Global Policy Forum

Chile to Join the "Rich Man's Club"


By Thalif Deen

December 22, 2009

The Paris-based Organization for Economic Cooperation and Development (OECD) has invited Chile, a developing nation with a vibrant economy, to join what has long been described as "the rich man's club".

Having formally accepted the invitation, Chile will join the ranks of some of the world's major industrial powers in the 30-member OECD, including the United States, Britain, Germany and Japan. The accession agreement is expected to be signed by Chilean President Michelle Bachelet in Santiago on Jan. 11, 2010.

The last two countries to break ranks from the developing world and join the OECD were Mexico (in May 1994) and South Korea (December 1996).

"As a middle-income South American country, we will bring a new perspective to the OECD's debate on global economic and social development," says Chile's Finance Minister Andres Velasco.

Mexico and South Korea, like Chile, were members of the Group of 77 (G77), the largest single intergovernmental coalition of developing countries at the United Nations. But both countries withdrew - or were forced to withdraw - from the G77, no sooner than they joined the OECD.

However, according to one Latin American diplomat, Chile may want to keep one foot in the G77 and the other in the OECD. "It is very unlikely that either Group will want such a relationship," he said. "Chile does not want to jump; it wants to be pushed."

The 130-member G77, which also includes China, has lost four other members over the years: Cyprus and Malta (both in May 1994) and Romania (January 2007) when they joined the European Union. A fourth country, Palau, a small island developing nation in the Pacific, withdrew from the G77 in June 2006, ostensibly for financial reasons. According to the OECD, it is also discussing the possibility of inviting four other countries - Estonia, Israel, Russia and Slovenia - to join the exclusive club.

Additionally, the OECD is also planning to have discussions with Brazil, China, India, Indonesia and South Africa - all active members of the G77 - "with a view to possible membership".

OECD Secretary General Angel Gurria says: "Emerging, developing and advanced economies need to work together to address the global challenges of our time."

According to OECD, the accession procedure is complex and can be long, as it involves a series of examinations to assess a country's ability to meet OECD standards in a wide range of policy areas.

Asked whether the expansion of OECD at the expense of the G77 will dilute the clout wielded by the Group, former UN Under-Secretary General Anwarul Karim Chowdhury told IPS: "It was anticipated for quite sometime that the big economies would leave the G77 in pursuit of their self interest."

But he also pointed out that the G20 (which also includes G77 members such as Argentina, Brazil, China, India, Indonesia, Saudi Arabia, and South Africa) is already a reality.

"So, whether some G77 countries join OECD or not is irrelevant," said Chowdhury, who is a former UN High Representative for Least Developed Countries, Landlocked Developing Countries and Small Island Developing States. There should be serious brainstorming as well as soul-searching in the G77 as to what should be its agenda and its role at multilateral forums, he noted.

"It would be necessary to regenerate the real G77 agenda of upholding the cause of the voiceless and less powerful countries so that their rightful share is not overlooked by the powerful," he said.

The UN's inter-governmental work and deliberations are going to be affected rather seriously and in a major way as things evolve, said Chowdhury, a former Permanent Representative of Bangladesh to the United Nations.

Chakravarti Raghavan, editor emeritus of the Geneva-based South-North Development Monitor, told IPS that the individual composition, structures of functioning and decision-making of the G77 may change and fluctuate over time - and based on issues and the fora.

But the underlying ethos and raison d'etre that gave birth to the Group, which dates back to June 1964, will still prevail as evidenced at the World Trade Organization's (WTO) ministerial meetings in Seattle (United States, November 1999) and Cancun (Mexico, September 2003), he said.

As has happened before, a very large number of countries, as in the G77, will stay together and attempt to influence and negotiate their common interests, said Raghavan, long considered an authority on the G77, and who has written extensively on the activities of the Group since its founding.

Contrary to popular myths, he pointed out, Seattle failed, not because of the protests outside, but because the smaller countries, who were not part of the negotiating process, said "No" on the last day of the WTO meeting. The same thing happened in Cancun.

Raghavan also pointed out that the political economy of the individual members of the G77 and broad regional or other subgroups are such that they have little endogenous decision-making power or capacity.

"This is glue enough to make them stick together". Even the majors (Brazil, China, India, South Africa et al), are only 'emerging'," he said. They still have no real autonomy in all spheres. They still try to form alliances, he added.

Speaking off the record, an Asian ambassador told IPS that the reports of countries such as Brazil, India and China joining G77 "are a bit exaggerated".

The Chinese in particular are likely to stay with the G77, which gives them cover for many issues, such as climate change, the UN budget, and others. "But, I don't think this signals the death knell for the G77," the ambassador said, noting that the G77 still has the numbers and will remain a significant bloc in the foreseeable future if you want to get things done in the UN

The G20 is a different proposition, he said. "It could evolve into something more than the premier forum for economic decision-making. It could start taking decisions in other areas."

In that sense, it could pose a challenge to the relevance of the UN "I am not suggesting that the UN will become redundant, but its role and influence in several areas might diminish if the G20 gains ground," the diplomat said.

Raghavan said that a major problem, from the beginning, and more so now in the trade and other economic negotiations, has been that while some of the smaller countries look to the big ones for support to stand up collectively against the North and be heard and be able to wield influence, they often do not reciprocate when the big ones feel the need for support from others.

However, to survive, the smaller countries need to appreciate that they cannot expect others to support their causes, unless they themselves are willing to support the bigger ones (where the interests of the larger in the group is not inimical to that of the smaller). "Solidarity cannot be a one-way street," he declared.

In the case of conflict between a G77 and an OECD member or grouping, unless its own interests are involved in a contrary way, a G77 member must support other developing nations and not side with the OECD, he said.

And the bigger ones need to get over their chauvinistic or hegemonic ideas, said Raghavan.


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