a way to improve prosperity and reduce inequalities. Well-run cities can improve efficiency and productivity within their boundaries and in surrounding areas by cutting commuting times, making streets safer, reducing air pollution and improving access to public services.

“The regional convergence engine has stalled since the crisis. National standards of well-being are not felt equally by people living in different regions,” said OECD secretary-general Angel Gurria, presenting two new reports on regions at the recent 12th European Week of Regions and Cities in Brussels.

“Smarter public investment, especially in cities, and reforms of outdated local government structures would help to address this.”

The OECD area counts more than 140,000 sub-national governments, often organized into centuries-old structures that lead to fragmentation and inefficiencies. Addressing these problems could help boost growth nationally and reduce regional inequalities.

A second OECD report, “How’s Life in Your Region”, reveals big differences in overall well-being among 362 regions within OECD countries by examining areas ranging from air quality and life expectancy to per-capita income, employment and Internet access.