Nearshore Americas

Will Colombia Join the OECD? President Santos Wants In to Elite LatAm Club with Chile and Mexico

Source: World Politics Review

Colombian President Juan Manuel Santos recently submitted his country’s application to join the Organization for Economic Cooperation and Development (OECD). In an e-mail interview, Michael Shifter, president of the Inter-American Dialogue, discussed the prospect of Colombia’s OECD membership.

WPR: What are the benefits and responsibilities of OECD membership?

Michael Shifter: The OECD is a privileged club: In Latin America, only Chile and Mexico are currently members. Membership is a measure of a certain level of economic development and a commitment to sound policies and good-governance practices. OECD members are expected to make important policy decisions in accordance with the highest standards and to coordinate economic approaches among themselves. Membership is symbolically significant and conveys a strong message to the world that serious institutional-reform efforts are underway.

WPR: What is the likelihood that Colombia will gain membership?

Shifter: Though it is hard to know with any certainty, Colombia appears to have a reasonably good chance of becoming an OECD member. Under the Santos administration, Colombia is pursuing an ambitious set of reforms that correspond to the essential criteria spelled out by the OECD for membership. The OECD’s “Economic Assessment of Colombia 2010” is notably favorable and highlights the country’s success in weathering the recent economic crisis. The fundamentals of Colombia’s banking sector are sound and contribute to insuring macroeconomic stability. There are, however, some problems, including Colombia’s high reliance on distortionary taxes, which have adverse effects on growth. Other areas of concern deal with Colombia’s high level of income inequality and low ranking on various indices such as human development and corruption perception. That Colombia’s bid is backed by Luis Alberto Moreno, president of the Inter-American Development Bank, and Angel Gurria, secretary-general of the OECD, increases the prospects for membership.

WPR: How would membership to the OECD affect Colombia’s future development?

Shifter: Colombia’s pursuit of OECD membership should be viewed within the wider context of the Santos administration’s energetic efforts to diversify and expand its global connections and exercise greater influence in regional and international affairs. Colombia’s moves to join the Asia-Pacific Economic Community and its nonpermanent seat on the U.N. Security Council should be seen in this light. Should the OECD piece of the overall strategy materialize, it is likely to be advantageous for Colombia’s future development. In the context of an improved security environment, OECD membership could provide additional impetus to Santos’ agenda of modernization of the state and could help draw even higher levels of direct foreign investment, resulting in enhanced productivity and competitiveness. At the same time, however, Colombia’s challenges — including widespread poverty, deficient infrastructure and a poor education system — remain formidable and will need to be effectively tackled to put the country on a more sustained, productive path of development. In and of itself, OECD membership — though no doubt a mark of progress and a recognition of Colombia’s achievements — will not be enough to overcome national political obstacles and resolve such difficult, underlying problems.

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Tarun George

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