The Organisation for Economic Cooperation and Development (OECD) has identified India, China, Brazil, South Africa and Indonesia, together called the E-5, as countries with which it wants to enhance its level of engagement with a view to rope them in as members. In an interview, the agency's Secretary-General Angel Gurria tells Sidhartha that it is for India to decide when it wants to join the OECD, often referred to as a club of rich countries. Edited Excerpts:
What is the status of the membership of Chile, Israel, Russia, Estonia and Slovenia?
The invitation to Chile will, perhaps, go before the end of the year. A formal signing will take place later. Invitations to Slovenia, Estonia and Israel will follow before the next ministerial council meeting at the end of May. Russia may take a little longer as it delivered its initial memorandum only a few months ago, while others gave it last year.
What about the E-5 countries?
They are all in enhanced engagement mode and we are working very intensely with all of them. In the case of India, we are here to do five different things over the next two days. This morning, at the seminar, we discussed the role of India, given the international economic recovery. In the past, we have done a review of regulatory policies of China, Brazil and Russia, and I am going to show these reports to (commerce and industry minister) Anand Sharma and say that we want to do this for India too.
Tomorrow, we will release the first OECD Investment Policy Review of India. We will discuss e-government, besides meeting all key members of the government. We also have a mission, which is talking to people at different levels, and we are starting the second economic review of India. Enhanced engagement is alive and very vibrant.
If you were to make a sales pitch to get India on board as a member, what would it be? How does India gain?
Regardless of what India gets from becoming a member, we need India. Our mandate is to enhance the engagement with India with a view to a possible membership. India did not knock on our doors, like many others. India is now a systemic player and it has to play a very important role in the stability, growth and welfare of the world.
What does India get? We are the hub for discussion of global issues. We have committees where you can go. You discuss your challenges and we can advise you on what to do. You can participate in the process of preparing policy recommendations, rather than receiving it and seeing if the input fits.
Would it be fair to say that Indonesia, South Africa and Brazil have moved faster on joining OECD compared with India and China?
No. India, China and Brazil are countries with whom we have had a memorandum of understanding or some kind of a framework for 10 years. With Indonesia and South Africa, because we were starting from a more modest base, ties are growing very fast, especially in the case of South Africa.
What is your assessment of India becoming a member?
India has every condition. We will be willing to start the process of India's accession anytime it decides. It is up to India to decide the pace. But for Mexico, it took three years. Korea and Chile also took three years. Mostly, you see that if you have to do a hundred things, you have done 90 and you have been talking about eight. So, it is the two things that take a little longer. Since we share economic principles, it's fairly easy for a country to reflect.
To be a member, you also take binding commitments on investment and anti-corruption. Given the strong domestic industry lobby, can a government agree to, say, a standstill that restricts its ability to reduce the foreign investment ceiling?
None of the instruments are damaging or bad to anybody. We believe that India would benefit from further liberalisation of its investment regime because it would benefit from greater competition. It would receive more foreign investment, more technology and more capital. The people who benefit would be the Indians. Domestic big business in any country is a powerful lobby. But, in the end, you have to see what is good for the consumers.
Coming to the work you have done at the tax forum, what should we expect next?
We have created a huge forum with 90 countries. Going forward, we want to provide a review of every single country and check all the laws, check all the regulations, check all the codes and also check on real compliance.
Post-Dubai, what happens to global recovery?
That was a major accident. It's a business deal — someone overdid it and some things went wrong. It makes us reflect on the fragility of the recovery and reflect on the fact that things like these could dampen or prolong or complicate the recovery.
So, there may still be a few bad surprises that we may get.
