What is OECD?
The Organization for Economic Cooperation and Development (OECD) is a group of 35 countries that have stable and strong economies, whose objective is to promote policies that improve economic and social well-being around the globe. Its predecessor, The Committee of European Economic Co-operation (CEEC), was created after the Second World War to direct the Marshall Plan to rebuild a continent that was devastated by the war. However, it was in 1961 that the organization was officially born when the OECD Convention came into force.
The organization facilitates areas where governments can work together to share, identify, study, and analyze common economic, social, and environmental problems that lead to the achievement of effective public policies to solve them. Currently, only two Latin American countries belong to the OECD: Chile (2010) and Mexico (1994). However, Colombia is right now in the process of joining since May 2013 and Costa Rica is also in the process of joining too.
What is missing to Colombia to join the OECD?
Since Colombia began its formal process of joining the Organization for Economic Cooperation and Development in 2013, Santos administration has not spared effort to achieve this goal, which is one of most ambitious objectives that he wants to fulfill. Nowadays, Colombia is one step away from entering, after fulfilling more than half of the approval of the OECD committees that establish good practices and institutional standards of the organization.
According to the official website of the organization, 21 committees have been approved. Those panels are: investments; bribery in international business transactions; corporate governance; financial markets; insurance and private pensions; competition; taxes; environment; chemical substances; public governance; regulatory policy; statistics; economy; education; Health; credits for export; farming; fishing; Sciences and technology; information technology and communications; and consumer policies.
Additionally, Santos government has about eight months left to fulfill this objective. At the moment, 21 committees have been approved of which the Committee of Commerce and the Labor Committee are missing by approval. It is expected to meet the requirements and obtain approval by the General Council of the OECD in Paris and later to be ratified by the Colombian Congress.
Likewise, the recommendations of the multilateral entity should be considered, such as maintaining the increase in public investment, financing more infrastructure programs at a regional scale, implementing the road concessions program, modifying the liquor tax scheme and improving water distribution schemes and renewal of the automotive fleet in the financial sector. The foregoing are the short-term goals and recommendations that the Colombian State must fulfill to be a full member of the organization.
Challenges and benefits
Now, the integration of Colombia to this multilateral entity would be of great benefit, because it would belong to a select group of countries with the most influential economies in the economic sphere that represent 70% of world trade and 80% of the planet's GDP. Besides, the country that enters this international organization has the seal that identifies it for the fulfillment of its good international practices in relevant topics such as financial stability, labor regulations, economic and environmental development, education, among others.
In accordance to Sebastián Nieto, sub-director head for Latin America of the Development Center of the OECD, one of the greatest challenges for Colombia is to achieve inclusive economic development to consolidate the middle class and labor formalization. In this moment, according to DANE figures, the no formal labor in Colombia for 2017 is 47%, an indicator in which Colombia should work with cross-cutting policies -educational schemes of higher quality and greater coverage- to approach this problematic.
If Colombia wants to be part of this group, it should aim better economic and labor policies to promote and strength the economic development of the lower and middle classes. The insertion to the formal labor world has become acuter in recent years and it is an aspect that the government should not neglect. Similarly, consistent policies must be implemented to maintain a stable economic system and efficient financial stability.
With the above, a place in the OECD could help Colombia to greatly increase its reputation in the international system as a country that respects good practices, the market economy, and human rights. A better reputation in international markets would attract more investment to the country, boosting economic growth and generating employment.
LatinAmerican Post | Camilo Salazar
Copy edited by Marcela Peñaloza