OECD Secretary General Angel Gurria at the 50th anniversary Ministerial Council Meeting 2011 at the OECD, in Paris, Wednesday, May 25, 2011.Jacques Brinon/The Associated Press
The Paris-based Organization for Economic Co-operation and Development - the global club of the world's wealthy economies - is celebrating its 50th anniversary this week. But it may be just an excuse to throw a party because the institution isn't a true Sixties child. The OECD's real birth date is 1948, not 1961. Then known as the Organization for European Economic Co-operation, its roots go back to the rubble left after the Second World War, when leaders decided the best way to rebuild was to come together, rather than punish the losing countries as they did after the First World War.
Now it's focused on causes such as ending corruption and banking secrecy, as well as promoting free-market policies and producing reliable global economic data - "better policies for better lives," as the OECD puts it. But as countries such as India and China, which aren't OECD members, increasingly gain economic clout, it's slowly losing influence to more inclusive groups, such as the G-20.
Beginnings:
Former U.S. secretary of state George Marshall had a simple idea. He wanted to make sure European countries stopped tearing each other apart as they rebuilt their economies with reconstruction cash from the U.S. and Canada. The OECD's raison d'être - and name - changed abruptly in 1961 as a revitalized Europe moved toward economic union. So the organization reoriented its focus outward, welcoming the U.S. and Canada as its first non-European members. It now has 34 members. It's still housed in the 17th-century royal French estate - Château de la Muette - that was the Second World War headquarters of the U.S. Army.
Canadian content:
Canada's ties to the OEEC and the OECD run deep. Its cash helped Europe rebuild. It also was among 20 founding members who drafted its guiding convention in 1961, pledging to "achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries." Former federal cabinet minister Donald Johnston was the first non-European to become secretary-general, serving from 1996 to 2006. Canada is the 8th-largest contributor to the OECD, putting up 3.54 per cent of this year's €342-million ($471-million) budget.
Highlights:
The OECD has gone through several iterations since 1961 as it expanded beyond its European base. Japan joined in 1964, heralding the country's postwar economic emergence. The collapse of communism in 1989 led to a wave of new members, including much of the former Soviet bloc. In the 1990s, the organization began a crusade against tax havens and corruption, spearheading a landmark anti-corruption treaty in 1999. In 2006, the OECD named former Mexican finance minister Angel Gurria as Secretary-General, its first head from the developing world. The Economist has complained about Mr. Gurria's high salary and spending habits.
Challenges:
The OECD founders imagined the organization as a sort of economic United Nations, steering and co-ordinating policies of members. And while it still does some of that, its influence is at the margins, with so-called "soft law" initiatives on taxation and corporate governance. It also produces world-class comparative economic data. But critics say the OECD has become more of an expensive debating society than a forceful agent of change, ceding a more active role to other global organizations and groupings. To counter that, Mr. Gurria has re-imagined the OECD as a sort of "globalization hub," welcoming new members such as Chile, Israel and Slovenia. Russia's membership bid is pending. Mr. Gurria has also reached out to emerging powers India, China, Brazil, South Africa and Indonesia through "enhanced engagement" that could eventually lead to membership. The reality remains that nearly 40 per cent of the global economy is not represented around the OECD table, and the gap is growing.