The Agony, Ecstasy, and Complexity of Joining the “Rich Nations Club”
Mexico and Chile are in. Colombia is on the brink. Costa Rica is jumping through the hoops. Argentina and Peru are waiting their turn. Brazil wants its bid fast-tracked. Some countries in Latin America wonder if membership is worth the price of admission. Others prefer to follow the guidance of Groucho Marx, who famously said that he would refuse to join any club that would accept him as a member.
The prize in question is membership in the Organisation for Economic Co-operation and Development (OECD).
This influential Paris-based intergovernmental economic body was founded in December 1960 to stimulate economic progress and world trade. The twenty founding members included most of Western Europe plus the United States and Canada. Since then, fifteen additional states have joined, most recently Latvia in July 2016. Many developing states view joining the OECD (nicknamed the “rich nations club”), as essential to demonstrating that they are highly developed nations and a safe destination for foreign investment. The accession process itself is fundamentally a transparency exercise for countries that provides governments with the leverage to push for needed legislative changes in sectors like education and public finance. However, the accession process can also be characterized by frustration, lethargy, and drift.
Mexico was the first Latin American country to join in 1994, followed by Chile in 2010. Now Colombia, Costa Rica, Argentina, Brazil, and Peru are all engaged in a shadow competition to be the next in line.
Of these Latin American countries, Colombia and Costa Rica are the closest to membership and have been granted coveted “accession road maps,” otherwise known as the terms, conditions, and process for accession that are set by the OECD Governing Body. These roadmaps guide the discussions and delineate what the prospective members need to do to become members. Roadmaps are granted by the OECD governing body which comprises all the members of the organization. Any member can block a country's request to accede. Traditionally centered in Europe, in recent years the OECD has increasingly accepted new members from Europe coupled with those from other regions, including Latin America.
To become a member of the OECD, countries must fulfill all of the steps in their roadmaps which include being accepted by 23 different OECD committees. The Committees, of which there are 250 including working groups, set and review standards for specific policy areas, such as economics, trade, science, employment, education, and financial markets.
Colombia and Costa Rica
Colombia was granted its accession roadmap in September 2013 and Costa Rica was granted its roadmap in July 2015. Colombia has accomplished many of the goals set out in its roadmap and could join within the next year. In October 2017 the nation was accepted into the OECD’s Committee on Public Governance. It now needs to be accepted by the Trade and Labor Committees and therefore is two committees away from becoming a member. In comparison, Costa Rica has only been accepted by 10 out of 23 committees.
Colombia and Costa Rica’s paths to OECD ascension may be slowed this year by their upcoming elections and by changes in their respective governments. Costa Rica’s second round of presidential elections will take place on April 1. Colombia will hold parliamentary elections on March 11 and the presidential election on May 27, with a likely second round on June 17. Both countries are expected to continue pursuing OECD membership even if the governments change, due to the perception that membership will increase investment and create jobs.
When Colombia was invited to join the OECD in May 2013, President Juan Manuel Santos hailed the decision: “We will increasingly improve the quality of our public policies, and now we’re going to be measured to the highest standards. It means that it will further increase the confidence of investors in our country, which translates into more jobs, more competitiveness, better living conditions for all Colombians.”
Similarly, upon receiving the OECD’s invitation to Costa Rica, President Luis Guillermo Solis declared that, “the accession process to the OECD is a commitment to the best standards in public administration and market efficiency under the greatest transparency, which will contribute to the business climate and investment to bring better living conditions to Costa Ricans.”
Argentina formally requested accession in June 2016, but has yet to be issued an accession roadmap. The nation has a relationship with the OECD dating back to the early 1990s, is engaging with the OECD via an Action Plan, and participates in many OECD committees. The Action Plan consists of 16 policy areas that support Argentina’s key reform priorities: economic policy, statistics, competition, investment, public management and modernization of the state, federalism, regional development and multi-level governance, fight against corruption, education and skills, and digital economy.
The Macri administration has stated on numerous occasions that it is committed to Argentina’s OECD ascension and the President has tasked his Ministers with engaging with relevant OECD committees. The OECD agenda is also aligned closely with the G20 agenda and Argentina is the president of the G20 in 2018, consequently the nation's OECD engagement in 2018 has taken on an even greater sense of urgency.
Like Argentina, Brazil formally requested to join the OECD in May 2017, and is awaiting its accession roadmap. Alone among the Latin American countries, Brazil was named a “key partner” of the OECD in 2007, joining other major emerging economies like China, India, Indonesia, and South Africa.
In addition, Brazil has been participating on a number of OECD committees over the past 20 years and signed a cooperation agreement with the OECD in 2015. This agreement created a Work Program to strengthen cooperation between Brazil and the OECD on a number of core issues related to economic, industrial, trade, and financial issues: public governance and the fight against corruption; science, technology, environment, agriculture and energy; labor, pension and social issues, and development cooperation. As with Colombia and Costa Rica, Brazil also has elections this year for president, parliament, and governors on October 7, with a second round for the presidential election scheduled for October 28.
Meanwhile, Peru requested accession in October 2016 and has yet to be granted an accession roadmap. The country has been engaging with the OECD since 2014 via a Country Program focused on five key areas: economic growth; public governance, anti-corruption and transparency; human capital and productivity; and the environment. Peruvian President Pedro Pablo Kuczynski’s administration made OECD membership a central plank of its Peru2021 plan. During his visit to Peru this week, U.S. Secretary of State Rex Tillerson signaled U.S. support by praising the “important steps that Peru has taken to position itself well for an invitation to the OECD.”
Upon Chile’s accession to membership in 2010, OECD Secretary General Angel Gurria, himself a former Mexican finance minister, said that engaging with Latin America, “fills me with joy because I know that this partnership is going to be highly beneficial for these countries; and likewise for the OECD, because Latin America is clearly becoming more important all the time, and its countries have much to contribute.” Eight years later, a half-dozen Latin American countries are still jostling to join the club.
Will 2018 be the year that the OECD finally admits a new member from the Americas? If so, it will be sign that the OECD’s relationship with the region has finally come of age.