OECD expands to include Russia

OECD expands to include Russia
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First Published: Thu, May 17 2007. 10 07 AM IST
Updated: Thu, May 17 2007. 10 07 AM IST
By Veronique Dupont, AFP
Paris: The Organisation for Economic Cooperation and Development (OECD), acknowledging that it must adapt to a changing global economy and invited Russia , Estonia, Chile, Israel and Slovenia to join membership talks.
The 30-member OECD, which tries to coordinate economic policies among industrialized countries, is prepared to further consider membership to include emerging market powerhouses Brazil, China, India, Indonesia and South Africa and said priority would in addition be accorded to southeast Asia.
“OECD countries agreed to invite Chile, Estonia, Israel, Russia and Slovenia to open discussions for membership of the organisation and offered enhanced engagement, with a view to possible membership, to Brazil, China, India, Indonesia and South Africa,” the organisation said in a statement during its annual ministerial meeting.
In Moscow, Andrei Kondakov, head of the economic cooperation department at the Russian foreign ministry, hailed the news as “something we’ve been waiting for for 11 years.”
The invitation to Russia comes at a time of tense relations between Moscow on the one hand and the European Union and the US on the other due to concerns over dependence on Russian energy and US plans for a missile shield in Poland and the Czech Republic.
Israeli Prime Minister Ehud Olmert also welcomed the decision as “a new measure of confidence accorded by the OECD to the Israeli economy, its force and its development capacity.”
“There is no doubt that the country can now enjoy new investments from the entire world,” he said in a statement.
The OECD added that “in light of its growing importance in the world economy, priority will be given to southeast Asia with a view to identifying countries for possible membership.”
The organisation argues that enlargement is necessary because the OECD’s share of world trade and output has declined as other countries take steps toward integration into the global economy.
When the OECD was founded in 1961, its membership represented 75% of global wealth. Today it accounts for only 60% and rapid growth in Brazil, Russia, India, China could eventually reduce its share to around 50% , OECD Secretary general Angel Gurria has said.
“In order to remain an influential voice in the world economy, through policy analysis, dialogue and rule making, the OECD must strengthen its links with other countries,” the organisation said on 16 May.
It said the accession process can take time because it requires assessments of a country’s ability to meet OECD standards in a wide range of policy areas.
“This makes it difficult to bring on board more than a small number of new members at the same time. That is why the OECD wishes to start accession negotiations with a few countries now, while at the same time strengthening its relations, with a view to possible membership, with other major economies,” it added.
“We don’t have a timeline,” Gurria said. “We will give the countries all the time they need.”
OECD finance, trade and foreign affairs ministers also discussed the possibility of closer cooperation with the Group of Eight of leading economies.
“During the discussions of an enlarged membership, and therefore of a stronger institution, additional avenues to increase OECD’s relevance through an enhanced relationship with G8, or by supporting developing countries on service delivery were suggested,” they said in their closing statement.
They expressed satisfaction with the current strong pace of growth in Europe and Asia and said the slowdown in the US economy appeared to be contained, with the housing market downturn apparently having no effect on other areas of the economy.
“Ministers ... welcomed the dynamism of the recovery and the fall in unemployment in continental Europe, as well as the sustained momentum of the expansion in Asia,” they said.
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First Published: Thu, May 17 2007. 10 07 AM IST