The Organisation for Economic Co-operation and Development (OECD), the Paris-based body that is committed to the market economy and democracy, has been at the forefront in analysing and suggesting solutions to the ongoing global economic crisis. Thelma J Askey, deputy chief of this 30-member body and a career diplomat, was in India last week to hold discussions with senior government officials. In an interview with Rituparna Bhuyan and John Samuel Raja D, she says countries should keep the markets open so that innovators can emerge from the current crisis. Excerpts:
How do you plan to take the OECD’s relationship with India in the future?
We want to take the relationship to a more strategic level through mutual efforts. It needs to take into account priorities that were identified by India. We don’t want to assume what priorities are or what outcomes are until India becomes more involved. We are in a constant dialogue with India as to how to elevate the relationship, and allow India to gain from participating in our community and analytical work. We want India to be more involved in the ministerial meetings and analytical work.
What is the status of India’s membership?
Initially, India was participating in disperse(d) ways. Over the last year and a half, we have seen the participation elevated. We have seen increased participation not only in investment and corporate governance areas, but also in economic surveys, which are difficult and important discussions to have. We want to continually assess new priorities for the relationship.
We don’t think we are at the optimum by any means. But we would like to move to a level where they actually engage in peer review with other countries, to compare OECD standards with Indian practices. And then we can move to the next level, where India participates in the review of other countries so that they can become an equal partner in peer review, which is an important aspect of OECD’s work.
What we are striving for is more of a strategic review of relationship by the Indian government. We have a better working relationship with the finance and commerce ministries. It is harder to get the overall strategic commitment to the OECD from the Indian government. That depends on more internal co-ordination by India.
G20 leaders are meeting on April 2. In this background, do you see convergence of views between India and the OECD as to how to respond to the crisis?
At this point of time, it is an election season, so they (India) are not really assessing too much. However, OECD is contributing to G20 by evaluating elements of the process and also the stimulus packages — the commonality and differences between the packages announced. And lay out options from our past experiences and from our own analytical work.
We are not crisis managers. We are looking at the medium and long term, as to how to create a work pattern. And also how to extract governments from what would be their extensive involvement in dealing with the crisis. We are looking at developing options, laying out experiences and analysing the packages.
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Do you think it is feasible for countries to continue liberalising their economies in the backdrop of the crisis?
OECD has been vouching for liberalising economies as a way to tackle the crisis. For a country like India, it is a priority to protect its domestic industries in the backdrop of the crisis.
OECD is among the international organisations that cautioned about throwing out fundamental principles that have served countries so well, just because we are having a real test. OECD, along with the WTO, World Bank and other organisations, continues to declare that open markets for trade and investment, and also making space for innovation, are important. So as we select the elements to tackle the financial crisis, OECD will remind countries to keep those elements in mind. It is not just India, it is also the US and the European Union which are generally going to be pressurised to protect what’s there, especially employment.
But we should remember that we do not end up creating an uncompetitive situation. In the areas of innovation and competition, we should remember that some of the big companies like GE have emerged from the crisis. We should give space to innovation.
We want to give space to those new innovators. We don’t want to close up the opportunities just because we have the crisis.
Last year, OECD said 9 per cent growth rate for India was sustainable. After the crisis, the forecast has been lowered…
We readjusted the levels of growth not just for India but also for other countries. When you are looking at 5 per cent growth, it is pretty good when you compare with (other) OECD members. India does not seem to be affected in the same way as other countries are. First of all, its trade as a component of GDP is smaller than many countries.