OECD: Explained

What is Organisation for Economic Co-operation and Development (OECD)?

The Organisation for Economic Co-operation and Development (OECD) is an international, intergovernmental economic organization of 38 countries with market economies that work with each other, as well as with more than 70 non-member economies to promote economic growth, prosperity, and sustainable development.

The organisation’s headquarters is at the Château de la Muette in Paris, France.

Economic Co-operation and Development Objectives

The objectives of the Cooperation include fostering economic development and cooperation and fighting poverty through the promotion of economic stability.

It also ensures that the environmental impact of growth and social development is always considered.

To promote policies that will improve the economic and social well-being of people around the world.

To provide a forum of countries describing themselves as committed to democracy and the market economy.

To provide a forum in which governments can work together to share experiences and seek solutions to common problems.

Over the years, it has raised the standards of living in multiple countries. It has also contributed to the expansion of world trade.

OECD Functions and Responsibilities

• The OECD plays an integral role in promoting economic stability on a global scale. The OECD publishes and updates a model tax convention that serves as a template for allocating taxation rights between countries.
• It is responsible for publishing economic reports, statistical databases, analyses, and forecasts on the outlook for economic growth worldwide.
• The group analyzes the impact of social issues on economic growth and makes recommendations to extend forethoughts to the environmental concerns associated with economic development too.
• The organization endeavours to eliminate bribery and other forms of financial crimes worldwide.
• It also maintains a “blacklist” of nations that are considered uncooperative tax havens.
• It also took efforts to eradicate tax avoidance by profitable corporations and in the G-20 countries. It also encourages the G-20 countries to promote tax reforms.

OECD Composition

The OECD comprises Member Countries, Substantive Committees, and the OECD Secretariat.

Member Countries:

OECD currently has 38 member nations and the Member Countries are each represented by a delegation led by their ambassadors.

The 38 Member Countries consist of Australia, Austria, Belgium, Canada, Chile, Colombia, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, South Korea, Latvia, Lithuania, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States.

Colombia has been invited to join while six other countries (Argentina, Brazil, Bulgaria, Croatia, Peru, and Romania) request to join is under the consideration of the OECD.

Under the direction and guidance of member governments, it also researches social changes or evolving patterns in trade, environment, education, agriculture, technology, taxation, and other areas.

OECD is funded by its member countries. National contributions are based on a formula that takes into account the size of each member’s economy. Countries may also make voluntary contributions to financially support outputs in the OECD program of work.

Substantive Committees:

Representatives of member and observer countries meet in specialized committees on specific policy areas, such as economics, trade, science, employment, education or financial markets.

There are about 200 committees, working groups and expert groups. Committees discuss policies and review progress in the given policy area.

OECD Secretariat:

OECD Secretariat is led by the Secretary-General and provides support to Standing and Substantive Committees. It is organized into Directorates.

The European Commission participates in the work of the OECD alongside the EU member states.

Exchanges between governments benefit from the information, analysis, and preparation of the OECD Secretariat.

The secretariat collects data, monitors trends, and analyses and forecasts economic developments.

Specialised bodies:

• Africa Partnership Forum (APF)
• Business and Industry Advisory Committee (BIAC)
• Development Assistance Committee (DEC)
• OECD Development Centre
• International Transport Forum (ITF) (formally known as the European Conference of Ministers of Transport)
• International Energy Agency (IEA)
• Nuclear Energy Agency (NEA)
• Multilateral Organisation Performance Assessment Network (MOPAN)
• Partnership for Democratic Governance (PDG)
• Sahel and West Africa Club
• Trade Union Advisory Committee (TUAC)

Reports:

• OECD Economic Outlook
• OECD Communication Outlook
• OECD Internet Economy Outlook
• International Migration Outlook

India and OECD:

• India is not a member of the OECD. But India has had a cooperation programme with it since 1997.
• India became the 27^th member of the organisation’s Development Centre.
• The OECD Council at the Ministerial level adopted a resolution on 16 May 2007 to strengthen cooperation with India, as well as with Brazil, China, Indonesia and South Africa, through a programme of enhanced engagement, defining these countries as Key Partners of the organisation.
• As a Key Partner, India is included in the analysis and statistical databases of the organisation.
• Its participation in the bodies and fora is encouraged as a means of allowing Indian policymakers to benefit from the OECD’s technical expertise and analytical capacity.