Photo courtesy of @OECD: Twitter.
Colombia has become the second nation in South America and the 37th member country to join the Organisation for Economic Co-operation and Development (OECD). It now joins a list of member countries around the world, unofficially dubbed ‘the league of rich nations’ from Europe, to Asia, the Pacific and both North and Central America.
Founded in 1961 and labelled “the world’s most exclusive group of good practice,” by President Santos, the OECD’s main objectives are to stimulate economic progress and world trade. All members of the forum promise to commit to democracy and the market economy, and most are high-income, developed nations. However, the member list does also include emerging countries such as Mexico and Turkey.
The Accession Agreement was signed by President Juan Manuel Santos and Secretary-General Gurría on May 30th during a meeting in Paris.
On May 25th, when the news was announced, President Santos tweeted, “being part of the OECD will be very important for Colombia so that it can continue to advance, reducing poverty, receiving even more investment and guaranteeing development that preserves our environment.”
Colombia’s enrolment in the OECD has meant it has been subject to thorough reviews, undertaken by 23 committees made up of experts in fields such as education, employment, economics, politics and the environment.
Its new status has also forced Colombia to make important changes to its legislation and policies, bringing them in line with OECD standards. The reforms affect sectors such as the justice system, management of state-owned enterprises, and policies on industrial chemicals, waste management, anti-bribery and trade.
According to Santos, Colombia has benefited from these changes in various ways. The independence of supervisory organisations has been strengthened, corporate governments of state companies modernised, regulatory politics improved and the supervisory reach of financial conglomerates increased. The Ministry of Labour has also seen their capacity to comply with regulations strengthened in order to better combat informalities and corruption.
Colombia’s entry into the OECD may come as a surprise to some given the country’s economic problems, on top of serious concerns of governmental corruption, educational lapses and a widening inequality between rich and poor.
According to the World Bank, Colombia is the second worst country on the continent when it comes to financial inequality (measured in terms of the GINI index). A recent Oxford Analytica Report, that had been released ahead of the Horasis Global Meeting 2018 in Cascais this year, advocated that this can be addressed with policies that foster “redistribution, diversification and growth,” and they acknowledged that redistribution and reforms would be difficult if growth was low.
Despite these concerns, however, OECD Secretary-General Angel Gurría said: “We are very pleased to welcome Colombia as a member of the OECD…the accession of Colombia will contribute to our efforts to transform the OECD into a more diverse and inclusive institution, which will ensure our relevance in the years and decades ahead. The global challenges we are facing today can only be addressed if we have emerging, developing and advanced economies working together.”
Now Colombia is part of the OECD, what’s next? Santos outlined three main benefits that he hopes the OECD will bring to the country he will soon no longer be President of, labelling it “one of the most important legacies that he will leave his country.” Firstly, he hopes it will bring more international investment, better financing for infrastructure projects (in which the country plans to invest over $40 million) and finally, cheaper credit as well as more favourable conditions on the point of acquiring it.
In a speech he gave at the ceremony marking Colombia’s joining of the OECD, Santos took the opportunity to speak about the advances Colombia has made over the eight years of his presidency. Aside from the signing of the 2016 Peace Accord, he described improvements in the education system, such as free education in state schools and increased access to higher education, developments in the health system and technological advances. Investment in Colombia is now among the highest in Latin America, he said, and inequality has been reduced as a result of a now lower Gini coefficient. Notably, he also referenced the fact that former FARC leader Timochenko was able to vote in last Sunday’s elections, a huge step towards democracy, claimed Santos.
“Getting the go ahead wasn’t easy, but it was worth it,” stated Santos, who hopes that Colombia’s new membership of the OECD will allow the country to look at what has and hasn’t worked for other countries, with the overall goal of improving the country’s public policy. In the long-term, he hopes that the improvements in public policy will translate into better well-being for the Colombian population, although he emphasised that the country faces a long road of improvement ahead.